Information Concerning the Proposed Transaction
The acceptance of the LOI will be followed by good faith negotiations of definitive documentation, including a definitive merger, amalgamation or share exchange agreement (the 'Definitive Agreement') among the parties setting forth the detailed terms of the Transaction, including the basic understandings set out in the LOI and such other terms and conditions as are customary for transactions of the similar nature and magnitude of the Transaction.
It is anticipated that the Transaction will be completed pursuant to a share exchange but the final structure of the Transaction is subject to receipt by the parties of tax, corporate and securities law advice that each party may receive from their respective advisors, including without limitation with respect to the disposition as a condition of the Transaction (if applicable) in connection with any of the existing assets or liabilities that may be required for the Corporation to be an appropriate vehicle for the Transaction and the business of the Resulting Issuer.
For the purposes of the Transaction, the deemed value of each Common Share shall be calculated such that the aggregate value of all issued and outstanding Common Shares as at the closing of the Transaction (but prior to the proposed Lipari Financing (as defined below)) shall represent in aggregate eight percent (8%) of the issued and outstanding common shares of the Resulting Issuer and the deemed value of each common share of Lipari, shall be calculated such that the aggregate value of all the common shares of Lipari issued and outstanding as at the closing of the Transaction (but prior to the proposed Lipari Financing (as defined below)) shall represent ninety-two percent (92%) of the issued and outstanding common shares of the Resulting Issuer. Assuming the minimum Lipari Financing is completed the investors in the financing will hold approximately 15.5% of the outstanding shares of the Resulting Issuer with the holders of the Common Shares holding 6.8% and the holders of the common shares of Lipari holding 77.7%. Assuming the maximum Lipari Financing is completed the investors in the financing will hold approximately 47.9% of the outstanding shares of the Resulting Issuer with the holders of the Common Shares holding 4.2% and the holders of the common shares of Lipari holding 47.9%.
The authorized share capital of the Company consists of an unlimited number of Common Shares without nominal or par value and the number of issue and outstanding Common Shares is 48,186,345 Common Shares as of the date hereof.
Prior to the closing of the Transaction and prior to the completion of the Lipari Financing, the only securities of Lipari that will be issued and outstanding are 25,000,000 common shares in the capital of Lipari ('Lipari Shares') and a total of 3,850,000 Lipari Shares will be reserved for issuance pursuant to the conversion of certain convertible debentures (the 'Convertible Debenture').
In conjunction with, or prior to the closing of the Transaction, Lipari intends to complete a brokered private placement to raise gross proceeds of a minimum of
The completion of the Transaction is subject to a number of conditions precedent to be fulfilled prior to Closing, including, the completion of: (i) satisfactory due diligence review, (ii) negotiation and execution of the Definitive Agreement respecting the Transaction and accompanying transaction documents, (iii) approval by the boards of directors of each of the Company and Lipari, (iv) approval of the shareholders of Lipari (if necessary), (v) approval of the shareholders of the Company at a special meeting of the shareholders of the Company, (vi) obtaining necessary third party approvals, Exchange acceptance and closing of the minimum Lipari Financing. There can be no assurance that the Transaction will be completed as proposed, or at all.
Lipari Financing
Lipari has engaged
Lipari Financial Information and Insiders of the Resulting Issuer
The financial statements of Lipari are currently being generated and the parties expect to provide an update with respect to the financial information of Lipari in a subsequent press release concurrent with the execution of the Definitive Agreement in accordance with the policies of the Exchange (the 'Subsequent Press Release' ).
Upon completion of the Transaction, it is anticipated that the board of directors of the Resulting Issuer shall consist of seven members to be determined by Lipari.
Biographical information of the anticipated directors and officers of the Resulting Issuer shall be provided in the Subsequent Press Release.
About Lipari
In
The mineral concession comprising the
Tchiuzo Kimberlite
The 9.6 hectare Tchiuzo kimberlite pipe is the most advanced stage deposit within the Tchitengo concession having been developed to the pre-feasibility stage of development by SMC. In
The Brauna 3 Mine,
Under the terms of the SEA, Lipari will also acquire LML which owns 100% of the Brauna property which encompasses the Brauna 3 mine. The Brauna 3 mine is the first diamond mine in
The mine currently operates as a conventional open-pit mining operation using an owner-operated mining fleet which feeds kimberlite material from the Brauna 3 pipe to a 2,000 tpd processing plant. As of
Lipari engaged SRK to evaluate on a conceptual level, mining of the Brauna 03 pipe beyond the planned
SRK's study has determined that the South Lobe of the Brauna 3 pipe could be economically mined using VMINE. The proposed VMINE plan has a capital requirement (initial and sustaining) of
About Golden Share
Golden Share is listed on the
Qualified Persons
The disclosure in this news release of scientific and technical information regarding Golden Share's mineral properties has been reviewed and approved by
Cautionary Note on Forward-Looking Statements
This press release and the documents incorporated by reference may contain 'forward-looking statements' regarding Lipari. These forward-looking statements are made as of the date of this press release or, in the case of the documents incorporated by reference herein, as of the date of such documents and, the Company does not intend, and does not assume any obligation, to update these forward-looking statements, except as required by law. These forward-looking statements include, among others, statements with respect to: terms of the proposed Transaction, Golden Share and Lipari's objectives for the ensuing year, its medium and long-term goals, and strategies to achieve those objectives and goals, as well as statements with respect to the companies' plans, objectives, expectations, anticipations, estimates and intentions. All forward-looking statements and information are based on Golden Share's and Lipari's current beliefs as well as assumptions made by and information currently available to both companies concerning anticipated financial performance, business prospects, strategies, regulatory developments, development plans, exploration, development and mining activities and commitments. Although management considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect. Forward-looking statements relate to future events or future performance and reflect current expectations or beliefs regarding future events and include, but are not limited to, statements with respect to: (i) the amount of mineral resources and exploration targets; (ii) the amount of future production over any period; (iii) net present value and internal rates of return of the mining operation; (iv) assumptions relating to capital costs, operating costs and other cost metrics set out in the independent technical studies; (v) assumptions relating to gross revenues, operating cash flow and other revenue metrics set out in the independent technical studies; (vi) assumptions relating to recovered grade, average ore recovery and other mining parameters set out in the independent technical studies; (vii) mine expansion potential and expected mine life; (viii) expected time frames for completion of permitting and regulatory approvals and making a production decision; (ix) future exploration plans; (x) future market prices for rough diamonds; and (xi) sources of and anticipated financing requirements. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as 'expects', 'anticipates', 'plans', 'projects', 'estimates', 'assumes', 'intends', 'strategy', 'goals', 'objectives' or variations thereof or stating that certain actions, events or results 'may', 'could', 'would', 'might' or 'will' be taken, occur or be achieved, or the negative of any of these terms and similar expressions) are not statements of historical fact and may be forward-looking statements. Certain important factors that could cause actual results, performances or achievements to differ materially from those in the forward-looking statements include, but are not limited to: (i) required capital investment and estimated workforce requirements; (iii) estimates of net present value and internal rates of return; (iv) receipt of regulatory approvals on acceptable terms within commonly experienced time frames; (v) the assumption that a production decision will be made, and that decision will be positive; (vi) anticipated timelines for the commencement of mine production; (vii) anticipated timelines for community consultations and the impact of those consultations on the regulatory approval process; (ix) market prices for rough diamonds and the potential impact on asset value; (x) Lipari's ability to raise the required capital to operate or extend the life of its
Completion of the Transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable, disinterested 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 the Company should be considered highly speculative.
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