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TORONTO, Aug. 28, 2024 (GLOBE NEWSWIRE) -- Vicunau Metals Corp. ("Vicunau" or the "Company") is pleased to announce that it has executed a letter of intent, dated December 1, 2023, with 1287409 B.C. Ltd., a corporation incorporated under the Business Corporations Act (British Columbia) and a reporting issuer controlled by Medalist Capital Ltd. ("MedalistCo"), pursuant to which the Company and MedalistCo have agreed to, among other things, complete a transaction (the "Proposed Transaction") that will result in the "reverse takeover" of MedalistCo by Vicunau in accordance with Policy 5.2 – Changes of Business and Reverse Takeovers of the TSX Venture Exchange (the "TSXV") and shall result in the common shares (the "Resulting Issuer Shares") of the resulting issuer from the Proposed Transaction (the "Resulting Issuer") becoming listed on the TSXV. The parties intend to enter into a definitive agreement in respect of the Proposed Transaction (the "Definitive Agreement"). The Proposed Transaction remains subject to the approval of the TSXV.
Concurrent with the Proposed Transaction, Vicunau has entered into an engagement agreement, dated July 12, 2024, with Haywood Securities Inc. ("Haywood"), on its own behalf and on behalf of Canaccord Genuity Corp. ("Canaccord" and together with Haywood, the "Agents"), as co-lead agents and joint bookrunners, pursuant to which the Agents have agreed to sell, on a "best efforts" private placement basis, up to 37,038,000 subscription receipts of Vicunau (the "Subscription Receipts") at a price of C$0.27 per Subscription Receipt (the "Issue Price") for aggregate gross proceeds of up to C$10,000,260 (the "Concurrent Offering"). Closing of the Concurrent Offering is expected to occur on or about the week of September 23, 2024, or such other date as agreed between the Agents and Vicunau, each acting reasonably. Vicunau has also granted the Agents an option to sell up to an additional C$1,500,000 in Subscription Receipts at the Issue Price, exercisable in whole or in part at any time up to 48 hours prior to the closing of the Concurrent Offering.
Highlights of Vicunau Metals:
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Terms of the Proposed Transaction
As will be set out in the Definitive Agreement, MedalistCo is expected to acquire all of the issued and outstanding common shares of the Company (the "Vicunau Shares") pursuant to a three-cornered amalgamation to be completed under the Business Corporations Act (Ontario) among Vicunau, MedalistCo, and a wholly-owned subsidiary of MedalistCo to be incorporated for the purpose of completing the amalgamation (the "Amalgamation"). The Amalgamation is expected to result in the issuance, to each shareholder of Vicunau (each, a "Vicunau Shareholder"), of one (1) post-Consolidation (as defined herein) Resulting Issuer Share for each one (1) Vicunau Share held by such holder immediately prior to the closing of the Proposed Transaction (the "Closing"). As part of the Amalgamation, all convertible securities of Vicunau outstanding immediately prior to the Closing are expected to be replaced with or exchanged for equivalent convertible securities of the Resulting Issuer entitling the holders thereof to acquire or receive post-Consolidation Resulting Issuer Shares in lieu of Vicunau Shares, subject to adjustment in connection with the Proposed Transaction.
The Amalgamation will result in the reverse takeover of MedalistCo by the Vicunau Shareholders. Following the completion of the Proposed Transaction, MedalistCo, being the Resulting Issuer, is expected to carry on the current business of Vicunau, being the exploration and development of Vicunau's mineral properties in Chile.
As will be further set out in the Definitive Agreement, MedalistCo is expected to, prior to the Closing, (i) effect a consolidation or reverse consolidation (the "Consolidation") of its outstanding common shares at a consolidation ratio to be agreed upon by the parties; and (ii) effect a change of its corporate name to such name as may be determined by Vicunau and approved by the shareholders of MedalistCo and is acceptable to the applicable regulatory authorities, including the TSXV. After giving effect to the Consolidation, the product obtained by multiplying the number of outstanding common shares of MedalistCo by the Issue Price will be equal to C$1,750,000.
The completion of the Proposed Transaction is subject to a number of terms and conditions, including without limitation, the following: (a) the parties entering into the Definitive Agreement; (b) the parties obtaining all necessary consents, orders, regulatory and shareholder approvals, including the approval of TSXV; (c) there being no material adverse changes in respect of either the Company or MedalistCo; (d) closing of the Concurrent Offering; and (e) other standard conditions of closing for a transaction in the nature of the Proposed Transaction. There can be no assurance that all of the necessary approvals will be obtained or that all conditions of closing will be satisfied. Additional details regarding the Proposed Transaction, including whether an exemption from the sponsorship requirement of the TSXV will be required, will be provided in a subsequent news release.
Upon completion of the Proposed Transaction, it is anticipated that the Resulting Issuer will be listed as a Tier 2 mining issuer on the TSXV and it will trade under a symbol to be determined by the Company and the TSXV.
Vicunau and MedalistCo are arm's length parties to each other and, accordingly, the Proposed Transaction is not a related party transaction within the meaning of Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions.
After completion of the Concurrent Offering, and assuming gross proceeds of C$10,000,260, existing Vicunau Shareholders will own approximately 69.6% of the Resulting Issuer, existing shareholders of MedalistCo will own approximately 4.5% of the Resulting Issuer, and subscribers under the Concurrent Offering will own approximately 25.9% of the Resulting Issuer, on a basic, non-diluted basis.
Board of Directors and Management
It is anticipated that the board of directors of the Resulting Issuer, upon completion of the Proposed Transaction, will consist of Norman Findlay, Mark Kucher, Isaac Maresky, Joseph de la Plante and Aleta Shiff, all subject to the approval of such nominees by the TSXV and the shareholders of MedalistCo. The officers of the Resulting Issuer are expected to consist of Isaac Maresky (President and CEO), Jonathan Warner (EVP) and such other officers to be confirmed in the Definitive Agreement. A news release outlining the professional backgrounds of each director, officer and insider will be disseminated by the Company once the Definitive Agreement has been executed.
Concurrent Offering
Vicunau has entered into an engagement agreement with Haywood, as co-lead agent and joint bookrunner, on its own behalf and on behalf of Canaccord, as co-lead agent and joint bookrunner, pursuant to which the Agents have agreed to sell, on a "best efforts" private placement basis, up to 37,038,000 Subscription Receipts at the Issue Price for aggregate gross proceeds of up to C$10,000,260. Closing of the Concurrent Offering is expected to occur on or about the week of September 23, 2024, or such other date as agreed between the Agents and Vicunau, each acting reasonably. Vicunau has also granted the Agents an option to sell up to an additional C$1,500,000 in Subscription Receipts at the Issue Price, exercisable in whole or in part at any time up to 48 hours prior to the closing of the Concurrent Offering.
The proceeds of the Concurrent Offering are expected to be used to fund: (i) the exploration and other expenses relating to Vicunau's gold-copper exploration properties located in Chile; (ii) the expenses of the Proposed Transaction and the Concurrent Offering; and (iii) the working capital requirements of the Resulting Issuer.
The Subscription Receipts will be created and issued pursuant to the terms of a subscription receipt agreement (the "Subscription Receipt Agreement") between Vicunau, Haywood, on behalf of the Agents, and an escrow agent (the "Subscription Receipt Agent") mutually acceptable to Vicunau and Haywood. Each Subscription Receipt will be deemed to be automatically converted, without payment of additional consideration or further action by the holder thereof, into one unit of Vicunau (each, a "SR Unit"), subject to adjustment in certain circumstances, immediately before the closing of the Proposed Transaction upon the satisfaction or waiver of the Escrow Release Conditions (as defined in the Subscription Receipt Agreement) at or before the date that is 120 days from the closing date of the Concurrent Offering (the "Escrow Release Deadline"). Each SR Unit will be comprised of one Vicunau Share (each, a "SR Share") and one-half of one common share purchase warrant of Vicunau (each whole warrant, a "SR Warrant"). Upon completion of the Proposed Transaction, each SR Share and SR Warrant shall immediately be exchanged for one Resulting Issuer Share and one common share purchase warrant of the Resulting Issuer (each, a "Resulting Issuer Warrant"), respectively, for no additional consideration and without any further action by the holders thereof. Each Resulting Issuer Warrant will be exercisable to acquire one Resulting Issuer Share (each, a "Resulting Issuer Warrant Share") at a price per Resulting Issuer Warrant Share of C$0.40 for a period of 24 months from the closing date of the Concurrent Offering.
In consideration for their services in connection with the Concurrent Offering, Vicunau has agreed to pay the Agents a cash fee (the "Agents' Fee") equal to 7.0% of the gross proceeds from the sale of the Subscription Receipts. 50% of the Agents' Fee will be paid on the closing date of the Concurrent Offering and the remaining 50% of the Agents' Fee will be deposited in escrow. As additional consideration for the services of the Agents, the Agents will be issued compensation options of Vicunau (the "Compensation Options") equal to 7.0% of the number of Subscription Receipts sold in the Concurrent Offering. Each Compensation Option will entitle the holder thereof to acquire one Vicunau Share at a price of C$0.27 per Vicunau Share for a period of 24 months following the date of closing of the Concurrent Offering. Each Compensation Option shall, upon completion of the Proposed Transaction, be automatically exchanged for one compensation option of the Resulting Issuer (the "Resulting Compensation Options"). Notwithstanding the foregoing, the Agents' Fee and the number of Compensation Options will be reduced to 3.5% on sales and proceeds of up to an aggregate amount of C$2,500,000 from purchasers directly arranged by Vicunau through a president's list.
Upon closing of the Concurrent Offering, the gross proceeds of the Concurrent Offering, less 50% of the Agents' Fee and the Agents' estimated expenses, will be deposited in escrow with the Subscription Receipt Agent pending satisfaction or waiver of the Escrow Release Conditions, in accordance with the provisions of the Subscription Receipt Agreement. If the Escrow Release Conditions are not satisfied at or before the Escrow Release Deadline, each of the then issued and outstanding Subscription Receipts will be cancelled and the Subscription Receipt Agent will return to each holder of Subscription Receipts an amount equal to the aggregate Issue Price of the Subscription Receipts held by such holder plus an amount equal to the holder's pro rata share of any interest or other income earned on the escrowed funds (less applicable withholding tax, if any). To the extent that the escrowed funds are insufficient to refund such amounts to each holder of the Subscription Receipts, Vicunau shall be liable for and will contribute such amounts as are necessary to satisfy the shortfall.
The securities offered have not been registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. 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 the securities in any State in which such offer, solicitation or sale would be unlawful.
Additional Information
Further updates in respect of the Concurrent Offering as well as the Proposed Transaction will be provided in subsequent news releases. Also, additional information concerning the Proposed Transaction, MedalistCo, Vicunau, and the Resulting Issuer will be provided in the filing statement to be filed by the MedalistCo and Vicunau in connection with the Proposed Transaction, which will be available in due course under the Company's profile on SEDAR+ (www.sedarplus.ca).
About Vicunau
Vicunau Metals Corp. is a private mineral exploration company incorporated under the Business Corporations Act (Ontario) seeking a TSXV listing via RTO, expected to close by year end 2024. Vicunau is headquartered in Toronto, Ontario, and is focused on copper and gold exploration at its land package located within the prolific Maricunga / Vicuña copper-gold belt in Chile. Vicunau's properties are 100% owned with no royalties and no option payments or minimum expenditures. Vicunau's land package is surrounded by some of the largest copper-gold resources in the Americas, including the Barrick-Newmont Norte Abierto JV (53 Moz Au & 14 Blbs Cu) and Lundin Mining's Caserones Mine. Vicunau plans to commence a 20,000 m drill program to confirm its geological thesis and target large copper-gold porphyry potential.
About MedalistCo
MedalistCo is a reporting issuer in British Columbia and is controlled by Medalist Capital Ltd. and its affiliates. None of its securities, are listed or posted for trading on any stock exchange and no public market exists for any securities of MedalistCo. Additional information on MedalistCo can be found by reviewing its profile on SEDAR+ (www.sedarplus.ca).
Qualified Person
The technical information contained in this news release related has been reviewed and approved by Mr. Jonathan A. Warner, Executive Vice President of Vicunau and a Qualified Person within the meaning of NI 43-101.
For further information please contact:
Vicunau Metals Corp.Isaac MareskyChief Executive Officer and DirectorEmail: [email protected]
Cautionary Note Regarding Forward-Looking Statements
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 successful completion of the Proposed Transaction and the Concurrent Offering; the use of proceeds from the Concurrent Offering; failure to satisfy or waive all applicable conditions to the completion of the Proposed Transaction (including receipt of all necessary shareholder, stock exchange and regulatory approvals or consents, and the absence of material changes with respect to the parties and their respective businesses); the Resulting Issuer's mineral properties; future development plans; the significance of the location of Vicunau's mineral properties; Vicunau's ability to consolidate additional properties; Vicunau's ability to establish a maiden mineral resources; and the business and operations of the Resulting Issuer after the Proposed Transaction. 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: business integration risks; fluctuations in general macroeconomic conditions; fluctuations in securities markets; fluctuations in spot and forward prices of gold, silver, base metals or certain other commodities; fluctuations in currency markets (such as the Canadian dollar to Chilean Peso exchange rate); change in national and local government, legislation, taxation, controls, regulations and political or economic developments; risks and hazards associated with the business of mineral exploration, development and mining (including environmental hazards, industrial accidents, unusual or unexpected formation pressures, cave-ins and flooding); inability to obtain adequate insurance to cover risks and hazards; the presence of laws and regulations that may impose restrictions on mining; employee relations; relationships with and claims by local communities and indigenous populations; availability of and increasing costs associated with mining inputs and labour; the speculative nature of mineral exploration and development (including the risks of obtaining necessary licenses, permits and approvals from government authorities); and title to properties.
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. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.
