TORONTO, July 8, 2024
/CNW/ - Karora Resources Inc. (TSX: KRR) (OTCQX: KRRGF)
("Karora" or the "Corporation") today announced that Institutional
Shareholder Services ("ISS"), a leading independent proxy advisory
firm, released a report (the "ISS Report") recommending that Karora
shareholders ("Karora Shareholders") vote in favour of
the previously announced statutory plan of arrangement (the
"Arrangement") with Westgold Resources Limited
("Westgold").
The ISS Report states, in addition to other things, that "The
arrangement carries sound strategic logic as the combined company
is expected to deliver meaningful cost synergies, benefit from
scale and a stronger financial position, and be more diversified.
Karora Shareholders will be able to participate in the upside
represented by the combined company through the share
consideration, receive some degree of certain and immediate value
through the cash portion, and retain additional optionality through
the ownership of Spinco."
Details of the Transaction
The Arrangement is outlined in Karora's management information
circular (the "Circular") dated June 17,
2024 prepared in respect of the annual general and special
meeting (the "Meeting) of Karora Shareholders to be held on
July 19, 2024. The proxy deadline
for voting is 10:00 a.m.
(Toronto time) on July 17, 2024.
The Arrangement is subject to the terms and conditions of an
arrangement agreement dated April 8,
2024, as amended (the "Arrangement Agreement"), entered into
among Karora, Westgold, 1474429 B.C.
Ltd., a wholly owned subsidiary of Westgold, and Culico Metals Inc.
(formerly 1000853883 Ontario Inc.) ("SpinCo"), a wholly owned
subsidiary of Karora, all as more particularly described in the
Circular.
Under the Arrangement Agreement, the parties have agreed to
effect the Arrangement, pursuant to which:
- Westgold will indirectly acquire all of the issued and
outstanding common shares of Karora ("Karora Shares"), and Karora
Shareholders will be entitled to receive for each Karora Share held
immediately prior to the effective time of the Arrangement, (i)
$0.608 in cash and (ii) 2.524 fully
paid ordinary shares in the capital of Westgold (each one whole
share, a "Westgold Share").
- Karora will assign, or cause its applicable direct or indirect
subsidiaries to assign, all of their respective ownership interest
in the Transferred Assets (as defined in the Circular) to SpinCo;
and
- Karora will spin out to the Karora Shareholders, at the
effective time of the Arrangement, 0.3 of a SpinCo Share for each
Karora Share held as at the effective time.
Special Committee and Board Recommendations
The board of directors of the Corporation (the "Karora Board")
believes that the Arrangement will deliver a premium and other
benefits to Karora Shareholders. The Karora Board and the
special committee established by the Karora Board (the "Special
Committee") have unanimously determined that the Arrangement is in
the best interests of the Corporation and that the Arrangement is
fair to the Karora Shareholders. Karora Shareholders are
encouraged to read the Circular, including pages 37 to 39 of the
Circular, for a detailed description of the "Reasons for the
Arrangement".
Amendment to Arrangement Agreement - Australian Government
Takeovers Panel
On May 29, 2024, the Australian
Government Takeovers Panel (the "Panel") issued a release advising
that it had received an application from Ramelius Resources Limited
("Ramelius"), challenging identified elements of the Arrangement
Agreement, and seeking a declaration of "unacceptable
circumstances" in relation to those elements. After receiving
submissions from Ramelius, Westgold, Karora and the Australian
Securities and Investments Commission, on July 8, 2024, the Panel issued a release advising
that it had accepted undertakings from Westgold and Karora, and had
declined to make a declaration of unacceptable circumstances.
The undertakings address concerns expressed by the Panel in
relation to the non-solicitation provisions in the Arrangement
Agreement, in particular the effectiveness of the "fiduciary out".
The Panel accepted undertakings from Karora and Westgold to
amend the relevant provisions of the Arrangement Agreement as
sufficient to reduce fetters or constraints on the "fiduciary
out".
For further information, please refer to the media release
titled "Westgold Resources Limited – Panel Accepts Undertakings and
Declines to Make a Declaration", published on July 8, 2024 by the Panel.
Karora and Westgold have entered into an agreement to amend the
Arrangement Agreement (the "Amending Agreement") consistent with
the undertakings. A copy of the Amending Agreement will be
available under Karora's profile on SEDAR+ at
www.sedarplus.ca.
Meeting and Circular
The Meeting of the Karora Shareholders will be held at the
offices of Bennett Jones LLP located at One First Canadian Place,
100 King Street West, Suite 3400, Toronto, Ontario M5X 1A4 on July 19, 2024 at 10:00
a.m. (Toronto time). Karora
Shareholders of record as of the close of business on June 13, 2024 are entitled to receive notice of
and to vote at the Meeting. Karora Shareholders are urged to
vote before the proxy deadline of 10:00
a.m. (Toronto time) on
July 17, 2024.
The Circular provides important information on the Arrangement
and related matters, including the background of the Arrangement,
the rationale for the recommendations made by the Special Committee
and the Karora Board and voting procedures. Karora Shareholders are
urged to read the Circular and its appendices carefully and in
their entirety. The Circular has been mailed to Karora Shareholders
in compliance with applicable Canadian corporate and securities
laws. The Circular is available under Karora's profile on SEDAR+ at
www.sedarplus.ca and on Karora's website at
www.karoraresources.com.
Completion of the Arrangement remains subject to, among other
things, the approval of the special resolution with respect to the
Arrangement at the Meeting, applicable regulatory approvals and
receipt of the final order of the Court for the Arrangement.
Shareholder Questions and Assistance
Karora Shareholders who have questions or need assistance
regarding the Meeting, please contact the Corporation's proxy
solicitation agent, Morrow Sodali, by telephone at 1-888-999-2602
(toll-free in North America) or
1-289-695-3075 (collect call outside North America), or by email at
assistance@morrowsodali.com.
About Karora Resources
Karora is focused on increasing gold production at its
integrated Beta Hunt Gold Mine and Higginsville Gold Operations
("HGO") in Western Australia. The
Higginsville treatment facility is a low-cost 1.6 Mtpa processing
plant, which is fed at capacity from Karora's underground Beta Hunt
mine and Higginsville mines. In July
2022, Karora acquired the 1.0 Mtpa Lakewood Mill in
Western Australia. At Beta Hunt, a
robust gold Mineral Resource and Reserve are hosted in multiple
gold shears, with gold intersections along a 5 km strike length
remaining open in multiple directions. HGO has a substantial
Mineral gold Resource and Reserve and prospective land package
totaling approximately 1,900 square kilometers. Karora has a strong
Board of Directors and management team focused on delivering
shareholder value and responsible mining, as demonstrated by
Karora's commitment to reducing emissions across its operations.
The Karora Shares trade on the TSX under the symbol KRR and on the
OTCQX market under the symbol KRRGF.
About Westgold Resources
Westgold Resources Limited (ASX: WGX / OTCQX: WGXRF) is an
innovative and progressive West Australian gold producer located in
the Murchison and Bryah regions of WA. The company has tenure of
more than 1,300 km2 and operates four underground mines and three
processing plants with an installed processing capacity of
approximately four million tonnes per annum.
Operating on a 'hub and spoke' model, Westgold's Murchison mines
feed ore to its Meekatharra and Tuckabianna processing hubs and its
Bryah Basin mines send ore to the Fortnum hub.
Westgold owns and operates its mines. With this in-house
expertise and a modern underground mining fleet, Westgold has
greater cost control and operating flexibility. The company offers
substantial career development opportunities across multiple
operating mines and processing plants.
Cautionary Statement Concerning Forward-Looking
Statements
This news release contains "forward-looking information"
including without limitation statements relating to: information
and statements regarding the Arrangement; the impact of the
Arrangement on stakeholders, including the expected benefits
to Karora Shareholders; receipt and timing of shareholder,
regulatory and court approval of the Arrangement; the timing and
ability of Karora to complete the Arrangement (if at all); and the
timing and ability of Karora to satisfy the conditions precedent to
completing the Arrangement (if at all) as set forth in the
Arrangement Agreement; the potential benefits, value and synergies
in respect of the combined company and the upside potential of
Spinco.
Forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance or achievements of Karora to be materially different
from any future results, performance or achievements expressed or
implied by the forward-looking statements. Factors that could
affect the outcome include, among others: failure to obtain
required regulatory approvals third party consents, including
approval of the Court, the TSX and the ASX; failure to obtain
approval of the Karora Shareholders; the ability of exploration
activities (including drilling) to accurately predict
mineralization; errors in geological modelling; 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; results of exploration programs (including
drilling); accidents, labour disputes and other risks of the mining
industry; political instability, terrorism, insurrection or war;
delays in obtaining governmental approvals, projected cash
operating costs; and 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 Karora 's filings with Canadian securities regulators,
including the most recent Annual Information Form, available on
SEDAR+ at www.sedarplus.ca.
Although Karora 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 Karora 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 Karora Resources Inc.