Sprott Resource to merge with Adriana Resources, raise $15 mln

Canadian private equity firm Sprott Resource Corp (SRC) has agreed to combine with Toronto's Adriana Resources Inc (TSX-V: ADI), owner of a 40 percent stake in Québec's Lac Otelnuk iron ore project. The proposed deal, which will create a new entity called Sprott Resource Holdings Inc (SRH), will see holders of SRC shares receive 3.0 ADI shares per SRC share. As part of the deal, SRC's partner Sprott Inc, a Sprott affiliate and Term Oil Inc have agreed to invest $15 million in SRH through the purchase of ADI shares and warrants. Steve Yuzpe, SRC's CEO, said the merger will create "an integrated company with approximately $150 million in investable capital.”

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