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Alternative Earth Resources Inc (2)
Symbol AER
Shares Issued 13,066,059
Close 2016-08-31 C$ 0.13
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Alternative Earth firms up Black Sea acquisition

2016-08-31 17:31 ET - News Release

An anonymous director reports

ALTERNATIVE EARTH RESOURCES AGREES TO ACQUIRE BLACK SEA COPPER & GOLD CORP.

Alternative Earth Resources Inc. has agreed on terms of a definitive and binding share exchange agreement dated Aug. 31, 2016, among the company, Black Sea Copper & Gold Corp. (BSCG) and all of the securityholders of BSCG, whereby Alternative Earth will acquire all of the outstanding securities of BSCG. The agreement has been executed by AER, BSCG and a substantial majority of the BSCG securityholders, and is currently being executed by the remaining securityholders of BSCG. AER currently has approximately $1.6-million in net cash and no other assets.

BSCG is a non-reporting B.C. corporation that holds interests in various mineral properties and licence applications located in Eastern Europe, including Bulgaria, Serbia and Turkey. The principal property of BSCG is an option to acquire 100 per cent of the Alankoy copper-gold project located in Turkey.

Under the agreement, Alternative Earth will acquire all of the common shares of BSCG in exchange for the issuance to the shareholders of BSCG of a total of 23,190,002 common shares in the capital of Alternative Earth, based upon an exchange ratio of one Alternative Earth share for each share of BSCG. Alternative Earth will also acquire all outstanding options, warrants and convertible debt of BSCG in exchange for the issue of replacement securities by Alternative Earth based on the exchange ratio.

Concurrently with and as a condition of the acquisition of BSCG, Alternative Earth will complete, on a postconsolidation basis, a non-brokered private placement of 7.5 million units at a price of 20 cents per unit for gross proceeds of $1.5-million, with each unit consisting of one common share and one warrant to purchase an additional common share exercisable for two years at a price of 35 cents per share. The warrants will contain an acceleration provision providing Alternative Earth the right to give notice to accelerate the expiry date of the warrants where the Alternative Earth common shares trade for 10 consecutive days over 60 cents, and providing for an expiry date that is 30 days from such notice. The financing is subject to an overallotment of up to 30 per cent (up to 2.25 million additional units). Alternative Earth may, in appropriate circumstances, pay finders' fees (cash and warrants) in connection with the financing.

To facilitate the acquisition, immediately before closing of the acquisition, Alternative Earth will consolidate its share capital on the basis of 1.24 existing common shares for each new share, such that its 13,066,059 common shares outstanding before the acquisition will be consolidated into 10,537,144 common shares on a postconsolidation basis. After completion of the consolidation, the acquisition and the financing, Alternative Earth will have approximately 41.2 million shares outstanding. Upon completion of the acquisition, the directors and officers of Alternative Earth will be reconstituted to consist of Vince Sorace as chief executive officer and director, Gavin Cooper as chief financial officer, and Jim Yates, Rod McKeen and John Williamson as directors. The acquisition and the financing will not result in a change of control of Alternative Earth.

The acquisition, consolidation and financing are subject to the acceptance of the TSX Venture Exchange. An NI 43-101-compliant technical report on the Alankoy project and a title opinion on the Alankoy project have previously been filed with the exchange. The agreement and the terms of the acquisition were negotiated at arm's length.

Alternative Earth also announces its intention to grant, concurrently with the completion of the acquisition and subject to regulatory approval, an aggregate of 1.15 million stock options to directors, officers and consultants at 20 cents for a period of five years.

Further information concerning the progress of the acquisition and the financing will be disclosed in due course. Take note that the acquisition contemplated by the agreement is subject to numerous conditions, and there is no certainty that it will be completed on schedule, in accordance with the terms described in this news release or at all. Accordingly, investors should use caution when trading in the securities of Alternative Earth.

We seek Safe Harbor.

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