i-80 Gold Corp. Announces Additional Details on Financing Package Intention to Seek Written Shareholder Consent for Certain Equity Issuances including to Orion and Equinox All dollar figures are in US dollars unless otherwise noted
i-80 Gold Corp. Announces Additional Details on Financing
Package
Intention to Seek Written Shareholder Consent for Certain Equity Issuances including to Orion and Equinox
All dollar figures are in US dollars unless otherwise noted
RENO, Nev.
,
Oct. 8, 2021
/CNW/ -
i-80 GOLD CORP.
(TSX: IAU) (OTCQX: IAUCF)
("i-80", or the "Company")
announces
that in connection with the previously announced acquisitions by the Company of the Lone Tree and Buffalo Mountain gold
deposits from Nevada Gold Mines LLC ("
NGM
") and the Ruby Hill mine from affiliates of Waterton Global Resource
Management ("
Waterton
"), the Company will be seeking shareholder approval pursuant to the requirements of the Toronto
Stock Exchange (the "
TSX
") of certain proposed issuances of securities and common shares of the Company ("
Common
Shares
") to one or more investment funds managed by Orion Resource Partners (collectively, together with their respective
affiliates, "
Orion
"), Equinox Gold Corp. ("
Equinox
") and certain other potential convertible debt investors, as further described
in a news release dated
September 7, 2021
and detailed below.
As previously announced, the Company has entered into a non-binding term sheet with Orion for up to
$140 million
of
acquisition financing, with an additional
$100 million
potentially available via an accordion feature. The Company and Orion are
in the process of finalizing definitive documentation in respect of the foregoing.
The Orion Financing is expected to include a mix of equity and convertible securities, warrants and secured instruments for up
to
$140 million
, with an additional
$100 million
potentially available via an accordion feature. The securities to be issued will be
priced based on the issue price of
C$2.62
(the "
Issue Price
") in respect of the previously-announced equity private placement
the Company expects to complete with NGM and others, including the issuance of: (i) up to 19,195,419 Common Shares (the
"
Orion Conversion Shares
"), upon conversion of the principal of a
$50 million
unsecured convertible loan (the "
Orion
Convertible Loan
") that is intended to be provided by Orion to the Company along with, if Orion elects to receive its accrued
interest in the form of Common Shares, such number of Common Shares upon conversion of the interest on such loan as is
determined based on the market price of the Common Shares on the TSX at time of the conversion (ii) 839,799 Common
Shares (the "
Transfer Fee Shares
") at the Issue Price in satisfaction of the transfer fee of
$1.75 million
that will be payable
by the Company to Orion in connection with the Asset Exchange (as defined below), and (iii) 5,500,000 Common Share
purchase warrants (the "
Orion Warrants
") to Orion, with each Orion Warrant exercisable for one Common Share at price
equal to 125% of the Issue Price for a period of three years from the date of issue (subject to acceleration under certain
circumstances). Orion may also subscribe for Common Shares in the Additional Private Placement (as defined below) at the
Issue Price for up to that number of Common Shares such that when added with its current holdings of Common Shares and
the Transfer Fee Shares it will own 9.9% of the issued and outstanding Common Shares following the completion by the
Company of the transactions with NGM, Waterton, Orion and the private placement (the "
Orion Private Placement Shares
",
and together with the Orion Conversion Shares, the Transfer Fee Shares and the Orion Warrants, the "
Orion Issuances
").
Pursuant to the rules of the TSX, the Orion Conversion Shares and the Common Shares issuable upon exercise by Orion of
the Orion Warrants will be deemed to have been issued at a discount to market price and are regarded as being part of the
number of Common Shares being issued pursuant to the transactions with NGM, Waterton and the private placement. The
Corporation also expects to accept additional unsecured convertible loans from one or more additional potential convertible
debt investors in a principal amount of up to an additional
$10 million
(the "
Additional Convertible Loans
" and together with
the Orion Convertible Loans, the "
Convertible Loans
") on the same terms as the Orion Convertible Loan.
As disclosed in its news release dated
September 7, 2021
, the Company has entered into a definitive membership interest
purchase agreement to acquire the Ruby Hill mine from Waterton in consideration of (1)
US$75 million
in cash payable on
closing, (2) Common Shares (the "
Ruby Hill Payment Shares
") equal to
$8,000,000
divided by the US dollar equivalent of the
10-day volume weighted average trading price as of the date that is three business days immediately prior to the closing date
of the acquisition based on the USD/CAD exchange rate on such date (the "
Ruby Hill Issuance
") and, (3) milestone payment
rights pursuant to which Waterton will be entitled to receive up to an additional
$67,000,000
upon the occurrence of certain
milestones in accordance with the milestone payment rights agreement to be entered into on closing of the acquisition. The
Company may, prior to closing of the acquisition, elect to pay up to
$8,000,000
in cash in lieu of all or any portion of the Ruby
Hill Payment Shares, in which event the number of Ruby Hill Payment Shares issuable would be reduced accordingly. If the
issuance of the Ruby Hill Payment Shares, after giving effect to any election by the Company to pay any portion thereof in
cash, would result in Waterton holding more than 9.99% of the then issued and outstanding Common Shares calculated on a
partially diluted basis, the number of the Ruby Hill Payment Shares to be issued will be reduced and the Company will pay
cash in lieu of such portion of the Ruby Hill Payment Shares.
As previously announced, the Company has entered into a definitive exchange agreement to acquire the Lone Tree and Buffalo
Mountain gold deposits from NGM, including certain processing infrastructure, via an asset exchange in consideration of (1)
the Company's 40% ownership in the South Arturo property; (2) assignment of the Company's option to acquire the adjacent
Rodeo Creek exploration property; (3) contingent consideration of up to
$50 million
based on production from the Lone Tree
property; and (4) arrangement of substitute bonding (and release of NGM bonds) in respect of the Lone Tree and Buffalo
Mountain reclamation obligations at closing (collectively, the "
Asset Exchange
").
Concurrent with or as soon as practicable following the closing of the Asset Exchange, NGM has agreed to subscribe for
Common Shares at the Issue Price in an amount equal to the lesser of
$50 million
and the amount that would result in NGM
holding 9.9% of the issued and outstanding Common Shares on a non-diluted basis, after giving effect to the Additional Private
Placement Issuance (defined below) (including any participation by other subscribers, including any potential subscription by
Equinox Gold Corp. ("
Equinox
") upon exercise of its anti-dilution rights, and any shares issued to Waterton on or prior to the
private placement) (the "
NGM Issuance
").
The NGM Issuance is part of a larger non-brokered private placement offering (the "
Additional Private Placement
Issuance
") by the Company of up to
$90 million
of Common Shares at the Issue Price, not including any shares that may be
issued to Equinox upon the exercise of its anti-dilution right (the "
Anti–Dilution Right
") pursuant to the support agreement
between the Company and Equinox dated
April 7, 2021
(the "
Support Agreement
"). Equinox currently holds 56,041,282
Common Shares and 2,318,596 warrants to purchase Common Shares representing 29.03% of the issued and outstanding
Common Shares on a partially-diluted basis (calculated in accordance with the Support Agreement).
The Ani-Dilution Right provides Equinox the right to maintain its pro rata ownership of Common Shares in connection with the
Ruby Hill Issuance, the NGM Issuance, the Additional Private Placement Issuance and the Orion Issuances. Equinox may elect
to maintain its pro-rata ownership of Common Shares by:
(i)
subscribing for and purchasing from treasury an agreed-upon number of Common Shares (the "
Anti–Dilution Shares
") on a pro-rata basis at a price per Anti-Dilution Share equal to the implied price per Common Share
issued in connection with the equity private placement transactions giving rise to such Anti-Dilution Right (the "
Equinox Share Issuance
");
(ii)
providing the Corporation a convertible loan (the "
Anti-Dilution Convertible Loan
") on the same terms as the Convertible Loans on a pro-rata basis (the "
Equinox Convertible Loan Issuance
"); and/or
(iii)
to extent the issuance of the Orion Warrants trigger the rights Anti-Dilution Rights under the Support Agreement, subscribing for warrants (the "
Anti-Dilution Warrants
" and together with the Anti–Dilution Shares and
Anti-Dilution Convertible Loan, the "
Anti-Dilution Securities
") of the Corporation on a pro-rata basis (the "
Equinox Warrant Issuance
" and together with the Equinox Share Issuance and the Equinox Convertible Loan
Issuance, the "
Equinox Issuance
")
in each case subject to the requirements of the TSX and the provisions of the Support Agreement.
Equinox has advised the Company that it intends to exercise its Anti-Dilution Right for up to
$10 million
, but has not determined
the type or mix of the Equinox Issuance. If Equinox were to exercise the Anti-Dilution Right exclusively to provide an Anti-
Dilution Convertible Loan, Equinox would be entitled to maintain its pro-rata ownership of Common Shares in respect of the
Convertible Loans by providing an Anti-Dilution Convertible Loan in a principal amount of up to approximately
$24.5 million
alongside the
$60 million
of Convertible Loans. If the full principal amount of the Anti-Dilution Convertible Loan is converted at
the Conversion Price, the Anti-Dilution Convertible Loan would result in the issuance of 9,420,547 Common Shares. If Equinox
were to exercise the Anti-Dilution Right exclusively to acquire Anti-Dilution Shares, Equinox would be entitled to purchase up to
12,506,375 Anti-Dilution Shares at the Issue Price for gross proceeds to the Company of approximately
US$26 million
without
the need for disinterested shareholder approval in respect of insider participation under the rules of the TSX. Assuming the
issuance of the Orion Warrants trigger the Anti-Dilution Right, if Equinox were to exercise the Anti-Dilution Right to acquire
Anti-Dilution Warrants, it would be entitled to acquire up to 2,249,753 Anti-Dilution Warrants. The Company does not expect
the ultimate scope of Equinox's exercise of its Anti-Dilution Rights to require disinterested shareholder approval, however
Equinox has not provided a binding commitment the Company in respect thereof. Equinox is not under a binding commitment to
purchase any Anti-Dilution Securities, or provide an Anti-Dilution Convertible Loan as at the date hereof.
The Equinox Issuance, together with the Ruby Hill Issuance, the NGM Issuance, the Additional Private Placement Issuance,
the Orion Conversion Shares, the Transfer Fee Shares and the Orion Warrants, are referred to as the "
Other Issuances
".
The Company confirms today that it will be seeking shareholder approval of the Orion Issuances, Additional Convertible Loans
and the Equinox Issuance pursuant to the requirements of Section 607(g) of the TSX Company Manual. Shareholder approval
of the Orion Issuances, Additional Convertible Loans and the Equinox Issuance is required pursuant to the rules of the TSX
because the Orion Issuances, Additional Convertible Loans and the Equinox Issuance, when combined with the other portion of
the Other Issuances, will result in the issuance of an aggregate number of listed securities greater than 25% of the number of
securities of the Company which were outstanding, on a non-diluted basis, at the time the transactions were agreed to. As
noted above, rules of the TSX deem these securities to have been issued at a discount to the then-current market price. The
Company is relying on an exemption from the requirement to hold a shareholder meeting available under Section 604(d) of the
TSX Company Manual, and is seeking to obtain the approval of the Orion Issuances and Equinox Issuances by written consent
by more than 50% of the shareholders of the Company.
As previously announced, the closing of each of the transactions with NGM, Waterton, Orion and the private placement are
subject to the satisfaction of a number of conditions precedent, including regulatory approvals and, in the case of the
Convertible Loans, completion of due diligence and the negotiation and execution of mutually satisfactory definitive
documentation with Orion.
This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities described herein
in
the United States
. The securities have not been and will not be registered under the United States Securities Act of 1933, as
amended (the "
U.S. Securities Act
") or any state securities laws and may not be offered or sold within
the United States
unless registered under the U.S. Securities Act and applicable state securities laws, unless an exemption from such
registration is available.
About i-80 Gold Corp.
i-80 Gold Corp. is a
Nevada
-focused mining company with a goal of achieving mid-tier gold producer status. i-80 is well
financed with more than
$70.1 million
(as at
June 30, 2021
) in cash and has recently signed financing agreements with NGM
and non–binding term sheet with Orion to provide access to as much as
$240 million
.
Cautionary Note Regarding Forward-Looking Information
Certain statements in this release constitute "forward-looking statements" or "forward-looking information" within the meaning
of applicable securities laws, including but not limited to, completion of the Asset Exchange, completion of the Ruby Hill
acquisition, completion of the equity private placement with NGM, Orion, Equinox and/or other subscribers, and completion of
the convertible loan financing transaction with Orion and others and the exercise of the Anti-Dilution Right by Equinox. Such
statements and information involve known and unknown risks, uncertainties and other factors that may cause the actual
results, performance or achievements of the company, its projects, or industry results, to be materially different from any
future results, performance or achievements expressed or implied by such forward-looking statements or information. Such
statements can be identified by the use of words such as "may", "would", "could", "will", "intend", "expect", "believe", "plan",
"anticipate", "estimate", "scheduled", "forecast", "predict" and other similar terminology, or state that certain actions, events or
results "may", "could", "would", "might" or "will" be taken, occur or be achieved. These statements reflect the Company's
current expectations regarding future events, performance and results and speak only as of the date of this release.
Forward-looking statements and information involve significant risks and uncertainties, should not be read as guarantees of
future performance or results and will not necessarily be accurate indicators of whether or not such results will be achieved. A
number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements
or information, including, but not limited to: failure to satisfy of the relevant conditions to the completion of the transactions
described herein, failure to obtain the relevant regulatory approvals, material adverse changes, exercise of termination rights
by any relevant party, unexpected changes in laws, failure to complete the Orion financing transaction on satisfactory terms,
rules or regulations, or their enforcement by applicable authorities; the failure of parties to contracts with the company to
perform as agreed; social or labour unrest; changes in commodity prices; and the failure of exploration, refurbishment,
development or mining programs or studies to deliver anticipated results or results that would justify and support continued
exploration, studies, development or operations.
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SOURCE
i-80 Gold Corp
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For further information:
Ewan Downie - CEO, Matt Gili - President & COO, Matthew Gollat - EVP Business & Corporate
Development, 1.866.525.6450, [email protected], www.i80gold.com
CO: i-80 Gold Corp
CNW 17:00e 08-OCT-21