TIDMDALR
TORONTO, June 21, 2018 (GLOBE NEWSWIRE) -- Dalradian Resources Inc.
(TSX:DNA) (AIM:DALR) ("Dalradian" or the "Company") and Orion Mine
Finance are pleased to announce that the Company and certain affiliates
of Orion Mine Finance (collectively, "Orion") have entered into a
definitive arrangement agreement (the "Arrangement Agreement"), whereby
Orion will acquire all of the issued and outstanding common shares of
the Company ("Dalradian Shares") by way of a statutory plan of
arrangement under the Business Corporations Act (Ontario) (the
"Transaction"). Under the terms of the Arrangement Agreement, the
Dalradian Shares held by certain members of the Dalradian senior
management team, Sean Roosen and Osisko Gold Royalties Ltd (collectively,
the "Remaining Shareholders") will not be acquired by Orion.
Collectively, Orion and the Remaining Shareholders currently hold
72,695,911 Dalradian Shares or 20.4% of the issued and outstanding
Dalradian Shares.
The Arrangement Agreement
Under the terms of the Arrangement Agreement, each Dalradian shareholder
(other than the Remaining Shareholders) (the "Affected Dalradian
Shareholders") will receive cash consideration of C$1.47 for each
Dalradian Share held (the "Consideration"), valuing Dalradian's total
equity at approximately C$537 million, on a fully diluted in-the-money
basis. The Consideration represents a 62% premium to the closing price
of the Dalradian Shares on the Toronto Stock Exchange (the "TSX") on
June 20, 2018 and a 49% premium to the volume weighted average price
("VWAP") of the Dalradian Shares over the last 30 trading days.
Benefits to Dalradian Shareholders
-- Immediate and significant premium of approximately 62% to the closing
price of the Dalradian Shares on June 20, 2018, and approximately 49%
based on the 30-day VWAP.
-- All cash offer that is not subject to a financing condition.
-- Strong deal certainty with support agreements accounting for a total of
approximately 31.4% from directors and senior officers of Dalradian,
certain funds, Orion and the Remaining Shareholders.
Oskar Lewnowski, Chief Investment Officer of Orion, commented, "We are
very pleased to expand our ownership in one of the world's best
undeveloped gold deposits. Curraghinalt gets more exciting as additional
exploration and engineering work is completed, the recent positive
resource update being just the latest example. The Dalradian team has
done an outstanding job of growing the deposit and advancing it through
the feasibility stage. We look forward to working with the core
Dalradian management team to secure planning permission for a world
class mine using best-in-class mining, processing and environmental
standards."
Patrick F.N. Anderson, CEO of Dalradian, stated, "Orion and Osisko are
showing great confidence in Northern Ireland, our high grade
Curraghinalt project and our West Tyrone workforce. Their goals as
strategic investors are completely aligned with ours - to secure
planning permission for an underground gold mine and continue advancing
the project in a way that benefits all our stakeholders. We will
continue to work closely with community members, all levels of
government, employees, contractors and local suppliers toward building
one of the world's top gold mines."
Jim Rutherford, Non-Executive Chairman of Dalradian, stated, "In the
space of less than ten years, Dalradian has succeeded in transforming
its flagship Curraghinalt project in Northern Ireland from a virtual
grassroots discovery into one of the world's best and highest grade gold
deposits, that will provide significant inward investment and economic
benefits for the Northern Ireland economy. The premium cash offer from
Orion that we have announced today therefore reflects the results of
several years' diligent, professional work by the entire Dalradian team.
My fellow board directors and I would like to express our thanks and
appreciation to all who have been involved in successfully developing
the project to this stage."
Major Shareholder Support
Certain funds and accounts under management by subsidiaries of BlackRock
Inc., which hold approximately 37,945,699 Dalradian Shares, representing
approximately 10.7% of Dalradian's issued and outstanding common shares,
have entered into a support agreement (the "Support Agreement") with
Orion, agreeing, subject to the terms of the Support Agreement, to vote
their Dalradian Shares in favour of the Transaction. Orion and the
Remaining Shareholders, who collectively hold approximately 72,695,911
Dalradian Shares, representing approximately 20.4% of Dalradian's issued
and outstanding common shares, have each agreed to continue to hold its
Dalradian Shares and also to vote in favour of the Transaction.
Independent Committee and Board of Directors Recommendations
An independent committee of Dalradian's board of directors (the
"Independent Committee") comprised of Jonathan Rubenstein, Patrick
Downey and Thomas Obradovich was constituted to consider the
Transaction. The Independent Committee, on behalf of the Dalradian Board
of Directors, obtained a formal valuation (the "Valuation") from Raymond
James Ltd. ("Raymond James") as required by Multilateral Instrument
61-101 - Protection of Minority Security Holders in Special Transactions
("MI 61-101"). The Valuation was prepared under the supervision of the
Independent Committee and determined that in Raymond James' opinion, and
based upon and subject to the assumptions, limitations and
qualifications set forth therein, the fair market value of the Dalradian
Shares, as at June 20, 2018 is in the range of C$1.35 to C$1.70 per
Dalradian Share. In addition, Raymond James has provided a fairness
opinion to the Independent Committee (the "Raymond James Fairness
Opinion"), stating that in its opinion, and based upon and subject to
the assumptions, limitations and qualifications set forth therein, the
Consideration to be received by the Affected Dalradian Shareholders
pursuant to the Arrangement Agreement is fair, from a financial point of
view, to such Affected Dalradian Shareholders.
Maxit Capital LP has provided a fairness opinion to the Independent
Committee (the "Maxit Fairness Opinion"), stating that in its opinion,
and based upon and subject to the assumptions, limitations and
qualifications set forth therein, the Consideration is fair, from a
financial point of view, to the Affected Dalradian Shareholders.
The Board of Directors (excluding Patrick Anderson, Michael Barton and
Sean Roosen who were recused from discussions and voting given their
interests in the Transaction as Mr. Anderson is part of the senior
management team and is a Remaining Shareholder, Mr. Barton is a
principal of Orion and Mr. Roosen is a Remaining Shareholder and a
principal of Osisko) after receiving financial and legal advice, and
following receipt of the Maxit Fairness Opinion, the Raymond James
Fairness Opinion and the Valuation, and the recommendation of the
Independent Committee, unanimously approved the Transaction and
recommend that Affected Dalradian Shareholders vote in favour of the
Transaction.
In addition, directors and senior officers of Dalradian, including the
Remaining Shareholders, who as of the date hereof, collectively hold
approximately 2.2% of Dalradian's issued and outstanding common shares,
have entered into agreements to support the Transaction and vote their
Dalradian Shares in favour of the Transaction.
Transaction Conditions and Timing
The Transaction will be implemented by way of a Court-approved plan of
arrangement under the Business Corporations Act (Ontario) and will
require the approval of: (i) 66 2/3% of the votes cast by the holders of
Dalradian's common shares; and (ii) a simple majority of the votes cast
by holders of Dalradian common shares after excluding any votes of Orion,
Osisko Gold Royalties Ltd and certain other persons required to be
excluded under MI 61-101, all at a special meeting of Dalradian
shareholders to consider the Transaction.
The completion of the Transaction will also be subject to obtaining
required court and other approvals and satisfaction of closing
conditions customary for a transaction of this nature. The Arrangement
Agreement provides for customary deal-protection provisions, including a
non-solicitation covenant on the part of Dalradian and a right for Orion
to match any Superior Proposal (as defined in the Arrangement
Agreement). The Arrangement Agreement includes a termination fee of C$20
million, payable by Dalradian, under certain circumstances (including if
the Arrangement Agreement is terminated in connection with Dalradian
pursuing a Superior Proposal).
It is anticipated that the special meeting of Dalradian shareholders to
consider the Transaction will be held in August 2018. The effect of
Dalradian shareholders voting for the resolution to approve the plan of
arrangement and it becoming effective will be the cancellation of the
Dalradian Shares from trading on the TSX and AIM following closing of
the Transaction. The Transaction is expected to close in the third
quarter of 2018.
No Financing Contingency
The acquisition will be financed using cash on hand in the Company, made
available to Orion as a loan, and cash available to Orion. Orion has
confirmed that it has sufficient cash available to finance the
consideration for the Transaction.
Advisors and Counsel
Maxit Capital LP is acting as financial advisor to Dalradian in
connection with the Transaction. Cassels Brock & Blackwell LLP is
serving as Canadian counsel to Dalradian, Blake, Cassels & Graydon LLP
is serving as counsel to the Independent Committee and Fieldfisher LLP
is acting as UK counsel to Dalradian.
Stikeman Elliott LLP is serving as counsel to Orion.
Bennett Jones LLP is serving as counsel to the senior management team.
McCarthy Tétrault LLP is serving as counsel to Osisko Gold
Royalties Ltd.
Additional Information about the Proposed Transaction
Copies of the Maxit Fairness Opinion, Raymond James Fairness Opinion,
the Valuation, and a description of the various factors considered by
the Board of Directors of the Company in its determination to approve
the Transaction, as well as other relevant background information, will
be included in the management information circular to be sent to the
Company's shareholders at least 21 days in advance of the Special
Meeting. The management information circular, the Arrangement Agreement,
the plan of arrangement and certain related documents will be filed with
the Canadian securities regulators and will be available on SEDAR at
www.sedar.com.
About Orion
Orion Resource Partners is a global alternative investment management
firm with $4.5 billion under management. Orion specializes in
institutional metals and mining investment strategies in the base and
precious metals space. Orion's private equity, hedge fund, and merchant
service divisions enable it to access in-depth knowledge of the global
metals and mining supply chain and robust insight into the physical and
financial demand driving global metals prices. Orion is an industry
leader in delivering comprehensive and customized financial solutions to
mining companies and base and precious metals investors.
About Dalradian Resources Inc.
Dalradian Resources Inc. is a mineral exploration and development
company that is focused on advancing its high-grade Curraghinalt Gold
Project located in Northern Ireland, United Kingdom. The Curraghinalt
Project is in permitting, with exploration ongoing to build on the
positive feasibility study released in January 2017.
This announcement contains inside information for the purposes of
Article 7 of Regulation (EU) No 596/2014.
About Osisko Gold Royalties Ltd
Osisko Gold Royalties Ltd is an intermediate precious metal royalty
company focused on the Americas that commenced activities in June 2014.
Osisko holds a North American focused portfolio of over 130 royalties,
streams and precious metal offtakes. Osisko's portfolio is anchored by
five cornerstone assets, including a 5% NSR royalty on the Canadian
Malartic Mine, which is the largest gold mine in Canada. Osisko also
owns a portfolio of publicly held resource companies, including a 15.5%
interest in Osisko Mining Inc., a 12.7% interest in Falco Resources Ltd.
and a 32.4% in Barkerville Gold Mines Ltd.
Osisko's head office is located at 1100 Avenue des Canadiens-de
Montréal, Suite 300, Montréal, Québec, H3B 2S2.
For more information:
Marla Gale
Vice President Communications
+1 416 583 5600
investor@dalradian.com
Grant Thornton UK LLP (Nominated Adviser)
Philip Secrett / Richard Tonthat
+44 (0)20 7383 5100
Numis Securities Limited (Broker)
John Prior / James Black / Paul Gillam
+44 (0)20 7260 1000
FORWARD LOOKING STATEMENTS
This press release contains "forward-looking information" which may
include, but is not limited to, statements with respect to management's
assessment of the anticipated benefits to Dalradian shareholders of the
proposed Transaction, anticipated meeting date, timing for completion of
the Transaction and delisting from both the TSX and AIM, the delivery of
an updated feasibility study and an updated technical report, future
financial or operating performance of the Company and its subsidiaries
and its mineral project, the future price of metals, test work and
confirming results from work performed to date, the estimation of
mineral resources and mineral reserves, the realization of mineral
resource and mineral reserve estimates, the timing and amount of
estimated future production, costs of production, capital, operating and
exploration expenditures, costs and timing of the development of new
deposits, costs and timing of future exploration, requirements for
additional capital, government regulation of mining operations,
environmental risks, reclamation expenses, title disputes or claims,
limitations of insurance coverage, the timing and possible outcome of
pending regulatory matters and the realization of the expected
production, economics and mine life of the Curraghinalt gold deposit.
Often, but not always, forward-looking statements can be identified by
the use of words and phrases 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 are based on the opinions and estimates of
management as of the date such statements are made and are based on
various assumptions that management believes are reasonable, such as the
receipt of all shareholder and regulatory approvals, no undue delays
with respect to the Transaction, effects of general economic conditions,
changing foreign exchange rates and actions by government authorities,
continued political stability in Northern Ireland, that permits required
for Dalradian's operations will be obtained in a timely basis in order
to permit Dalradian to proceed on schedule with its planned exploration
and mine development, construction and production programs, that a
permitting application for mine construction will be approved, that
skilled personnel and contractors will be available as Dalradian's
operations commence and continue to grow towards production and mining
operations, that the price of gold will be at levels that render the
Dalradian's mineral project economic, and that the necessary capital
will be available to finance Dalradian's operations and realize on
mineral resource and mineral reserve estimates and current mine plans.
Forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance or achievements of Dalradian to be materially different from
any future results, performance or achievements expressed or implied by
the forward-looking statements. Such factors include, among others, the
risk that the required Dalradian shareholder approval or necessary court
approvals may not be obtained in connection with the Transaction,
uncertainties associated with negotiations, misjudgments in the course
of preparing forward-looking information, the Transaction may not close
when planned or at all or on the terms and conditions set forth in the
Arrangement Agreement, the benefits expected from the Transaction not
being realized, risks related to the integration of acquisitions,
general business, economic, competitive, political and social
uncertainties; legal challenges to permits or permitting applications;
the actual results of current and future exploration activities; the
actual results of reclamation activities; conclusions of economic
evaluations; meeting various expected cost estimates; changes in project
parameters and/or economic assessments as plans continue to be refined;
future prices of metals; possible variations of mineral grade or
recovery rates; the risk that actual costs may exceed estimated costs;
failure of plant, equipment or processes to operate as anticipated;
accidents, labour disputes and other risks of the mining industry;
political instability; delays in obtaining governmental approvals or
financing or in the completion of development or construction activities,
as well as those factors discussed in the section entitled "Risk
Factors" in the Company's Annual Information Form for the year ended
December 31, 2017 dated March 15, 2018.
Although the Company has attempted to identify important factors that
could cause actual actions, events or results to differ materially from
those described in forward-looking statements, there may be other
factors that cause actions, events or results to differ from those
anticipated, estimated or intended. Forward-looking statements contained
herein are made as of the date of this press release and the Company
disclaims any obligation to update any forward-looking statements,
whether as a result of new information, future events or results, except
as may be required by applicable securities laws. 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, readers should not place
undue reliance on forward-looking statements.
This announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the information
contained therein.
Source: Dalradian Resources Inc. via Globenewswire
http://www.dalradian.com/
(END) Dow Jones Newswires
June 21, 2018 02:03 ET (06:03 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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