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Transaction Summary
The proposed Transaction will be completed pursuant to a court-approved plan of arrangement under the Business Corporations Act (Alberta). The Transaction will require approval by two-thirds of the votes cast by the shareholders of Cornerstone and a majority of the votes cast by disinterested shareholders at a special meeting of Cornerstone shareholders expected to be held in the fourth quarter of 2022.
All Cornerstone directors, executive officers and certain shareholders, collectively representing 44.1% of the Cornerstone Shares (47.0% on a fully diluted basis) have entered into voting support agreements with SolGold, agreeing to, among other things, vote their Cornerstone Shares in favour of the Transaction. The Transaction is subject to obtaining customary approvals including applicable court and stock exchange approvals. The Agreement includes customary deal protection provisions in favour of SolGold.
In addition, the Parties have agreed to make any amendments to the Agreement or plan of arrangement if necessary or desirable in order to implement an exchangeable share structure to allow eligible Canadian Cornerstone shareholders to receive a tax-deferred roll-over under the Income Tax Act (Canada) to the extent that the non-share consideration received does not exceed the shareholder's cost base for Canadian tax purposes. The implementation of such amendments will not be a condition of closing of the Transaction and there is no assurance that such a structure will be implemented.
Upon closing of the Transaction, the SolGold board of directors will be comprised of up to ten individuals with Cornerstone entitled to nominate two directors.
Full details of the Transaction and the Agreement will be included in Cornerstone’s management information circular which is expected to be filed with the regulatory authorities in Canada and mailed to shareholders of Cornerstone in the fourth quarter of 2022. Further, SolGold intends on filing a prospectus with the applicable regulatory authorities in the UK with respect to the shares to be distributed to Cornerstone shareholders pursuant to the Transaction, which is expected to be filed in the fourth quarter of 2022.
Pursuant to the Agreement, SolGold is pursuing a strategic review process with the goal of maximizing value for all shareholders (the “Strategic Review Process”). Accordingly, SolGold has appointed Citigroup Global Markets Inc. and Maxit Capital LP (“Maxit Capital”) to act as financial advisors to assist with exploring value creating alternatives for the Combined Group. The Strategic Review Process may include, but shall not be limited to, evaluating and pursuing the following:
22-22 - SolGold & Cornerstone Announce Friendly Merger Transaction
Consolidates 100% of the Cascabel Project
Strategic Review Process Initiated for Combined Group
SolGold plc (LSE:SOLG; TSX:SOLG) (“SolGold”) and Cornerstone Capital Resources Inc. (TSXV:CGP; OTC:CTNXF; FWB:GWN1) (“Cornerstone”) (together the “Parties” and individually, a “Party”) are pleased to announce that they have entered into a definitive agreement (the “Agreement”) whereby SolGold will acquire all of the issued and outstanding shares of Cornerstone (“Cornerstone Shares”), other than Cornerstone Shares already held, directly or indirectly, by SolGold, pursuant to a court-approved plan of arrangement (the “Transaction”).
Under the terms of the Agreement, Cornerstone Shares will be exchanged for 15 SolGold ordinary shares (“SolGold Shares”) for each Cornerstone common share held. Pursuant to the terms of the Agreement, SolGold may elect to pay up to 20% of the consideration in cash, in which case the cash would be pro rated among all Cornerstone shareholders and the number of SolGold Shares issuable to Cornerstone shareholders would be reduced. Upon completion of the Transaction, if SolGold elects not to pay any portion of the consideration in cash, existing SolGold and Cornerstone shareholders are expected to own approximately 80% and 20% of the combined entity (the “Combined Group”), respectively, on a fully diluted in-the-money basis which is consistent with the current effective exposure of approximately 80/20 to the Cascabel Project prior to the Transaction.
The merger of Cornerstone and SolGold will significantly strengthen the ability of the Combined Group to create value for shareholders by consolidating ownership of the Cascabel Project along with a robust portfolio of other projects primarily across Ecuador.
Darryl Cuzzubbo, CEO and Managing Director of SolGold, stated: “It has been my view from the start that SolGold and Cornerstone are more valuable together than apart. This is an exciting value enhancing transaction for all stakeholders. This Transaction also sets the stage for a strategic review of the Combined Group as we methodically assess options that are in the best interest of our shareholders.”
Brooke Macdonald, President and CEO of Cornerstone, stated: “This merger transaction makes sense for both sets of shareholders. The merger allows our shareholders to maintain exposure to the world class Cascabel Project and is a step towards maximizing value. Having considered the landscape, we are convinced that combining forces with SolGold will unlock significant value for all shareholders. The strategic review for the combined group aligns with our views on the best path forward. Today represents a significant milestone for all Cornerstone stakeholders and I would like to thank them for their support over the years."
Around 20 min
https://youtu.be/TMhJecmH9bQ
https://twitter.com/dgrglobal/status/1559026363633647616?s=21&t=BofVJx1XG9OcerKr5-oRXg
BHP this morning launched a takeover of Oz minerals a reasonably large copper play here in Oz 8 bill Oz market Cap (35% premium or there abouts). Their Prominent Hill mine is close to Olympic Dam in South Australia. All the copper stocks on the ASX are pumping as a result an example of another stock I am in Sandfire is up 10%. OZ minerals reject the offer as being too low and not letting them do due diligence etc.
Looks like this is the start of the M&A spree which is coming in the copper space.
When employees get put on garden leave it's because the Company no longer wants them out of the office and no longer working for them for what ever reason. You get full pay and usually gardening leave is applied while you are serving out your notice period. Usually gets applied when the employee goes to work for a competitor and the company may want to safeguard confidential information or has concerns that the employee may not act in the employers best interests.
DGR announced that Mather and various entities he is associated with have exercised 6,984,565 options in DGR at 8.4c a share (DGR has been trading between 6 to 7c over the last few months). Well above where DGR is currently trading at for a total consideration of around 575K AUD. This to me is very bullish as if he didn't believe DGR and by extension Solgold shares were going alot higher he wouldn't have exercised options that were well out of the money and due to expire. A total of 10.4 million options were exercised so I suspect some of the other DGR directors also exercised theirs but didn't have to lodge a holding notice as a result. It would not be possible to buy this number of shares on the market without pushing the DGR share price alot higher so to me this means we will likely see some positive near term news coming for Solgold which is DGR's main asset.
Bring on news of the AGM and more drilling results.