TORONTO, June 21, 2018 (GLOBE
NEWSWIRE) -- Dalradian Resources Inc. (TSX:DNA) (AIM:DALR)
("Dalradian" or the "Company") and Orion Mine Finance are pleased
to announce that the Company and certain affiliates of Orion Mine
Finance (collectively, "Orion") have entered into a definitive
arrangement agreement (the "Arrangement Agreement"), whereby Orion
will acquire all of the issued and outstanding common shares of the
Company ("Dalradian Shares") by way of a statutory plan of
arrangement under the Business Corporations
Act (Ontario) (the "Transaction"). Under the terms of the
Arrangement Agreement, the Dalradian Shares held by certain members
of the Dalradian senior management team, Sean Roosen and Osisko
Gold Royalties Ltd (collectively, the "Remaining Shareholders")
will not be acquired by Orion. Collectively, Orion and the
Remaining Shareholders currently hold 72,695,911 Dalradian Shares
or 20.4% of the issued and outstanding Dalradian Shares.
The
Arrangement Agreement
Under the terms of the Arrangement
Agreement, each Dalradian shareholder (other than the Remaining
Shareholders) (the "Affected Dalradian Shareholders") will receive
cash consideration of C$1.47 for each Dalradian Share held (the
"Consideration"), valuing Dalradian's total equity at approximately
C$537 million, on a fully diluted in-the-money basis. The
Consideration represents a 62% premium to the closing price of the
Dalradian Shares on the Toronto Stock Exchange (the "TSX") on June
20, 2018 and a 49% premium to the volume weighted average price
("VWAP") of the Dalradian Shares over the last 30 trading days.
Benefits to
Dalradian Shareholders
- Immediate and significant premium of
approximately 62% to the closing price of the Dalradian Shares on
June 20, 2018, and approximately 49% based on the 30-day VWAP.
- All cash offer that is not subject to a financing
condition.
- Strong deal certainty with support agreements
accounting for a total of approximately 31.4% from directors and
senior officers of Dalradian, certain funds, Orion and the
Remaining Shareholders.
Oskar Lewnowski, Chief Investment
Officer of Orion, commented, "We are very pleased to expand our
ownership in one of the world's best undeveloped gold deposits.
Curraghinalt gets more exciting as additional exploration and
engineering work is completed, the recent positive resource update
being just the latest example. The Dalradian team has done an
outstanding job of growing the deposit and advancing it through the
feasibility stage. We look forward to working with the core
Dalradian management team to secure planning permission for a world
class mine using best-in-class mining, processing and environmental
standards."
Patrick F.N. Anderson, CEO of
Dalradian, stated, "Orion and Osisko are showing great confidence
in Northern Ireland, our high grade Curraghinalt project and our
West Tyrone workforce. Their goals as strategic investors are
completely aligned with ours - to secure planning permission for an
underground gold mine and continue advancing the project in a way
that benefits all our stakeholders. We will continue to work
closely with community members, all levels of government,
employees, contractors and local suppliers toward building one of
the world's top gold mines."
Jim Rutherford, Non-Executive
Chairman of Dalradian, stated, "In the space of less than ten
years, Dalradian has succeeded in transforming its flagship
Curraghinalt project in Northern Ireland from a virtual grassroots
discovery into one of the world's best and highest grade gold
deposits, that will provide significant inward investment and
economic benefits for the Northern Ireland economy. The premium
cash offer from Orion that we have announced today therefore
reflects the results of several years' diligent, professional work
by the entire Dalradian team. My fellow board directors and I would
like to express our thanks and appreciation to all who have been
involved in successfully developing the project to this stage."
Major
Shareholder Support
Certain funds and accounts under
management by subsidiaries of BlackRock Inc., which hold
approximately 37,945,699 Dalradian Shares, representing
approximately 10.7% of Dalradian's issued and outstanding common
shares, have entered into a support agreement (the "Support
Agreement") with Orion, agreeing, subject to the terms of the
Support Agreement, to vote their Dalradian Shares in favour of the
Transaction. Orion and the Remaining Shareholders, who collectively
hold approximately 72,695,911 Dalradian Shares, representing
approximately 20.4% of Dalradian's issued and outstanding common
shares, have each agreed to continue to hold its Dalradian Shares
and also to vote in favour of the Transaction.
Independent
Committee and Board of Directors Recommendations
An independent committee of
Dalradian's board of directors (the "Independent Committee")
comprised of Jonathan Rubenstein, Patrick Downey and Thomas
Obradovich was constituted to consider the Transaction. The
Independent Committee, on behalf of the Dalradian Board of
Directors, obtained a formal valuation (the "Valuation") from
Raymond James Ltd. ("Raymond James") as required by Multilateral
Instrument 61-101 - Protection of Minority
Security Holders in Special Transactions ("MI 61-101").
The Valuation was prepared under the supervision of the Independent
Committee and determined that in Raymond James' opinion, and based
upon and subject to the assumptions, limitations and qualifications
set forth therein, the fair market value of the Dalradian Shares,
as at June 20, 2018 is in the range of C$1.35 to C$1.70 per
Dalradian Share. In addition, Raymond James has provided a fairness
opinion to the Independent Committee (the "Raymond James Fairness
Opinion"), stating that in its opinion, and based upon and subject
to the assumptions, limitations and qualifications set forth
therein, the Consideration to be received by the Affected Dalradian
Shareholders pursuant to the Arrangement Agreement is fair, from a
financial point of view, to such Affected Dalradian
Shareholders.
Maxit Capital LP has provided a
fairness opinion to the Independent Committee (the "Maxit Fairness
Opinion"), stating that in its opinion, and based upon and subject
to the assumptions, limitations and qualifications set forth
therein, the Consideration is fair, from a financial point of view,
to the Affected Dalradian Shareholders.
The Board of Directors (excluding
Patrick Anderson, Michael Barton and Sean Roosen who were recused
from discussions and voting given their interests in the
Transaction as Mr. Anderson is part of the senior management team
and is a Remaining Shareholder, Mr. Barton is a principal of Orion
and Mr. Roosen is a Remaining Shareholder and a principal of
Osisko) after receiving financial and legal advice, and following
receipt of the Maxit Fairness Opinion, the Raymond James Fairness
Opinion and the Valuation, and the recommendation of the
Independent Committee, unanimously approved the Transaction and
recommend that Affected Dalradian Shareholders vote in favour of
the Transaction.
In addition, directors and senior
officers of Dalradian, including the Remaining Shareholders, who as
of the date hereof, collectively hold approximately 2.2% of
Dalradian's issued and outstanding common shares, have entered into
agreements to support the Transaction and vote their Dalradian
Shares in favour of the Transaction.
Transaction
Conditions and Timing
The Transaction will be
implemented by way of a Court-approved plan of arrangement under
the Business Corporations
Act (Ontario) and will require the approval of: (i) 66
2/3% of the votes cast by the holders of Dalradian's common shares;
and (ii) a simple majority of the votes cast by holders of
Dalradian common shares after excluding any votes of Orion, Osisko
Gold Royalties Ltd and certain other persons required to be
excluded under MI 61-101, all at a special meeting of Dalradian
shareholders to consider the Transaction.
The completion of the Transaction
will also be subject to obtaining required court and other
approvals and satisfaction of closing conditions customary for a
transaction of this nature. The Arrangement Agreement provides for
customary deal-protection provisions, including a non-solicitation
covenant on the part of Dalradian and a right for Orion to match
any Superior Proposal (as defined in the Arrangement Agreement).
The Arrangement Agreement includes a termination fee of C$20
million, payable by Dalradian, under certain circumstances
(including if the Arrangement Agreement is terminated in connection
with Dalradian pursuing a Superior Proposal).
It is anticipated that the
special meeting of Dalradian shareholders to consider the
Transaction will be held in August 2018. The effect of Dalradian
shareholders voting for the resolution to approve the plan of
arrangement and it becoming effective will be the cancellation of
the Dalradian Shares from trading on the TSX and AIM following
closing of the Transaction. The Transaction is expected to close in
the third quarter of 2018.
No Financing
Contingency
The acquisition will be financed
using cash on hand in the Company, made available to Orion as a
loan, and cash available to Orion. Orion has confirmed that it has
sufficient cash available to finance the consideration for the
Transaction.
Advisors and
Counsel
Maxit Capital LP is acting as
financial advisor to Dalradian in connection with the Transaction.
Cassels Brock & Blackwell LLP is serving as Canadian counsel to
Dalradian, Blake, Cassels & Graydon LLP is serving as counsel
to the Independent Committee and Fieldfisher LLP is acting as UK
counsel to Dalradian.
Stikeman Elliott LLP is serving as
counsel to Orion.
Bennett Jones LLP is serving as
counsel to the senior management team.
McCarthy Tétrault LLP is serving
as counsel to Osisko Gold Royalties Ltd.
Additional
Information about the Proposed Transaction
Copies of the Maxit Fairness
Opinion, Raymond James Fairness Opinion, the Valuation, and a
description of the various factors considered by the Board of
Directors of the Company in its determination to approve the
Transaction, as well as other relevant background information, will
be included in the management information circular to be sent to
the Company's shareholders at least 21 days in advance of the
Special Meeting. The management information circular, the
Arrangement Agreement, the plan of arrangement and certain related
documents will be filed with the Canadian securities regulators and
will be available on SEDAR at www.sedar.com.
About
Orion
Orion Resource Partners is a
global alternative investment management firm with $4.5 billion
under management. Orion specializes in institutional metals and
mining investment strategies in the base and precious metals space.
Orion's private equity, hedge fund, and merchant service divisions
enable it to access in-depth knowledge of the global metals and
mining supply chain and robust insight into the physical and
financial demand driving global metals prices. Orion is an industry
leader in delivering comprehensive and customized financial
solutions to mining companies and base and precious metals
investors.
About
Dalradian Resources Inc.
Dalradian Resources Inc. is a
mineral exploration and development company that is focused on
advancing its high-grade Curraghinalt Gold Project located in
Northern Ireland, United Kingdom. The Curraghinalt Project is in
permitting, with exploration ongoing to build on the positive
feasibility study released in January 2017.
This
announcement contains inside information for the purposes of
Article 7 of Regulation (EU) No 596/2014.
About Osisko
Gold Royalties Ltd
Osisko Gold Royalties Ltd is an
intermediate precious metal royalty company focused on the Americas
that commenced activities in June 2014. Osisko holds a North
American focused portfolio of over 130 royalties, streams and
precious metal offtakes. Osisko's portfolio is anchored by five
cornerstone assets, including a 5% NSR royalty on the Canadian
Malartic Mine, which is the largest gold mine in Canada. Osisko
also owns a portfolio of publicly held resource companies,
including a 15.5% interest in Osisko Mining Inc., a 12.7% interest
in Falco Resources Ltd. and a 32.4% in Barkerville Gold Mines
Ltd.
Osisko's head office is located at
1100 Avenue des Canadiens-de Montréal, Suite 300, Montréal, Québec,
H3B 2S2.
For more
information:
Marla Gale
Vice President Communications
+1 416 583 5600
investor@dalradian.com
Grant Thornton UK LLP (Nominated
Adviser)
Philip Secrett / Richard Tonthat
+44 (0)20 7383 5100
Numis Securities Limited
(Broker)
John Prior / James Black / Paul
Gillam
+44 (0)20 7260 1000
FORWARD
LOOKING STATEMENTS
This press release contains
"forward-looking information" which may include, but is not limited
to, statements with respect to management's assessment of the
anticipated benefits to Dalradian shareholders of the proposed
Transaction, anticipated meeting date, timing for completion of the
Transaction and delisting from both the TSX and AIM, the delivery
of an updated feasibility study and an updated technical report,
future financial or operating performance of the Company and its
subsidiaries and its mineral project, the future price of metals,
test work and confirming results from work performed to date, the
estimation of mineral resources and mineral reserves, the
realization of mineral resource and mineral reserve estimates, the
timing and amount of estimated future production, costs of
production, capital, operating and exploration expenditures, costs
and timing of the development of new deposits, costs and timing of
future exploration, requirements for additional capital, government
regulation of mining operations, environmental risks, reclamation
expenses, title disputes or claims, limitations of insurance
coverage, the timing and possible outcome of pending regulatory
matters and the realization of the expected production, economics
and mine life of the Curraghinalt gold deposit.
Often, but not always,
forward-looking statements can be identified by the use of words
and phrases such as "plans," "expects," "is expected," "budget,"
"scheduled," "estimates," "forecasts," "intends," "anticipates," or
"believes" or variations (including negative variations) of such
words and phrases, or state that certain actions, events or results
"may," "could," "would," "might" or "will" be taken, occur or be
achieved.
Forward-looking statements are
based on the opinions and estimates of management as of the date
such statements are made and are based on various assumptions that
management believes are reasonable, such as the receipt of all
shareholder and regulatory approvals, no undue delays with respect
to the Transaction, effects of general economic conditions,
changing foreign exchange rates and actions by government
authorities, continued political stability in Northern Ireland,
that permits required for Dalradian's operations will be obtained
in a timely basis in order to permit Dalradian to proceed on
schedule with its planned exploration and mine development,
construction and production programs, that a permitting application
for mine construction will be approved, that skilled personnel and
contractors will be available as Dalradian's operations commence
and continue to grow towards production and mining operations, that
the price of gold will be at levels that render the Dalradian's
mineral project economic, and that the necessary capital will be
available to finance Dalradian's operations and realize on mineral
resource and mineral reserve estimates and current mine plans.
Forward-looking statements involve
known and unknown risks, uncertainties and other factors which may
cause the actual results, performance or achievements of Dalradian
to be materially different from any future results, performance or
achievements expressed or implied by the forward-looking
statements. Such factors include, among others, the risk that the
required Dalradian shareholder approval or necessary court
approvals may not be obtained in connection with the Transaction,
uncertainties associated with negotiations, misjudgments in the
course of preparing forward-looking information, the Transaction
may not close when planned or at all or on the terms and conditions
set forth in the Arrangement Agreement, the benefits expected from
the Transaction not being realized, risks related to the
integration of acquisitions, general business, economic,
competitive, political and social uncertainties; legal challenges
to permits or permitting applications; the actual results of
current and future exploration activities; the actual results of
reclamation activities; conclusions of economic evaluations;
meeting various expected cost estimates; changes in project
parameters and/or economic assessments as plans continue to be
refined; future prices of metals; possible variations of mineral
grade or recovery rates; the risk that actual costs may exceed
estimated costs; failure of plant, equipment or processes to
operate as anticipated; accidents, labour disputes and other risks
of the mining industry; political instability; delays in obtaining
governmental approvals or financing or in the completion of
development or construction activities, as well as those factors
discussed in the section entitled "Risk Factors" in the Company's
Annual Information Form for the year ended December 31, 2017 dated
March 15, 2018.
Although the Company 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 press release and the Company
disclaims any obligation to update any forward-looking statements,
whether as a result of new information, future events or results,
except as may be required by applicable securities laws. There can
be no assurance that forward-looking statements 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
statements.
This
announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Dalradian Resources Inc. via Globenewswire
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