Cassowary Executes Definitive Share Exchange Agreement FOR Proposed Qualifying Transaction and Increases Size of Concurrent Private Placement Financing
CASSOWARY CAPITAL CORPORATION LIMITED
CASSOWARY EXECUTES DEFINITIVE SHARE EXCHANGE AGREEMENT FOR PROPOSED
QUALIFYING TRANSACTION AND INCREASES SIZE OF CONCURRENT PRIVATE
PLACEMENT FINANCING
For Immediate Release
Calgary, Alberta July 20, 2020
Cassowary Capital Corporation Limited (TSXV – BIRD.P) (“BIRD” or the “Company”) is pleased to
announce that it has entered into a binding definitive share exchange agreement dated effective July 14,
2020 (the “Definitive Agreement ”) with Western Gold Exploration Limited (“WGE”) and the holders of a
majority of the outstanding shares of WGE, to provide for the completion of a business combination with the
Company (the “Transaction”), as more particularly described below. The Transaction was initially
announced in a Company press release dated June 1, 2020, indicating the Company and WGE had entered
into a binding letter of intent in respect of the Transaction. The combined entity (the “Resulting Issuer”) will
continue the business of WGE and initially will be engaged in the exploration and development of
prospective mineral properties located in Scotland, with a focus on gold and copper exploration and
development. See “About WGE” below.
Concurrent Private Placement Financing
The Company is also pleased to announce that due to strong demand, it intends to increase the size of its
recently announced concurrent non-brokered private placement (the “Private Placement”) to a maximum of
CAD$1,650,000 worth of subscription receipts of the Company (“Subscription Receipts ”), in order to fill
such demand. The Company announced in its June 19, 2020 press release that it proposed to undertake
the Private Placement of Subscription Receipts at CAD$0.15 per Subscription Receipt (on a pre-
Consolidation basis (as defined below)). Up to a minimum of 5,200,000 Subscription Receipts and a
maximum of 11,000,000 Subscription Receipts of the Company may now be issued pursuant to the Private
Placement. See the Company’s June 19, 2020 press release for additional information about the Private
Placement and the Subscription Receipts.
About the Resulting Issuer
Board of Directors and Management
Upon the Completion of the Transaction, the proposed directors and officers of the Resulting Issuer are as
follows:
Harry Dobson – Monaco - Executive Chairman – A mining industry veteran and pioneer, Mr. Dobson is
currently the Executive Chairman of WGE, and is a founder of metals mining companies, Kirkland Lake Gold,
Rupert Resources, Breakwater Resources, Rambler Metals, American Pacific Mines, and in the diamond
industry, Mountain Province Diamonds and Lytton Minerals. He has extensive experience organizing and
financing mines, including in unique jurisdictions and locations. Mr. Dobson is a former investment banker
and senior partner of Yorkton Securities.
Ross McLellan – Scotland – Chief Executive Officer and Director – Mr. McLellan was involved in setting up
Scotgold Resources Ltd., which subsequently listed on the ASX. He acted as a director of Scotgold
Resources Ltd and Fynegold Exploration Ltd. for 10 years. Mr. McLellan has over 30 years background in
financial services and currently runs all daily activity of WGE.
Willie McLucas – Scotland - Director – Mr. McLucas is a long time mining financier with extensive global
experience in exploration, development and production of not only gold and base metals, but also coal, iron
ore and specialty metals such as Tungsten and Molybdenum. He previously acted as Chief Executive of
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Waverley Mining Finance plc and Thistle Mining Inc. and as a director of Amur Minerals Plc, Longview
Capital Partners, Republic Gold Ltd. and Oriental Minerals Inc.
Stuart Olley – Calgary, Canada - Director – Mr. Olley is a senior partner of Gowling WLG (Canada) LLP and
Co-leader of the Natural Resources Group. He has extensive experience, domestically and internationally,
working with a variety of issuers and underwriters in transactions in industries including mining, oil and gas,
real estate and technology. Mr. Olley has served on the board of directors of various public companies. Mr.
Olley is currently the Chief Executive Officer and a director of BIRD.
Jim O’Neill – Ontario, Canada - Chief Financial Officer and Corporate Secretary – Mr. O’Neill, a Chartered
Accountant with over 30 years of industry experience, brings a depth of knowledge from various international
mining, project management and distribution companies. Has acted as Chief Financial Officer for Virtus
Mining Ltd., Aldridge Minerals Inc. and Royal Coal Corp.
Other Insiders of the Resulting Issuer
Assuming the Company completes the aforementioned Private Placement, and assuming that financing
totals the CAD$1,650,000 maximum, then it is expected that (i) current shareholder of both BIRD and WGE,
Zila Corporation of Monaco (controlled indirectly by Val Huxley of Monaco) (“ Zila”) is expected to hold
approximately 14% of the outstanding common shares of the Resulting Issuer, and (ii) the combined
holdings of Mr. Rupert Williams and Mr. Jeremy Woodgate, and the company they control Smaller Company
Capital Ltd. (which is a shareholder of both BIRD and WGE) (the “ SCC Group ”), is expected to be
approximately 11% of the outstanding common shares of the Resulting Issuer.
About WGE
WGE is a private company formed under the laws of England and Wales, that holds minerals rights in Argyll
County in western Scotland, and which mineral rights include the Knapdale and Lagalochan projects. The
mineral rights at Knapdale extend to base metal exploration rights over 3,253 hectares, with right to lease,
and gold exploration rights over 1,574 hectares, with conditional right to lease. The mineral rights at
Lagalochan extend to base metal exploration rights over 612.5 hectares, with right to lease, and gold
exploration rights over 188 km 2, with conditional right to lease. A National Instrument 43-101 – Standards of
Disclosure for Mineral Projects compliant technical report and recommended work program is currently being
prepared in respect of WGE’s mining interests.
As at March 31, 2020 (unaudited, as provided by WGE), WGE had assets of £454,908.40 (CAD$616,082.44)
and liabilities of £50,000 (CAD$67,715). As at July 15, 2020, WGE had estimated working capital of
£400,000 (CAD$541,720) (unaudited, as provided by WGE), which includes £600,500 (CAD$813,257) in
additional subscription funds which were allocated on May 7, 2020. For the year ended 2019 (unaudited, as
provided by WGE), WGE had no revenue, operating expenses of £128,217 (CAD$173,644) and a net loss
for the year of £75,407 (CAD$102,123).
The only shareholder of WGE that is expected to hold a controlling interest in WGE prior to closing of the
Transaction is Zila, which is expected to be holding approximately 22% of the outstanding shares of WGE
prior to closing of the Transaction.
The Transaction
Pursuant to the terms of the Definitive Agreement, BIRD will acquire all of the issued and outstanding shares
of WGE (which will be 199,676,875 shares immediately prior to the closing of the Transaction) pursuant to
the terms of the Definitive Agreement, in exchange for 32,666,900 common shares of the Resulting Issuer
(on a pre-Consolidation basis (as defined below)) at closing of the Transaction. See the Company’s June 1,
2020 press release for information regarding the valuation of the Transaction. As the majority of
shareholders of WGE have executed the Definitive Agreement, WGE has exercised drag along rights to
compel the remaining WGE shareholders to participate in the Transaction. Consequently, subject to the
conditions described below, the Company will acquire 100% of the outstanding shares of WGE.
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The Transaction is intended to constitute the “Qualifying Transaction” of BIRD, as such term is defined in
Policy 2.4 of the Exchange, and will result in a reverse takeover of BIRD.
Completion of the Transaction is subject to a number of conditions, including:
(i) the parties preparing an information circular in accordance with the rules of the Exchange,
outlining the terms of the Transaction;
(ii) the parties receiving all requisite regulatory approval, including the approval of the Exchange, and
any third party approvals and authorizations;
(iii) each of BIRD and WGE obtaining the requisite shareholder approvals for the Transaction;
(iv) the parties obtaining requisite board approvals for the Transaction;
(v) each of the parties required by the Exchange entering into an escrow agreement upon the terms
and conditions imposed pursuant to the policies of the Exchange;
(vi) completion of the Private Placement; and
(vii) the Resulting Issuer meeting the applicable Initial Listing Requirements of the Exchange as a
Mining Issuer (pursuant to Policy 2.1 – Initial Listing Requirements of the Exchange), including,
without limitation, the public float requirements.
BIRD expects that upon completion of the Transaction, the Resulting Issuer will be an exploration stage
company with no producing properties and, consequently, no current operating income, cash flow or
revenues. There is no assurance that a commercially viable mineral deposit exists on the mineral interests
held by WGE.
Sponsorship
Sponsorship of the Transaction is required by the Exchange unless an exemption or waiver from
sponsorship requirement is available. BIRD is currently reviewing the requirements for and may apply for an
exemption from the sponsorship requirements pursuant to the policies of the Exchange. BIRD intends to
include any additional information regarding sponsorship in a subsequent news release.
Proposed Consolidation
It is also proposed that concurrent with the completion of the Transaction, the common shares of the
Resulting Issuer be consolidated on the basis of one (1) post-consolidation share for each two and one-half
(2.5) pre-consolidation shares (the “Consolidation”). A special resolution for the approval of the
Consolidation will be put to BIRD’s shareholders for consideration at BIRD’s shareholder meeting, as
described below.
Proposed Name Change
BIRD intends to seek the requisite shareholder approval to change the name of the Company. Any such
name change is subject to applicable Exchange and other regulatory approvals.
Related Party Transaction and Shareholder Approval
The SCC Group holds more than 10% of the issued and outstanding shares of each of BIRD and WGE and
as a result, the Transaction will not constitute a “Non-Arm’s Length Qualifying Transaction” (as such term is
defined by the Exchange) and will instead constitute a “related party transaction” (as such term is defined by
Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions ) and is
subject to Policy 5.9 of the Exchange. As a result, a meeting of the shareholders of BIRD is required
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pursuant to Policy 2.4 of the Exchange or applicable securities laws to, among other things, approve the
Transaction, the Consolidation and the proposed name change.
Trading Halt
The BIRD Common Shares are presently halted and will remain halted until the Transaction is completed
and approved by the Exchange.
Further Information
BIRD will issue additional news releases related to the Transaction, the Private Placement and other material
information as it becomes available.
For further information, please contact:
Stuart Olley
Chief Executive Officer and Director
Cassowary Capital Corporation Limited
403 618 4900
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 proposed Transaction and has
neither approved nor disapproved the contents of this news release.
Neither the TSX Venture Exchange nor its Regulation Service Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this
release.
This press release is not an offer of the Company’s securities for sale in the United States. The Company’s
securities may not be offered or sold in the United States absent registration or an available exemption from
the registration requirements of the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act”) and
applicable U.S. state securities laws. The Company will not make any public offering of its securities in the
United States. The Company’s securities have not been and will not be registered under the U.S. Securities
Act.
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 these securities, in any jurisdiction in which such offer, solicitation or sale would be unlawful.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION: This news release
includes certain "forward-looking statements" under applicable Canadian securities legislation. Forward-
looking statements include, but are not limited to, statements with respect to the structure, terms, conditions
and proposed timing for completion of the Transaction and the Offering; the ability of BIRD and WGE to
complete the Transaction and the Private Placement; the receipt of all necessary shareholder, Exchange,
securities regulatory authority and other third party consents and approvals; the receipt by BIRD of an
exemption from the sponsorship requirements of the Exchange and the resumption in trading of the common
shares of the Resulting Issuer; the Resulting Issuer’s future business operations and results. Forward-
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looking statements are necessarily based upon a number of estimates and assumptions that, while
considered reasonable, are subject to known and unknown risks, uncertainties, and other factors, which may
cause the actual results and future events to differ materially from those expressed or implied by such
forward-looking statements. Such factors include, but are not limited to: general business, economic,
competitive, political and social uncertainties; delay or failure to receive shareholder or regulatory approvals;
and the results of continued development, marketing and sales. There can be no assurance that such
statements will prove to be accurate, as actual results and future events could differ materially from those
anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking
statements. BIRD disclaims any intention or obligation to update or revise any forward-looking statements,
whether because of new information, future events or otherwise, except as required by law.
NOT FOR DISTRIBUTION OR DISSEMINATION IN THE UNITED STATES. FAILURE TO COMPLY WITH
THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF UNITED STATES SECURITIES LAWS.