Richmond ROAD Capital Corp. Announces Its Qualifying Transaction and Concurrent Private Placement of Subscription Receipts
RICHMOND ROAD CAPITAL CORP. ANNOUNCES ITS QUALIFYING
TRANSACTION AND CONCURRENT PRIVATE PLACEMENT OF
SUBSCRIPTION RECEIPTS
NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR RELEASE, PUBLICATION, DISTRIBUTION OR
DISSEMINATION DIRECTLY, OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES.
Calgary, Alberta, June 13, 2017 – Richmond Road Capital Corp. (NEX: RRD.H) (“Richmond
Road" or the “Company”), a capital pool company as defined under policy 2.4 – Capital Pool
Companies ("CPC") of the TSX Venture Exchange (the “Exchange”), is pleased to announce it has
entered into a letter of intent dated as of June 8, 2017 (the "Agreement") with North American Lithium
Inc. (" North American Lithium "), a private company incorporated under the laws of Canada,
whereby the Company will acquire all of the issued and outstanding common shares of North
American Lithium (the "North American Lithium Shares ") by way of a three-cornered amalgamation,
or such other business combination transaction as the parties may agree upon (the " Transaction"),
subject to the terms and conditions outlined below. Richmond Road intends that the Transaction will
constitute its Qualifying Transaction, as such term is defined in the policies of the Exchange.
North American Lithium is a Canadian industrial minerals mining company focused on the extraction
and processing of lithium products in Quebec incorporated under the federal laws of Canada. North
American Lithium is focused on operating its 100% owned Quebec Lithium mine located in Val-d’Or,
Quebec where over C$500 million has been invested to-date. North American Lithium is expected to
be North America’s first “hard rock” lithium producer. The purpose of the Transaction is to create a
publicly-listed, “pure play” lithium company that is anticipated to initially produce lithium concentrate
(also known as spodumene) and, through the refurbishment of the existing hydrometallurgical plant
located at the Quebec Lithium mine, become one of the first integrated lithium carbonate producers
with operations focused in North America. The Quebec project site is now being commissioned with
the aim of putting the mine into commercial production this year.
In connection with the Transaction, Richmond Road anticipates that the 5,000,000 shares in the
capital of Richmond Road (the “Richmond Road Shares ”) currently issued and outstanding will be
consolidated (the “Consolidation”) on the basis of 1 (new) Richmond Road Share for every 18.5 (old)
Richmond Road Shares.
Summary of the Qualifying Transaction
The Agreement contemplates Richmond Road and North American Lithium completing an arm's
length business combination transaction by way of a three-cornered amalgamation under the
provisions of the Canada Business Corporations Act , pursuant to which a newly incorporated, wholly-
owned subsidiary of Richmond Road will amalgamate with North American Lithium, and Richmond
Road would acquire all of the issued and outstanding North American Lithium Shares in exchange for
shares of Richmond Road on the basis of one post-Consolidation Richmond Road Share for each
issued and outstanding North American Lithium Share. As described below, on completion of the
Transaction, the current shareholders of North American Lithium would own a majority of the issued
and outstanding shares of the Resulting Issuer (as such term is defined in Exchange Policy 2.4) and
North American Lithium will become a wholly-owned subsidiary of the Resulting Issuer. The common
shares of the Resulting Issuer will be listed for trading on the Exchange. Further information about the
proposed Transaction consideration, comprised of the Transaction's amalgamation and share
exchange, will be provided in a subsequent news release.
The parties to the Transaction are at arm’s length and it is therefore anticipated that the approval of
the shareholders of Richmond Road will not be required. It is anticipated that shareholders of the
Company will be asked to approve certain ancillary matters required to enable the Company to
reorganize to complete the Transaction, which include approval for the Consolidation, the continuance
of the Company out of the Province of Alberta and into the Province of British Columbia (the
“Continuance”), an increase in the size of the board of directors and a change of name of the
Company (the "Name Change").
Pursuant to the terms of the Agreement, North American Lithium and Richmond Road have agreed
not to solicit or negotiate with any other entities in regard to a transaction similar to the Transaction.
Each of Richmond Road and North American Lithium will bear their own costs in respect of the
Transaction, subject to the occurrence of certain termination events provided in the Agreement.
The completion of the Transaction is subject to the satisfaction of various conditions as are standard
for a transaction of this nature, including but not limited to (i) the completion of the Financing (as
defined below) for minimum gross proceeds of at least C$25 million; (ii) all requisite approvals from
the shareholders of North American Lithium and the Board of each of Richmond Road and North
American Lithium, (iii) the approval by the shareholders of Richmond Road of the ancillary matters
including the Consolidation, the Continuance and the Name Change; (iv) the absence of any material
adverse change, material litigation, claims, investigations or other matters affecting Richmond Road
or North American Lithium , including any subsidiaries or related companies thereof; (v) receipt of all
requisite regulatory, stock exchange, court or governmental authorizations and consents, (vi) the
approval of the Exchange for the Transaction, the Financing, the Consolidation and the listing of the
common shares of the Resulting Issuer including those shares to be issued upon conversion of the
Subscription Receipts (as defined below). Upon completion of the Transaction, the Resulting Issuer
shall be a mining issuer. There can be no assurance that the Transaction will be completed on the
terms proposed above or at all.
Private Placement Financing
In connection with the Transaction, North American Lithium will undertake to complete an equity
financing to raise a minimum of at least C$25 million up to approximately C$75 million (the
"Financing'') through the issuance of subscription receipts (the " Subscription Receipts "). The
Financing will be completed on a "best efforts" brokered private placement basis at a price to be
determined in the context of the market (the " Issue Price"). GMP Securities L.P. has been engaged to
act as lead agent (the " Agent") in connection with the Financing which is anticipated to close in July,
2017 (the "Closing Date"). For its services in connection with the Financing, the Agent will receive (i)
a cash commission equal to 6% of the gross proceeds of the Financing and (ii) compensation options
entitling the Agent to subscribe for a period of two years after the completion of the Transaction for that
number of North American Lithium Shares as is equal to 3% of the total number of Subscription
Receipts sold pursuant to the Financing (collectively, the " Agency Fee"). No Agency Fee will be paid
to the Agents in connection with Subscription Receipts sold to certain investors subscribing to the
Financing. Further information about the Financing will be provided in a subsequent news release.
Each Subscription Receipt will be automatically exchanged, without payment of any additional
consideration and subject to adjustment, for one North American Lithium Share (each an " SR Share")
upon satisfaction of the Escrow Release Conditions (as hereinafter defined) on or before the Escrow
Deadline (as hereinafter defined). The SR Shares will be exchanged for common shares of Richmond
Road pursuant to the Transaction. All securities issued pursuant to the Financing (including, for
greater certainty, the SR Shares) shall be subject to a statutory hold period of four months and one
day from the Closing Date.
The gross proceeds of the Financing less an amount equal to 50% of the Agency Fee in connection
with the Financing will be delivered to and held by a licensed Canadian trust company or other escrow
agent (the "Escrow Agent") mutually acceptable to the Agent and the Company in an interest bearing
account (the " Escrowed Funds "). An amount equal to 50% of the Agency Fee plus any interest
accrued thereon will be released to the Agents out of the Escrowed Funds and the balance of the
Escrowed Funds will be released from escrow to the Company upon satisfaction of the following
conditions (together, the " Escrow Release Conditions ") on or before 5:00 p.m. (Toronto time) on
September 30, 2017 (the "Escrow Deadline"):
(A) the satisfaction of all conditions precedent to the business combination transaction involving North
American Lithium and Richmond Road to the satisfaction of the Agent;
(B) the receipt of all required shareholder and regulatory approvals (including, without limitation, the
conditional approval of the Exchange for the Transaction and the listing of the common shares of
the Resulting Issuer;
(C) counsel to the Company having delivered an opinion (the final form of which opinion shall
ultimately be delivered on the Closing Date) addressed to the Agent confirming, among other
things, that the common shares of the Resulting Issuer issued in exchange for the SR Shares
pursuant to the Transaction shall be free of any statutory hold periods in Canada upon the issue
thereof, other than in respect of control block sales; and
(D) a shareholder agreement having been entered into between the Resulting Issuer and certain of the
controlling shareholders of North American Lithium in a form satisfactory to the Agent acting
reasonably.
If the Escrow Release Conditions are not satisfied on or before the Escrow Deadline, the Escrowed
Funds plus any accrued interest shall be used by the Company to repurchase the Subscription
Receipts at a redemption price per Subscription Receipt equal to the Issue Price plus a pro rata
amount of any interest accrued in respect of the Escrowed Funds to the date of redemption. To the
extent that the Escrowed Funds (plus any accrued interest) are not sufficient to purchase all of the
Subscription Receipts at the Issue Price, the Company has agreed to contribute such amounts as are
necessary to satisfy any shortfall. Release to North American Lithium of Escrowed Funds of a
particular subscriber under the Financing prior to the satisfaction of the Escrow Release Conditions
may only be authorized by specific written agreement of such subscriber and North American Lithium.
The net proceeds of the Financing will be used to fund (i) the ongoing commissioning of North
American Lithium’s Quebec Lithium project, (ii) the evaluation and redevelopment of the hydro
metallurgical plant at the Quebec Lithium project, and (iii) corporate and general working capital
purposes.
Sponsorship of the Qualifying Transaction
Sponsorship of a "Qualifying Transaction" of a CPC is required by the Exchange unless exempt
therefrom in accordance with the Exchange's policies . Given the size and nature of the Transaction,
including the amount of the Financing, Richmond Road intends to apply for an waiver from the
sponsorship requirements pursuant to the policies of the Exchange. If the waiver is not granted by the
Exchange, then Richmond Road would be required to engage a sponsor.
The Resulting Issuer
Upon completion of the Transaction the Resulting Issuer is expected to change its name to North
American Lithium Corp. or such other name as determined by North American Lithium.
It is estimated that there will be approximately 76.9 million common shares of the Resulting Issuer
issued and outstanding immediately following closing of the Transaction (on a basic basis), with
former Richmond Road shareholders holding approximately 0.4% of such common shares, former
North American Lithium shareholders holding approximately 73.7% of such common shares and
subscribers under the Financing holding approximately 26.0% of such common shares. The principal
shareholders of North American Lithium are 9554548 Canada Inc. (currently holding 75% of the
issued and outstanding shares of North American Lithium) and Resources Quebec Inc. (currently
holding 25% of the issued and outstanding shares of North American Lithium). 9554548 Canada Inc.
("955") is a wholly owned subsidiary of Jien International Investment Ltd. (" JIIL"), which is expected to
be a control person of the Resulting Issuer upon completion of the Transaction by virtue of its
ownership and control of shares of the Resulting Issuer through its subsidiary, 955. No other control
person is expected to be created pursuant to the Transaction.
Concurrent with the completion of the Transaction, it is expected that all directors and officers of
Richmond Road will resign and be replaced by the directors and officers of North American Lithium
listed below. Additional directors will be added to the board of directors of the Resulting Issuer (the
"Board") in the normal course and once identified, information with respect to the proposed additional
directors will be included in a subsequent news release.
The management and Board of the Resulting Issuer will include the persons identified below:
James Xiang – Chief Executive Officer & Director
Mr. Xiang, who led the acquisition of the Quebec Lithium project, is the Chief Executive Officer of the
Company and has been since July 2016. In addition, Mr. Xiang serves as director for several TSX and
US-listed companies, and has served as a director and CFO for several TSX and US-listed companies
since 2005. Mr. Xiang is the Chief Executive Officer and a director of Jien International Investment Ltd.
and has managed its $1.6 billion asset in Canada since 2013. Prior to his engagement with Jien
International Investment Ltd., Mr. Xiang was the President of China Mineral Resources Limited, a
company that provides investment and financial advisory services to Chinese companies seeking to
list, finance or transact on M&A opportunities in North America. Mr. Xiang holds a Bachelor of Arts
from Huazhong University of Science & Technology in China and a Masters of Business
Administration from York University.
Yves Desrosiers – General Manager
Mr. Desorsiers is a metallurgical engineer graduated from Laval in 1994. He began his career at
Cambior Gant Dormant to pursue at Louvicout Mine as a metallurgist and environmental engineer.
Since 1999, Yves has held management positions such as Timbal's superintendent pit and mill and
Timber Superintendent for Tembec. From 2005 to 2012, he worked for ArcelorMittal as head of ovens
in Contrecoeur, plant and mine manager in Fermont and as deputy general manager. In 2012, he
became general manager for Canada Lithium and then in 2013 moved to be Managing Director at
Nyrstar in Lebel Sur Quevillon until joining the Company in August 2016.
Charles Sung – Chief Financial Officer
Charles Sung, CPA, CA, CPA(IL) is a Canadian and US CPA. Through his eleven years of experience,
Charles provides business/financing consulting, accounting, assurance and general tax services to
private and public entities. Before joining the Company, Charles was also an Assurance Manager at
MNP Canada, and has managed numerous audit and consulting engagements and advised on
technical accounting and auditing issues for private and public clients. Charles graduated from
University of Toronto with a Master of Management of Professional Accounting degree and a Bachelor
of Applied Science degree in Electrical Engineering.
Thomas Laporte Aust – VP Corporate Affairs & Corporate Secretary
Mr. Aust leads NAL’s corporate affairs and sustainability programs. Prior to joining NAL in 2017, Mr.
Aust served as a outside counsel to the Company and was involved in the acquisition of the Quebec
Lithium project from the RB Energy receivership. Over the course of his career, he has been involved
in acquisition projects across a variety of sectors throughout Canada. Previously, he worked as a
lawyer within the corporate and securities practice of one of Canada's most prestigious national law
firms. Mr. Aust holds a Bachelor of Arts (Political Science) from Queens University and a law degree
from Université Laval (LLB). He is a member of the Barreau du Québec as well as the American Bar
Association.
André Boivin - Director
Mr. Boivin is a Partner at the law firm Cassels Brock & Blackwell LLP with a practice focused on
corporate and securities law, primarily in the mining and natural resources sectors, for companies with
properties and operations all over the world including the Americas, Africa, Eastern Europe and
Australia. Mr. Boivin has substantial experience leading capital market financing transactions and
public mergers & acquisitions and advises numerous public companies with respect to regulatory
compliance and governance matters.
Ruobing Wang - Director
Mr. Wang is the Chairman of Jilin Jien Nickel Industry Co. Ltd. Mr. Wang joined Jilin Jien in 1996 as
an auditor and has since held the positions of Vice President and President of the Company. Jilin Jien
Nickel Industry Co. Ltd. is listed on the Shanghai Stock Exchange.
About Richmond Road Capital Corp.
Richmond Road Capital Corp. is a capital pool company. The Company's principal business activity is
to identify and evaluate opportunities for acquisition of assets or business. The Company was founded
on September 19, 2012 and is headquartered in Calgary, Alberta.
About North American Lithium Inc.
North American Lithium Inc., is a Canadian industrial minerals mining company operating the Quebec
Lithium mine located near Val d'Or, Quebec. The Quebec Lithium mine is an open pit, hard rock
lithium mine and processing plant currently in the process of being commissioned to produce lithium
concentrate. With the restart of the hydro metallurgical plant at the Quebec Lithium Mine, North
American Lithium intends to become an integrated producer capable of producing lithium carbonate.
The high quality product expected to be produced from the mine is anticipated to meet the rapidly
growing needs of the portable consumer electronics industry, electric and hybrid-electric vehicles, and
grid storage solutions. Further information about North American Lithium, including financial and other
information, will be provided in a subsequent news release.
As noted above, North American Lithium is currently 75% owned by 955 and 25% by Resources
Quebec Inc. Resources Quebec Inc. is a Quebec corporation resident in the Province of Quebec, and
is beneficially owned directly or indirectly by the Province of Quebec. 955 is a corporation resident in
Ontario, existing under the federal laws of Canada, and is wholly owned by JIIL. JIIL has investment
decision-making authority over 955 and the holdings of 955, and is a corporation resident in Ontario
and existing under the federal laws of Canada.
Cautionary Note
As noted above, completion of the Transaction is subject to a number of conditions including, without
limitation, approval of the Exchange, approval of the shareholders of North American Lithium and
Richmond Road, court approval of the Transaction (if required), completion of the Consolidation and
Continuation by Richmond Road and completion of the Financing by North American Lithium. Where
applicable, the Transaction cannot close until the required approvals have been 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 continuous disclosure document containing
full, true and plain disclosure regarding the Transaction, required to be filed with the securities
regulatory authorities having jurisdiction over the affairs of the Company, any information released or
received with respect to the Transaction may not be accurate or complete and should not be relied
upon. The trading in the securities of Richmond Road on the Exchange, if reinstated prior to
completion of the Transaction, should be considered highly speculative.
Trading in the common shares of the Company is presently halted and is expected to remain halted
pending closing of the Transaction. While halted, the common shares of the Company may only trade
upon Exchange approval and the filing of required materials with the Exchange as contemplated by
Exchange policy.
CONTACT INFORMATION
Richmond Road Capital Corp.
Robb McNaughton
Director
(403) 298-1077
(403) 695-3546 (FAX)
Richmond Road Capital Corp.
Michael Doyle
President, Chief Executive Officer and Director
(403) 708-2427
Disclaimer for Forward-Looking Information
Although the Company believes, in light of the experience of its officers and directors, current conditions
and expected future developments and other factors that have been considered appropriate that the
expectations reflected in this forward-looking information are reasonable, undue reliance should not be
placed on them because the Company can give no assurance that they will prove to be correct. When
used in this press release, the words "estimate", "project", "belief", "anticipate", "intend", "expect",
"plan", "predict", "may" or "should" and the negative of these words or such variations thereon or
comparable terminology are intended to identify forward-looking statements and information. The
forward-looking statements and information in this press release include information relating to the
business plans of Richmond Road and North American Lithium, the Financing, the Transaction
(including Exchange approval, court approval, and the closing of the Transaction) and the board of
directors and management of the Resulting Issuer upon completion of the Transaction. Such statements
and information reflect the current view of Richmond Road and/or North American Lithium, respectively.
Risks and uncertainties that may cause actual results to differ materially from those contemplated in
those forward-looking statements and information.
By their nature, forward-looking statements involve known and unknown risks, uncertainties and other
factors which may cause our actual results, performance or achievements, or other future events, to be
materially different from any future results, performance or achievements expressed or implied by such
forward-looking statements.
Such factors include, among others, the following risks:
there is no assurance that the Financing will be completed or as to the actual proceeds to be
raised in connection with the Financing or as to the offering price to be realized. In particular,
the amount raised may be significantly less than the amounts indicated if investors are not
prepared to invest;
there is no assurance that Richmond Road and North American Lithium will obtain all requisite
approvals for the Transaction, including the approval of the North American Lithium
Shareholders, the approval of the Exchange for the Transaction (which may be conditional upon
amendments to the terms of the Transaction) or court approval of the Transaction;
following completion of the Transaction, the Resulting Issuer may require additional financing
from time to time in order to continue its operations. Financing may not be available when
needed or on terms and conditions acceptable to the Resulting Issuer;
new laws or regulations could adversely affect the Resulting Issuer's business and results of
operations;
the stock markets have experienced volatility that often has been unrelated to the performance
of companies. These fluctuations may adversely affect the price of the Resulting Issuer's
securities, regardless of its operating performance;
There are a number of important factors that could cause Richmond Road and North American Lithium's
actual results to differ materially from those indicated or implied by forward-looking statements and
information. Such factors include, among others: currency fluctuations; limited business history of
Richmond Road; disruptions or changes in the credit or security markets; results of operation activities
and development of projects; project cost overruns or unanticipated costs and expenses, fluctuations in
commodity prices, and general market and industry conditions. The terms and conditions of the
Qualifying Transaction may be based on the Company's due diligence (which is going to be limited as
the Company intends largely to rely on the due diligence of other parties of the Qualifying Transaction to
contain its costs, among other things) and the receipt of tax, corporate and securities law advice for both
the Company and North American lithium. The Company undertakes no obligation to comment on
analyses, expectations or statements made by third parties in respect of the Company, North American
Lithium, their securities, or their respective financial or operating results (as applicable).
Richmond Road cautions that the foregoing list of material factors is not exhaustive. When relying on
Richmond Road's forward-looking statements and information to make decisions, investors and others
should carefully consider the foregoing factors and other uncertainties and potential events. Richmond
Road has assumed that the material factors referred to in the previous paragraph will not cause such
forward-looking statements and information to differ materially from actual results or events. However,
the list of these factors is not exhaustive and is subject to change and there can be no assurance that
such assumptions will reflect the actual outcome of such items or factors. The information about North
American Lithium contained in this press release has not been independently verified by the Company.
THE FORWARD-LOOKING INFORMATION CONTAINED IN THIS PRESS RELEASE REPRESENTS
THE EXPECTATIONS OF RICHMOND ROAD AS OF THE DATE OF THIS PRESS RELEASE AND,
ACCORDINGLY, IS SUBJECT TO CHANGE AFTER SUCH DATE. READERS SHOULD NOT PLACE
UNDUE IMPORTANCE ON FORWARD-LOOKING INFORMATION AND SHOULD NOT RELY UPON
THIS INFORMATION AS OF ANY OTHER DATE. WHILE RICHMOND ROAD MAY ELECT TO, IT
DOES NOT UNDERTAKE TO UPDATE THIS INFORMATION AT ANY PARTICULAR TIME EXCEPT
AS REQUIRED IN ACCORDANCE WITH APPLICABLE LAWS.
This press release is not an offer of the securities for sale in the United States. The securities have not
been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in
the United States absent registration or an exemption from registration. This press release shall not
constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities
in any state in which such offer, solicitation or sale would be unlawful.
Completion of the Transaction is subject to a number of conditions, including but not limited to,
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 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 the
policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press
release.