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by Stockwatch Business Reporter

The TSX Venture Exchange declined 7.25 points to 663.33 Monday. Frank Giustra's cash-rich NEX shell, PNO Resources Ltd. (PNO), up 10 cents to 25 cents on 231,500 shares, will be taken over by Richard Munson's Sandspring Resources Ltd. (SSP: $0.135), which owns the Toroparu gold project in Guyana.

Sandspring plans to first roll back 1:3, leaving it with 48,236,261 postconsolidated shares, after which it will issue one postconsolidated Sandspring share to PNO shareholders for each share held, for a total of 12,441,642 postconsolidated shares. As well, immediately before closing this transaction, PNO will complete a private placement of up to $3.5-million by selling up to 17.5 million units at 20 cents; those units will convert into postconsolidated units of Sandspring, with each such unit comprising one share and one warrant, convertible at 30 cents for five years.

Sandspring is acquiring PNO for its treasury of $1.88-million (as of March 31) plus the ability of its management to raise more money. Sandspring is not entirely broke yet, but it is operating in a difficult market. As of March 31, the company had $90,290 cash and a working capital deficit of $1.91-million. Since then, however, it has signed a silver streaming deal with Silver Wheaton Corp. (SLW: $22.21). In April, after signing the deal, Sandspring received $500,000 (U.S.) as part of a $5-million (U.S.) agreement for 50 per cent of the payable silver production from the Toroparu project, should it go into production. In June, Sandspring received a second $500,000 (U.S.) payment, and it will receive two more payments this year for a total of $2-million (U.S.). Sandspring has agreed to deliver a feasibility study for Toroparu to Silver Wheaton by the end of 2016.

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