Ranchero Gold Corp. (formerly, Melior Resources Inc.) (TSXV:
“
RNCH”) (the “
Company”) is
pleased to announce that it has completed its previously announced
reverse-takeover transaction (the “
Transaction”)
with the private entity Ranchero BC Holding Corp. (formerly
Ranchero Gold Corp.) (“
Ranchero”). In accordance
with the terms of the Transaction, the Company has acquired all of
the issued and outstanding securities of Ranchero by way of a
three-cornered amalgamation in accordance with the terms and
conditions of the amalgamation agreement dated February 17, 2021,
as amended, between Melior Resources Inc., Ranchero and 1274169
B.C. Ltd. The Transaction constituted a reverse takeover of the
Company by Ranchero pursuant to Policy 5.2 of the Corporate Finance
Manual of the TSX Venture Exchange (the “
TSXV”),
as following the closing of the Transaction, the former
shareholders of Ranchero own a majority of the outstanding common
shares of the Company.
The Company has filed a filing statement dated
September 30, 2021 (the “Filing Statement”) on
SEDAR under its profile relating to the Transaction. In connection
with the Filing Statement, the Company also filed a technical
report regarding the Santa Daniela property titled “CSA NI 43-101
Technical Report on the Santa Daniela Gold Project, Municipios of
Sahuaripa and Yecora, Sonora, Mexico” with an effective date of
August 24, 2020 (the “Technical Report”).
Investors are encouraged to review the Filing Statement and
Technical Report, which provide detailed information about the
Transaction, the Company and the Santa Daniela property.
The common shares of the Company are expected to
commence trading on the TSXV on or about October 18, 2021 under the
new trading symbol “RNCH”. The Transaction remains subject to the
final acceptance of the TSXV.
Name Change and
Consolidation
Prior to the completion of the Transaction, the
Company changed its name to “Ranchero Gold Corp.” and consolidated
its common shares (the “Consolidation”) on the
basis of 32.6764 pre-Consolidation common shares for one
post-Consolidation common share of the Company. Letters of
transmittal providing instructions on exchanging pre-Consolidation
share certificates for post-Consolidation share certificates or
Direct Registration System (DRS) Statements to be issued in the
name of “Ranchero Gold Corp.” will be mailed by TSX Trust Company
to the Company’s registered shareholders. Registered shareholders
are encouraged to send their share certificates, together with
their letter of transmittal, to TSX Trust Company in accordance
with the instructions in the letter of transmittal. Beneficial
shareholders holding common shares in the capital of the Company
through an intermediary should be aware that the intermediary may
have different procedures for processing the Consolidation and are
encouraged to contact their respective intermediaries in this
regard. No fractional common shares will be issued as a result of
the Consolidation. Where the Consolidation would otherwise result
in an entitlement to a fractional common share, the number of
post-Consolidation shares issued will be rounded up or down to the
nearest whole number of common shares.
An aggregate of 57,862,322 common shares of the
Company were issued pursuant to the Transaction. Following the
completion of the Transaction, the Company has an aggregate of
approximately 65,737,322 common shares issued and outstanding. The
CUSIP number of the common shares of the Company has been changed
to 75189P109 and its ISIN has been changed to CA75189P1099.
Debt Settlement and Success
Fee
As a condition to closing of the Transaction,
the Company settled its debt of approximately C$35.5 million owing
to Pala Investments Limited (“Pala”) through the
conversion of approximately C$32.0 million of the outstanding
indebtedness into an aggregate of 6,449,759 common shares of the
Company, on a post-Consolidation basis, and Pala forgave the
remaining indebtedness of approximately C$3.5 million pursuant to
the terms of a debt settlement agreement between Pala and the
Company.
As Pala was a control person of the Company
prior to the Transaction, the debt settlement was a related party
transaction pursuant to Multilateral Instrument 61-101 – Protection
of Minority Security Holders in Special Transactions (“MI
61-101”). The Company relied on the financial hardship
exemptions from valuation and minority approval contained in
sections 5.5(g) and 5.7(e) of MI 61-101. The debt settlement was
unanimously approved by the board of directors of the Company.
Prior to the debt settlement and Transaction, Pala owned 47.3% of
the issued and outstanding shares of the Company, and following the
debt settlement and Transaction, Pala owns approximately 11.6% of
the issued and outstanding shares of the Company.
The Company also issued an aggregate of 510,154
common shares of the Company, on a post-Consolidation basis, to
LACG Capital Inc. (“LACG”) in consideration for
LACG’s assistance in introducing Ranchero to the Company.
The common shares of the Company issued to Pala
and LACG are subject to a hold period expiring on February 8, 2022,
and the shares issued to Pala are also subject to a TSXV Form 5D –
Escrow Agreement.
Concurrent Financing
Ranchero previously completed a private
placement of an aggregate of 9,561,613 subscription receipts, at a
price of $0.55 per subscription receipt, to raise aggregate gross
proceeds of $5,258,887 (the “Concurrent
Financing”). Haywood Securities Inc. (the
“Agent”) acted as the agent and bookrunner to
locate purchasers in the Concurrent Financing on a best-efforts
agency basis. Immediately prior to the closing of the Transaction,
each subscription receipt issued in the Concurrent Financing was
converted one common share of Ranchero, which was immediately
exchanged for one common share of the Company pursuant to the
Transaction. The gross proceeds of the Concurrent Financing less
certain deductions and 50% of the cash fee payable to the Agent,
applicable taxes and expenses of the Agent incurred in connection
with the Concurrent Financing were released from escrow
concurrently with the completion of the Transaction. The Company
issued an aggregate of 319,093 broker warrants (the “Broker
Warrants”) in exchange for the broker warrants that were
previously issued by Ranchero to the Agent and the finders of the
Concurrent Financing. Each Broker Warrant entitles the holder
thereof to acquire one common share of the Company at an exercise
price of $0.55 until October 7, 2023.
Shareholder Approval
In accordance with the policies of the TSXV, the
Company obtained the written consent of shareholders of the Company
holding greater than 50% of the issued and outstanding common
shares of the Company to the Consolidation and the Transaction.
Board of Directors and
Management
Following completion of the Transaction, the
board of directors of the Company has been reconstituted to consist
of Martyn Buttenshaw, Gustavo Mazón, Steven Ristorcelli and William
Pincus. Management of the Company has been reconstituted to consist
of William Pincus as President and CEO and Ranbir Sall as CFO and
Corporate Secretary.
On behalf of the board of directors of the
Company:
William PincusPresident, Chief Executive Officer
and Director
For further information, please contact:
William PincusPresident, Chief Executive Officer
and Director+1 303 589 3734
This news release does not constitute an offer
to sell and is not a solicitation of an offer to buy any securities
in the United States. The securities of the Company have not been
and will not be registered under the United States Securities Act
of 1933, as amended (the “U.S. Securities Act”) or
any state securities laws and may not be offered or sold within the
United States or to U.S. Persons unless registered under the U.S.
Securities Act and applicable state securities laws unless pursuant
to an exemption from such registration.
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.
Cautionary Note Regarding Forward
Looking Statements
This news release contains certain
forward-looking statements. Any statements that express or involve
discussions with respect to predictions, expectations, beliefs,
plans, projections, objectives, assumptions or future events or
performance (often, but not always, using words or phrases such as
“expects” or “does not expect”, “is expected”, “anticipates” or
“does not anticipate” “plans”, “estimates” or “intends” or stating
that certain actions, events or results “ may”, “could”, “would”,
“might” or “will” be taken, occur or be achieved) are not
statements of historical fact and may be “forward-looking
statements”. Forward-looking statements contained in this news
release include, but are not limited to, the final acceptance of
the TSXV to the Transaction.
Forward-looking statements are subject to a
variety of risks and uncertainties which could cause actual events
or results to materially differ from those reflected in the
forward-looking statements. These risks and uncertainties include,
but are not limited to: risks related to regulatory approval,
including the approval of the TSXV. There can be no assurance that
forward-looking statement will prove to be accurate, and actual
results and future events could differ materially from those
anticipate in such statements. The Company undertakes no obligation
to update forward-looking statements if circumstances or
management’s estimates or opinions should change except as required
by applicable securities laws. The reader is cautioned not to place
undue reliance on forward-looking statements.
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