/ NOT FOR DISSEMINATION IN THE UNITED STATES OF AMERICA /
CALGARY, June 1, 2020 /CNW/ - Cassowary Capital
Corporation Limited (TSXV – BIRD.P) ("BIRD") is
pleased to announce that it has entered into a binding letter of
intent dated effective June 1, 2020
("LOI") with Western Gold Exploration Limited ("WGE")
to complete a business combination, whereby BIRD has agreed,
subject to certain conditions, to acquire WGE (the
"Transaction"). Upon completion 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.
The Transaction is intended to constitute the Qualifying
Transaction of BIRD, as such term is defined in Policy 2.4 of the
TSX Venture Exchange (the "Exchange"), and will result in a
reverse takeover of BIRD.
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 118 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, and details of that technical report and further
information regarding WGE's mineral rights will be disclosed in a
subsequent news release. Financial information with respect to WGE
will also be disclosed in a subsequent news release.
The Qualifying Transaction
Terms of the Transaction
The LOI is to be superseded by a definitive agreement
("Definitive Agreement") to be executed on or before
June 30, 2020 (or such other date as
is agreed to by BIRD and WGE). BIRD proposes to acquire all of the
issued and outstanding WGE Shares (as defined below) 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. This share
exchange was based on BIRD shareholders and WGE shareholders
holding (before the Concurrent Financing (as defined below)), 30%
and 70% of the outstanding common shares of the Resulting Issuer
upon completion of the Transaction, respectively, or on a deemed
valuation of BIRD of $0.1225 per BIRD
Common Share and a deemed valuation of WGE of $4 million. Pursuant to the Transaction, the
holders of the WGE Shares will become shareholders of the Resulting
Issuer. The last closing price of the BIRD Common Shares
prior to the issuance of this news release was $0.05 per share.
Prior to the completion of the Transaction, the parties will use
"commercially reasonable efforts" to cause BIRD or WGE (as
determined by the parties) to complete an arm's length private
placement financing of securities (the "Concurrent
Financing"), provided that such securities represent no less
than 10% of the outstanding common shares of the Resulting Issuer
upon completion of the Transaction. The terms and pricing of such
Concurrent Financing and the involvement of any agents has not yet
been determined and will be dependent on various factors, including
market conditions.
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.
Conditions of Closing
Completion of the Transaction is subject to a number of
conditions, including:
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(i)
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the parties and the
requisite number of WGE shareholders entering into the Definitive
Agreement on or before June 30, 2020;
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(ii)
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the parties preparing
an information circular in accordance with the rules of the
Exchange, outlining the terms of the Transaction;
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(iii)
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the parties receiving
all requisite regulatory approval, including the approval of the
Exchange, and any third party approvals and
authorizations;
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(iv)
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each of BIRD and WGE
obtaining the requisite shareholder approvals for the
Transaction;
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(v)
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the parties obtaining
requisite board approvals for the Transaction;
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(vi)
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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;
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(vii)
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completion of the
Concurrent Financing;
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(viii)
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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; and
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(ix)
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completion of
confirmatory due diligence by each of BIRD and WGE, acting
reasonably.
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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.
Related Party Transaction and Shareholder Approval
The Transaction will not constitute a "Non-Arm's Length
Qualifying Transaction" (as such term is defined by the Exchange)
but will 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.
Prior to the completion of the Transaction, BIRD will call a
meeting of its shareholders for the purpose of approving, among
other matters:
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(i)
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a change of name of
BIRD, as acceptable to the applicable regulatory authorities,
effective upon closing of the Transaction;
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(ii)
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reconstitution of
BIRD's board of directors, as applicable;
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(iii)
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as required by
governing regulatory bodies, the requisite approval of the
Transaction; and
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(iv)
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the
Consolidation.
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Trading Halt
The BIRD Common Shares are presently halted and will remain
halted until the Transaction is completed and approved by the
Exchange.
Pre-Closing Capitalization of BIRD
As of the date hereof, BIRD's authorized share capital consists
of an unlimited number of common shares ("BIRD Common
Shares") in the capital of BIRD, of which 14,000,100 BIRD
Common Shares are issued and outstanding. As well there are
1,400,000 options and 400,000 broker options outstanding, each
exercisable to acquire one BIRD Common Share at an exercise price
of $0.10.
Pre-Closing Capitalization of WGE
As of the date hereof, 135,817,334 ordinary shares in WGE
("WGE Shares") are issued and outstanding. Prior to the
completion of the Transaction, WGE will have no more than
154,834,000 WGE Shares issued and outstanding.
Additional details regarding the ownership of WGE will be
disclosed in a subsequent news release.
Board of Directors and Management
BIRD will confirm the expected members of the Board of Directors
and management of the Resulting Issuer upon completion of the
Transaction, in a subsequent news release.
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.
Further Information
BIRD will issue additional news releases related to the final
legal structure of the Transaction, Concurrent Financing terms,
sponsorship, financial and shareholder information regarding WGE,
the names and background of insiders of the Resulting Issuer 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.
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 Concurrent Financing;
the anticipated ownership percentages in connection with the
Transaction; the resumption in trading of the BIRD Common Shares;
the Resulting Issuer's future business operations and results; 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; the anticipated terms of the
Definitive Agreement; and the anticipated composition of the board
of directors and management of the Resulting Issuer.
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