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Austral Gold Ltd
Symbol AGLD
Shares Issued 566,053,797
Close 2020-11-09 C$ 0.20
Recent Sedar Documents

Austral Gold enters definitive deal to acquire Revelo

2020-11-12 23:00 ET - News Release

Also News Release (C-RVL) Revelo Resources Corp (2)

Mr. Stabro Kasaneva of Austral Gold reports

REVELO AND AUSTRAL GOLD ANNOUNCE SIGNING OF DEFINITIVE ARRANGEMENT AGREEMENT FOR AUSTRAL TO ACQUIRE REVELO FOR SHARES AND CASH

Further to the joint announcement of Sept. 2, 2020, Austral Gold Ltd. and Revelo Resources Corp. have entered into a definitive arrangement agreement dated Nov. 12, 2020, pursuant to which, among other things, Austral has agreed to acquire all the outstanding common shares of Revelo for a combination of shares and cash by way of a statutory plan of arrangement under the Business Corporations Act (British Columbia).

Particulars of the transaction

Under the terms of the arrangement agreement, holders of Revelo shares will be entitled to receive, in exchange for each Revelo share held immediately prior to the effective time of the transaction: (i) 0.9184 ordinary share of Austral; and (ii) 3.045715 cents in cash, together representing an implied price of 30.5977 cents per Revelo share based on the closing price of Austral shares on the TSX Venture Exchange of 30 cents on Sept. 1, 2020, the day prior to the original announcement of the transaction. Austral proposes to finance the aggregate cash consideration in the amount of $1,176,471 using its cash reserves. Austral will use existing capacity under Australian Securities Exchange listing Rule 7.1 to issue the Austral shares which form part of the consideration. Austral expects that it will issue an aggregate of 35,475,113 Austral shares to the Revelo shareholders under the transaction.

Completing the transaction will, among other things, require the approval of at least two-thirds of the votes cast by Revelo shareholders at a special meeting expected to take place in early January, 2021. Revelo shareholders representing approximately 51.6 per cent of the issued and outstanding Revelo shares have entered into voting and support agreements with Austral in support of the arrangement. The board of directors of Revelo has unanimously approved the arrangement and will recommend that Revelo shareholders vote in favour of the arrangement.

There will be no changes to the board of Austral as a consequence of the transaction. Completion of the transaction will not require approval of the shareholders of Austral.

Completion of the transaction remains subject to the satisfaction (or waiver) of a number of conditions precedent, including, but not limited to, the following material conditions:

  • Approval of the Revelo shareholders at the Revelo meeting;
  • Obtaining all applicable regulatory approvals (including court approval in British Columbia, Canada);
  • The absence of material adverse changes to Revelo or Austral.

The arrangement agreement includes covenants typical of transactions of this nature, including with respect to non-solicitation and a right to match. In addition, Revelo and Austral have each agreed to pay a termination fee of $500,000 (U.S.) to the other party upon the occurrence of certain events.

If all conditions precedent for completion of the transaction are satisfied or waived, the transaction is expected to close during January, 2021.

Austral's chief executive officer, Stabro Kasaneva, said: "We are very pleased to have entered into the definitive arrangement agreement with Revelo. The addition of Revelo's assets to our portfolio, including three projects located close to our pre-existing Guanaco/Amancaya mining complex, is strategic, and provides us with a leading role in the Paleocene-Eocene belt in Chile. In addition, we believe this prolific mineralized belt is underexplored for precious metals."

Revelo's chairman, Michael Winn, commented: "The signing of the definitive arrangement agreement with Austral represents the next step in what is an incredibly attractive deal for Revelo's shareholders. We look forward to the successful completion of this transaction."

Full details of the arrangement will be included in the management information circular of Revelo, describing the matters to be considered at the Revelo meeting, which is expected to be mailed to the Revelo shareholders in December, 2020. Copies of the management information circular and arrangement agreement will be made available on SEDAR.

About Austral Gold Ltd.

Austral Goldis a growing gold and silver mining, development and exploration company, building a portfolio of quality assets in Chile, the United States and Argentina. Its flagship Guanaco/Amancaya project in Chile is a gold- and silver-producing mine with further exploration upside. Austral also holds the Casposo mine (San Juan, Argentina), a 26.46-per-cent interest in the Rawhide mine (Nevada, United States), and an attractive portfolio of exploration projects, including the Pinguino project in Santa Cruz, Argentina (100-per-cent interest) and the San Guillermo and Reprado projects near Amancaya (100-per-cent interest). With an experienced local technical team and a highly regarded major shareholder, Austral has a goal of continuing to strengthen its asset base through acquisition and discovery. Austral Gold is listed on the TSX Venture Exchange and the Australian Securities Exchange.

About Revelo Resources Corp.

Revelo Resources is a Canadian company listed on the TSX Venture Exchange. Revelo holds interests in a substantial portfolio of gold-silver and copper projects located along world-class mineral belts in northern Chile. Discounting the eight properties in the process of being sold to West Pacific Ventures Corp., Revelo's landholdings include four projects focused on gold and silver totalling approximately 38,000 hectares, together with three projects focused on copper-gold totalling approximately 30,000 hectares, and represent an important portfolio in the country with many highly prospective indicators of precious metal and copper porphyry mineralization, including, in some cases, historic drill intercepts. Additionally, Revelo has a 15-per-cent equity interest in a private company, Atacama Copper Exploration Ltd., and will have a 19.9-per-cent equity interest in the new spinout venture involving West Pacific Ventures, provided that transaction closes.

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