VANCOUVER, April 12, 2018 /CNW/ - Leagold Mining Corporation
(TSX:LMC; OTCQX:LMCNF) ("Leagold" or the "Company") is pleased to
announce that shareholders of Leagold have voted in favour of the
resolution necessary to give effect to the proposed acquisition of
Brio Gold Inc. ("Brio"). Brio shareholders also voted in favour of
the proposed acquisition by Leagold at a special meeting of
shareholders held earlier today with 99.99% of the votes cast at
the Brio shareholder meeting voting in favour. Brio intends to seek
a final order approving the transaction from the Ontario Superior
Court of Justice on or about April 17,
2018. Assuming all other customary terms and conditions to
the transaction are met and certain Mexican regulatory approvals
obtained, the Arrangement is expected to close in May 2018.
"We are very pleased with the overwhelming support for this
transaction by Leagold and Brio shareholders," said Neil Woodyer, CEO of Leagold. "The acquisition
of Brio advances our strategy to create an intermediate Latin
American gold producer. With four operating mines and two
development projects in Mexico and
Brazil, the combined operations
have the potential to produce over 700,000 ounces of gold by 2020;
this gives Leagold a strong platform for further growth within
Latin America."
Under the terms of the plan of arrangement (the "Arrangement")
for each Brio common share issued and outstanding, Leagold will
issue 0.922 of a Leagold share (each whole share, a "Leagold
Share") and 0.4 of a Leagold share purchase warrant (each whole
warrant, a "Leagold Warrant") with each Leagold Warrant entitling
the holder to purchase one Leagold Share at a price of C$3.70 for a period of two years from the date of
issue. On closing of the transaction, Brio shareholders will own
42% of Leagold.
Regulatory Information
Leagold Shares will also be issued in exchange for issued and
outstanding restricted stock, restricted share units and deferred
share units issued pursuant to Brio's omnibus incentive plan ("Brio
Convertible Securities") on the basis of 0.922 of a Leagold Share
for each Brio Share underlying a Brio Convertible Security. However
in lieu of also issuing 0.4 of a Leagold Warrant for each Brio
Share underlying a Brio Convertible Security, holders will be
entitled to receive the Black-Scholes value of 0.4 of a Leagold
Warrant, calculated at closing of the Arrangement using the
parameters described in the Arrangement Agreement, which value is
payable in Leagold Shares. Holders of options issued pursuant to
Brio's omnibus incentive plan will receive options exercisable for
Leagold Shares. Further details of the issuance of Leagold Shares
in exchange for outstanding Brio Convertible Securities pursuant to
the terms of the Arrangement can be found in the Arrangement
Agreement entered into between Leagold and Brio dated February 15, 2018 which is available under
Leagold's SEDAR profile at www.sedar.com.
While the exact number of Leagold Shares to be issued to holders
of the Brio securityholders cannot be determined at this time,
assuming a VWAP of C$2.00,
C$3.0371 and C$4.00 of the Leagold Shares, an aggregate of
approximately 158,297,527, 158,181,341 and 158,132,809 Leagold
Shares, respectively, are issuable under the terms of the
Arrangement and in satisfaction of certain severance
obligations.
On completion of the Arrangement, Yamana Gold is expected to
hold approximately 22% of the outstanding shares of Leagold.
Assuming no other convertible securities of the Company are
exercised, in the event of Yamana's exercise of Leagold Warrants to
acquire Leagold Shares, Yamana's interest in Leagold will increase
to 29%.
Because (i) Leagold expects to issue up to 160,000,000 Leagold
Shares, representing approximately 105% of the current outstanding
Leagold Shares, in connection with the transactions contemplated by
the Arrangement, being greater than 25% of Leagold's currently
issued and outstanding shares; and (ii) the issuance of Leagold
Shares and Leagold Warrants to Yamana Gold Inc. may, according to
the rules and policies of the TSX, materially affect control of
Leagold, the rules of the Toronto Stock Exchange ("TSX") required
the approval of the same from Leagold's shareholders (the "Leagold
Shareholder Approval"), which has been obtained.
The TSX permitted Leagold to rely on subsection 604(d) of the
TSX Company Manual to obtain written approval from its shareholders
owning or having control or direction over, more than 50% of
Leagold's outstanding common shares in order to satisfy the Leagold
Shareholder Approval requirement. The Arrangement was negotiated at
arm's length and the Company understands that no insiders of the
Company hold any outstanding Brio common shares as of the date
hereof.
About Leagold Mining Corporation
Leagold is building a mid-tier gold producer with a focus on
opportunities in Latin America.
The Company is based in Vancouver,
Canada and owns 100% of the Los Filos mine in Mexico. Leagold is listed on the TSX under the
trading symbol "LMC" and trades on the OTCQX market as "LMCNF".
Cautionary Note Regarding Forward-Looking Information
This news release contains "forward-looking statements" and
"forward looking information" (as defined under applicable
securities laws). Forward-looking statements are often, but not
always, identified by the use of words such as "anticipate",
"expect", "believe", "may", "plan", "project", "should",
"scheduled", "intend", "objective", continuous", and "estimate", or
similar words suggesting future events, circumstances or outcomes.
Forward-looking statements in this news release include anticipated
production, AISC and AISC margin of a combined Brio-Leagold entity,
diversification benefits, growth upside, potential for expansion in
Latin America, anticipated timing
of the closing of the Arrangement and conditions to closing the
Arrangement.
Forward-looking statements are subject to a variety of risks and
uncertainties which could cause actual events or results to differ
materially from those expressed in the forward-looking statements
and information. They include, among others, the failure to obtain
regulatory or other approvals or meeting the other conditions in
connection with the proposed Arrangement, completing the
Arrangement, the actual number of Leagold shares and Leagold
warrants to be issued in connection with the Arrangement and those
risk factors identified in Leagold's most recent Annual Information
Form prepared and filed with securities regulators which is
available on SEDAR at www.sedar.com under Leagold's profile.
There are no assurances that Leagold can fulfill forward-looking
statements and information. Such forward-looking statements and
information are only predictions based on current information
available to Leagold's management team; actual events or results
may differ materially as a result of risks facing Leagold, some of
which are beyond Leagold's control. Although Leagold believes that
any forward-looking statements and information contained in this
news release are based on reasonable assumptions, readers cannot be
assured that actual outcomes or results will be consistent with
such statements. Accordingly, readers should not place undue
reliance on forward-looking statements and information. The
forward-looking statements and forward-looking information are made
as of the date hereof and Leagold disclaims any obligation to
update any such factors or to publicly announce the result of any
revisions to any of the forward-looking statements or
forward-looking information contained herein to reflect future
results. Please refer to Leagold's most recent filings under its
profile at www.sedar.com for further information respecting the
risks affecting Leagold and its business.
SOURCE Leagold Mining Corporation