TIDMBCN
RNS Number : 2021F
Bacanora Minerals Ltd
19 February 2018
THIS PRESS RELEASE IS NOT FOR PUBLICATION OR DISSEMINATION IN
THE UNITED STATES. FAILURE TO COMPLY WITH THIS RESTRICTION MAY
CONSTITUTE A VIOLATION OF UNITED STATES SECURITIES LAW.
BACANORA ANNOUNCES ENTERING INTO AN ARRANGEMENT AGREEMENT TO
FACILITATE ITS PROPOSED RE-DOMICILE TO THE UK
19 February 2018 - Bacanora Minerals Ltd. (the "Company" or
"Bacanora Canada") (TSX-V: BCN and AIM: BCN), the London and
Canadian listed lithium company, announces that, further to its
announcement released on 9 February 2018, it has entered into an
arrangement agreement made effective February 16, 2018 (the
"Arrangement Agreement") between the Company, Bacanora Lithium plc
("Bacanora UK") and 1976844 Alberta Ltd. (a wholly owned subsidiary
of Bacanora UK) pursuant to which Bacanora UK will indirectly
acquire the entire issued share capital of Bacanora Canada (the
"Bacanora Canada Shares") in exchange for new shares in Bacanora UK
("Bacanora UK Shares") to facilitate the Company's proposed
reorganisation to effect a re-domicile to the United Kingdom (the
"Re-Domicile" or the "Transaction"). In connection with the
Re-Domicile, Bacanora UK will apply for admission to trading of its
Bacanora UK Shares on the AIM market of the London Stock Exchange
("AIM"). Upon the admission of Bacanora UK Shares to trading on
AIM, Bacanora Canada intends to delist the Bacanora Canada Shares
from the TSX Venture Exchange (the "TSXV") and cancel the admission
to trading of the Bacanora Canada Shares on AIM.
In connection with the Transaction, the Company will send to
shareholders in Bacanora Canada ("Bacanora Canada Shareholders") a
management information circular (the "Circular") setting out the
details of the Transaction and containing a notice of annual and
special meeting of Bacanora Canada to be held in the Three Sisters
Boardroom of Gowling WLG (Canada) LLP, at 1600, 421 - 7th Avenue
S.W., Calgary, Alberta, Canada, T2P 4K9 on 19 March 2018 at 10:00
a.m. (Calgary time) (the "Annual and Special Meeting"). The
Circular will also outline the considerations of the board of
directors of Bacanora Canada (the "Board") with respect to its
determination that the Transaction is in the best interests of
Bacanora Canada and the Bacanora Canada Shareholders and its
recommendation that all Bacanora Canada Shareholders vote in favour
the Arrangement.
At the Annual and Special Meeting, among other things, the
Bacanora Canada Shareholders will be asked to approve the
Re-Domicile and its implementation by way of an Alberta, Canada,
court-approved plan of arrangement (the "Arrangement"), pursuant to
the Arrangement Agreement. Bacanora Canada is incorporated in
Alberta and its head office and registered office are located in
Calgary, Canada. The Bacanora Canada Shares are currently listed on
the TSXV and admitted to trading on AIM. The Arrangement will
result in Bacanora UK becoming the ultimate parent company of
Bacanora Canada and its current affiliates (collectively, the
"Bacanora Canada Group" and together with Bacanora UK and its
affiliates, the "Bacanora Group"). Bacanora UK will have its
corporate head office and a place of business located in London and
Bacanora UK will be subject to the Companies Act 2006 (as amended)
(the "U.K. Companies Act") and the City Code on Takeovers and
Mergers.
The Arrangement must be approved by not less than 662/3% of the
votes cast by Bacanora Canada Shareholders present in person or
represented by proxy and entitled to vote at the Annual and Special
Meeting. Each Bacanora Canada Shareholder will be entitled to one
vote for each Bacanora Canada Share held. The approval of not less
than 662/3% of the votes cast by Bacanora Canada Shareholders at
the Annual and Special Meeting will also fulfil the TSXV
requirement to obtain the approval of a simple majority of Bacanora
Canada Shareholders. The Arrangement also requires, among other
things, final approval of the Alberta Court of Queen's Bench of
Alberta (the "Court"). The Court is scheduled to hear the
application with respect to final approval of the Arrangement on 19
March 2018, following the Annual and Special Meeting. If the
Arrangement is approved by the Bacanora Canada Shareholders at the
Annual and Special Meeting and final approval is granted by the
Court, it is intended that the Re-Domicile will be completed on the
following day ("Effective Date").
Pursuant to the application for the admission of Bacanora UK
Shares to trading on AIM, Bacanora UK will shortly publish an AIM
Schedule 1 announcement ("Schedule 1 Announcement") together with
an Appendix to that announcement ("Appendix") which contains more
information about the Re-Domicile and Bacanora UK. The Circular and
the Schedule 1 Announcement, together with the Appendix, will
shortly be made available for viewing on Bacanora Canada's website
at www.bacanoraminerals.com and on its SEDAR profile at
www.sedar.com.
In addition, Bacanora Canada will shortly publish on its website
a copy of an updated competent person's report prepared by G.E.O.S.
Ingenieurgesellschaft mbh on the Company's 50 per cent. owned
Zinnwald Lithium Project located in southern Saxony in Germany. The
report was prepared in accordance with the Pan-European Reserves
& Resources Reporting Committee standard and confirms the
minerals resource estimate on the Zinnwald Lithium Project
previously announced by the Company. A resource infill drilling
programme to upgrade the existing resource model in accordance with
National Instrument 43-101 - Standards of Disclosure for Mineral
Projects ("NI 43-101") is ongoing.
Reasons for the Arrangement
The Board believes that the Re-Domicile and the admission of the
Bacanora UK Shares to trading on AIM will be in the best interests
of Bacanora Canada and Bacanora Canada Shareholders. Given the
geographic spread of the Bacanora Canada Group's production,
development and exploration licences, the Board believes that a UK
domiciled company would be more appropriate operationally and from
an investor standpoint for the reasons set out below:
-- Bacanora UK intends to move its headquarters and senior
management to the UK, so that it can be closer to where the
majority of its shareholders reside and where its potential debt
providers are located.
-- Bacanora Canada is one of the very few, and the most
advanced, of the pure-Lithium investment opportunities on the AIM
Market and therefore achieves a higher investor profile through its
listing in the UK. Whereas in Canada, there are a large number of
listed lithium companies all vying for a limited pool of equity
capital.
-- Since listing on AIM in 2014, Bacanora Canada has been
successful in raising funding from the UK Capital Markets and has
already added three Global Institutional investors and a major
off-take partner to its shareholder base. Bacanora UK now intends
to raise a significant amount of new debt and equity financing to
fund its growth as an international lithium company with new
projects in Mexico and Germany and believes that a UK domiciled
company with its primary listing on AIM is the best way to achieve
this.
-- The Board believes that admission of the Bacanora UK Shares
to trading on AIM will raise Bacanora Canada's profile and status
amongst European investors and within the international mining
sector generally, and will give Bacanora Canada access to an
international market with a broad, relevant peer group and
considerable research expertise.
-- Bacanora Canada currently incurs high costs associated with
having a dual listing on AIM and on TSXV, yet Canadian
shareholdings are estimated at less than 10% of Bacanora Canada's
shareholder base.
-- The Board believes that the Canadian shareholder base may
continue to decrease and as a result having a single listing on AIM
would allow Bacanora Canada to be more cost efficient without
material downside.
-- Bacanora Canada Shares currently have less liquidity on the
TSXV compared to AIM. The liquidity of Bacanora Canada Shares has
increased significantly since Bacanora Canada dual listed for
trading on AIM.
Terms of the Arrangement
Under the terms of the Arrangement Agreement, if the requisite
approval of the Arrangement is obtained from the Bacanora
Shareholders and the Court and the Arrangement is effected,
Bacanora Canada's Shareholders will receive one Bacanora UK Share
for each Bacanora Canada Share held.
Accordingly, immediately upon the Arrangement becoming
effective, a Bacanora Canada Shareholder will have the same
proportionate interest in the profits, net assets and dividends of
Bacanora UK as they have in Bacanora Canada immediately prior to
the Effective Date. The Bacanora Group will have the same business
and operations immediately after the Effective Date as the Bacanora
Canada Group had immediately before the Effective Date. The assets
and liabilities of the Bacanora Group immediately after the
Effective Date will not differ materially from the assets and
liabilities the Bacanora Canada Group had before the Effective
Date, save that Bacanora UK will hold all of the common shares then
in issue in Bacanora Canada.
Share Issuance Headroom
Having successfully completed the Feasibility Study on its
Sonora Lithium Project, the Company intends to embark on a fund
raising exercise in order to secure the US$419 million capital
expenditure requirement to develop phase 1 of the Sonora Lithium
Project and finance further work on the Zinnwald Lithium Project.
It is intended that a substantial proportion of the funding will be
raised through equity finance.
Bacanora UK will be subject to the U.K. Companies Act and the
statutory rights of pre-emption contained therein. Bacanora UK,
acting in accordance with the U.K. Companies Act, has conditionally
obtained an express authority by way of a special resolution from
its members granting the directors authority to disapply
pre-emption rights to the allotment of up to 365,000,000 Bacanora
UK Shares in the period up to its next annual general meeting.
Bacanora UK and Bacanora Canada are mindful that this authority
has been obtained prior to the implementation of the Arrangement,
on completion of which, the entire share capital of the Bacanora UK
will be held by Bacanora Canada Shareholders, who did not have the
direct opportunity to vote on the resolutions. Accordingly,
Bacanora UK's resolutions have been passed subject to approval, in
principle, by the Bacanora Canada Shareholders at the Annual and
Special Meeting of an equivalent resolution.
The Board believes that this and the other related resolutions
are in the best interests of the Bacanora Group, as they provide
greater flexibility to raise the funds required to continue the
Company's development as an international lithium company. Bacanora
UK intends to update its shareholder authorities on an annual basis
at its annual general meetings of shareholders.
Further details of the resolutions passed by Bacanora UK
allowing the board of directors of Bacanora UK to issue and allot
shares as if the pre-emption rights contained in the U.K. Companies
Act did not apply will be set out in the Circular.
Expected timetable of principal events
2018
Latest date for receipt of Forms of Direction 14 March
Latest date for receipt of Forms of Proxy 15 March
Time and date of Shareholder Meeting to approve Plan of Arrangement 10:00 a.m. (Calgary time) on 19 March
Court hearing for approval of the Plan of Arrangement 19 March
Last day of trading of Bacanora Canada Shares on TSXV and AIM 20 March
Effective Date of the Plan of Arrangement 20 March
Admission and commencement of dealings of Bacanora UK Shares on AIM 08:00 a.m. (London time) on 21 March
CREST accounts expected to be credited by 21 March
Dispatch of definitive share certificates by 29 March
This timetable is indicative only. The actual timetable will
depend upon the time at which the conditions precedent to the
Arrangement, including conditions relating to receipt of regulatory
approvals, are satisfied or, if applicable, waived. Any variation
to the timetable set out above will be announced by Bacanora Canada
and published on Bacanora Canada's website.
*ENDS**
For further information, please contact:
Bacanora Minerals Peter Secker, CEO info@bacanoraminerals.com
Ltd.
----------------------- ------------------- --------------------------
Cairn Financial Sandy Jamieson +44 (0) 20
Advisers LLP, Nomad / Liam Murray 7213 0880
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Canaccord Genuity, Martin Davison +44 (0) 20
Broker / James Asensio 7523 8000
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St Brides Partners, Megan Dennison +44 (0) 20
Financial PR Adviser / Frank Buhagiar 7236 1177
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ABOUT BACANORA CANADA:
Bacanora Canada is a Canadian and London listed lithium
exploration and development company (TSXV: BCN and AIM: BCN). The
Company is exploring for, and developing a pipeline of
international lithium projects, with a primary focus on its Sonora
Lithium Project. The Company's operations are based in Hermosillo
in northern Mexico. The Company is led by a team with lithium
expertise and proven mine development, construction and operations
experience.
The Sonora Lithium Project(1) , which consists of ten mining
concession areas covering approximately 100 thousand hectares in
the northeast of Sonora State. The Company, through drilling and
exploration work to date, has established a Measured plus Indicated
Mineral Resource estimate of over 5 Mt (comprising 1.9Mt of
Measured Resources and 3.1Mt of Indicated Resources) of LCE(2) and
an additional Inferred Mineral Resource of 3.7 Mt of LCE. The
Company's Feasibility Study (which was announced 12 December 2017)
has established Proven Mineral Reserves (in accordance with NI
43-101) of 1.67 MT and Probable Mineral Reserves of 2.85 Mt LCE and
confirmed the economics associated with becoming a 35,000 tpa
lithium carbonate and 30,000 tpa SOP producer in Mexico. In
addition to the Sonora Lithium Project, the Company also has a 50%
interest in the Zinnwald Lithium Project and the Falkenhain Licence
in southern Saxony, Germany. Each of the Zinnwald Lithium Project
and the Falkenhain Licence are located in a granite hosted Sn/W/Li
belt that has been mined historically for tin, tungsten and lithium
at different times over the past 300 years. The strategic location
of the Zinnwald Lithium Project and the Falkenhain Licence provides
close geographical proximity to the German automotive and
downstream lithium chemical industries.
1 The Sonora Lithium Project is comprised of the following
lithium properties: La Ventana lithium concession, which is 100
percent owned by Bacanora and El Sauz and Fleur concessions, which
are held by Mexilit S.A. de C.V. ('Mexilit') which is owned 70
percent by Bacanora and 30 percent by Cadence Minerals Plc.
2 LCE = lithium carbonate (Li(2) CO(3) ) equivalent; determined
by multiplying Li value in percent by 5.324 to get an equivalent
Li(2) CO(3) value in per cent. Use of LCE is to provide data
comparable with industry reports and assumes complete conversion of
lithium in clays with no recovery or process losses.
FORWARD LOOKING STATEMENTS:
Except for statements of historical fact, this news release
contains certain "forward-looking information" within the meaning
of applicable securities law. Forward-looking information is
frequently characterized by words such as "plan", "expect",
"project", "intend", "believe", "anticipate", "estimate" and other
similar words, or statements that certain events or conditions
"may" or "will" occur. In particular, forward-looking information
in this press release includes, but is not limited to the
estimation of resources and reserves, the approval and competition
of the Arrangement, mailing of the Circular the ability of the
Company to raise additional capital including with respect to the
capital expenditure requirements of the Sonora Lithium Project and
the further work on the Zinnwald Lithium Project, the de-listing of
the Bacanora Canada Shares on the TSXV and cancelling of the same
on AIM, the approval of the admission of the Bacanora UK Shares on
AIM and the receipt of the final court approval and any regulatory
approvals of the Arrangement. Although the Company believes that
the expectations reflected in the forward-looking information are
reasonable, there can be no assurance that such expectations will
prove to be correct. The Company cannot guarantee future results,
performance or achievements. Consequently, there is no
representation that the actual results achieved will be the same,
in whole or in part, as those set out in the forward-looking
information.
Forward-looking information is based on the opinions and
estimates of management at the date the statements are made, and
are subject to a variety of risks and uncertainties and other
factors that could cause actual events or results to differ
materially from those anticipated in the forward-looking
information. Some of the risks and other factors that could cause
the results to differ materially from those expressed in the
forward-looking information include, but are not limited to:
commodity price volatility; general economic conditions in Canada,
the United States, Mexico and globally; industry conditions,
governmental regulation, including environmental regulation;
unanticipated operating events or performance; failure to obtain
industry partner and other third party consents and approvals, if
and when required; the availability of capital on acceptable terms;
the need to obtain required approvals from regulatory authorities;
stock market volatility; competition for, among other things,
capital, skilled personnel and supplies; changes in tax laws; and
the other risk factors. Readers are cautioned that this list of
risk factors should not be construed as exhaustive.
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 information is provided by RNS
The company news service from the London Stock Exchange
END
MSCGRGDDCUBBGII
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February 19, 2018 02:00 ET (07:00 GMT)
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