Rebel Capital Inc. (“
Rebel” or the
“
Corporation”) (TSXV: RBL.P), a capital pool
company, is pleased to announce that it has entered into a letter
of intent dated November 21, 2019 (the “
Letter of
Intent”) with Electric Royalties Ltd., a British Columbia
company (“
Electric Royalties”) pursuant to which
Rebel will acquire all of the issued and outstanding shares in the
capital of Electric Royalties (the “
Proposed
Transaction”). The Proposed Transaction is intended to
constitute Rebel’s “Qualifying Transaction”, in accordance with TSX
Venture Exchange Policy 2.4 – Capital Pool Companies
(“
Policy 2.4”).
Background on Electric
RoyaltiesElectric Royalties’ focus is to acquire a
portfolio of royalties over mining projects that will feed the
increasing metal demand from the global electrification of cars and
shift to rechargeable batteries and renewable energy. Renewable
energy is the fastest growing energy sector and production capacity
of electric vehicles and batteries is slated to significantly
increase over the next decade driving demand growth across several
key commodities including copper, nickel, graphite, lithium,
manganese, vanadium, tin and cobalt. Electric Royalties intends to
focus on these “electric” metals with each of the targeted metals
forecast to have sizgnificant supply deficits by 2025 with most
targeted metals expected to have significant supply deficits by
2022.
Electric Royalties currently has a portfolio of
6 royalties under binding letter of intent, as a condition
precedent to closing on the royalty acquisitions Electric Royalties
must complete a C$5,000,000 financing and complete a going public
transaction by Feb 28th, 2020.
Electric Royalties will focus predominantly on
acquiring royalties on advanced stage projects as well as operating
projects to build a diversified portfolio located in jurisdictions
with low geopolitical risk.
Electric Royalties was incorporated on January
26, 2012 under the Business Corporations Act (British Columbia) and
is based in Vancouver, British Columbia, Canada. Directors and
management of Electric Royalties, collectively, beneficially hold a
majority of the outstanding shares of Electric Royalties with
Brendan Yurik and Claire Snyman each currently, directly or
indirectly, beneficially holding a controlling interest in Electric
Royalties.
Transaction StructureThe
Proposed Transaction is expected to be completed by way of a share
exchange or other form of business combination determined by the
legal and tax advisors to each of Rebel and Electric Royalties,
acting reasonably, which will result in Electric Royalties becoming
a wholly-owned subsidiary of Rebel or otherwise combining its
corporate existence with that of a Rebel entity (the
“Resulting Issuer”). The Resulting Issuer will
carry on the business heretofore carried on by Electric Royalties
upon completion of the Proposed Transaction.
Pursuant to the Proposed Transaction, the
current shares of Rebel will be consolidated on the basis of one
new Rebel common share for every two existing common shares,
resulting in a total of 2,330,000 post-consolidation Rebel shares.
Rebel will then acquire 100% of the issued and outstanding shares
of the Electric Royalties at a ratio of one post-consolidation
Rebel share for every one Electric Royalties share. It is expected
that the shareholders of Electric Royalties Ltd. will be issued
approximately 20 million post-consolidation Rebel common shares
upon closing of the Proposed Transaction. Rebel will also issue an
additional 2.6 million post-consolidation shares as partial payment
of the acquisition of 6 royalties that are currently under option
by Electric Royalties.
The completion of the Proposed Transaction will
be subject to requisite regulatory approval, including the approval
of the TSX Venture Exchange (the “TSXV”), and a number of
additional conditions precedent, including the negotiation and
execution of a definitive agreement, and the completion of a
private placement financing to fund a portion of the Purchase
Price. There can be no assurance that the Proposed Transaction will
be completed on the terms proposed in the Letter of Intent or at
all.
On closing of the Proposed Transaction, Rebel
anticipates being classified as a "Tier 2" Investment Issuer that
will meet the TSXV's initial listing requirements applicable
therefor. The Proposed Transaction will not be a Non-Arm's Length
Qualifying Transaction (as that term is defined under Policy 2.4),
and as a result, it is anticipated that the approval of the
shareholders of Rebel to the Proposed Transaction will not be
required. However, depending on the ultimate structuring of the
Proposed Transaction, Rebel may be required to obtain shareholder
approval under corporate law to approve certain matters ancillary
to the Proposed Transaction. No Finders Fees are payable in
connection with the Proposed Transaction, and no advances or other
consideration will be paid by Rebel to Electric Royalties in
advance of closing of the Proposed Transaction.
Proposed Private Placement
FinancingIt is anticipated that Rebel will complete a
private placement of subscription receipts (the
“Financing”) for gross proceeds of approximately
C$5 million to fund the operations of Electric Royalties. The size
of the Financing and the issue price will be determined by Rebel in
the context of the market. The proposed Financing may be completed
on a non-brokered or brokered basis. The gross proceeds of the
Financing will be held in escrow pending satisfaction of certain
specified escrow release conditions, including the satisfaction of
all conditions precedent to the completion of the Proposed
Transaction. In the event that the Financing is brokered, the agent
retained by Rebel may be paid customary compensation for such
agency services. The Financing is subject to TSXV approval.
Electric Royalties may, concurrently with the
Proposed Transaction, as part of the Financing, complete a private
placement of securities (“Electric Royalties Private Placement”),
subject to the approval of the TSXV. Any securities issued under
the Electric Royalties Private Placement, will be acquired by Rebel
at a ratio of one post-consolidation Rebel share for every one
Electric Royalties security issued.
Proposed Management and
Directors Subject to TSXV approval, on completion of the
Proposed Transaction, the board of the Resulting Issuer will be
increased to 5 members and it is currently anticipated that it will
consist of the following five directors and the management will
consist of Mr. Brendan Yurik and Mr. Luqman Khan.
Brendan Yurik, Director and Chief Executive
Officer
Founder and CEO of
Evenor Investments Ltd., a financial advisory group to junior
mining companies for alternative financing, debt, equity and
M&A with experience on over $2 billion in mining financing
transactions throughout his career. Prior global experience as a
research analyst as well as in business development and mining
financial advisory roles with Endeavour Financial, Cambrian Mining
Finance Ltd., Northern Vertex Mining Corp. and King & Bay West
Management Corp.
Marchand Snyman, Chairman and Director
Co-founder and
Chairman of RE Royalties Ltd., a renewable energy royalty company,
involved in the acquisition of 63 royalties to date. Over
25 years senior executive experience in corporate finance and
mining with a global merger, financing, acquisition and divestiture
track record of more than 50 transactions.
Chris Zahovskis, PEng, Director
Professional Mining
Engineer with over 30 years of experience through operations,
project development and due diligence assessments including 17
years with Cominco and 9 years with Inco Limited in project
development and operations roles. Currently CEO & President of
Northcliff Resources Ltd., a tungsten mine development company.
Robert Schafer, PGeo, Director
Co-founding director
of International Royalty Corp. (sold for $800m to Royal Gold). More
than 30 years of experience working internationally in business
development roles with major and junior mining companies including
formerly representing as Chairman of PDAC. Serves as a director of
a number of public resource companies.
Craig Lindsay, MBA, CFA, Director
Founder and CEO of
Otis Gold Corp. (TSXV: OOO) and a current director of VR Resources
Ltd. (TSXV: VRR), Alianza Minerals Ltd. (TSXV: ANZ) and Philippine
Metals Inc. (TSXV: PHI). Prior to Otis, was Founder and CEO of
Magnum Uranium Corp. and led its sale to Energy Fuels Inc. In
excess of 25 years of experience in corporate finance, venture
capital and public company management.
Luqman Khan, Chief Financial Officer (CPA,
CGA)
CFO RE Royalties
Ltd., a renewable energy royalty company, involved in the
acquisition of 63 royalties to date. Financial reporting executive
with over 20 years of professional experience in accountancy and
business management. Has served as CFO for several publicly listed
TSX-V resource companies and previously with Ernst and Young in
their assurance practice.
Details of insiders of Rebel will be disclosed
in a further news release.
Filing Statement and Information
CircularIn connection with the Proposed Transaction and
pursuant to the requirements of the TSXV, Rebel will file a filing
statement or a management information circular on its issuer
profile on SEDAR at www.sedar.com, which will contain details
regarding the Proposed Transaction, the Financing and Electric
Royalties.
Sponsorship Sponsorship of a
qualifying transaction of a capital pool company is required by the
TSXV unless an exemption from the sponsorship requirement is
available. The parties will be seeking a waiver of any requirement
for a sponsor, but in the event a waiver is not obtained, the
parties will update the markets accordingly.
Trading HaltTrading in the
common shares of Rebel is currently halted in compliance with the
policies of the TSXV. Rebel anticipates that trading will remain
halted pending the review of the Proposed Transaction by the
TSXV.
GeneralRebel will issue
additional news releases relating to the Proposed Transaction,
including information relating to transaction structure, the
shareholders of Electric Royalties, the Electric Royalties Private
Placement and summary financial information of Electric Royalties,
if and when the parties enter into the definitive agreement.
About RebelRebel is
incorporated under the provisions of the Business Corporations Act
(British Columbia) with its registered and head office in
Vancouver, British Columbia. Rebel is a “reporting issuer” in the
provinces of Ontario, British Columbia and Alberta. The Rebel
Shares are currently suspended from trading on the TSXV pending
completion of a Qualifying Transaction.
For further information please contact:
Rebel Capital Inc. Craig Lindsay DirectorEmail:
craig@agcap.caTel: 604-218-0550
Electric Royalties Ltd. contact:Brendan
YurikEmail: Brendan.yurik@electricroyalties.com Tel: +1 (604)
364-3540
Completion of the Proposed Transaction is
subject to a number of conditions, including but not limited to,
TSXV acceptance and if applicable pursuant to TSXV, majority of the
minority shareholder approval. Where applicable, the Proposed
Transaction cannot close until the required shareholder approval is
obtained. There can be no assurance that the Proposed 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 Proposed
Transaction, any information released or received with respect to
the Proposed Transaction may not be accurate or complete and should
not be relied upon. Trading in the securities of a capital pool
company should be considered highly speculative.
The TSXV has in no way passed upon the merits of
the Proposed Transaction and has neither approved nor disapproved
the contents of this press release.
Neither the TSXV nor its Regulation Services
Provider (as that term is defined in the policies of the TSXV)
accepts responsibility for the adequacy or accuracy of this
release.
Cautionary Statements Regarding
Forward-Looking Information
This press release contains forward-looking
information within the meaning of Canadian securities laws. Such
information includes, without limitation, information regarding the
terms and conditions of the Proposed Transaction, the terms of the
Non-Brokered Financing and the Brokered Financing and the
composition of the board of directors of the resulting issuer upon
completion of the Proposed Transaction. Although Rebel believes
that such information is reasonable, it can give no assurance that
such expectations will prove to be correct.
Forward looking information is typically
identified by words such as: “believe”, “expect”, “anticipate”,
“intend”, “estimate”, “postulate” and similar expressions, or are
those, which, by their nature, refer to future events. Rebel
cautions investors that any forward-looking information provided by
Rebel is not a guarantee of future results or performance, and that
actual results may differ materially from those in forward looking
information as a result of various factors, including, but not
limited to: Rebel's ability to complete the Proposed Transaction;
the expected timing and terms of the Proposed Transaction and the
related private placements; the state of the financial markets for
Rebel's securities; the state of the natural resources sector in
the event the Proposed Transaction is completed; recent market
volatility; Rebel's ability to raise the necessary capital or to be
fully able to implement its business strategies; and other risks
and factors that Rebel is unaware of at this time. The reader is
referred to Rebel's initial public offering prospectus for a more
complete discussion of applicable risk factors and their potential
effects, copies of which may be accessed through Rebel’s issuer
page on SEDAR at www.sedar.com.
The forward-looking statements contained in this
press release are made as of the date of this press release. Rebel
disclaims any intention or obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by law.
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