(via TheNewswire)
The Proposed Transactions
To complete the Acquisition, the following steps are intended to be conducted (the “Transactions”):
Balkan Metals will reimburse certain of Medgold’s expenses related to the Transactions in consideration of the issuance by Medgold to Balkan Metals of Convertible Debentures (see description below under the heading “Other Key Terms of the Transactions”) in the maximum aggregate principal amount of
C$150,000 .Medgold will consolidate its common shares on a 16:1 basis.
Medgold will settle up to
C$330,000 in accounts payable by issuing up to 1,650,000 post-consolidation common shares of the Company at a deemed price ofC$0.20 per share.Balkan Metals will arrange a private placement financing in Medgold to raise
C$2.0 million . See the description of the Concurrent Financing under the heading “Other Key Terms of the Transactions” below.Medgold Shareholders immediately prior to the closing of the Transactions will receive a contingent value right (aCVR”), with the CVR entitling the holders thereof to receive a pro-rata portion of cash payment, or at the election of the Company, an equivalent amount of Resulting Issuer Sharesequal to
US$8.00 for every ounce of gold mineral reserves set out in an independent feasibility study that the Resulting Issuer may prepare in respect of the Tlamino GoldProject in southSerbia (comprised of exploration permits currently held by Medgold).In consideration for the transfer to Medgold of 100% of the issued shares of Balkan Metals, Medgold will issue an aggregate of 26,264,266 post-consolidation common shares to the shareholders of Balkan Metals, being one Medgold Share for each Balkan Metals Share.
The name of the Company will be changed to “Balkan Metals Corp.”.
The Transactions will constitute a “reverse takeover” pursuant to the policies of the
It is anticipated the upon completion of the Transactions, the Company (the “Resulting Issuer”) will have a maximum of 48,005,248 common shares issued and outstanding, of which approximately 58% will be owned by the former Balkan Metals Shareholders. No finder’s fee is payable with respect to the Acquisition. The Resulting Issuer will be a “Tier 2 mining company” according to the Exchange’s listing classifications. A waiver of the sponsorship requirements of the Exchange will be sought.
It is intended that upon completion of the Transactions, the Resulting Issuer will have at least three directors, a majority of whom are not executive officers or employees. Dr.
Dr.
A Serbian citizen,
Balkan Metals has built its portfolio and its operations with a help ofa motivated and efficient team of experienced in-country operators.
Dr.
Balkan Metals controls over 760 km2of mineral rights spanning two of the most prospective metallogenic provinces in the “Tethyan Belt” of
The Resulting Issuer’s principal project will be Balkan Metals’
The Luka permit is located close to Zijin’s
The Makovište permit is contiguous to the Luka permit, to its SSE. Strong Cu -Au anomalism in sampling completed by FQM is noted from ridge and spur samples adjacent to the Luka permit over a strike of approximately 4km long, which remains open.
The Bukova Glava permit is located 5km east of Zijin’s Majdanpek copper open-pit mine, itself part of the Bor Mining complex. Historic soil sampling data show a correlation between Au, Mo, As and Sn of similar character to Majdanpek. In 2016, results of their extensive regional stream sampling program prompted FQM to stake the Bukova Glava permit on the grounds of its potential for porphyry intrusions similar to Majdanpek. Balkan Metals is planning to expand detailed geological mapping and grid soil sampling, started in
Summary Information for Balkan Metals
Balkan Metals was incorporated on
Other Key Terms of the Transaction
The other key terms of the Transaction are as follows:
(1)In consideration of the exclusivity Medgold has granted to Balkan Metals pursuant to the LOI, Balkan Metals has made a non-refundable cash payment to Medgold in the amount of
C$20,000 at the signing of the LOI. Balkan Metals is to make an additional non-refundable payment ofC$30,000 to Medgold upon execution of a definitive agreement, expected to be signed byDecember 15, 2022 .(2)Balkan Metals has agreed to provide interim working capital financing to Medgold until
April 30, 2023 by way of unsecured convertible debentures (theConvertible Debentures”) in the maximum aggregate principal amount ofC$150,000 . The principal amounts of the Convertible Debentures shall bear interest at a rate of 5% per annum, such interest to be payable only if the LOI is terminated and the Acquisition will not complete. Medgold shall have the right to prepaythe principal amount owing under the Convertible Debentures without penalty. The principal amount outstanding under the Convertible Debentures shall be convertible at Balkan Metals’ option into common shares of Medgold prior to completion of the Transactions at a price equal to the lesser ofC$0.05 and the lowest conversion price permitted by the Exchange.(3)Concurrently with closing of the Transaction, Balkan Metals is to arrange and close a private placement (theConcurrent Financing”) of a minimum of 10,000,000 units (the “Units”) of the Resulting Issuer, at an expected minimum price of
C$0.20 per Unit, to raise minimum gross proceeds ofC$2,000,000 . The net proceeds of the Concurrent Financing will be used by the Resulting Issuer to fund exploration of its Serbian properties (and principally, theTimok East Project ) and for working capital and general corporate purposes. A finder’s fee may be paid in respect of the Concurrent Financing.
As required by the policies of the Exchange, trading of Medgold’s common shares has been halted in connection with the announcement of the Acquisition. Trading will remain halted pending the satisfaction of the Exchange’s initial filing requirements in respect of the Transactions and the Exchange’s initial assessment of the Acquisition and related matters. Medgold Shareholders are advised that trading may remain halted until the Exchange provides its final acceptance of the Transactions.
CAUTIONARY STATEMENT
Completion of the Acquisition is subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable, disinterested shareholder approval. Where applicable, the Acquisition cannot close until the required shareholder approval is obtained. There can be no assurance that the Acquisition 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 Transactions, any information released or received with respect to the Transactions may not be accurate or complete and should not be relied upon. Trading in the securities of Medgold should be considered highly speculative.
The
Neither the
Qualified Person
Aleksandar Vučković, MAIG, Exploration Manager for Medgold and Qualified Person as defined by NI 43-101, has reviewed and approved the scientific and technical content of this news release. Mr.Vučković is not independent of the Company.
About
Medgold is a TSX-V listed, gold exploration company targeting early-stage properties in the Balkan region. Run by an experienced management team with a successful track-record of building value in resource companies, Medgold is focused on growth through exploration and resource definition in the prospective and under-explored Balkan region.
Additional information on Medgold can be found on the Company’s website atwww.medgoldresources.comand by reviewing the Company’s page on SEDAR atwww.sedar.com.
ON BEHALF OF THE BOARD
For Further Information, Contact:
Forward-looking Information
Certain statements contained in this news release constitute forward-looking information within the meaning of Canadian securities legislation. All statements included herein, other than statements of historical fact, are forward-looking information and include, without limitation, statements regarding the proposed Acquisition transactions and the Resulting Issuer’s plans for the
Forward-looking information involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Medgold and the Resulting Issuer to be materially different from any results, performance or achievements expressed or implied by forward-looking information. Such uncertainties and factors include, among others, whether the Exchange and Medgold shareholders will approve of the Acquisition and related transactions; whether the Acquisition will be completed as planned; changes in general economic conditions and financial markets; risks associated with the results of exploration and development activities, and the geology, grade and continuity of mineral deposits; unanticipated costs and expenses; and such other risks detailed from time to time in Medgold’s quarterly and annual filings with securities regulators and available under Medgold’s profile on SEDAR atwww.sedar.com. Although Medgold has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended.
Forward-looking information contained herein are based on the assumptions, beliefs, expectations and opinions of management, including but not limited to: that the Acquisition will be completed as planned; that the Resulting Issuer’s stated goals and planned exploration and development activities will be achieved; that there will be no material adverse change affecting the Resulting Issuer or its properties; and such other assumptions as set out herein. Forward-looking information has been made as of the date hereof and Medgold disclaims any obligation to update any forward-looking information, whether as a result of new information, future events or results or otherwise, except as required by law. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, investors should not place undue reliance on forward-looking information.
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