Goldstrike Announces Proposed Spin-Off of White Gold District Properties
May 16 2018 - 7:45AM
Highlights:
Goldstrike Resources Ltd.
("
Goldstrike" or the
"
Company") (TSX-V:GSR) (Frankfurt:KCG1) (OTC
PINK:APRAF) is pleased to announce the proposed spin-off of its six
100% owned properties located in the White Gold District, Yukon by
way of a plan of arrangement (the "
Arrangement")
under the Business Corporations Act (British Columbia).
In furtherance thereof, the Company has entered
into an arrangement agreement (the "Agreement")
with Luckystrike Resources Ltd. ("Luckystrike"), a
wholly-owned subsidiary of the Company. Pursuant to the
Arrangement, among other things:
- Goldstrike shareholders will receive one common share of
Luckystrike (a "Luckystrike Share") for every
seven common shares of Goldstrike held; and
- Luckystrike will indirectly acquire the Company's six 100%
owned White Gold District properties, being the Lucky Strike,
Hotspot, the Bull’s Eye, BRC, Gold Source and King’s Ransom
properties.
In addition, prior to completion of the
Arrangement, Goldstrike will invest an aggregate of $2.5 million in
Luckystrike, by subscribing for 8,333,334 units (the
"Units") of Luckystrike at a subscription price of
$0.30 per Unit, with each Unit consisting of one Luckystrike Share
and one warrant exercisable into a Luckystrike Share at a
subscription price of $0.60 or such other price as may be
acceptable to the Company and Luckystrike for a period of three
years after closing, subject to acceleration if the Luckystrike
Shares trade at a price of $1.00 or more for 10 consecutive trading
days. The Agreement also contemplates the completion of an
additional non-brokered private placement of subscription receipts
by Luckystrike in the amount of up to $2.5 million, with each
Subscription Receipt converting into Units upon closing of the
Arrangement.
The board of directors of Goldstrike has
determined that the Arrangement is in the best interests of
Goldstrike. Among other things, the separation of the White Gold
District properties into a separate public company will position
such assets to be valued on a standalone basis. In addition, the
transaction will allow Goldstrike management to focus their efforts
on the Company's existing strategic partnership regarding the
Plateau project with Newmont Mining Corporation with Luckystrike's
management focused on exploring and developing the White Gold
District properties.
Terrence King, Chairman, President and Chief
Executive Officer of Goldstrike stated: "We are pleased to announce
the Arrangement, which we believe will help unlock and maximize
value for our shareholders. On completion, Luckystrike will be
positioned well to advance our efforts in the White Gold District,
with a strong balance sheet and experienced management team. We
look forward to updating shareholders on this transaction as it
progresses."
The Company intends to apply for a listing of
the Luckystrike Shares on the TSX Venture Exchange (the
"TSX-V"). Any such listing will be subject to
Luckystrike fulfilling all of the requirements of the TSX-V.
It is currently expected that the directors of
Luckystrike on completion of the Arrangement, will consist of
William Chornobay, Yilu (Lucy) Zhang, Terrence King, Reimar Koch
and Ewan Webster, with Mr. Chornobay acting as President and Chief
Executive Officer and Ms. Zhang acting as Chief Financial
Officer.
In addition, pursuant to the Arrangement,
holders of Goldstrike options and warrants will exchange such
securities for new options and warrants of Goldstrike and
Luckystrike, which exercisable into shares of such companies on
their existing terms with necessary adjustments for the Arrangement
based on the proportionate value of the White Gold District
properties.
The Arrangement is expected to be effected by
way of a plan of arrangement under the Business Corporations Act
(British Columbia) and remains subject to customary conditions,
including, among other things, the approval by the TSX-V, approval
by an affirmative vote of 66 2/3% of shareholders of Goldstrike in
attendance at a shareholders’ meeting, and approval of the Supreme
Court of British Columbia.
Additional details of the Arrangement will be
included in information circular to be mailed to shareholders of
Goldstrike in connection with the Company’s shareholders meeting
referred to above.
ON BEHALF OF THE BOARD
Terrence E. KingChairman, President andChief
Executive Officer
For new information from the Company’s programs,
please visit Goldstrike’s website at GoldstrikeResources.com or
contact Jeff Stuart of King James Capital Corporation, handling
Investor Relations for the Goldstrike, by telephone at (604)
210-2150 or by email at jstuart@kingjamescapital.com.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Forward-Looking Statements
Statements contained in this news release that
are not historical facts are “forward-looking information” or
“forward-looking statements” (collectively, “Forward-Looking
Information”) within the meaning of applicable Canadian securities
legislation. Forward-Looking Information includes, but is not
limited to, the timing and completion of the Arrangement and
proposed financings of Luckystrike, the satisfaction of the
conditions under the Agreement and the expected benefits of the
Arrangement. In certain cases, Forward-Looking Information can be
identified by the use of words and phrases such as “anticipates”,
“expects”, “understanding”, “has agreed to” or variations of such
words and phrases or statements that certain actions, events or
results “would”, “occur” or “be achieved”. Although Goldstrike has
attempted to identify important factors and risks that could affect
Goldstrike and may cause actual actions, events or results to
differ materially from those described in Forward-Looking
Information, there may be other factors and risks that cause
actions, events or results not to be as anticipated, estimated or
intended, including, without limitation: not receiving the
requisite shareholder or regulatory approvals for completion of the
Arrangement or otherwise satisfying the conditions thereto; failure
to complete the proposed financings on acceptable terms or at all;
inherent risks involved in the exploration and development of
mineral properties; the uncertainties involved in interpreting
drill results and other exploration data; the potential for delays
in exploration or development activities; the geology, grade and
continuity of mineral deposits; the possibility that future
exploration, development or mining results will not be consistent
with Goldstrike’s expectations; accidents, equipment breakdowns,
title and permitting matters; labour disputes or other
unanticipated difficulties with or interruptions in operations;
fluctuating metal prices; unanticipated costs and expenses;
uncertainties relating to the availability and costs of financing
needed in the future, including to fund any exploration programs on
its projects; that Goldstrike may not be able to confirm historical
exploration results and other risks set forth in Goldstrike's
public filings at www.sedar.com. In making the forward-looking
statements in this news release, Goldstrike has applied several
material assumptions, including the assumption that general
business and economic conditions will not change in a materially
adverse manner. There can be no assurance that Forward-Looking
Information 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 Information. Except as required by law, Goldstrike
does not assume any obligation to release publicly any revisions to
Forward-Looking Information contained in this news release to
reflect events or circumstances after the date hereof or to reflect
the occurrence of unanticipated events.
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