Aura Minerals Inc. (TSX:ORA) (“Aura”) and Rio Novo Gold Inc.
(TSX:RN) (“Rio Novo”) announced today that they have entered into
an agreement (the “Merger Agreement”) to combine and create strong
portfolio of mining properties with a long term production life.
The combination will be effected by a plan of merger under section
170 of the British Virgin Islands Business Companies Act, 2004
pursuant to which Aura will, among other things, acquire all of the
shares of Rio Novo and Rio Novo shareholders will receive 0.053 of
an Aura common share for each Rio Novo share held. The combined
entity will operate under the Aura name and will remain listed on
the Toronto Stock Exchange.
Rodrigo Barbosa, CEO of Aura, commented, “We are
very excited to announce this strategic transaction. The
transaction creates new opportunities for both Aura’s and Rio
Novo’s shareholders. For Aura this opportunity provides a great new
pipeline for growth, and for Rio Novo’s shareholders, a company
committed to developing its assets.”
Patrick Panero, President and CEO of Rio Novo,
added, “We are excited to unite our companies, giving our
shareholders access to Aura’s strong operating mines and healthy
balance sheet, thereby creating the opportunity for development of
our existing portfolio of assets within the newly merged and
enlarged company.”
Transaction Details
Under the terms of the Merger Agreement, Aura
will, among other things, acquire all of the shares of Rio Novo and
Rio Novo shareholders will receive 0.053 of an Aura common share
for each Rio Novo share held. The combination will be subject to
the approval of a majority of the votes cast at special meetings of
Aura and Rio Novo shareholders to be held on or about February
2018, as well minority shareholder approval in accordance with
Multilateral Instrument 61-101 – Protection of Minority Security
Holders in Special Transactions (“MI 61-101”) at each of the Aura
and Rio Novo special meetings.
Votes held by Northwestern Enterprises Ltd.
(“Northwestern”) and certain other insiders of Aura and Rio Novo
will be excluded for purposes of the minority approval vote
required by MI 61-101. The transaction is also subject to other
customary closing conditions. The Merger Agreement provides for,
among other things, customary reciprocal board support and
non-solicitation covenants, with “fiduciary out” provisions that
allow Rio Novo to accept a superior proposal in certain
circumstances and a 10-business day “right to match period” in
favour of Aura. The Merger Agreement also provides for
reimbursement of expenses for either party up to a cap of CAD $1M
if the Merger Agreement is terminated in certain specified
circumstances.
Northwestern, which currently holds
approximately 52% of Aura’s common shares and 65% of Rio Novo’s
common shares, has entered into a customary voting and support
agreement pursuant to which, among other things, it has agreed to
vote its Aura common shares and Rio Novo common shares in favour of
the transaction. Northwestern is controlled by Paulo de Brito, who
currently serves as Chairman of Aura. Following closing, it is
expected that the combined company will have approximately
43,039,156 shares issued and outstanding and Northwestern is
expected to hold an approximate 55.3% interest in the combined
company. The other directors and senior officers of each of Aura
and Rio Novo have also entered into customary support and voting
agreements to vote their shares in favour of the combination. The
Merger Agreement will be filed under each of Aura’s and Rio Novo’s
profiles on SEDAR (www.sedar.com). The terms of the transaction and
related matters will also be described in detail in a joint
management information circular of Aura and Rio Novo to be filed
with the regulatory authorities and mailed to shareholders in
accordance with applicable securities laws.
Board Recommendations
Aura’s Board of Directors, based on the
recommendation of a committee of independent directors (the “Aura
Special Committee”), has determined that the combination is in the
best interests of Aura and has unanimously recommended that Aura
shareholders vote in favour of the transaction. Rio Novo’s Board of
Directors (the “Rio Novo Board”) has determined that the
combination is in the best interests of Rio Novo and has
unanimously recommended that Rio Novo shareholders vote in favour
of the transaction. The Aura Special Committee and the Rio Novo
Board retained MNP LLP (“MNP”) as independent valuator to provide
certain financial advisory services in respect of the transaction,
including the preparation of formal valuations of the common shares
of both Aura and Rio Novo in accordance with MI 61-101.
In addition, MNP rendered an opinion to the Rio
Novo Board that, as at December 15, 2017, subject to the
assumptions, limitations and qualifications described therein, the
consideration to be received by Rio Novo shareholders pursuant to
the transaction is fair, from a financial point of view, to the Rio
Novo shareholders, other than Northwestern. The Aura Special
Committee retained Canaccord Genuity Corp. as its financial advisor
in connection with the transaction, and Canaccord Genuity Corp. has
rendered an opinion to Board of Directors of Aura that the
consideration to be paid by Aura pursuant to the transaction is
fair, from a financial point of view, to Aura shareholders, other
than Northwestern.
Advisors and Legal Counsel
Canaccord Genuity Corp. is acting as financial
advisor and Blake, Cassels & Graydon LLP is acting as legal
counsel to the Aura Special Committee. BNP Paribas is acting as
financial advisor and McCarthy Tétrault LLP is acting as legal
counsel to Rio Novo and its board of directors.
Investor Conference Call
Details
Aura and Rio Novo will host a joint investment
community conference call on or about January 10, 2018, the details
of which will be provided in due course.
Disclaimer in Respect of Aura
This news release contains certain
“forward-looking information” and “forward-looking statements”, as
defined in applicable securities laws (collectively,
“forward-looking statements”). All statements other than statements
of historical fact are forward-looking statements. Forward-looking
statements relate to future events or future performance and
reflect Aura’s current estimates, predictions, expectations or
beliefs regarding future events and include, without limitation,
statements with respect to: the Merger Agreement and the
anticipated benefits of the transactions contemplated thereunder.
Often, but not always, forward-looking statements may be identified
by the use of words 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.
Forward-looking statements are necessarily based
upon a number of estimates and assumptions that, while considered
reasonable by Aura, are inherently subject to significant business,
economic and competitive uncertainties and contingencies. Known and
unknown risks, uncertainties and other factors, many of which are
beyond Aura’s ability to predict or control could cause actual
results to differ materially from those contained in the
forward-looking statements. Specific reference is made to Aura’s
most recent Annual Information Form on file with certain Canadian
provincial securities regulatory authorities for a discussion of
some of the factors underlying forward-looking statements, which
include, without limitation, gold and copper or certain other
commodity price volatility, changes in debt and equity markets, the
uncertainties involved in interpreting geological data, increases
in costs, environmental compliance and changes in environmental
legislation and regulation, interest rate and exchange rate
fluctuations, general economic conditions and other risks involved
in the mineral exploration and development industry. Readers are
cautioned that the foregoing list of factors is not exhaustive of
the factors that may affect the forward-looking statements.
All forward-looking statements herein are
qualified by this cautionary statement. Accordingly, readers should
not place undue reliance on forward-looking statements. Aura
undertakes no obligation to update publicly or otherwise revise any
forward-looking statements whether as a result of new information
or future events or otherwise, except as may be required by law. If
Aura does update one or more forward-looking statements, no
inference should be drawn that it will make additional updates with
respect to those or other forward-looking statements.
Disclaimer in Respect of Rio
Novo
This press release contains forward-looking
statements. All statements, other than of historical fact, that
address activities, events or developments that Rio Novo believes,
expects or anticipates will or may occur in the future (including,
without limitation, statements regarding the Merger Agreement and
the anticipated benefits of the transactions contemplated
thereunder) are forward-looking statements. Forward-looking
statements are often identifiable by the use of words such as
“anticipate”, “believe”, “plan”, may”, “could”, “would”, “might” or
“will”, “estimates”, “expect”, “intend”, “budget”, “scheduled”,
“forecasts” and similar expressions or variations (including
negative variations) of such words and phrases. Forward-looking
statements are subject to a number of risks and uncertainties, many
of which differ materially from those discussed in the
forward-looking statements. Factors that could cause actual results
or events to differ materially from current expectations include,
among other things, without limitation, failure to establish
estimated mineral resources, the possibility that future
exploration results will not be consistent with Rio Novo's
expectations, the price of gold and other risks identified in Rio
Novo’s most recent annual information form filed with the Canadian
securities regulatory authorities on www.SEDAR.com. Any
forward-looking statement speaks only as of the date on which it is
made and, except as may be required by applicable securities laws,
Rio Novo disclaims any intent or obligation to update any
forward-looking statements.
Contacts:
Aura MineralsRyan GoodmanVP, Legal Affairs and
Business Development305-239-9332
Rio NovoPatrick Panero President & CEO Rio
Novo Gold Inc. +55 (21) 2429-5100 patrick.panero@Rnovogold.com
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