TIDMURU
RNS Number : 6128L
URU Metals Limited
13 January 2021
13 January 2021
URU Metals Limited
Potential disposal of Zebediela Project
URU Metals Limited ("URU" or "Company") (LON: URU) has entered
into a letter of intent, dated 7 January 2021, with Blue Rhino
Capital Corp, a company listed on the TSX Venture Exchange
("TSX-V") (TSX-V: RHNO.P) ("BRC") whereby BRC proposes to acquire
all of the issued and outstanding share capital of Zebediela Nickel
Company (Pty) Ltd. ("ZEB"), which controls the Company's Zebediela
Nickel Project in South Africa (the "Project").
Transaction Summary
Pursuant to the terms of the Transaction, it is contemplated
that BRC will consolidate its share capital on a 2.3-for-1 basis
(the "Consolidation"), following which it will issue 41,000,000
post-Consolidation common shares (the "Consideration Shares") to
URU in consideration for all of the outstanding share capital of
ZEB. BRC will also assume all ongoing liabilities and obligations
of ZEB, which will include a 2.5% royalty on all revenue generated
from the Project (the "Royalty"). Two percent of the Royalty can be
purchased for a one-time cash payment of US$3,000,000.
BRC is at arms-length from each of URU and ZEB, and ZEB is a
wholly-owned subsidiary of URU. Upon the completion of the
Transaction, it is expected that ZEB will become a wholly owned
subsidiary of BRC (the "Resulting Issuer"), and URU will become a
"control person" of the Company.
Pursuant to the letter of intent, and in connection with the
Transaction, the Company intends to complete a non-brokered private
placement (the "Concurrent Financing") of subscription receipts
(each, a "Receipt") at a price of CND 0.25 per Receipt to raise CND
$2,000,000 before expenses. Proceeds from the Concurrent Financing
will be held in escrow pending completion of the Transaction.
Following completion of the Transaction, the Receipts will
automatically be converted into post-Consolidation common shares of
the Company. Net proceeds of the Concurrent Financing will be used
for the exploration and development of the Project, and for working
capital and general corporate purposes. All securities issued in
connection with the Concurrent Financing will be subject to a
four-month-and-one-day statutory hold period in accordance with
applicable Canadian securities laws.
Completion of the Transaction is subject to a number of
conditions including:
-- the completion of the Concurrent Financing of CND $2,000,000 by BRC;
-- the satisfactory completion of due diligence by the Company and BRC;
-- the negotiation and entering into of definitive agreements;
-- the completion of the Concurrent Financing by BRC;
-- receipt of all required shareholder, regulatory and
third-party consents, including approval of the TSX-V and the
shareholders of URU;
-- satisfaction of other customary closing conditions.
The Transaction and Concurrent Financing cannot close until the
required approvals are obtained. There can be no assurance that the
Transaction and Concurrent Financing will be completed as proposed
or at all.
In connection with the Transaction, BRC has commissioned a
geological report on the Project. Prior to completion of the
Transaction, a copy of the geological report will be filed and
posted on SEDAR. Further information on the Transaction will be
available and posted on SEDAR upon completion of a filing statement
that will be prepared by BRC.
Trading in the common shares of BRC will remain halted pending
further filings with the TSX-V.
Assuming that the Transaction is completed, URU will have an
interest in 41,000,000 common shares of BRC, representing
approximately 79.85% of the issued common share capital of BRC.
Shareholders should note that, should the Transaction proceed,
the disposal of ZEB would be deemed to be a a fundamental change of
change of business pursuant to Rule 15 of the AIM Rules for
Companies. Accordingly, a circular will be published by the Company
prior to the completion of the Transaction and shareholders of URU
will be asked to consent to the disposal of ZEB at a meeting of
shareholders. For the avoidance of doubt, URU is not expected to
become an AIM Rule 15 company as a consequence of the
Transaction.
URU intends to retain ownership of the common shares of BRC for
the forseeable future and these shares will be subject to a hold
period, further details of which will be provided when the Company
publishes a circular in connection with the Transaction.
There are no profits or losses attributable to ZEB, as it is a
holding company for the Project.
Information Concerning ZEB
ZEB is a wholly-owned subsidiary of URU, established under the
laws of the Republic of South Africa. ZEB owns a seventy-four
percent interest in Umnex Minerals Limpopo (Pty) Ltd., which in
turn holds an interest in Lesego Platinum Uitloop (Pty) Ltd. which
controls the Project. Aside from its interest in the Project, ZEB
has no assets.
Management and Board of Directors
Upon completion of the Transaction, it is expected that all the
directors and officers of BRC, other than Anton Drescher, will
resign and the board of directors and management of BRC will be
reconstituted to consist of nominees of URU. The following sets out
the names and backgrounds of all persons who are expected to be
appointed as officers and directors of the Resulting Issuer:
Wayne Isaacs, CEO and Director. Mr. Isaacs has a thirty-year
career on Bay Street specializing in the resource sector both as a
corporate executive of resource companies and as an investment
banker. This extensive experience has allowed him to successfully
seek out and engage and acquire significant resource assets and
financing to support exploration, development and mining activities
for his operating and investee companies. Mr. Isaacs has been
involved as principal in 30 listed companies and has served as a
director and / or senior officer of over 35 listed companies. He
was the President and Director of Forsys Metals Corp. from 2003 to
2007, a TSX listed company with uranium properties in Namibia,
Africa which he managed from start up to in excess of $750 million
in market capitalization raising over $70 million to advance its
uranium property from the exploration stage to the production
decision stage. Mr. Isaacs is currently a Director of AM Resources
Corp. (TSX.V: AMR), a mining company engaged in the exploration of
coal, hydrocarbons and gold mining sites located in Colombia. He is
a graduate of the University of Western Ontario and has held
numerous securities certifications and licenses.
Tom Panoulias, Director. Mr. Panoulias is a capital markets
professional with over fifteen years of experience. He has
previously worked at Echelon Wealth Partners, Fraser Mackenzie, and
Dundee Capital Markets, raising over one billion dollars for
issuers in the mining sector and advising senior management teams
on numerous merger and acquisition transactions. Prior to entering
capital markets, Mr. Panoulias held senior roles at Kinross Gold
Corporation and TVX Gold Inc. in corporate development, responsible
for managing various acquisition and divestiture activities. He
currently is the Vice President of Corporate Development for
Freeman Gold Corp. and a director of Bonavista Resources Corp. Mr.
Panoulias holds an Honours Bachelor of Commerce degree from the
University of Toronto and is a member of the Canadian Institution
of Mining and Metallurgy and the Toronto Society of Financial
Analysts.
Anton Drescher, Director. Mr. Drescher has been a Certified
Public Accountant, Certified Management Accountant since 1981. Mr.
Drescher is currently involved with several public companies
including as: a director (since 1991) of International Tower Hill
Mines Ltd., a public mining company listed on the TSX and the
NYSE-MRT; a director (since 1996) and Chief Financial Officer
(since 2012) of Xiana Mining Inc., a public mineral exploration
company listed on the TSXV; a director (since 2007) and the Chief
Financial Officer of Oculus VisionTech Inc., a public company
involved in watermarking of film and data listed on the TSXV and
the OTC Bulletin Board; a director (since 2014) of CENTR Brands
Corp., a public company listed on the CSE. Mr. Drescher is also the
President (since 1979) of Westpoint Management Consultants Limited,
a private company engaged in tax and accounting consulting for
business reorganizations, and the President (since 1998) of Harbour
Pacific Capital Corp., a private company involved in regulatory
filings for businesses in Canada.
Greg McKenzie, Director. Mr. McKenzie (JD, MBA) is a former
senior investment banker with more than twenty years of experience
in financing, M&A, financial advisory, valuation, and strategic
advice to mid-cap companies. Mr. McKenzie has held positions with
Morgan Stanley, CIBC World Markets and Haywood Securities, and has
been involved in transactions valued in excess of $18 billion. In
addition to his capital market experience Mr. McKenzie previously
practiced corporate law with a leading Canadian securities and
M&A law firm. He is currently the President & CEO of Golden
Tag Resources, a Mexican Silver Exploration and Development
Company.
Jay Vieira, Director. Mr Vieira is the Non-executive Chairman of
URU and former Vice President, Corporate and Legal Affairs at
Distinct Infrastructure Group Inc. Previously, from 2006 to 2016,
he was a partner with the law firm of Fogler, Rubinoff LLP,
Toronto, Ontario, where he focussed on securities and corporate
finance. Mr. Vieira is a member of the Canadian and Ontario bar
associations and the Law Society of Upper Canada. He was admitted
to the Ontario bar in 1999 after obtaining his LL.B. from the
University of Windsor Law School. Mr. Vieira also holds a B.A.
(Hons.) in Humanities from McMaster University.
Martin Vydra, Strategic Advisor to the Board . Mr. Vydra
President of Giga Metals joined following a thirty-one year career
with Sherritt International Corporation, a leader in the mining,
processing and refining of lateritic nickel and cobalt with
operations in Canada, Cuba and Madagascar. Martin is widely
recognized as an expert in nickel and cobalt extraction, processing
and refining including the development and application of advanced
technologies to maximize the recovery of valuable metals such as
nickel and cobalt from a variety of feeds. While at Sherritt,
Martin's technical accomplishments spanned four continents and over
20 operations including postings in Australia where he was
integrated in Murrin Murrin's refinery start up; Finland for the
design of Harjavalta's nickel reduction circuit; and, in Chile
where he oversaw the design, construction and commissioning of a
major pressure oxidation operation. Most recently, Martin served as
Sherritt's Senior Vice President, Commercial and Technologies,
where he had oversight for the sales and marketing of nickel and
cobalt, and marketing and commercialization of Sherritt's
proprietary technologies. Mr. Vydra also currently works for Conic
Metals Corp in a strategic capacity.
Justin Cochrane, Advisor to the Board. Mr. Cochrane, President
and CEO of Conic Metals Corp., has 20 years of royalty and stream
financing, M&A and corporate finance experience. Prior to Conic
Metals, he served as President & COO of Cobalt 27 Capital Corp.
and before that as Executive Vice President and Head of Corporate
Development for Sandstorm Gold Ltd. Mr. Cochrane's expertise is in
the structuring, negotiation, execution and funding of royalty and
stream financing contracts around the world, across dozens of
projects, totaling over $2 billion. Prior to Sandstorm, he spent
nine years in investment banking and equity capital markets with
National Bank Financial where he covered the resource, clean-tech
and energy technology sectors. In addition, Mr. Cochrane is
currently a board member of Nevada Copper Corp.
David Cross, Chief Financial Officer and Corporate Secretary.
Mr. Cross, a Certified Public Accountant, Certified Management
Accountant, started his accounting career at a Chartered Accountant
firm in 1997. Currently he is a partner of Cross Davis &
Company LLP, an accounting firm founded in 2010, which is focused
on providing accounting and management services for publicly traded
companies. Mr. Cross also serves as the Chief Financial Officer and
director of several publicly listed companies.
Sponsorship
The Transaction is subject to the sponsorship requirements of
the TSX-V unless an exemption from those requirements is granted.
BRC intends to apply for an exemption from the sponsorship
requirements; however, there can be no assurance that an exemption
will be obtained. If an exemption from the sponsorship requirements
is not obtained, a sponsor will be identified at a later date. An
agreement to act as sponsor in respect of the Transaction should
not be construed as any assurance with respect to the merits of the
Transaction or the likelihood of its completion.
Name Change
Upon completion of the Transaction, BRC intends to change its
name to "ZEB Nickel Corp." or such other name as the BRC and URU
may determine, and the parties expect that the TSX-V will assign a
new trading symbol for the Resulting Issuer.
Further information about BRC
BRC is a capital pool company ("CPC") within the meaning of the
policies of the TSX-V that has not commenced commercial operations
and has no assets other than cash. The current directors and
officers of BRC consists of Anton Drescher (Director, President,
Chief Executive Officer and Corporate Secretary), Raphael Danon
(Director), David Cross (Chief Financial Officer) and David Brett
(Director).
BRC currently has 5,400,000 common shares issued and
outstanding, as well as 200,000 incentive stock options and 200,000
broker warrants to acquire common shares, each exercisable at CND
0.10 per share. Following the Consolidation, BRC will have
approximately 2,347,826 shares outstanding, and 86,957 incentive
stock options and 86,957 broker warrants, each exercisable at CND
0.23 per share.
Following completion of the Transaction, BRC is expected to have
51,347,826 common shares in issue.
Upon successful completion of the proposed acquisition of ZEB,
it is anticipated that BRC will be listed as a Tier 2 Mining issuer
on the TSX-V and will be involved in the exploration and
development of the Project. The Transaction is intended to
constitute BRC's "qualifying transaction" pursuant to Policy 2.4 -
Capital Pool Companies of the TSX-V.
For further information please contact:
Completion of the Transaction is subject to a number of
conditions, including but not limited to, TSX Venture Exchange
acceptance. The Transaction cannot close until the required
approvals are obtained, and the outstanding conditions satisfied.
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 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 BRC should be considered highly
speculative.
The TSX Venture Exchange 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 TSX Venture
Exchange nor its Regulation Services Provider (as that term is
defined in policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release.
This news release may contain certain "Forward-Looking
Statements" within the meaning of the United States Private
Securities Litigation Reform Act of 1995 and applicable Canadian
securities laws. When or if used in this news release, the words
"anticipate", "believe", "estimate", "expect", "target, "plan",
"forecast", "may", "schedule" and similar words or expressions
identify forward-looking statements or information. These
forward-looking statements or information may relate to proposed
financing activity, regulatory or government requirements or
approvals, the reliability of third-party information and other
factors or information. Such statements represent the Company's
current views with respect to future events and are necessarily
based upon a number of assumptions and estimates that, while
considered reasonable by the Company, are inherently subject to
significant business, economic, competitive, political and social
risks, contingencies and uncertainties. Many factors, both known
and unknown, could cause results, performance or achievements to be
materially different from the results, performance or achievements
that are or may be expressed or implied by such forward-looking
statements. The Company does not intend, and does not assume any
obligation, to update these forward-looking statements or
information to reflect changes in assumptions or changes in
circumstances or any other events affecting such statements and
information other than as required by applicable laws, rules and
regulations.
Certain information contained in this announcement would have
been deemed inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 until the release of this
announcement.
For further information, please contact:
URU Metals Limited
John Zorbas
(Chief Executive Officer)
+1 416 504 3978
SP Angel Corporate Finance LLP
(Nominated Adviser and Broker)
Ewan Leggat
+ 44 (0) 203 470 0470
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January 13, 2021 12:21 ET (17:21 GMT)
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