VANCOUVER, British Columbia, Aug. 04, 2020 (GLOBE NEWSWIRE) --
Novo Resources Corp. (“
Novo” or the “
Company”) (TSX-V: NVO; OTCQX: NSRPF) is pleased to announce that it has today signed an arm’s length agreement to acquire all of the outstanding shares of privately held Millennium Minerals Limited (“
Millennium”) from IMC Resources Gold Holdings Pte Ltd, Heritas Capital Management (Australia) Pty Ltd, and IMC Resources Ltd (collectively, “
IMC”) (the “
Acquisition”). Millennium’s assets are located approximately 10 km south of Novo’s 100% controlled Beatons Creek conglomerate gold project (the “
Beatons Creek Project”) in the Nullagine region, Shire of East Pilbara, Western Australia (
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below) and include the requisite processing infrastructure to accelerate Novo’s planned transition to a producing gold company1.
Acquisition Summary
Under the terms of the agreements signed with IMC (the “
Agreements”), Novo will acquire all of the outstanding ordinary shares of Millennium on a cash and debt free basis (except as described below) in exchange for approximately $44 million (A$61 million) of Novo units (each unit comprised of one common share and one-half of one common share purchase warrant priced on the same terms as the subscription receipts offering outlined below). Trinc completion of the Acquisition, Millennium will be required to repay IMC’s secured debt of approximately $49.8 million (A$69 million) by way of the payment of $43.3 million (A$60 million) in cash and the balance of $6.5 million (A$9 million) in Novo units (on the terms outlined above). To the extent Millennium does not have sufficient funds to repay IMC’s secured debt, Novo will provide funding to Millennium to allow repayment (and will issue the Novo units at Millennium’s direction).
The equity consideration issued to IMC and the Novo units issued in repayment of debt will be subject to a statutory hold period expiring four months from the date of issuance; in addition, a further contractual hold period will apply to half of the Novo units issued to IMC, increasing the hold period to 12 months. If, subsequent to closing of the Acquisition, IMC holds 10% or more of Novo’s issued and outstanding shares, IMC will have the right to appoint a representative to Novo’s board of directors until its interest in Novo dilutes below 10%. Upon closing of the Acquisition, the IMC secured debt repayment and the Concurrent Financing (as defined below), it is anticipated that IMC will hold 9.47% of Novo’s issued and outstanding common shares.
Novo has also agreed to pay to IMC deferred consideration in the form of a fee on future gold production equal to 2% of all gold revenue generated by Novo (the “
Deferred Consideration”) up to the later of cumulative gold production of 600,000 ounces or cumulative payments of A$20 million having been made to IMC.
[...]
As an integral part of the Acquisition, Novo has entered into an agreement with a syndicate of agents led by Clarus Securities Inc. and Stifel GMP (the “
Agents”) for a marketed private placement of 9,230,769 subscription receipts (the “
Subscription Receipts”) at a price of C$3.25 per Subscription Receipt for gross proceeds of C$30 million (approximately $22.4 million) which will be placed in escrow and released immediately prior to closing of the Acquisition. The Agents will have an option (the “
Over-Allotment Option”) to offer up to an additional 15% in Subscription Receipts up to 48 hours prior to closing of the Offering. The Agents will have no obligation to exercise the Over-Allotment Option.
Provided that the Escrow Release Conditions have been satisfied prior to the Termination Time, each Subscription Receipt will automatically be exchanged for one unit of Novo (an “
Unit”), each Unit comprised of one common share of Novo (a “
Share”) and one-half of one Share purchase warrant (a “
Warrant”), with each whole Warrant entitling the holder thereof to acquire one Share at a price of C$4.40 for a period of 36 months after the closing of the Offering
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