Eros Resources Corp. (TSXV:ERC) (OTCQB:EROSF)
(“
Eros”),
MAS Gold Corp. (TSXV: MAS) (“
MAS
Gold”) and
Rockridge Resources Ltd. (TSXV: ROCK)
(“
Rockridge”) are pleased to announce that they have entered
into a business combination agreement (the “
Business Combination
Agreement”) to combine the companies in a three-way merger
transaction (the “
Transaction”). Pursuant to the
Transaction, Eros will acquire all of the issued and outstanding
shares of both Rockridge and MAS Gold that it does not already own
by way of two plans of arrangement under the Business Corporations
Act (British Columbia).
Pursuant to the Transaction, shareholders of
Rockridge will receive 0.375 common shares of Eros (each full
share, an “Eros Share”) for each Rockridge common share (a
“Rockridge Share”) held and shareholders of MAS Gold will
receive 0.25 Eros Shares for each MAS Gold common share (a “MAS
Gold Share”) held. Upon closing of the Transaction, existing
Eros shareholders will own approximately 42.37% of the combined
company, existing MAS Gold shareholders will own approximately
37.33% of the combined company, and existing Rockridge shareholders
will own approximately 20.30% (based on the current issued and
outstanding shares of each of the companies).
Highlights of the Transaction:
- Proven Leadership Team: The combined
company board and management will bring decades of relevant
experience, with a track record of significant valuation creation
for stakeholders, capital markets expertise, and technical
experience.
- Corporate Mandate: The combined company
will focus on the exploration and development of high-grade gold
deposits in Saskatchewan.
- Mineral Resources with Exploration Potential in
Saskatchewan, Canada: The combined company will consist of
high-grade gold and copper assets in Saskatchewan and the portfolio
of the combined company is expected to provide shareholders with
exposure to approximately 77,890 hectares of mineral claims,
offering the potential for new discoveries and potentially
attracting larger strategic partners.
- Strong Balance Sheet to Execute on Growth
Initiatives: The combined company will benefit from
Eros’ portfolio of equities recently valued at over $7.5
million.
Jonathan Wiesblatt, Chief Executive Officer of
Rockridge, commented: “This is a very compelling story and with the
re-branding strategy we all have in place, we are confident that
the combined company will create significant value to all
stakeholders. We are excited to have such an incredible opportunity
to create one of Canada’s premier exploration companies with both
gold and copper assets that will soon be back in high demand. We
are thrilled to be able to leverage the combined company’s
technical and financial resources to maximize the value of this
opportunity by combining highly complimentary exploration assets
from across the exploration risk curve in top-tier Canadian mining
jurisdictions.”
Robert Matthews, Director of MAS Gold,
commented: “I am very excited about the assembly of these assets
and a management team that can realize the inherent values of those
assets. Mr. Ron Netolitzky, founder of MAS Gold assembled the gold
properties in Saskatchewan in close proximity to existing
infrastructure over 15 years ago. The joining of Eros, MAS Gold and
Rockridge with a mentoring opportunity to utilize the knowledge and
insights of Mr. Netolitzky and his exploration associates is an
opportunity where the combination of the inputs are anticipated to
result in a much greater organization. The Transaction represents a
truly symbiotic situation for the three companies.”
Tom MacNeill, Chief Executive Officer and
Director of Eros commented: “This is a transformative transaction
to create an unparalleled exploration company with significant
upside on multi-fronts. The Transaction is expected to bring an
immediate increase in value for shareholders of all three companies
with ongoing exposure to one of the most robust portfolios of
assets in the sector. The combined company will be fully funded and
boasts a suite of highly prospective assets and is expected to have
increased scale and prospectivity.”
Leadership and Governance
Following the closing of the Transaction, the
board of directors of the combined company will consist of five (5)
directors, comprised of three (3) directors from Rockridge, being
Jordan Trimble, Jonathan Wiesblatt and Joseph Gallucci, ICD.D, one
(1) director from Eros, being Ross McElroy, and one (1) director
from MAS Gold, being Tim Termuende. Management of the combined
company will include Jordan Trimble as President, Jonathan
Wiesblatt as Chief Executive Officer and Chantelle Collins as Chief
Financial Officer.
Transaction Summary
Under the terms of the Business Combination
Agreement, the Transaction will be implemented by way of two
court-approved plans of arrangement involving Rockridge and MAS
Gold under the Business Corporations Act (British) (each, an
“Arrangement”). Pursuant to the Transaction, Eros will issue
approximately 86,246,640 Eros Shares to MAS Gold shareholders and
approximately 46,877,481 Eros Shares to Rockridge shareholders. On
completion of the Transaction, Eros shareholders will own
approximately 42.37% of the combined company, MAS Gold shareholders
will own approximately 37.33% of the combined company, and
Rockridge shareholders will own approximately 20.30%, on a
non-diluted basis.
The Arrangements will each require the approval
of at least 66 2/3% of the votes cast by the shareholders of each
of MAS Gold and Rockridge, and if required under applicable
securities law, a simple majority of votes cast by shareholders of
each of MAS Gold and Rockridge excluding votes cast by certain
holders of MAS Gold Shares and Rockridge Shares, as applicable,
that are required to be excluded pursuant to Multilateral
Instrument 61-101 – Protection of Minority Security Holders in
Special Transaction, voting at special meetings of those companies.
Eros shareholders will be asked to approve the Transaction by a
simple majority of votes cast by the shareholders, in accordance
with the rules of the TSX Venture Exchange, at a special meeting of
Eros shareholders.
The directors and executive officers of each of
Eros, MAS Gold and Rockridge have entered into customary voting and
support agreements and have agreed to, among other things, vote
their securities in favour of the Transaction. Total Eros Shares
under such support agreements represent approximately 11.96% of the
issued and outstanding Eros Shares, MAS Gold Shares under such
support agreements represent approximately 28.65% of the issued and
outstanding MAS Gold Shares and Rockridge Shares under such support
agreements represent approximately 7.14% of the issued and
outstanding Rockridge Shares.
The Business Combination Agreement includes
non-solicitation provisions for each of Eros, MAS Gold and
Rockridge, and contains fiduciary outs to allow each party to
accept a superior proposal, subject to rights to match and other
customary exceptions.
Under the terms of the Arrangements, any
outstanding MAS Gold stock options and Rockridge stock options will
be exchanged for Eros stock options based on the applicable
exchange ratio with equivalent economic terms and vesting
provisions, and any outstanding MAS Gold warrants and Rockridge
warrants will be adjusted in accordance with their terms such that,
upon the exercise of a MSA Gold warrant or Rockridge warrant, the
holder will receive such number of Eros Shares had such holder been
a holder of MAS Gold shares or Rockridge shares underlying such
warrants, as applicable, immediately prior to the completion of the
Transaction.
Pursuant to the Business Combination Agreement,
and subject to approval of its shareholders, Eros will amend its
articles to create a new class of preferred shares which are
redeemable and retractable upon certain conditions and bear a
cumulative dividend of 4% per annum (each, an “Eros Preferred
Share”). As part of the Transaction, Ronald Netolitzky, a
director of Eros and Interim Chief Executive Officer of MAS Gold,
will convert a promissory note issued by Eros in the outstanding
principal amount of $2,352,000 into Eros Preferred Shares at a
price of $1 per Eros Preferred Share.
Immediately following the completion of the
Transaction, the combined company expects to complete a
consolidation of the outstanding Eros Shares on the basis of ten
(10) pre-consolidation Eros Shares for every one (1)
post-consolidation Eros Share.
The Transaction will constitute a “Reviewable
Transaction”, as defined in TSXV Policy 5.3 – Acquisitions and
Dispositions of Non-Cash Assets. As a result, the completion of the
Merger is subject to approval by the TSXV. The Transaction is also
subject to receipt of court and other applicable regulatory
approvals and the satisfaction of certain other closing conditions
customary in transactions of this nature. Following completion of
the Transaction, the common shares of the combined company are
expected to trade on the TSXV, subject to approval or acceptance of
each exchange in respect of the Transaction.
Board of Directors’ Recommendations
Evans and Evans has provided a fairness opinion
to the special committee of independent MAS Gold directors
established to review the Transaction that, as of the date of such
opinion and subject to the assumptions, limitations and
qualifications set out in such fairness opinion, the consideration
to be received by MAS Gold shareholders in connection with the
Transaction is fair, from a financial point of view, to the MAS
Gold shareholders.
Evans and Evans has provided a fairness opinion
to the special committee of independent Rockridge directors
established to review the Transaction that, as of the date of such
opinion and subject to the assumptions, limitations and
qualifications set out in such fairness opinion, the consideration
to be received by Rockridge shareholders in connection with the
Transaction is fair, from a financial point of view, to the
Rockridge shareholders.
Following their review and in consideration of,
among other things, their respective fairness opinions and the
recommendation of their respective special committees of
independent directors established to review the Transaction, the
board of directors of each of Eros, MAS Gold and Rockridge (with
any conflicted directors abstaining from voting) have approved the
Transaction and determined that the Transaction is fair to its
shareholders and is in the best interest of Eros, MAS Gold and
Rockridge, respectively and as applicable, and each board of
directors recommends to its shareholders that they vote in favour
of the Transaction.
Additional Information
Full details of the Transaction are set out in
the Business Combination Agreement, which will be filed by each of
Eros, MAS Gold and Rockridge (together, the “Companies”)
under its respective profile on SEDAR+ at www.sedarplus.ca. In
addition, further information regarding the Transaction will be
contained in a joint management information circular to be prepared
in connection with the shareholder meetings of each of the
Companies to be held for purposes of approving the Transaction and
filed on each of the Companies’ respective SEDAR+ profile at
www.sedarplus.ca at the time that it is mailed to shareholders of
the Companies. All shareholders are urged to read the joint
management information circular once it becomes available as it
will contain additional important information concerning the
Transaction.
About Eros Resources Corp.
Eros Resources Corp. is a Canadian public
company listed on the TSXV. Eros’ business objective is the
identification, acquisition, and exploration of advanced-stage
projects with a North American focus. In addition, Eros plans to
make strategic investments with a global focus on a diverse
commodity base.
About MAS Gold Corp.
MAS Gold Corp. is a Canadian mineral exploration
company focused on advancing its gold exploration projects in the
prospective La Ronge Gold Belt of Saskatchewan. MAS Gold is
exploring on four properties in the belt, including the
Preview-North, Greywacke Lake, Elizabeth Lake and Henry Lake
Properties totaling 35,175.6 hectares (86,920.8 acres). These
properties extend along the geologically prospective La Ronge,
Kisseynew and Glennie Domains that make up the La Ronge Gold Belt
in north-central Saskatchewan.
About Rockridge Resources Ltd.
Rockridge Resources Ltd. is a public mineral
exploration company focused on the acquisition, exploration and
development of mineral resource properties in Canada, specifically
copper and gold. Rockridge’s 100% owned Knife Lake Project is
located in Saskatchewan which is ranked as a top mining
jurisdiction in the world by the Fraser Institute. The project
hosts the Knife Lake Deposit, which is a VMS, near-surface
Cu-Co-Au-Ag-Zn deposit open along strike and at depth. There is
strong discovery potential in and around the deposit area as well
as at regional targets on the large property package. Rockridge’s
gold asset is its 100% owned Raney Gold Project, which is a
high-grade gold exploration project located in the same greenstone
belt that hosts the world class Timmins and Kirkland Lake lode gold
mining camps. Additional information about Rockridge and its
project portfolio can be found on the Company’s website at
www.rockridgeresourcesltd.com.
For further information, please contact:
Eros Resources Corp.Tom MacNeill,
President and Chief Executive OfficerTelephone: 306-653-2692Email:
tmacneill@fnr.ca
MAS Gold Corp.Ronald K. Netolitzky, Executive Chairman
and Interim Chief Executive OfficerTelephone: 306-986-5722
or Email: info@masgoldcorp.com.
Rockridge Resources Ltd.Jonathan Wiesblatt, CEONicholas
Coltura, Corporate Communications Telephone: 647-203-9190
Email: info@rockridgeresourcesltd.com
NEITHER THE TSXV NOR ITS REGULATION SERVICES
PROVIDER ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THE
CONTENT OF THIS NEWS RELEASE.
None of the securities to be issued pursuant to
the Transaction have been, nor will be, registered under the United
States Securities Act of 1933, as amended (the “U.S. Securities
Act”) or any U.S. state securities laws, and may not be offered or
sold in the United States or to, or for the account or benefit of,
United States persons absent registration or an applicable
exemption from the registration requirements of the U.S. Securities
Act and applicable U.S. state securities laws. This press release
does not constitute an offer to sell or the solicitation of an
offer to buy securities in the United States, nor in any other
jurisdiction.
Forward-Looking Information and
Statements
This press release contains certain
“forward-looking information” and “forward-looking statements”
within the meaning of applicable securities legislation. Such
forward-looking information and forward-looking statements are not
representative of historical facts or information or current
condition, but instead represent only the beliefs of each of the
Companies regarding future events, plans or objectives, many of
which, by their nature, are inherently uncertain and outside of the
Companies’ control. Generally, such forward-looking information or
forward-looking statements can be identified by the use of
forward-looking terminology such “could”, “intend”, “expect”,
“believe”, “will”, “projected”, “planned”, “estimated”, “soon”,
“potential”, “anticipate” or variations of such words. By
identifying such information and statements in this manner, the
Companies are alerting the reader that such information and
statements are subject to known and unknown risks, uncertainties
and other factors that may cause the actual results, level of
activity, performance or achievements of the Companies and/or the
combined company to be materially different from those expressed or
implied by such information and statements. In addition, in
connection with the forward-looking information and forward-looking
statements contained in this press release, the Companies have made
certain assumptions. Among the key factors that could cause actual
results to differ materially from those projected in the
forward-looking information and statements are the following: the
inability of the Companies to integrate successfully such that the
anticipated benefits of the Transaction are realized; the inability
to realize synergies and cost savings at the times, and to the
extent, anticipated; the inability of the Companies to obtain the
necessary regulatory, stock exchange, shareholder and other
approvals which may be required for the Transaction; the inability
of the Companies to close the Transaction on the terms and timing
described herein, or at all; the inability of the Companies to work
effectively with strategic partners and any changes to key
personnel; inability of the combined company to successfully
complete a private placement or other financing upon completion of
the Transaction; and material adverse changes in general economic,
business and political conditions, including changes in the
financial markets. These risks are not intended to represent a
complete list of the factors that could affect the Companies and/or
the combined company; however, these factors should be considered
carefully. Should one or more of these risks, uncertainties or
other factors materialize, or should assumptions underlying the
forward-looking information or forward-looking statements prove
incorrect, actual results may vary materially from those described
herein. The impact of any one assumption, risk, uncertainty, or
other factor on a particular forward-looking statement cannot be
determined with certainty because they are interdependent and the
combined company’s future decisions and actions will depend on
management’s assessment of all information at the relevant
time.
Although the Companies believe that the
assumptions and factors used in preparing, and the expectations
contained in, the forward-looking information and forward-looking
statements are reasonable, undue reliance should not be placed on
such information and forward-looking statements, and no assurance
or guarantee can be given that such forward-looking information and
forward-looking statements will prove to be accurate, as actual
results and future events could differ materially from those
anticipated in such information and statements. The forward-looking
information and forward-looking statements contained in this press
release are made as of the date of this press release, and the
Companies do not undertake to update any forward-looking
information and/or forward-looking statements that are contained or
referenced herein, except in accordance with applicable securities
laws.
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