Kirkland Lake Gold Ltd. (“Kirkland Lake
Gold” or the “
Company”)
(TSX:KL) (NYSE:KL) (ASX:KLA) today announced it has entered into an
agreement with Stifel GMP and Clarus Securities Inc. as agents on
behalf of Kirkland Lake Gold (the “Dealers”) to arrange for the
sale of 18,500,000 units (the “Units”) at a price of $2.45 per Unit
for gross proceeds to Kirkland Lake Gold of $45,325,000 (the “Sale
Transaction). Each Unit consists of one (1) common share (a “Novo
Share”) of Novo Resources Corp. (“Novo”) owned by Kirkland Lake
Gold (a “Unit Share”) and one-half (0.5) of a common share purchase
warrant of Kirkland Lake (each whole warrant a “Warrant”). Each
Warrant shall entitle the holder thereof to acquire one (1)
additional Novo Share owned by Kirkland Lake Gold (a “Warrant
Share”) at an exercise price of $2.80 for a term of 12 months from
the date of issue. In Canada, the sale of the Unit Shares will be
made through block trades and the sale of the Warrants will be made
on a private placement basis. In the United States, the sale of
both the Unit Shares and the Warrants will be made on a private
placement basis.
In Canada, the Warrants will be subject to a
four month and one day hold period, in accordance with applicable
securities laws. Kirkland Lake Gold intends to use the net proceeds
of Sale Transaction for general corporate purposes.
The Sale Transaction is scheduled to close on or
about December 3, 2020, or such other date as agreed between
Kirkland Lake Gold and the Dealers and is subject to certain
conditions.
The securities to be issued under the Sale
Transaction have not been, and will not be, registered under the
United States Securities Act of 1933, as amended (the "U.S.
Securities Act"), or any state securities laws, and accordingly,
may not be offered or sold within the United States or to or for
the account or benefit of a U.S. person (as defined in Regulation S
under the U.S. Securities Act) or a person in the United States,
except in compliance with the registration requirements of the U.S.
Securities Act and applicable state securities requirements or
pursuant to exemptions therefrom. This news release does not
constitute an offer to sell or a solicitation of an offer to buy
any of the securities in the United States.
Upon closing of the Sale Transaction and
assuming the sale of the Warrants in full, Kirkland Lake Gold will
own 135,168 Novo Shares. Kirkland Lake Gold has agreed with the
Dealers that its remaining Novo Shares will be subject to a 30-day
lock-up period, subject to customary exceptions.
Early Warning Disclosure
Upon closing of the Sale Transaction, Kirkland
Lake Gold will have sold 18,500,000 Novo Shares as a component of
the Units. The sale of Units will provide aggregate gross proceeds
in the amount of $45,325,000. The sales of the Units will be made
by block trade to the Dealers.
Prior to the Sale Transaction, Kirkland Lake
Gold held 27,885,168 Novo Shares, representing and approximate
12.1% interest Novo. Upon closing of the Sale Transaction,
Kirkland Lake Gold will own 9,385,168 Novo Shares representing an
approximate 4.1% interest in Novo.
In the event that the Warrants forming part of
the Units are exercised in full, Kirkland will dispose of an
additional 9,250,000 Novo Shares at a value of $2.80 per Novo Share
(being the exercise price of the Warrants), for additional gross
proceeds to Kirkland Lake Gold of $25,900,000. This further
disposition will result in an additional decrease in Kirkland’s
shareholdings in Novo, resulting in Kirkland Lake Gold holding
135,168 Novo Shares, representing approximately 0.05% of the
currently issued and outstanding Novo Shares.
The disposition of Novo Shares provides an
immediate source of capital for the business of Kirkland Lake
Gold. While Kirkland Lake Gold currently has no immediate
plans or intentions with respect to the Novo Shares, depending on
market conditions, general economic and industry conditions,
trading prices of the Novo Shares, Kirkland Lake Gold’s business,
financial condition and prospects and/or other relevant factors
including Kirkland’s financial position and liquidity, Kirkland
Lake Gold may develop such plans or intentions in the future and,
at such time, may from time to time acquire additional securities,
dispose of some or all of the existing or additional securities or
may continue to hold securities of Novo.
Kirkland Lake Gold will file an early warning
report under National Instrument 62-103 in connection with the
closing of the Sale Transaction. As Kirkland Lake Gold will
have decreased its security holdings in Novo below 10%, following
the above-noted early warning report filing, it will no longer be
required to report under the early warning requirements of National
Instrument 62-104 – Take-Over Bids and Issuer Bids, unless its
security holdings in Novo increases to 10% or more in the
future.
About Kirkland Lake
Kirkland Lake Gold Ltd. is a growing gold
producer operating in Canada and Australia that produced 974,615
ounces in 2019. The production profile of the Company is anchored
by three high-quality operations, including the Macassa Mine and
Detour Lake Mine, both located in Northern Ontario, and the
Fosterville Mine located in the state of Victoria, Australia.
Kirkland Lake Gold's solid base of quality assets is complemented
by district scale exploration potential, supported by a strong
financial position with extensive management expertise.
For further information on Kirkland Lake Gold
and to receive news releases by email, visit the website at
www.kl.gold.
FOR FURTHER INFORMATION, PLEASE CONTACT:
Anthony Makuch, President, Chief Executive Officer &
DirectorPhone: +1 416-840-7884E-mail: tmakuch@kl.gold
Mark Utting, Senior Vice President, Investor RelationsPhone: +1
416-840-7884E-mail: mutting@kl.goldWebsite : www.kl.gold
Cautionary Note Regarding Forward-Looking
Information
This press release contains statements which
constitute “forward-looking information” within the meaning of
applicable securities laws, including statements regarding the
plans, intentions, beliefs and current expectations of Kirkland
Lake Gold with respect to future business activities and operating
performance. Forward-looking information is often identified by the
words “may”, “would”, “could”, “should”, “will”, “intend”, “plan”,
“anticipate”, “believe”, “estimate”, “expect” or similar
expressions and, in this press release, include information
regarding including but not limited to statements regarding the
proposed Sale Transaction, the completion thereof and the use of
proceeds therefrom.
Investors are cautioned that forward-looking
information is not based on historical facts but instead reflect
the Company's management's expectations, estimates or projections
concerning future results or events based on the opinions,
assumptions and estimates of management considered reasonable at
the date the statements are made. Although Kirkland Lake Gold
believes that the expectations reflected in such forward-looking
information are reasonable, such information involves risks and
uncertainties, and undue reliance should not be placed on such
information, as unknown or unpredictable factors could have
material adverse effects on future results, performance or
achievements of the Company. Among the key factors that could cause
actual results to differ materially from those projected in the
forward-looking information are the following: the exercise of a
termination right by the Dealers, any conditions to the closing of
the Sale Transaction not being met, the use of proceeds of the Sale
Transaction being re-allocated for prudent business reasons,
changes in general economic, business and political conditions,
including changes in the financial markets; changes in applicable
laws. This forward-looking information may be affected by risks and
uncertainties in the business of Kirkland Lake Gold and market
conditions. This information is qualified in its entirety by
cautionary statements and risk factor disclosure contained in
filings made by Kirkland Lake Gold, including Kirkland Lake Gold's
annual information form for the year ended December 31, 2019 and
its interim consolidated financial statements and related MD&A
for the period ended September 30, 2020, which are filed with the
securities regulatory authorities in certain provinces of Canada
and available at www.sedar.com.
Should one or more of these risks or
uncertainties materialize, or should assumptions underlying the
forward-looking information prove incorrect, actual results may
vary materially from those described herein as intended, planned,
anticipated, believed, estimated or expected. Although Kirkland
Lake Gold has attempted to identify important risks, uncertainties
and factors which could cause actual results to differ materially,
there may be others that cause results not to be as anticipated,
estimated or intended. Kirkland Lake Gold does not intend, and do
not assume any obligation, to update this forward-looking
information except as otherwise required by applicable law.
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