Scorpio Gold Announces Execution of Amalgamation Agreement with Altus Gold
Scorpio Gold Announces Execution of
Amalgamation Agreement with Altus Gold
Vancouver, British Columbia--(Newsfile Corp. - January 18, 2024) -
Scorpio Gold Corporation
(TSXV:
SGN) ("
Scorpio Gold
" or the "
Company
") is pleased to announce that, further to its press release
dated November 8, 2023, it has entered into an amalgamation agreement dated January 17, 2024 (the
"
Amalgamation Agreement
") with Altus Gold Corp. ("
Altus Gold
") and the Company's wholly-owned
subsidiary, 1455812 B.C. Ltd. ("
Subco
"), pursuant to which the Company proposes to acquire all the
issued and outstanding shares of Altus Gold by way of a three-cornered amalgamation (the
"
Transaction
"). The Amalgamation Agreement supersedes the amended and restated letter of intent
between the Company and Altus Gold dated November 8, 2023. A copy of the Amalgamation
Agreement will be filed under the Company's SEDAR+ profile at
www.sedarplus.ca
.
Under the terms of the Amalgamation Agreement, Altus Gold will amalgamate with Subco, and the
Company will acquire all of the outstanding common shares of Altus Gold in exchange for common
shares of the Company on the basis of one common share of the Company for every one common share
of Altus Gold.
The Amalgamation Agreement contemplates that, upon completion of the Transaction, the board of
Scorpio Gold will be restructured to be comprised of five directors, two of which will be Altus Gold
nominees, being Zayn Kalyan and Michael Townsend, and three of which will be current directors of
Scorpio Gold, being Chris Zerga, Peter Brieger and Ian Dawson. Zayn Kalyan, a director of Altus Gold,
will be appointed as Chief Executive Officer of the Company, while Chris Zerga, the current President
and CEO of the Company, will become the Company's Chief Operating Officer.
Altus Gold is a private mining issuer with an option to acquire a mineral exploration property in
Esmeralda County, Nevada, referred to as the Northstar property, adjacent to Scorpio Gold's Mineral
Ridge Mine.
Closing of the Transaction is subject to a number of conditions precedent, including, without limitation:
a
.
the completion of a non-brokered private placement of units of the Company to raise gross
proceeds of at least $3,200,000 (the "
Financing
"), as described in the Company's press release
dated January 12, 2024;
b
.
the approval of the Transaction by the shareholders of Altus Gold;
c
.
the amendment of Altus Gold's option agreement to acquire the Northstar property on terms
agreed to between the Company and Altus Gold;
d
.
the restructuring of outstanding convertible debentures of the Company on terms agreed to
between the Company and Altus Gold;
e
.
the approval of the TSX Venture Exchange (the "
Exchange
") in respect of the Transaction and the
Financing, and compliance with all applicable regulatory requirements and conditions necessary to
complete the Transaction; and
f
.
other customary mutual conditions precedent.
It is anticipated that the second tranche of the Financing to raise gross proceeds of approximately
$915,000 will be completed on January 22, 2024.
Altus Gold has provided a non-interest bearing, secured loan (the "
Bridge Loan
") to the Company in the
aggregate principal amount of $1,000,000 in connection with the Transaction, subject to the approval of
the Exchange. The Bridge Loan will be forgiven if the Company completes the Transaction with Altus
Gold. If the Transaction does not complete, the Bridge Loan will be repayable in cash on demand by
Altus Gold, or in certain circumstances, the Bridge Loan may be settled in common shares of the
Company, subject to the approval of the Exchange. In the event that the settlement of the Bridge Loan in
common shares is not acceptable to the Exchange, it would remain payable in cash. If the Bridge Loan
is settled in common shares, for so long as Altus Gold holds at least 5% of the Company issued and
outstanding common shares (calculated on an undiluted basis), Altus Gold would have the right to
appoint one nominee to the board of directors of the Company.
The securities described herein have not been, and will not be, registered under the United States
Securities Act of 1933, as amended (the "
1933 Act
") or any state securities laws, and accordingly, may
not be offered or sold within the United States except in compliance with the registration requirements of
the 1933 Act and applicable state securities requirements or pursuant to exemptions therefrom. This
press release does not constitute an offer to sell or a solicitation to buy any securities in any jurisdiction.
ON BEHALF OF THE BOARD OF SCORPIO GOLD CORPORATION
Chris Zerga, CEO and President
Scorpio Gold Contact
Chris Zerga, President and CEO
Tel: (819) 825-7618
Email:
Altus Gold Contact
Zayn Kalyan, Director
Tel: (778) 938-3367
Email:
Neither the Exchange nor its Regulation Services Provider (as that term is defined in the policies of
the Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward-Looking Statements
The Company relies on litigation protection for forward-looking statements. This news release
contains forward-looking statements that are based on the Company's current expectations and
estimates. Forward-looking statements are frequently characterized by words such as "plan", "expect",
"project", "intend", "believe", "anticipate", "estimate", "suggest", "indicate" and other similar words or
statements that certain events or conditions "may" or "will" occur, and include, without limitation,
statements regarding the terms and completion of the Transaction and satisfying closing conditions
for the Transaction, and the timing and completion of the Financing. There is significant risk that the
forward-looking statements will not prove to be accurate, that the management's assumptions may not
be correct and that actual results may differ materially from such forward-looking statements. Such
forward-looking statements involve known and unknown risks, uncertainties and other factors that
could cause actual events or results to differ materially from estimated or anticipated events or results
implied or expressed in such forward-looking statements, including financial markets generally, the
inability to complete the Transaction, the Financing and related transactions, receipt of all regulatory
approvals required for the Transaction and related transactions, and those risk factors outlined in the
Company's Management Discussion and Analysis as filed on SEDAR+. Any forward-looking
statement speaks only as of the date on which it is made and, except as may be required by
applicable securities laws, the Company disclaims any intent or obligation to update any forward-
looking statement, whether as a result of new information, future events or results or otherwise.
Forward-looking statements are not guarantees of future performance and accordingly undue reliance
should not be put on such statements due to the inherent uncertainty thereof.
To view the source version of this press release, please visit
https://www.newsfilecorp.com/release/194827