VANCOUVER, Nov. 16, 2017 /CNW/ - Marlin Gold Mining Ltd.
(TSX-V: MLN) ("Marlin" or the "Company") is pleased to announce
that it has received an interim order from the Supreme Court of
British Columbia dated
November 15, 2017, authorizing the
Company to convene an annual and special meeting (the "Meeting") of
its shareholders (the "Shareholders") on December 14, 2017, for the purpose of, among
other things, considering and approving an arrangement under the
Business Corporations Act (British
Columbia) (the "Arrangement").
The Arrangement involves, among other things, the distribution
of common shares (the "SpinCo Shares") of Sailfish Royalty Corp.
("SpinCo"), currently a wholly owned subsidiary of the Company, to
the Shareholders on the basis of one SpinCo Share for every five
common shares of the Company (each, a "Marlin Share").
SpinCo holds the Company's interest in the gold stream agreement
with Golden Reign Resources Ltd. on its high grade San Albino gold
deposit in Nicaragua (the "SA Gold
Stream") and has entered into an agreement (the "TZ Royalty
Purchase Agreement") to acquire a 3.5% royalty (the "TZ Royalty")
on revenues derived from the sale of gold on Eldorado Gold Corp.'s
advanced stage Tocantinzinho gold project, subject to completion of
the Arrangement and certain other customary closing conditions. The
Arrangement has been proposed in order to facilitate the separation
of all of Marlin's rights and interests in the SA Gold Stream and
TZ Royalty from the La Trinidad Mine and other mineral exploration
assets which Marlin will continue to own and operate following the
Arrangement. The board of directors of the Company (the "Board")
believes that the creation of two separate public companies, one a
growth-oriented gold and silver mining company focused on the
Americas (Marlin) and the other a yield-focused royalty company
(SpinCo), will enhance their respective business operations,
provide Shareholders with additional investment choices and
flexibility, and unlock the value of Marlin's royalty
portfolio.
The Company's board of directors unanimously recommends that
Marlin Shareholders approve the Arrangement.
Prior to or concurrently with the Arrangement, Marlin will
transfer approximately US$7 million
in cash to SpinCo to fund the acquisition of the TZ Royalty and
provide working capital for SpinCo, and Marlin and SpinCo will
enter into an unsecured term credit facility in the principal
amount of up to US$14 million bearing
interest at a rate of 8% per annum in order for SpinCo to make the
remaining upfront payment under the SA Gold Stream.
On completion of the Arrangement, among other things: (i)
Shareholders at the effective time of the Arrangement will own
89.42% of the outstanding shares of SpinCo and the vendors of the
TZ Royalty will own an aggregate of 10.58% of the outstanding
shares of SpinCo, assuming the concurrent completion of the
acquisition of the TZ Royalty; (ii) each Shareholder will receive,
in exchange for each five Marlin Shares held immediately prior to
the Arrangement, one SpinCo Share and five new common shares of
Marlin (each, a "New Marlin Share"); and (iii) holders of options
of the Company ("Marlin Options") will receive, in exchange for
each five Marlin Options held immediately prior to the Arrangement,
one option to acquire a SpinCo Share and five options to
acquire New Marlin Shares, in each case at the exercise price
determined in accordance with the applicable formula set out in the
management information circular to be distributed by Marlin to
Shareholders (the "Marlin Circular").
Completion of the Arrangement is subject to customary
conditions, including, among others, receipt of the required
regulatory approvals, including the approval of the TSX-V, approval
of the Supreme Court of British
Columbia and, subject to the court's approval, approval of
the Arrangement at the Meeting by (i) a special resolution passed
by at least two-thirds of the votes cast by Shareholders present in
person or represented by proxy at the Meeting, which holders are
entitled to one vote for each Marlin
Share; and (ii) a simple majority of the votes cast by
Shareholders present in person or represented by proxy at the
Meeting, excluding the votes cast by such Shareholders as are
required to be excluded pursuant to Multilateral Instrument 61-101
– Protection of Minority Shareholders in Special
Transactions. Wexford Spectrum Trading Limited and Wexford
Catalyst Trading Limited, which together hold approximately 85.0%
of the issued and outstanding Marlin Shares, have indicated their
support for the Arrangement, however their votes will be excluded
from the "majority of the minority" vote.
On November 8, 2017, SpinCo
received conditional approval to list the SpinCo Shares on the TSX
Venture Exchange (the "TSX-V"). Listing on the TSX-V will be
subject to SpinCo meeting all of the listing requirements and
conditions and receiving the final approval of the TSX-V.
Additional details of the Arrangement will be provided in the
Marlin Circular, expected to be mailed to Shareholders and filed on
SEDAR at www.sedar.com on or prior to November 22, 2017. The Arrangement is
expected to close in or about December
2017, subject to receipt of all required approvals and the
concurrent closing of the acquisition of the TZ Royalty.
Accordingly, timing and completion of the Arrangement will be
dependent on the completion and timing of the acquisition of the TZ
Royalty.
Acquisition of the TZ Royalty
As announced on June 28, 2017, the
Company entered into the TZ Royalty Purchase Agreement with SpinCo
and two individuals who presently hold the TZ Royalty pursuant to
which, among other things, SpinCo agreed to purchase the TZ
Royalty. Marlin and SpinCo have agreed to an amendment to the
TZ Royalty Purchase Agreement to clarify that the aggregate number
of SpinCo Shares issuable to the vendors will represent 10.58% of
the issued and outstanding SpinCo Shares following the Arrangement
and to extend the outside date for the closing under the TZ Royalty
Purchase Agreement to January 12,
2018. The cash consideration payable to the vendors of the
TZ Royalty of US$6.5 million remains
unchanged. The closing of the acquisition of the TZ Royalty is
dependent on the concurrent completion of the Arrangement.
About Marlin
Marlin is a growth-oriented gold and silver mining company
focused on the Americas. The company owns three properties
located in Mexico and the
USA and a portfolio of
royalties. Marlin's priority is to profitably operate
its La Trinidad Mine, conduct further exploration on its other
projects and enhance shareholder value through growth of its
wholly owned subsidiary, Sailfish Royalty Corp. Marlin is
backed by a well-funded investor with a successful track record in
the resources sector. The La Trinidad Mine in Sinaloa, Mexico declared commercial production
on November 1, 2014 and is one of the
highest-grade open pit heap leach gold mines in Mexico.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as the term is defined in the policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release.
None of the securities to be issued under the Arrangement
have been or will be registered under the United States Securities
Act of 1933, as amended, or any state securities laws, and such
securities are anticipated to be issued in the United States pursuant to exemptions from
such registration requirements. This news release does not
constitute an offer of any securities for sale, nor a solicitation
for offers to buy any securities.
Cautionary statement regarding
forward‐looking information
This news release contains "forward-looking statements"
within the meaning of applicable securities laws. Forward-looking
statements are statements that are not historical facts and are
generally, but not always, identified by words such as the
following: expects, plans, anticipates, believes, intends,
estimates, projects, assumes, potential and similar expressions.
Forward-looking statements also include reference to events or
conditions that will, would, may, could or should occur, including,
without limitation, statements relating to the completion of the
Arrangement. These forward-looking statements are necessarily based
upon a number of estimates and assumptions that are based on
management's expectations and considered reasonable at the time
they are made, including among others: that the Company will obtain
all necessary court, shareholder and regulatory approvals for the
Arrangement; that the Company will be able to complete the
Arrangement as expected; that the SpinCo Shares will be accepted
for listing on the TSX-V; that the Company will hold the Meeting on
or about December 14, 2017; and that
the Company will complete the acquisition of the TZ Royalty
concurrently with the Arrangement. Investors are cautioned that all
forward-looking statements are inherently subject to a variety of
risks and uncertainties which could cause actual events or results
to differ materially from those reflected in the forward-looking
statements, including, without limitation: that the Company may be
unable to obtain all necessary court, shareholder and regulatory
approvals for the Arrangement as and when expected or at all; that
the Arrangement may not be completed as expected or at all; that
the Company may fail to hold the Meeting when expected; that the
Company may not close the acquisition of the TZ Royalty as expected
or at all; and other risks and uncertainties, including those
described in the Company's annual management's discussion and
analysis filed on SEDAR at www.sedar.com. As a
result, readers are cautioned not to place undue reliance on these
forward-looking statements. The forward-looking statements
contained in this news release are made as of the date of this
release. Unless required by law, Marlin has no intention to and
assumes no obligation to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise.
SOURCE Marlin Gold Mining Ltd.