This Restriction May Constitute a Violation of United States Securities Laws. Cassowary Capital Corporation Limited Cassowary Announces $1.7 Million Closing of Non-Brokered Private Placement IN Connection with Proposed Qualifying
NOT FOR DISTRIBUTION OR DISSEMINATION IN THE UNITED STATES. FAILURE TO COMPLY WITH
THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF UNITED STATES SECURITIES LAWS.
CASSOWARY CAPITAL CORPORATION LIMITED
CASSOWARY ANNOUNCES $1.7 MILLION CLOSING OF NON-BROKERED
PRIVATE PLACEMENT IN CONNECTION WITH PROPOSED QUALIFYING
TRANSACTION TO BECOME GOLD EXPLORATION COMPANY
For Immediate Release
Calgary, Alberta August 21, 2020
Cassowary Capital Corporation Limited (TSXV: BIRD.P) (" BIRD" or the “Company”) is
pleased to announce that it has closed its previously announced non-brokered private
placement (the “Private Placement ”) offering of subscription receipts of the Company (the
“Subscription Receipts”), representing an aggregate of 11,333,333 Subscription Receipts for
gross proceeds of CAD$1.7 million. Each Subscription Receipt has been issued at a price of
CAD$0.15.
The Private Placement is being completed in conjunction with the previously announced
proposed “Qualifying Transaction” (the “Transaction”) pursuant to the policies of the TSX
Venture Exchange (the “Exchange”), with the result that the Company will acquire Western
Gold Exploration Limited ("WGE"). Upon completion 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.
Each Subscription Receipt will, upon satisfaction of certain escrow release conditions,
automatically convert, without any further action or further consideration from the Subscription
Receipt holder, into one (1) common share of BIRD and, immediately thereafter, upon
completion of the Transaction, will be subject to Consolidation (assuming the Consolidation is
approved by BIRD shareholders as described below). If the escrow release conditions are not
satisfied by 4:00 pm (Calgary time) on November 30, 2020 (unless otherwise extended in
accordance with the terms of the subscription receipt agreement which governs the Subscription
Receipts), then the Subscription Receipts will immediately become null and void and the escrow
agent shall distribute the escrowed proceeds and accrued interest to the holders of the
Subscription Receipts, together with their pro rata share of interest earned thereon.
As previously announced, 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 in connection with the
Transaction.
All of the securities of the Company issued in connection with the Private Placement will be
subject to a hold period of four months and a day.
The net proceeds of the Private Placement will be used with a view to developing the business
of the Resulting Issuer and for general working capital purposes.
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In connection with the Private Placement, the Company has agreed to pay (i) Haywood
Securities Inc. a cash finder’s fee equal to 3% of the gross proceeds raised in respect of the
aggregate sales to subscribers under the Private Placement that were introduced by Haywood
Securities Inc. (up to CAD$5,250); (ii) Canaccord Genuity Corp. a cash finder’s fee equal to 5%
of the gross proceeds raised in respect of the aggregate sales to subscribers under the Private
Placement that were introduced by Canaccord Genuity Corp. (up to CAD$12,375); and (iii)
Richardson GMP Limited a cash finder’s fee equal to 6% of the gross proceeds raised in
respect of the aggregate sales to subscribers under the Private Placement that were introduced
by Richardson GMP Limited (up to CAD$7,875). These cash finder’s fees are payable by the
Company upon completion of the Transaction.
See the Company’s press releases dated June 1, 2020, June 19, 2020, July 20, 2020 and
August 12, 2020 for further information regarding the Transaction. BIRD will issue additional
news releases related to the Transaction and other material information as it becomes available.
Related Party Disclosure
Under the Private Placement, Stuart Olley, the CEO and a director of the Company purchased
40,000 Subscription Receipts at a subscription price of $6,000. In addition, Gordon Chmilar, the
CFO and a director of the Company, purchased 16,666 Subscription Receipts at a subscription
price of $2,500. Their participation in the Private Placement constitutes a “related party
transaction” as defined in Multilateral Instrument 61-101 – Protection of Minority Security
Holders in Special Transaction (“MI 61-101 ”), which has been adopted by the Exchange
pursuant to its Policy 5.9 - Protection of Minority Security Holders in Special Transaction. These
transactions are exempt from the formal valuation and minority shareholder approval
requirements of such instrument and policy, pursuant to subsections 5.5(a), 5.5(b), 5.5(c), 5.7(a)
and 5.7(b) of MI 61-101 as the fair market value was not more than 25% of market
capitalization, the distribution of securities was for cash and the fair market value not more than
$2,500,000.
The Company did not file a material change report more than 21 days before the expected
closing of the Private Placement because the details of the participation therein by related
parties of the Company were not settled until shortly prior to closing of such transactions and
the Company wished to close on an expedited basis for sound business reasons.
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
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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 Consolidation; the ability of BIRD and WGE to complete the Transaction and the
Consolidation; the satisfaction of escrow release conditions and the conversion or cancellation
of the Subscription Receipts; the use of proceeds of the Private Placement; the Resulting
Issuer’s future business operations and results; the receipt of all necessary shareholder,
Exchange, securities regulatory authority and other third party consents and approvals; and the
anticipated composition of the board of directors and management of the Resulting Issuer.
Forward-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; the impact of COVID-19 on the parties to the Transaction and the world economy;
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, forward-looking statements are inherently unreliable and,
therefore, 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.