/NOT FOR DISTRIBUTION TO U.S. NEWS WIRE
SERVICES OR DISSEMINATION IN THE UNITED
STATES/
VANCOUVER, Oct. 7, 2019 /CNW/ - Bluenose Gold Corp.
(TSXV – BN.H) (the "Company") announces, that it has
entered into a letter of intent dated October 4, 2019 (the "LOI") with Gran
Colombia Gold Corp. (TSX: GCM. OTCQX: TPRFF) ("Gran Colombia") in respect of the proposed
acquisition by Bluenose of certain mining assets (the "Mining
Assets") at Gran Colombia's Marmato Project located in the
Department of Caldas, Colombia
(the "Transaction").
The Mining Assets principally comprise the existing producing
underground gold mine, including the right to mine in the lower
portion of the Echandia license area, the existing 1200 tonnes per
day processing plant and the area encompassing the Deeps
mineralization, all located within the mining license area referred
to as Zona Baja. Gran Colombia has reported that the existing
underground mine at Marmato produced 24,951 ounces of gold in 2018
and is on track to produce between 24,000 and 26,000 ounces of gold
in 2019. The Mining Assets have excellent infrastructure, being
located by the Pan American Highway with access to Medellin to the north and Manizales to the
south, and have access to the national electricity grid which runs
near the property. Gran Colombia
is currently working with SRK Consulting (US) Inc. to complete a
technical report for the Mining Assets pursuant to National
Instrument 43‐101 - Standards of Disclosure for Mineral Project
(the "Technical Report"). The Technical Report, expected to be
completed by the end of November and filed on the Company's SEDAR
site, will include an updated Mineral Resource estimate for the
Mining Assets. Gran Colombia will
retain its existing ownership of the mining licenses in the areas
known as Zona Alta and
Echandia. Gran Colombia and Bluenose are not related
parties.
Terms of the Transaction
Prior to the completion of the Transaction, Bluenose will
consolidate its outstanding Common Shares on a one (1) for ten (10)
basis (the "Consolidation").
It is currently anticipated that Bluenose will acquire the
Mining Assets by way of purchase from Gran Colombia of all of the
issued and outstanding shares of Gran Colombia's wholly-owned
subsidiary, Medoro Resources Colombia Inc. ("Marmato
Panama"). Marmato Panama holds all of the issued and
outstanding shares of Gran Colombia Gold Marmato S.A.S.
("Marmato Colombia"), which, in turn, holds all of the
Mining Assets. The Mining Assets will be acquired by Bluenose for
C$57,500,000 which will be satisfied
by the issuance by Bluenose to Gran Colombia of an aggregate of
28,750,000 Bluenose Common Shares (on a post-Consolidation basis)
having a deemed price of C$2.00 per
post consolidation Bluenose Common Share.
Prior to, or concurrent with, the completion of the Transaction:
(i) Gran Colombia will purchase from Bluenose, on a private
placement basis, 2,500,000 units of Bluenose ("Units"), at a
price of C$2.00 per Unit, for
aggregate gross proceeds to Bluenose of C$5,000,000 (the "Private Placement"); and
Bluenose anticipates that it will complete a brokered private
placement of a minimum of 5,000,000 Units and a maximum of
7,500,000 Units, at a price of C$2.00
per Unit, for aggregate gross proceeds to Bluenose of between
C$10,000,000 and C$15,000,000 (the "Brokered Private
Placement"). No agent has yet been engaged with respect to the
Brokered Private Placement.
The Units to be issued pursuant to the Private Placement and
Brokered Private Placement, respectively, will each be comprised of
one Bluenose post-Consolidation Common Share and one share purchase
warrant (a "Warrant"), with each Warrant being exercisable
to acquire one additional Bluenose post-Consolidation Common Share
at a price of C$3.00 for a period of
five (5) years from the closing of the Private Placement or
Brokered Private Placement, as applicable.
Pursuant to an agreement between Fiore Management &
Advisory Corp. ("Fiore") and Bluenose, Fiore shall be
entitled to 100,000 Bluenose post-Consolidation Common Shares upon
the completion of the Transaction.
The following table outlines the anticipated share capital of
Bluenose on a post-Consolidation basis following the completion of
the Private Placement, Brokered Private Placement and
Transaction.
|
Number of
Bluenose
Common Shares
(minimum
Brokered
Private Placement)
|
Number of
Bluenose
Common Shares
(maximum
Brokered
Private Placement)
|
Outstanding Bluenose
Common Shares
(pre-Transaction)
|
10,602,880
|
10,602,880
|
Bluenose Common
Shares issuable to Gran
Colombia pursuant to Transaction
|
28,750,000
|
28,750,000
|
Bluenose Common
Shares issuable to Gran
Colombia pursuant to Private Placement
|
2,500,000
|
2,500,000
|
Bluenose Common
Shares issuable
pursuant to Brokered Private Placement
|
5,000,000
|
7,500,000
|
Bluenose Common
Shares issuable to Fiore
|
100,000
|
100,000
|
Total Issued and
Outstanding
|
46,952,880
|
49,452,880
|
Bluenose Common
Shares reserved for
issuance under Bluenose Options
|
580,000
|
580,000
|
Bluenose Common
Shares underlying
Warrants issuable to Gran Colombia
pursuant to Private Placement
|
2,500,000
|
2,500,000
|
Bluenose Common
Shares underlying
Warrants issuable pursuant to Brokered
Private Placement
|
5,000,000
|
7,500,000
|
Total Issued and
Outstanding
Fully-Diluted
|
55,032,880
|
60,032,880
|
The Company and Gran Colombia intend to negotiate and enter into
a definitive agreement (the "Definitive Agreement") setting
forth the detailed terms and conditions of the Transaction. The
closing of the Transaction is subject to the receipt of all
necessary regulatory and third-party consents, authorizations and
approvals, including, without limitation, the approval of the
listing of the Bluenose Common Shares issued in connection with the
Transaction on the TSX-V which will be subject to Bluenose
satisfying the TSX-V's minimum listing conditions for a mining
issuer.
The closing of the Transaction will also be subject to the
following conditions, amongst others:
(i)
|
Gran Colombia and
Bluenose being satisfied with the results of their respective due
diligence investigations;
|
|
|
(ii)
|
all liens and
encumbrances in respect of Marmato Panama, Marmato Colombia and the
Mining Assets granted in favour of the holders of the 8.25% senior
secured notes due in 2024 shall have been released and discharged,
on terms and conditions satisfactory to Bluenose, acting
reasonably;
|
|
|
(iii)
|
to the extent
required, the receipt of shareholder approval from the shareholders
of Bluenose;
|
|
|
(iv)
|
the Consolidation
shall have been completed;
|
|
|
(v)
|
the Private Placement
and the Brokered Private Placement shall have been
completed;
|
|
|
(vi)
|
the name of Bluenose
shall have been changed to "Caldas Gold Corporation" or such other
name as may be specified by Gran Colombia in writing;
|
|
|
(vii)
|
no adverse change
shall have occurred in the business, results of operations, assets,
liabilities, financial condition or affairs of Bluenose, Marmato
Panama or Marmato Colombia, taken as a whole, or the Mining Assets;
and
|
|
|
(viii)
|
the final structure
and steps for the Transaction shall be satisfactory to both
Bluenose and the Company, acting reasonably, from a tax, corporate
and securities law and due diligence perspective.
|
About the Resulting Issuer
Pursuant to the LOI, the initial members of the board of
directors of Bluenose following the completion of the Transaction
(the "Resulting Issuer Board") shall be selected by Gran
Colombia and set forth in the Definitive Agreement. If a
meeting of the shareholders of Bluenose (the "Bluenose
Shareholder Meeting") is required for the purposes of obtaining
Bluenose Shareholder Approval, the members of the Resulting Issuer
Board will be nominated and elected by the shareholders of Bluenose
at the Bluenose Shareholder Meeting (subject to, and contingent
upon, the completion of the Transaction). The current directors and
officers of Bluenose shall resign at or prior to the completion of
the Transaction.
The Resulting Issuer Board will be fixed at five (5) directors
as at the completion of the Transaction, or as soon as practicable
thereafter. Pursuant to the LOI, Gran Colombia shall be provided a
continuing right to nominate a minimum of: (i) two (2) directors to
the Resulting Issuer Board, so long as it holds greater than 20% of
the outstanding Bluenose Common Shares, or (ii) one (1) director to
the Resulting Issuer Board, so long as it holds greater than 10% of
the outstanding Bluenose Common Shares.
The proposed Resulting Issuer Board is expected to include the
following members and Gran Colombia intends to appoint the
following individuals as officers of the resulting entity upon
completion of the Transaction (the "Resulting Issuer"); the
two additional nominees to the Resulting Issuer Board are being
recruited and will be disclosed when nominated:
Name and
Municipality of
Residence
|
Proposed Position
with
the Resulting Issuer
|
Present Principal
Occupation or Employment,
Principal Occupation or Employment for the
Past Five Years or More, and Other Current
Public Directorships
|
Serafino
Iacono
Panama City, Panama
|
Interim Chief
Executive
Officer and Director
|
Executive Co-Chairman
of the Board of Gran
Colombia since August 20, 2010; Co-Chairman
of the Board of Pacific Exploration & Production
Corporation from January 23, 2008 to November
2, 2016; Interim Chief Executive Officer and
President of Medoro Resources Ltd. from
September 2010 to June 10, 2011.
|
Michael
Davies
Ontario, Canada
|
Chief Financial
Officer
|
Chief Financial
Officer of Gran Colombia since
August 20, 2010. Mr. Davies is a Chartered
Accountant (Ontario) and has a Bachelor of
Commerce degree from the University of
Toronto. Over the last more than twenty years he
has gained extensive international and public
company experience in financial management,
strategic planning and external reporting. Mr.
Davies was the Chief Financial Officer of
PetroMagdalena Energy Corp. from July 13,
2009 to July 27, 2012. His diverse background
also includes senior finance roles with several
public companies, including LAC Minerals, IMAX
Corporation, Century II Holdings, Energentia
Resources, Pamour Inc. and Giant Yellowknife
Mines.
|
Lombardo
Paredes
Arenas Medellin,
Colombia
|
Director
|
Mr. Paredes has been
the Chief Executive
Officer of Gran Colombia since February 1, 2014.
Prior to joining Gran Colombia, he worked as an
Independent Consultant from 2005 until January
2014. Mr. Paredes also held a number of
positions at Petróleos de Venezuela and its
affiliates from 1975 to 1998.
|
Hernan Juan
Jose
Martinez Torres
Barranquilla,
Colombia
|
Director
|
Mr. Martinez has been
the Executive Chairman
and a director of Caribbean Resources
Corporation since September 4, 2012. Mr.
Martinez served as Minister of Mines (Colombia)
from July 2006 to August 2010, President of
Atunec S.A. from August 2002 to July 2006 and
held a number of positions at Exxon Mobil
Colombia S.A. from 1964 to 2002.
|
Upon completion of the Transaction, the Resulting Issuer will
continue to operate within mining and natural resources
industry.
The Transaction does not need to be approved by Bluenose
shareholders under TSX-V Policy 5.2, as the Company is inactive and
in good standing, the Transaction is not a "Related Party
Transaction", and no other circumstances exist which may compromise
the independence of the Company or other interested parties.
The Company intends to seek a waiver from the TSX-V to exempt
the Transaction from the sponsorship requirements of TSX-V Policy
2.2.
About Gran Colombia Gold Corp.
Gran Colombia is a
Canadian-based mid-tier gold producer with its primary focus in
Colombia where it is currently the
largest underground gold and silver producer with several mines in
operation at its Segovia and Marmato Operations. Gran Colombia is continuing to focus on
exploration, expansion and modernization activities at its
high-grade Segovia Operations and, through the Transaction
described in this press release, progressing toward a major
expansion and modernization of its underground mining operations at
the Marmato Project.
Additional information on Gran Colombia can be found on its
website at www.grancolombiagold.com and by reviewing its profile on
SEDAR at www.sedar.com.
On behalf of BLUENOSE GOLD CORP.
"Raymond
Roland"
Chief Executive Officer
Cautionary Statement on Forward-looking Information
This news release contains "forward-looking information",
which may include, but is not limited to, statements with respect
to anticipated business plans or strategies and the future
financial or operating performance of the Company and its projects.
Often, but not always, forward-looking statements can be identified
by the use of words such as "plans", "expects", "is expected",
"budget", "scheduled", "estimates", "forecasts", "intends",
"anticipates", or "believes" or variations (including negative
variations) of such words and phrases, or state that certain
actions, events or results "may", "could", "would", "might" or
"will" be taken, occur or be achieved. Forward-looking statements
involve known and unknown risks, uncertainties and other factors
which may cause the actual results, performance or achievements of
Bluenose to be materially different from any future results,
performance or achievements expressed or implied by the
forward-looking statements.
Forward-looking statements contained herein are made as of
the date of this press release and Bluenose disclaims, other than
as required by law, any obligation to update any forward-looking
statements whether as a result of new information, results, future
events, circumstances, or if management's estimates or opinions
should change, or otherwise. There can be no assurance that
forward-looking statements will prove to be accurate, as actual
results and future events could differ materially from those
anticipated in such statements. Accordingly, the reader is
cautioned not to place undue reliance on forward-looking
statements.
Further Information
As noted above, completion of the Transaction is subject to a
number of conditions, including, but not limited to, acceptance
from the TSX-V and if applicable, disinterested shareholder
approval. Where applicable, the Transaction cannot close until the
required shareholder approval is obtained. There can be no
assurance that the Transaction 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 Transaction, any information released or
received with respect to the Transaction may not be accurate or
complete and should not be relied upon. Trading in the securities
of the Resulting Issuer should be considered highly speculative.
The TSX-V has in no way passed upon the merits of the proposed
Transaction and has neither approved nor disapproved the contents
of this news release.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
This news release does not constitute an offer to sell, or a
solicitation of an offer to buy, any securities under the Financing
in the United States. The
securities 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 may not be
offered or sold within the United
States or to U.S. Persons (as defined under the U.S.
Securities Act) unless registered under the U.S. Securities Act and
applicable state securities laws or an exemption from such
registration is available.
SOURCE Bluenose Gold Corp.