Upon completion of the transaction the company will change its name to Kuya Silver Corporation
Miramont Resources signs agreement for amalgamation with Kuya Silver. (Credit: Gerd Altmann from Pixabay)
Miramont Resources has executed a definitive agreement (the “Definitive Agreement”) with Kuya Silver, whereby the Company will acquire all of the issued and outstanding shares of Kuya in exchange for shares of the Company (the “Transaction”). The Transaction will constitute a “Fundamental Change” of the Company as defined by Canadian Securities Exchange (“CSE”) policies.
Pursuant to the Definitive Agreement, the Company will complete a consolidation of its issued and outstanding common shares (the “Consolidation”) on the basis of one post-Consolidation common share (the “Shares”) for every ten (10) outstanding common shares in the capital of the Company. Following the Consolidation, each of the shareholders of Kuya (the “Kuya Shareholders”) will receive 1.835 Shares in exchange for each share held in the capital of Kuya (the “Exchange Ratio”) and holders of convertible securities in Kuya will receive replacement securities in the Company adjusted in accordance with the Exchange Ratio. As a condition to the completion of the Transaction, Kuya must complete a private placement financing as detailed below (the “Concurrent Financing”). Upon completion of the Transaction the Company will change its name to “Kuya Silver Corporation” or such other similar name as the parties may agree to (the “Name Change”).
It is expected that the Transaction will be structured as a three-cornered amalgamation in accordance with Section 174 of the Business Corporations Act (Ontario) in which Kuya will amalgamate with 2757974 Ontario Inc., a newly incorporated, wholly-owned subsidiary of the Company, formed solely for the purpose of facilitating the Transaction. Following the Transaction, the amalgamated company will be a wholly-owned subsidiary of the Company.
Concurrent Financing
In connection with the Transaction, the Company announces that Kuya intends to complete a brokered private placement of subscription receipts at a price of C$1.65 (“Subscription Receipts”) per Subscription Receipt to raise gross proceeds of up to C$10,000,000. The Concurrent Financing is being conducted by a syndicate of agents led by Cormark Securities Inc. (“Cormark”) and will include Canaccord Genuity Corp., PI Financial Corp. and Red Cloud Securities Inc.
Each Subscription Receipt will be deemed to be exchanged upon satisfaction of the Release Conditions (as defined below) on or before the day that is 180 days following closing of the Concurrent Financing (the “Release Deadline”), without payment of any additional consideration, for one common share of Kuya (each a “Kuya Share”). The Company following completion of the Transaction will use the net proceeds from the Concurrent Financing to fund exploration and engineering costs for the development of the Bethania project, as well as to complete its obligations to acquire an 80% interest in S&L Andes Export, the entity that holds the Bethania project.
The gross proceeds of the Concurrent Financing will be deposited in escrow on the closing date and shall be released to Kuya upon Kuya having obtained the approval of the CSE and completion of certain other administrative matters (the “Release Conditions”) on or before the Release Deadline. If the Release Conditions are not satisfied on or before the Release Deadline, or if prior to such date Kuya advises Cormark or announces to the public that it does not intend to satisfy the Release Conditions, the escrow agent will return to holders of the Subscription Receipts, an amount equal to the aggregate purchase price for the Subscription Receipts held by such holder, together with a pro rata portion of the interest earned on the escrowed proceeds.
The Subscription Receipts issued in the Concurrent Financing will be subject to a statutory four month hold period. Closing of the private placement is subject to negotiation and execution of definitive documentation and receipt of all regulatory approvals. Closing of the Concurrent Financing is expected to occur on or about August 31, 2020.
Source: Company Press Release