/NOT FOR DISTRIBUTION OR DISSEMINATION IN THE UNITED
STATES. FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE
A VIOLATION OF UNITED STATES
SECURITIES LAWS./
CALGARY, AB, Aug. 21, 2020 /CNW/ - 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.
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.
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 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.
SOURCE Cassowary Capital Corporation Limited
