/NOT FOR DISTRIBUTION OR DISSEMINATION IN THE UNITED
STATES. FAILURE TO COMPLY WITH THIS RESTRICTION MAY
CONSTITUTE A VIOLATION OF UNITED
STATES SECURITIES LAWS./
CALGARY, AB, July 20, 2020 /CNW/ - Cassowary Capital
Corporation Limited (TSXV: BIRD.P) ("BIRD" or the
"Company") is pleased to announce that it has entered into a
binding definitive share exchange agreement dated effective
July 14, 2020 (the "Definitive
Agreement") with Western Gold Exploration Limited
("WGE") and the holders of a majority of the outstanding
shares of WGE, to provide for the completion of a business
combination with the Company (the "Transaction"), as more
particularly described below. The Transaction was initially
announced in a Company press release dated June 1, 2020, indicating the Company and WGE had
entered into a binding letter of intent in respect of the
Transaction. The combined entity (the "Resulting Issuer")
will continue the business of WGE and initially will be engaged in
the exploration and development of prospective mineral properties
located in Scotland, with a focus
on gold and copper exploration and development. See "About WGE"
below.
Concurrent Private Placement Financing
The Company is also pleased to announce that due to strong
demand, it intends to increase the size of its recently announced
concurrent non-brokered private placement (the "Private
Placement") to a maximum of CAD$1,650,000 worth of subscription receipts of
the Company ("Subscription Receipts"), in order to fill such
demand. The Company announced in its June 19, 2020 press release that it proposed to
undertake the Private Placement of Subscription Receipts at
CAD$0.15 per Subscription Receipt (on
a pre-Consolidation basis (as defined below)). Up to a
minimum of 5,200,000 Subscription Receipts and a maximum of
11,000,000 Subscription Receipts of the Company may now be issued
pursuant to the Private Placement. See the Company's
June 19, 2020 press release for
additional information about the Private Placement and the
Subscription Receipts.
About the Resulting Issuer
Board of Directors and Management
Upon the Completion of the Transaction, the proposed directors
and officers of the Resulting Issuer are as follows:
Harry Dobson – Monaco - Executive Chairman – A mining
industry veteran and pioneer, Mr. Dobson is currently the Executive
Chairman of WGE, and is a founder of metals mining companies,
Kirkland Lake Gold, Rupert
Resources, Breakwater Resources, Rambler Metals, American Pacific
Mines, and in the diamond industry, Mountain Province Diamonds and
Lytton Minerals. He has extensive experience organizing and
financing mines, including in unique jurisdictions and locations.
Mr. Dobson is a former investment banker and senior partner of
Yorkton Securities.
Ross McLellan – Scotland – Chief Executive Officer and
Director – Mr. McLellan was involved in setting up Scotgold
Resources Ltd., which subsequently listed on the ASX. He acted as a
director of Scotgold Resources Ltd and Fynegold Exploration Ltd.
for 10 years. Mr. McLellan has over 30 years background in
financial services and currently runs all daily activity of
WGE.
Willie McLucas – Scotland - Director – Mr. McLucas is a
long time mining financier with extensive global experience in
exploration, development and production of not only gold and base
metals, but also coal, iron ore and specialty metals such as
Tungsten and Molybdenum. He previously acted as Chief Executive of
Waverley Mining Finance plc and Thistle Mining Inc. and as a
director of Amur Minerals Plc, Longview Capital Partners, Republic
Gold Ltd. and Oriental Minerals Inc.
Stuart Olley – Calgary, Canada - Director – Mr. Olley is
a senior partner of Gowling WLG (Canada) LLP and Co-leader of the Natural
Resources Group. He has extensive experience, domestically and
internationally, working with a variety of issuers and underwriters
in transactions in industries including mining, oil and gas, real
estate and technology. Mr. Olley has served on the board of
directors of various public companies. Mr. Olley is currently the
Chief Executive Officer and a director of BIRD.
Jim O'Neill – Ontario, Canada - Chief Financial Officer and
Corporate Secretary – Mr. O'Neill, a Chartered Accountant with
over 30 years of industry experience, brings a depth of knowledge
from various international mining, project management and
distribution companies. Has acted as Chief Financial Officer
for Virtus Mining Ltd., Aldridge Minerals Inc. and Royal Coal
Corp.
Other Insiders of the Resulting Issuer
Assuming the Company completes the aforementioned Private
Placement, and assuming that financing totals the CAD$1,650,000 maximum, then it is expected that
(i) current shareholder of both BIRD and WGE, Zila Corporation of
Monaco (controlled indirectly by
Val Huxley of Monaco) ("Zila") is expected to hold
approximately 14% of the outstanding common shares of the Resulting
Issuer, and (ii) the combined holdings of Mr. Rupert Williams and Mr. Jeremy Woodgate, and the company they control
Smaller Company Capital Ltd. (which is a shareholder of both BIRD
and WGE) (the "SCC Group"), is expected to be approximately
11% of the outstanding common shares of the Resulting Issuer.
About WGE
WGE is a private company formed under the laws of England and Wales, that holds minerals rights in Argyll
County in western Scotland, and
which mineral rights include the Knapdale and Lagalochan projects.
The mineral rights at Knapdale extend to base metal exploration
rights over 3,253 hectares, with right to lease, and gold
exploration rights over 1,574 hectares, with conditional right to
lease. The mineral rights at Lagalochan extend to base metal
exploration rights over 612.5 hectares, with right to lease, and
gold exploration rights over 188 km2, with conditional
right to lease. A National Instrument 43-101 – Standards of
Disclosure for Mineral Projects compliant technical report and
recommended work program is currently being prepared in respect of
WGE's mining interests.
As at March 31, 2020 (unaudited,
as provided by WGE), WGE had assets of £454,908.40 (CAD$616,082.44) and liabilities of £50,000
(CAD$67,715). As at July 15, 2020, WGE had estimated working capital
of £400,000 (CAD$541,720) (unaudited,
as provided by WGE), which includes £600,500 (CAD$813,257) in additional subscription funds
which were allocated on May 7,
2020. For the year ended 2019 (unaudited, as provided by
WGE), WGE had no revenue, operating expenses of £128,217
(CAD$173,644) and a net loss for the
year of £75,407 (CAD$102,123).
The only shareholder of WGE that is expected to hold a
controlling interest in WGE prior to closing of the Transaction is
Zila, which is expected to be holding approximately 22% of the
outstanding shares of WGE prior to closing of the Transaction.
The Transaction
Pursuant to the terms of the Definitive Agreement, BIRD will
acquire all of the issued and outstanding shares of WGE (which will
be 199,676,875 shares immediately prior to the closing of the
Transaction) pursuant to the terms of the Definitive Agreement, in
exchange for 32,666,900 common shares of the Resulting Issuer (on a
pre-Consolidation basis (as defined below)) at closing of the
Transaction. See the Company's June 1,
2020 press release for information regarding the valuation
of the Transaction. As the majority of shareholders of WGE
have executed the Definitive Agreement, WGE has exercised drag
along rights to compel the remaining WGE shareholders to
participate in the Transaction. Consequently, subject to the
conditions described below, the Company will acquire 100% of the
outstanding shares of WGE.
The Transaction is intended to constitute the "Qualifying
Transaction" of BIRD, as such term is defined in Policy 2.4 of the
Exchange, and will result in a reverse takeover of BIRD.
Completion of the Transaction is subject to a number of
conditions, including:
- the parties preparing an information circular in accordance
with the rules of the Exchange, outlining the terms of the
Transaction;
- the parties receiving all requisite regulatory approval,
including the approval of the Exchange, and any third party
approvals and authorizations;
- each of BIRD and WGE obtaining the requisite shareholder
approvals for the Transaction;
- the parties obtaining requisite board approvals for the
Transaction;
- each of the parties required by the Exchange entering into an
escrow agreement upon the terms and conditions imposed pursuant to
the policies of the Exchange;
- completion of the Private Placement; and
- the Resulting Issuer meeting the applicable Initial Listing
Requirements of the Exchange as a Mining Issuer (pursuant to
Policy 2.1 – Initial Listing Requirements of the
Exchange), including, without limitation, the public float
requirements.
BIRD expects that upon completion of the Transaction, the
Resulting Issuer will be an exploration stage company with no
producing properties and, consequently, no current operating
income, cash flow or revenues. There is no assurance that a
commercially viable mineral deposit exists on the mineral interests
held by WGE.
Sponsorship
Sponsorship of the Transaction is required by the Exchange
unless an exemption or waiver from sponsorship requirement is
available. BIRD is currently reviewing the requirements for and may
apply for an exemption from the sponsorship requirements pursuant
to the policies of the Exchange. BIRD intends to include any
additional information regarding sponsorship in a subsequent news
release.
Proposed Consolidation
It is also proposed that concurrent with the completion of the
Transaction, the common shares of the Resulting Issuer be
consolidated on the basis of one (1) post-consolidation share for
each two and one-half (2.5) pre-consolidation shares (the
"Consolidation"). A special resolution for the approval of
the Consolidation will be put to BIRD's shareholders for
consideration at BIRD's shareholder meeting, as described
below.
Proposed Name Change
BIRD intends to seek the requisite shareholder approval to
change the name of the Company. Any such name change is subject to
applicable Exchange and other regulatory approvals.
Related Party Transaction and Shareholder Approval
The SCC Group holds more than 10% of the issued and outstanding
shares of each of BIRD and WGE and as a result, the Transaction
will not constitute a "Non-Arm's Length Qualifying Transaction" (as
such term is defined by the Exchange) and will instead constitute a
"related party transaction" (as such term is defined by
Multilateral Instrument 61-101 – Protection of Minority Security
Holders in Special Transactions) and is subject to Policy
5.9 of the Exchange. As a result, a meeting of the shareholders of
BIRD is required pursuant to Policy 2.4 of the Exchange or
applicable securities laws to, among other things, approve the
Transaction, the Consolidation and the proposed name change.
Trading Halt
The BIRD Common Shares are presently halted and will remain
halted until the Transaction is completed and approved by the
Exchange.
Further Information
BIRD will issue additional news releases related to the
Transaction, the Private Placement and other material information
as it becomes available.
Completion of the Transaction is subject to a number of
conditions, including but not limited to, Exchange acceptance and
if applicable pursuant to Exchange Requirements, majority of the
minority shareholder approval. Where applicable, the transaction
cannot close until the required shareholder approval is obtained.
There can be no assurance that the transaction will be completed as
proposed or at all.
Investors are cautioned that, except as disclosed in the
management information circular or filing statement to be prepared
in connection with the Transaction, any information released or
received with respect to the Transaction may not be accurate or
complete and should not be relied upon. Trading in the securities
of a capital pool company should be considered highly
speculative
The TSX Venture Exchange Inc. has in no way passed upon the
merits of the proposed Transaction and has neither approved nor
disapproved the contents of this news release.
Neither the TSX Venture Exchange nor its Regulation Service
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
This press release is not an offer of the Company's securities
for sale in the United States. The
Company's securities may not be offered or sold in the United States absent registration or an
available exemption from the registration requirements of the U.S.
Securities Act of 1933, as amended (the "U.S. Securities
Act") and applicable U.S. state securities laws. The Company
will not make any public offering of its securities in the United
States. The Company's securities have not been and will not
be registered under the U.S. Securities Act.
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy, nor shall there be any sale of
these securities, in any jurisdiction in which such offer,
solicitation or sale would be unlawful.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
INFORMATION: This news release includes certain
"forward-looking statements" under applicable Canadian securities
legislation. Forward-looking statements include, but are not
limited to, statements with respect to the structure, terms,
conditions and proposed timing for completion of the Transaction
and the Offering; the ability of BIRD and WGE to complete the
Transaction and the Private Placement; the receipt of all necessary
shareholder, Exchange, securities regulatory authority and other
third party consents and approvals; the receipt by BIRD of an
exemption from the sponsorship requirements of the Exchange and the
resumption in trading of the common shares of the Resulting Issuer;
the Resulting Issuer's future business operations and results.
Forward-looking statements are necessarily based upon a number of
estimates and assumptions that, while considered reasonable, are
subject to known and unknown risks, uncertainties, and other
factors, which may cause the actual results and future events to
differ materially from those expressed or implied by such
forward-looking statements. Such factors include, but are not
limited to: general business, economic, competitive, political and
social uncertainties; delay or failure to receive shareholder or
regulatory approvals; and the results of continued development,
marketing and sales. There can be no assurance that such statements
will prove to be accurate, as actual results and future events
could differ materially from those anticipated in such statements.
Accordingly, readers should not place undue reliance on
forward-looking statements. BIRD disclaims any intention or
obligation to update or revise any forward-looking statements,
whether because of new information, future events or otherwise,
except as required by law.
SOURCE Cassowary Capital Corporation Limited