Existing GORO and Aquila shareholders will own approximately 85.1% and 14.9%, respectively, of the combined company
Aquila Resources Inc. (TSX: AQA, OTCQB: AQARF) (“Aquila” or the “Company”) is pleased to announce that it has entered into a binding letter agreement (the “Letter Agreement”) with Gold Resource Corporation (“GORO”) (NYSE American: GORO) setting out certain key terms of a proposed acquisition by GORO of all the issued and outstanding common shares of Aquila by way of a plan of arrangement under the Business Corporations Act (Ontario) (the “Transaction”).
Pursuant to the Transaction, which is subject to the entering into of a definitive arrangement agreement (the “Arrangement Agreement”), GORO will acquire all the issued and outstanding Aquila shares for 0.0399 of a GORO share per Aquila share (the “Exchange Ratio”). Based upon the 20-day volume-weighted average price (“VWAP”) of GORO’s shares on the NYSE American stock exchange on September 3, 2021, being the last trading day prior to the date of the Letter Agreement, the Exchange Ratio represents a 29% premium to the 20-day VWAP of Aquila’s shares on the Toronto Stock Exchange as of such date. The Exchange Ratio represents consideration of C$0.09 per Aquila share (the “Per Share Price”), reflecting a premium of 12.5%, based upon the closing prices of the Aquila shares and the GORO shares on September 3, 2021. The Per Share Price implies an aggregate acquisition price for 100% of the outstanding Aquila shares of approximately C$30.9 million.
Upon closing of the Transaction, the existing GORO and Aquila shareholders will own approximately 85.1% and 14.9%, respectively, of the combined company on a fully diluted basis.
Barry Hildred, Executive Chair, commented, “We believe strongly that this Transaction provides substantial immediate and long-term benefits to Aquila shareholders. The business combination with GORO, a proven operator of a cash flowing mine in the Americas, materially de-risks the financing and development of the Back Forty Project. The Transaction also allows our shareholders to maintain exposure to the value that is created as Back Forty advances towards production.”
Guy Le Bel, President & CEO, added, “We share Allen’s vision for the combined company which, as a growth-oriented, multi-jurisdictional, diversified precious and base metal producer, will be well-positioned to create value for all shareholders.”
Commenting on the entering into of the Letter Agreement, Allen Palmiere, President and Chief Executive Officer of GORO, said: “This proposed business combination offers an attractive opportunity to the shareholders of both GORO and Aquila. By combining our complementary assets, we will enhance our mineral inventory and add jurisdictional diversification to our project portfolio. The combined company will become a new intermediate gold producer following the commencement of production at Aquila’s Back Forty Project, and its shareholders can look forward to the potential of a company that is expected to benefit from a peer leading growth profile, underpinned by a healthy balance sheet and strong cash flow capable of supporting the development of the Back Forty Project. We look forward to entering into the Arrangement Agreement with Aquila and successfully completing the Transaction.”
Source: Company Press Release