CALGARY, AB / ACCESSWIRE / May 7, 2019 / ChaiNode Opportunities Corp. (“ChaiNode”) (TSX Venture: CXD.P) is pleased to announce details concerning its proposed arm’s length qualifying transaction involving a business combination with AmAuCu Mining Corporation (“AmAuCu”), a private company incorporated under the laws of Canada on April 11, 2017.
AmAuCu identifies, explores, develops and operates base and precious metal mining properties in the Americas. It currently has an option to acquire all of the outstanding shares of CBAY Minerals Inc. which owns past producing mines and associated infrastructure in the Chibougamau Camp in Quebec, Canada.
ChaiNode has entered into a non-binding Letter of Intent with AmAuCu dated May 2, 2019 (the “LOI”) pursuant to which ChaiNode and AmAuCu intend to complete a business combination (the “Transaction”) to form a new company (“Newco”) called “Dore Copper Mining Corp.”. Pursuant to the proposed Transaction, (i) the issued and outstanding common shares of AmAuCu after the completion of its acquisition of CBAY Minerals Inc. (the “AmAuCu Common Shares”), collectively having a deemed value of approximately $27,800,000, will be exchanged for an aggregate of 19,222,857 common shares of Newco (the “Newco Common Shares”) at
a deemed price of $1.45 per Newco Common Share; (ii) the outstanding options to acquire 1,187,500 AmAuCu Common Shares will be exchanged for replacement stock options issued by Newco on an equivalent economic basis; (iii) each 12.08 issued and outstanding common shares of ChaiNode (the “ChaiNode Common Shares”) will be exchanged for one (1) Newco Common Share; and (iv) each outstanding stock option and agents’ option of ChaiNode will be exchanged for stock options or agents’ options of Newco on an equivalent economic basis.
It is intended that the Transaction, when completed, will constitute ChaiNode’s “Qualifying Transaction” in accordance with Policy 2.4 of the TSX Venture Exchange (the “Exchange”). A more comprehensive news release will be issued by ChaiNode disclosing details of the Transaction, including financial information respecting AmAuCu, the names and backgrounds of all persons who will constitute insiders of Newco, and information respecting sponsorship, once an agreement has been finalized and certain conditions have been met, including:
i) approval of the Transaction by ChaiNode’s Board of Directors;
ii) satisfactory completion of due diligence; and
iii) execution of the definitive agreement.
Shareholder approval is not required with respect to the Transaction under the rules of the Exchange because the Transaction does not constitute a Non-Arm’s Length Qualifying Transaction. However, the structure of the Transaction has not yet been finalized so shareholder approval under corporate law may be required. Trading in the common shares of ChaiNode has been halted and is not expected to resume trading until the Transaction is completed or until the Exchange receives the requisite documentation to resume trading. If the Transaction is completed ChaiNode expects to be listed on the Exchange as a mining issuer.
Pursuant to an engagement letter among AmAuCu, ChaiNode and Canaccord Genuity Corp. (“Canaccord”), AmAuCu and ChaiNode have agreed to engage a syndicate of agents led by Canaccord and co-managed by BMO Capital Markets (together, the “Agents”) in connection with AmAuCu’s private placement (the “AmAuCu Private Placement”) of subscription receipts (the “Subscription Receipts”) at a price of $1.45 per Subscription Receipt to raise, on a commercially reasonable efforts basis, gross proceeds of up to $6,000,000 with an option to place up to an additional 15% of the number of Subscription Receipts issuable under the AmAuCu Private Placement for additional gross proceeds of up to $900,000. Each Subscription Receipt will be automatically converted, immediately before the completion of the Transaction, into an AmAuCu Common Share and one half of a warrant with each whole warrant exercisable for one AmAuCu Common Share at a price of $2.17 for 24 months. The Agents will be paid a cash commission and granted broker warrants for its services, with a reduced commission and number of broker warrants in respect of certain investors on a President’s List. The net proceeds of the AmAuCu Private Placement will be used for the exploration and development of AmAuCu’s mineral projects in the Chibougamau Camp in Quebec and general working capital following completion of the Transaction.
Forward Looking Information
Statements in this press release regarding ChaiNode’s business which are not historical facts are “forward-looking statements” that involve risks and uncertainties, such as terms and completion of the proposed transaction. Since forward-looking statements address future events and conditions, by their very nature, they involve inherent risks and uncertainties. Actual results in each case could differ materially from those currently anticipated in such statements.
Completion of the Transaction is subject to a number of conditions, including but not limited to, execution of a binding definitive agreement relating to the Transaction, Exchange acceptance and if applicable pursuant to Exchange requirements, majority of the minority 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 a capital pool company should be considered highly speculative.
The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed Transaction and has neither approved nor disapproved the contents of this press release.
For further information, please contact:
ChaiNode Opportunities Corp.
President, Chief Executive Officer and Chief Financial Officer
Phone: (403) 690-5387
AmAuCu Mining Corporation
Phone: (647) 921-0501
Neither 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 news release.
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