TORONTO, March 20,
2024 /CNW/ - Orford Mining Corporation (TSXV:
ORM) ("Orford" or the "Company"). As
previously announced, the Company's special meeting of shareholders
will be held on March 27, 2024 at
10:00 a.m. (Toronto time) at 66 Wellington Street West,
Suite 4100, Toronto, ON M5K 1B7
(the "Meeting"), for the purpose of approving the previously
announced plan of arrangement pursuant to which Alamos Gold Inc.
(TSX: AGI, NYSE: AGI) ("Alamos") will acquire all of the
outstanding common shares of Orford ("Orford Shares") not
already owned by Alamos, for deemed consideration of C$0.10 per Orford
Share (the "Arrangement"). Pursuant to the
Arrangement Agreement, Orford's shareholders ("Orford
Shareholders") will receive 0.005588 (the "Exchange
Ratio") of an Alamos common share (an "Alamos Share")
for each Orford Share held (the
"Consideration").
Additionally, shareholders are being asked to approve the entry
by Orford into a non-convertible multi-draw credit facility or
loan, applicable if the Arrangement does not close by April 15, 2024 whereby Alamos, may provide to
Orford an amount up to C$2 million,
in the aggregate for the purpose of funding Orford's normal course
business activities, all on reasonable commercial terms reasonably
satisfactory to each of Alamos and Orford (the "Orford Credit
Facility").
The Arrangement and the Orford Credit Facility are described in
more detail in the management information circular dated
February 23, 2024 (the "Management
Information Circular") which was mailed to Orford Shareholders
and is available on SEDAR+ under Orford's profile at
www.sedarplus.com. As a supplement to the disclosure in the
Management Information Circular, Orford is pleased to provide
additional information below under the headings Fairness
Opinion and Background to the Arrangement.
YOUR VOTE IS IMPORTANT
The Board of Directors of Orford (with the abstention of the
interested Director) UNANIMOUSLY RECOMMENDS that Orford
shareholders vote:
- FOR the resolution approving the Arrangement,
and
- FOR the resolution approving the Orford Credit
Facility.
Shareholder Questions and
Assistance
If shareholders have any questions or require more
information in respect of the voting procedures or completing the
form of proxy or voting instruction form, please contact the
Company's transfer agent, Computershare Investor Services, by
telephone at 1-800-864-6253, or by email at
corporateactions@computershare.com.
Reasons for the Recommendation
In evaluating the Arrangement and the Orford Credit Facility and
UNANIMOUSLY (with the abstention of an interested director)
reaching their conclusion that the Arrangement is in the best
interests of all Orford securityholders and making their
recommendation that Orford shareholders vote FOR the
Arrangement and the Orford Credit Facility, the Orford board of
directors considered the benefits and advantages resulting from the
Arrangement and the Orford Credit Facility, including, among
others:
- Significant Premium: Orford Shareholders will
receive a significant premium for their Orford Shares of
approximately 114% premium to the closing price of the Orford
Shares on the TSXV on January 12,
2024, being the last trading day prior to the announcement
of the Arrangement.
- Thorough Process: The Arrangement and the Orford
Credit Facility have been evaluated and recommended by a Special
Committee of Orford independent directors, which conducted a
thorough process, in consultation with legal and financial
advisors, including a considered review of other potential
alternatives, as well as obtaining the Fairness Opinion (described
below).
- Preferred Alternative: The Special Committee and
the Board assessed the relative benefits and risks of various
alternatives to the Arrangement, and concluded that the
Consideration is likely to represent greater value than would
reasonably be expected from the continued execution of the
Company's existing strategic plan or of alternative transactions,
in light of the ongoing uncertainty surrounding the junior mineral
exploration market and limited equity financing alternatives.
- Fairness of Process: Orford Shareholders enjoy a
number of protections to assure fairness of the Arrangement. The
Arrangement Resolution must be approved by (i) the affirmative vote
of at least 66⅔% of the votes cast on the Arrangement Resolution by
holders of Orford Shares present or represented by proxy at the
Meeting, each being entitled to one vote per Orford Share held; and (ii) the affirmative vote
of the majority the votes cast on the Arrangement Resolution by
holders of Orford Shares present or represented by proxy at the
Meeting, excluding Alamos and Alamos Related Parties, Mr.
David Christie, and Ms. Michelle Sciortino, all in accordance with the
requirements of MI 61-101. The Arrangement must also be approved by
the Court, which will consider the fairness and reasonableness of
the Arrangement to Orford Shareholders. Orford Shareholders who
oppose the Arrangement may, upon compliance with certain
conditions, exercise Dissent Rights and, if ultimately successful,
receive fair value for their Orford Shares.
- Fair Treatment. In the Special Committee's
and the Board's respective views, the terms of the Arrangement
Agreement treat stakeholders of the Company equitably and fairly,
and the Arrangement is expected to benefit the Company and the
stakeholders of the Company.
- Elimination of Share Dilution. The Arrangement
eliminates the potential for significant share dilution from the
expected equity offerings that would be necessary to continue to
fund the exploration of the Company's Mineral Projects and overhead
costs in 2024.
- Option to Retain Alamos Shares. The
Arrangement provides the option to retain shares in Alamos, which
is a premier, low-risk, North American-focused intermediate gold
producer with a pristine balance sheet, fully funded growth profile
and commitment to return capital to shareholders.
- Cash, Technical Expertise, and In-Depth
Knowledge. Alamos has the cash, technical expertise, and
in-depth knowledge of geological structures and mineralization in
the area to accelerate the exploration and advancement of the
Mineral Projects.
Additionally, to be effective, the Orford Credit Facility
Resolution must be approved, with or without variation, by the
affirmative vote of the majority the votes cast on the Orford
Credit Facility Resolution by holders of Orford Shares present or
represented by proxy at the Meeting, excluding Orford Shares held
directly or indirectly by each of Alamos and the Alamos Related
Parties, all in accordance with the requirements of MI 61-101.
Fairness Opinion
In arriving at its view that the Arrangement was fair to
Orford's securityholders, the Special Committee and the Board were
informed by the fairness opinion provided by Red Cloud Securities
Inc. Red Cloud concluded that
the consideration to be received by Orford shareholders provides a
meaningful and immediate premium to Orford shareholders and
represents:
- an approximate 134% premium to the 20-day volume weighted
average price of Orford shares (based on trading on all Canadian
exchanges) for the period ended on January
12, 2024; and
- an approximate 114% premium to the closing price of Orford
shares on the TSX-V on January 12,
2024.
Red Cloud determined that these
implied premiums rank in the top quartile and well above the
overall average of over 125 precedent acquisitions of publicly
traded mineral exploration and development stage companies since
2015.
Red Cloud's Value Methodology
for Orford
Red Cloud applied a
sum-of-the-parts methodology by estimating a range of values for
each of Orford's material projects and properties using analysis of
selected publicly traded gold and lithium exploration companies as
well as analysis of precedent transactions. In deriving value
ranges, Red Cloud applied a range of
multiples that included (i) enterprise value ("EV") to hectare
multiples of select publicly traded companies with large,
pre-resource stage gold exploration property holdings in
Quebec, (ii) EV to hectare
multiples of select lithium pegmatite exploration companies with
key projects in Quebec, (iii)
transaction value ("TV") to hectare multiples of selected lithium
property transactions in the Nunavik region in Quebec, and (iv) TV to resource multiples of
selected precedent acquisitions of gold exploration projects in
Canada. Red Cloud also considered historical and
committed project expenditures incurred by the Company, and in the
case of the West Raglan Project, joint venture partner Wyloo Metals
Pty Ltd. Red Cloud derived a value
range per Orford share that was lower than the market value of the
consideration.
Red Cloud also considered other
qualitative factors and considerations, including, but not limited
to, the following:
- The substantial financing risk and potential future dilution to
Orford shareholders that Orford would face as a stand-alone company
by continuing to fund exploration programs across its 1,787 km2 of
highly prospective exploration properties in northern Quebec;
- Consideration in the form of Alamos Shares provides Orford
shareholders ownership in a premier, relatively lower risk, North
American-focused intermediate gold producer with a portfolio of
high-quality mines and development projects, a strong balance
sheet, fully funded growth profile and commitment to return capital
to shareholders;
- Access to Alamos's strong balance sheet, robust free cash flow
generation and technical expertise to accelerate the advancement of
Orford's portfolio of properties; and
- Alamos Shares on the TSX and the New York Stock Exchange are
highly liquid, providing a liquidity event for Orford
shareholders.
Background to the Arrangement
Alamos initially became a shareholder of Orford on May 17, 2019, when Alamos purchased 14,764,706
Orford Shares representing approximately 19.3% of the outstanding
Orford Shares in a private placement. Alamos remained a steadfast
supporter of Orford, participating in all of Orford's subsequent
private placements to maintain or increase its percentage holding
of Orford Shares, and providing Orford with a reliable source of
financing.
Discussions concerning Alamos purchasing Orford commenced on
March 30, 2023, when Alamos submitted
to Orford an unsolicited initial non-binding letter of intent
contemplating the acquisition of all the Orford common shares not
already owned by Alamos in exchange for common shares of Alamos
(the "Initial Proposal"). The Initial Proposal represented a
premium to the then-current market price of the Orford Shares. The
Orford board appointed a Special Committee of independent directors
to review the offer, with a mandate to negotiate the proposed
transaction with Alamos on the Orford board's behalf, and to
consider and evaluate the merits of any proposed transaction in
order to ultimately determine whether to recommend a proposal from
Alamos to the Orford board. Negotiations led to a revised
non-binding letter of intent being sent by Alamos to Orford on
April 4, 2023 (the "Second
Proposal"). Orford requested changes to the Second Proposal on
April 6, 2023 and received a response
from Alamos on April 10, 2023.
On that date, Orford's Special Committee retained Cormark
Securities Inc. ("Cormark") as its financial advisor and Red
Cloud Securities Inc. to provide a fairness opinion should the
transaction proceed.
The Special Committee met with Cormark on April 12, 2023 to review and discuss the Second
Proposal, and determined that it would be acceptable provided
certain changes were made, including provisions that Alamos
exercise warrants that would result in proceeds to Orford following
the transaction announcement, and provide Orford with additional
funds by way of loan. Negotiations continued on April 13, 2023 and April
14, 2023 ultimately resulting in Orford sending to Alamos a revised draft
non-binding letter of intent that was executed on April 14, 2023. On April 26, 2023, Alamos withdrew its offer.
No fairness opinion was presented or provided by Red Cloud
Securities Inc. to Orford prior to the withdrawal of the offer, and
the Special Committee was disbanded upon Alamos' withdrawal of
their offer.
On December 1, 2023, Orford
received an unsolicited non-binding letter of intent from Alamos,
at which time the Orford board reconstituted the Special Committee,
which commenced a new round of negotiations described in the
Management Information Circular, ultimately culminating in the
Arrangement Agreement and the Plan of Arrangement, as described in
the Management Information Circular.
Additional Information
The Company has mailed its Management Information Circular
and related materials (the "Meeting Materials") to its
shareholders. The Meeting Materials are available on SEDAR+ under
Orford's profile at www.sedarplus.com. All shareholders are
urged to read the Meeting Materials.
About Orford Mining
Orford Mining is a gold and critical mineral explorer focused on
highly prospective and underexplored areas of Northern Quebec. Orford's principal assets are
the Qiqavik, West Raglan and lithium exploration projects
comprising a land package totaling over 168,336 hectares in the
Cape Smith Belt of Northern
Quebec. The Qiqavik Project hosts several new high-grade
gold discoveries along a mineralized trend in excess of 40 km. The
West Raglan Project hosts a number of high-grade Raglan-style
nickel/copper/platinum group metal discoveries along a 55 km
mineralized trend. In early 2023 Orford acquired large claim blocks
targeting Lithium in the Nunavik Region. These Lithium claim blocks
have been carefully selected as having promising lithium potential
after an exhaustive compilation of available data. The first
field season of exploration on the lithium focused properties
returned positive results. Orford also has four property positions
in the Joutel region of the Abitibi District of Northern Quebec, which hosts historical
deposits such as the Eagle/Telbel, Joutel Copper, Poirier Copper, and Vezza deposits. Orford
continually seeks new gold exploration opportunities in
North America. Orford's common
shares trade on the TSX Venture Exchange under the symbol ORM. This
information from neighbouring properties is not necessarily
indicative of the mineralization on Orford Mining's properties.
To view further details about Orford's exploration
projects please visit Orford's website,
www.orfordmining.com.
Neither the TSXV nor its Regulation Services Provider (as
that term is defined in the policies of the TSXV) accepts
responsibility for the adequacy or accuracy of this
release.
Cautionary Statement Concerning Forward-Looking
Statements
This news release contains "forward-looking information" as
defined under applicable securities laws. Such forward-looking
statements include, but are not limited to, statements relating to:
the completion of the Transaction and the Arrangement as proposed
to be effected pursuant to the Agreement; the ability of the
parties to satisfy the conditions to closing of the Arrangement;
the anticipated timing of the completion of the Arrangement, and
statements relating to Orford's liquidity and capital resources and
potential of one or more of Orford's mineral exploration
properties.
Forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance or achievements of Orford to be materially different
from any future results, performance or achievements expressed or
implied by the forward-looking statements. These factors include,
among others, obtaining required shareholder, court, and regulatory
approvals, exercise of any termination rights under the Agreement,
meeting other conditions in the Agreement, material adverse effects
on the business, properties and assets of Orford, and whether any
superior proposal will be made. completion of the Transaction, and,
in respect of statements concerning Orford's liquidity, capital
resources and potential of Orford's mineral exploration
properties, future prices and the supply of metals; the
results of drilling; inability to raise the money necessary to
incur the expenditures required to retain and advance the
properties; environmental liabilities (known and unknown); general
business, economic, competitive, political and social
uncertainties; accidents, labour disputes and other risks of the
mining industry; political instability, terrorism, insurrection or
war; or delays in obtaining governmental approvals, failure to
obtain regulatory or shareholder approvals. For a more detailed
discussion of such risks and other factors that could cause actual
results to differ materially from those expressed or implied by
such forward-looking statements, refer to Orford's filings with
Canadian securities regulators available on SEDAR+ at
www.sedarplus.com.
Although Orford has attempted to identify important factors
that could cause actual actions, events or results to differ
materially from those described in forward-looking statements,
there may be other factors that cause actions, events or results to
differ from those anticipated, estimated or intended. Forward-
looking statements contained herein are made as of the date of this
news release and Orford disclaims any obligation to update any
forward-looking statements, whether as a result of new information,
future events or results or otherwise, except as required by
applicable securities laws.
SOURCE Orford Mining Corporation