GCM Mining Corp. (TSX:GCM) executed a term sheet to acquire remaining 55.7% stake in Aris Gold Corporation on June 28, 2022. GCM Mining Corp. entered into a definitive agreement to acquire remaining 55.7% stake in Aris Gold Corporation for approximately $100 million on July 25, 2022. Under the terms of the transaction, all the outstanding Aris Gold shares not held by GCM will be exchanged at a ratio of 0.5 of common share of GCM for each common share of Aris Gold (the Exchange Ratio). On closing, GCM shareholders and Aris Gold shareholders (taking into consideration the 44.3% of Aris Gold currently held by GCM) are expected to own, on a diluted in-the-money basis, approximately 74% and 26% of the combined group, respectively. GCM and Aris Gold have agreed to not solicit any alternative transactions and each party has the right to match any superior competing offer, with a reciprocal Transaction termination fee of $6 million to be paid in certain circumstances. The resulting entity will be named Aris Gold Corporation and will be led by Ian Telfer as Chair and Neil Woodyer as CEO and Director. Serafino Iacono will remain a director and advisor on matters in Colombia as well as an enthusiastic securityholder. The Board of Directors of the resulting entity will have nine members, with Ian Telfer as Chair and Daniela Cambone, David Garofalo, M=nica de Greiff, Serafino Iacono, Peter Marrone, Hernan Martinez, Attie Roux and Neil Woodyer as members. Both Lombardo Paredes, CEO of GCM, and Mike Davies, CFO of GCM, will retire from their roles with GCM.
The transaction is subject to approval by Aris Gold's shareholders, with greater than 66 2/3% approval threshold and approval of disinterested minority shareholders; approval by GCM's shareholders, with greater than 50% approval threshold; receipt of all required governmental and regulatory approvals including TSX, GCM Management Termination Payments shall have been made, Colombian anti-trust approvals and other customary conditions. Both the GCM and Aris Gold Boards of Directors (other than certain interested directors) have unanimously approved the terms of the arrangement agreement, and all of the directors and officers of both GCM and Aris Gold have entered into binding voting support agreements in favor of the transaction. It is anticipated that both the GCM and Aris Gold shareholder meetings will take place in mid-September 2022, and completion of the transaction is expected to occur promptly thereafter. As of September 19, 2022, Aris Gold and GCM shareholders have approved the transaction. Aris Gold has also received final authorization from the Superintendency of Industry and Commerce (SIC) and the Colombian competition regulator. The transaction is expected to close on September 26, 2022, subject to the satisfaction or waiver of certain customary closing conditions.
Stifel Nicolaus Canada and National Bank Financial, Inc. acted as fairness opinion providers and co-financial advisors to GCM Special Committee and the Board of Directors of GCM. Peter Volk of Wildeboer Dellelce LLP, Proskauer Rose LLP and CLA Consultores S.A.S. are acting as Canadian, US and Colombian legal advisors to GCM, respectively, and the GCM Special Committee has retained Blake, Cassels & Graydon LLP as its independent counsel. BMO Nesbitt Burns Inc and Canaccord Genuity Corp. acted as fairness opinion providers to Aris Special Committee. Canaccord is acting as financial advisor to Aris Gold. Georald Ingborg of Fasken Martineau DuMoulin LLP and Dentons Canada LLP are acting as legal advisors to Aris Gold. Morrow Sodali (Canada) Ltd. acted as proxy solicitation agent to GCM and Laurel Hill Advisory Group, LLC acted as proxy solicitation agent to ARIS. TSX Trust Company acted as transfer agent to GCM. Odyssey Trust Company acted as transfer agent to Aris. BMO Nesbitt Burns Inc. acted as due diligence provider to Aris. Morrow Sodali will be paid a fee of up to $250,000. Aris has agreed to pay Laurel Hill an aggregate fee of CAD 75,000 ($58,362.1253). BMO Capital Markets will be paid a fee of CAD 750,000 ($583,621.253) for its services and additional CAD 750,000 ($583,621.253) in cash upon BMO Capital Markets delivering to the Special Committee its written Formal Valuation and Opinion. BMO Nesbitt Burns Inc. acted as financial advisor to the Aris Special Committee.