Canamax Energy Ltd. closed the acquisition of the issued and outstanding common shares of Powder Mountain Energy Ltd. through a plan of arrangement under the Alberta Business Corporations Act.

The total consideration price was CA$27.6 million. This was based on Powder’s CA$21.7 million estimated working capital surplus and the CA$5.9 million attributed value of Powder’s existing lands, production and reserves.

The business combination was approved at the July 29 special meeting of Powder shareholders. The Court of Queen's Bench of Alberta approved the arrangement on July 30.

Powder shareholders received 0.954667 common shares of Canamax at 60 cents each. About 45.9 million Canamax shares were issued. Canamax now has about 114.8 million common shares outstanding.

All of the directors and officers of Powder resigned. The amalgamated corporation’s name continues as Canamax Energy Ltd.

Canamax’s board of directors will consist of lead director Hugh Ross, an existing director of Canamax; Kevin Adair, an existing director of Canamax; Brad Gabel, an existing director of Canamax and also its president and CEO; Bruce Murray, a former director of Powder and also its former president and CEO; Mitch Putnam, a former director of Powder; Gregg Smith, a former director of Powder; and Robert Maitland, appointed jointly by the above directors.

As part of the arrangement, 32 Degrees Diversified Energy Fund II (Canadian) LP and 32 Degrees Diversified Energy Fund II (US) LP now own about 13.8 million Canamax shares, in exchange for about 14.4 million Powder shares, or 12% of Canamax’s issued and outstanding shares. The two funds are advised by 32 Degrees Capital Advisor Ltd.

The separate acquisition of Grimshaw and Grande Prairie assets in the Montney area of Alberta is also closed, Canamax said. With the two closed, Canamax’s undrawn bank facility is CA$21 million, and estimated cash and working capital ranges between CA$3 million and CA$4 million. The core areas of operation have significant development potential, the company added.

Calgary, Alberta-based Canamax Energy Ltd. operates in the Montney.