Fengro Announces Execution of Business Combination Agreement with Elemental Royalties a Pril 30, 2020
NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR
DISSEMINATION IN THE UNITED STATES
FENGRO ANNOUNCES EXECUTION OF BUSINESS
COMBINATION AGREEMENT WITH ELEMENTAL ROYALTIES
A
pril 30, 2020 - VANCOUVER, BRITISH COLUMBIA: Fengro Industries Corp.
(TSX-V:FGR.H) (“Fengro” or “the Company”) is pleased to announce further to
its news release of November 5, 2019 that it has entered into a binding business
combination agreement dated April 27 , 2020 (the “Agreement”) respecting the
reverse takeover of the Company (the “ Transaction”) by the shareholders of
Elemental Royalties Limited (“Elemental”) with the Resulting Issuer carrying on the
business of Elemental, being investing in royalties over mining projects , under the
name “Elemental Royalties”. The Company following completion of the Transaction
is referred to in this news release as the “Resulting Issuer”.
P
ursuant to the Transaction, it is currently anticipated that Fengro will undertake a
consolidation of its share capital on a 209:1 basis , for which Fengro obtained
approval from its shareholders at a meeting which took place on March 24, 2020.
Holders of Elemental common shares (“ Elemental Shares”) will receive post -
consolidation common shares of Fengro (“Fengro Shares”) at an exchange ratio of
4.8114 Fengro Shares for each Elemental Share held (the “Exchange Ratio”).
Following such exchange, the former Elemental shareholders will hold
approximately 96% of the issued and outstanding shares of the Company .
Outstanding Performance Rights of Elemental entitling their holders to acquire
497,798 Elemental Shares will also be exchanged for equivalent securities of the
Company entitling them to acquire Fen gro Shares as adjusted for the Exchange
Ratio.
I
n connection with the Transaction, Elemental further intends to undertake a
brokered private placement of subscription receipts (the “Subscription Receipt
Financing”). The subscription receipts will be sold by a wholly owned British
Columbia subsidiary of Elemental (“Finco”), which will be party to a three-cornered
amalgamation under the Business Corporations Act (British Columbia) between
Fengro, Acquireco (a wholly owned subsidiary of Fengro) and Finco (the
“Amalgamation”). Finco and Acquireco will be incorporated by Elemental and
Fengro, respectively, for the purposes of completing the Subscription Receipt
Offering and the Amalgamation. Fengro Shares will be issued to purchasers of the
subscription receipts of Finco upon completion of the Amalgamation.
U
pon completion of the Transaction, the directors of the Company will be replaced
by nominees of Elemental.
A copy of the Agreement has been posted under the Company’s profile at
www.sedar.com.
T
he Transaction is not a Non- Arm’s Length Transaction (as defined in the Policies
of the TSX Venture Exchange (the “Exchange”)). Shareholder approval is not
required for the Transaction under the policies of the Exchange. The Company
previously obtained shareholder approval for the disposition of its historical Brazilian
fertilizer business at a shareholders’ meeting which took place on October 18, 2019.
The Company will be submitting a filing statement providing disclosure with respect
to the Resulting Issuer in the form of Exchange Form 3D2, which will also be filed
under the Company’s profile at www.sedar.com.
T
rading in Fengro’s shares is presently halted, and will remain halted until
completion of the Transaction. Further updates and more fulsome particulars of the
Transaction will be provided as the Transaction progresses and the Company
expects to issue a further press release providing additional information with respect
to the Transaction in the near future.
A
bout Elemental
E
lemental is a precious metals royalty company based in the British Virigin Islands
with a portfolio of producing and exploration assets spanning Burkina Faso, Chile,
Mexico, Kenya and Western Australia.
O
n behalf of Fengro Industries Corp.
D
uane Lo, Director
For
more information contact:
Email: [email protected]
+1 (778) 994 6577
Disclaimer
Completion of the Transaction is subject to a number of conditions, including but not limited to, Exchange
ac
ceptance and if applicable, disinterested 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.
I
nvestors are cautioned that, except as disclosed in filing statement to be prepared in connection with the
Transaction, any information released or received with respect to the T ransaction may not be accurate or
complete and should not be relied upon. Trading in the securities of Fegnro should be considered highly
speculative.
T
he Exchange has in no way passed upon the merits of the proposed Transaction and has neither approved nor
disapproved the contents of this news release.
T
his news release shall not constitute an offer to sell or the solicitation of an offer to buy any securities in any
jurisdiction. Any securities referred to herein have not been, nor will they be, registered under the United States
Securities Act of 1933, as amended, and may not be offered or sold in the United States or to a U.S. Person
absent registration or an applicable exemption from the registration requirements of the United States Securities
Act of 1933, as amended, and applicable state securities laws.
F
orward-Looking Statements
Certain information contained in this press release constitutes “forward-looking information”, within the meaning
of applicable Canadian securities legislation. Generally, these forward-looking statements can be identified by
the use of forward-looking terminology such as “aims”, “plans”, “expects” or “does not expect”, “is expected”,
“budget”, “scheduled”, “target”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or
“believes”, or variations of such words and phrases or statements that certain actions, events or results “may”,
“could”, “would”, “might” or “will be taken”, “occur”, “be achieved” or “has the potential to”. Forward looking
statements contained in this press release may include statements regarding the future operating or financial
performance of Fengro, the and anticipated completion of the Transactions, the Elemental the private placement
and the Subscription Receipt Financing, and the Amalagmation. Actual results and outcomes may differ
materially from what is expressed or forecasted in these forward-looking statements. Such statements are
qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. Among those
factors which could cause actual results to differ materially are the following: market conditions and other risk
factors listed from time to time in our reports filed with Canadian securities regulat ors on SEDAR at
www.sedar.com. The forward-looking statements included in this press release are made as of the date of this
press release and Fengro 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 expressly required by
applicable securities legislation.
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either the TSX Venture Exchange Inc. nor its Regulation Service Provider (as that term is defined in the
policies of the TSX Venture E xchange Inc.) accepts responsibility for the adequacy or accuracy of this
press release.