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MONTREAL, April 24, 2020 /CNW Telbec/ - Guerrero Ventures
Inc. (TSXV: GV) ("Guerrero"
or the "Company") is pleased to announce that it
has held a second closing of its previously-announced private
placement of subscription receipts ("Subscription
Receipts"). At the second closing, Guerrero issued 6,623,469 Subscription
Receipts at an issue price of C$0.90
per Subscription Receipt for gross proceeds of approximately
C$5.96 million.
To date, Guerrero has issued
10,044,269 Subscription Receipts in the private placement for
aggregate gross proceeds of approximately C$9.04 million and expects to hold a third
closing of the private placement in early May, subject to a maximum
of C$13.3 million.
"The successful completion of this second tranche demonstrates
the strong support shown by our investors as we near the launch of
Nomad Royalty Company, a new global acquisition-driven
precious metals royalty company" said Vincent Metcalfe, Chief Executive Officer of the
Company.
Each Subscription Receipt entitles the holder thereof to
receive, without payment of any additional consideration or further
action on the part of the holder, one common share of the Company
upon satisfaction and/or waiver of certain escrow release
conditions (the "Escrow Release Conditions"), including but
not limited to the closing of the Transaction (as defined
below).
The private placement is being effected through a syndicate of
securities dealers composed of Scotiabank and BMO Capital Markets
as Joint Bookrunners, CIBC Capital Markets, RBC Capital Markets,
Canaccord Genuity Corp., Desjardins Capital Markets, Haywood
Securities Inc. and National Bank Financial Inc. (collectively, the
"Agents").
The gross proceeds from the sale of the Subscription Receipts,
less fifty percent of the Agents' commission and Agents' expenses
payable on the closing date of the private placement, will be held
in escrow by Computershare Trust Company of Canada in accordance with a subscription
receipt agreement dated April 2, 2020 among Guerrero, Computershare Trust Company of
Canada, Scotiabank and BMO Capital
Markets and will be released to the Company upon satisfaction
and/or waiver of the Escrow Release Conditions. If the
Transaction closes on or before August 3,
2020, the escrowed proceeds from the private placement of
Subscription Receipts will be released to Guerrero. If the Transaction fails to close by
August 3, 2020, or the Transaction is
terminated at an earlier time, the gross proceeds and pro
rata entitlement to interest earned on the escrowed proceeds
will be paid to holders of the Subscription Receipts.
At the second closing, Guerrero
paid the Agents a cash commission representing 6% of the gross
proceeds raised, excluding funds received from the Insiders (as
defined below). Fifty percent of the cash consideration has been
deposited into escrow and will be released to the Agents upon
satisfaction and/or waiver of the Escrow Release Conditions.
Subject to satisfaction and/or waiver of the Escrow Release
Conditions, the Company will use the net proceeds from the private
placement for working capital purposes and to pay a portion of the
cash consideration to Yamana Gold Inc. and one of its affiliates in
connection with the previously-announced proposed transaction
(the "Transaction") involving the acquisition by
Guerrero from funds related to
Orion Resource Partners (USA) LP
and from Yamana Gold of two portfolios comprising an aggregate of
ten royalty, stream and gold loan assets for total consideration of
US$268 million and US$65 million, respectively, pursuant to
definitive purchase agreements dated February 23, 2020.
At the second closing, three directors and officers of
Guerrero (the "Insiders")
purchased an aggregate of 510,000 Subscription Receipts for total
gross proceeds of C$459,000. The
issuance of Subscription Receipts to the Insiders constitutes a
related party transaction but is exempt from the formal valuation
and minority approval requirements of Multilateral Instrument
61-101 - Protection of Minority Security Holders in Special
Transactions ("MI 61-101") as Guerrero's securities are not listed on any
stock exchange identified in Section 5.5(b) of MI 61-101 and
neither the fair market value of the Subscription Receipts issued
to the Insiders nor the fair market value of the entire private
placement exceeds 25% of Guerrero's market capitalization. Guerrero did not file a material change report
with respect to the participation of the Insiders at least 21 days
prior to the second closing of the private placement as the Insider
participation was not determined at that time.
Under applicable securities legislation, the Subscription
Receipts issued at the second closing of the private placement are
subject to a four-month hold period, expiring on August 25, 2020.
About Guerrero Ventures
Guerrero is a publicly listed company with a
focus on acquiring mineral assets that will provide the opportunity
to enhance shareholder value.
Completion of the Transaction is subject to a number of
conditions, including but not limited to, TSX Venture Exchange
acceptance and if applicable, disinterested 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 the Company should be considered highly speculative.
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.
Investors are cautioned that, except as disclosed in the
Company's public filings, any information released or received with
respect to the Transaction may not be accurate or complete and
should not be relied upon.
This news release does not constitute an offer to sell or the
solicitation of an offer to buy any securities in any
jurisdiction.
Notice on Forward-looking Statements
This news release
contains statements that may constitute "forward-looking
information" within the meaning of applicable Canadian securities
legislation. Forward-looking information may include, among
others, statements regarding the future plans, costs, objectives or
performance of the Company and its business, or the assumptions
underlying any of the foregoing. In this news release, words
such as "may", "would", "could", "will", "likely", "believe",
"expect", "anticipate", "intend", "plan", "estimate" and similar
words and the negative form thereof are used to identify
forward-looking statements. Forward-looking statements should
not be read as guarantees of future performance or results, and
will not necessarily be accurate indications of whether, or the
times at or by which, such future performance will be
achieved. The forward-looking events and circumstances
discussed in this press release, including completion of the
Transaction, may not occur and could differ materially as a result
of known and unknown risk factors and uncertainties affecting the
Company, including risks regarding royalty, stream and gold loan
assets, risks related to the COVID-19 pandemic, the ability of the
Company's management to manage and to operate the business of the
Company, and the equity markets generally. Forward-looking
information is based on information available at the time and/or
management's good-faith belief with respect to future events and
are subject to known or unknown risks, uncertainties, assumptions
and other unpredictable factors, many of which are beyond the
control of the Company. These risks, uncertainties and
assumptions include, but are not limited to, those that will be
described in the Company's continuous disclosure documents to be
filed, and which will be available, on SEDAR at www.sedar.com, and
could cause actual events or results to differ materially from
those projected in any forward-looking statements. The
Company does not intend, nor does it undertake any obligation, to
update or revise any forward-looking information contained in this
news release to reflect subsequent information, events or
circumstances or otherwise, except if required by applicable
laws.
SOURCE Guerrero Ventures Inc.
