Mr. Darryl Jones of Alpha reports
ALPHA AND CAVU ANNOUNCE SIGNING OF DEFINITIVE AGREEMENT TO BECOME A PREMIER COPPER EXPLORATION COMPANY IN BC AND THE YUKON
Alpha Copper Corp. and Cavu Energy Metals Corp., further to their news release dated Aug. 19, 2022, have entered into an arrangement agreement dated Sept. 30, 2022, pursuant to which Alpha has agreed to acquire all of the issued and outstanding common shares of Cavu by way of a statutory plan of arrangement under the Business Corporations Act (British Columbia).
Strategic highlights and benefits of the transaction:
Represents an attractive opportunity for Cavu shareholders to own shares in a larger, more liquid publicly traded entity at an exchange ratio that implies a 31.3 per cent premium to Cavu's share price (based on each company's respective 30-day volume-weighted average price (VWAP));
- Creates a larger-scale entity with a strong regional focus and increased access to capital to enable the financing of continuing exploration on four prospective copper assets;
- The combined entity will be well capitalized to increase the value of its improved project portfolio, supported by its strong executive management team and board of directors.
Darryl Jones, chief executive officer of Alpha Copper, stated: "This agreement is an opportunity to strengthen our grip on a portfolio of quality copper assets in Western Canada. The Hopper and Star projects present large upside for continued development. The Star property in particular has historical exploration indicative of a copper-gold porphyry deposit at depth and has multiple untested targets."
Danny Matthews, director of Cavu, commented: "The board of Cavu is pleased to enter into this milestone agreement and unanimously supports the transaction. The merged company will have premier assets of scale and regional focus that will benefit shareholders of both Cavu and Alpha. We believe the transaction will create a continued platform for growth and look forward to building to the success of Alpha."
The transaction is an arm's-length transaction and provides Cavu shareholders with a premium of approximately 31.3 per cent based on each company's respective 30-day VWAP. The transaction positions the combined entity of Alpha and Cavu to become a leading copper exploration company with an expanded portfolio of prospective base and precious metals assets in British Columbia and Yukon.
Under the terms of the agreement, each holder of Cavu shares (a Cavu shareholder and, collectively, the Cavu shareholders) will receive 0.7 of a common share of Alpha (each whole common share an Alpha share) for each Cavu share held. The value of the consideration was calculated on Sept. 29, 2022, the last day of trading prior to the announcement of the transaction, as 33 cents per Cavu share. Upon completion of the transaction, Cavu shareholders will hold approximately 30 per cent of the outstanding Alpha shares.
As part of the transaction, all outstanding options of Cavu will vest immediately and be exchanged for the number of options to purchase Alpha shares based on the exchange ratio and holders of Cavu warrants will be entitled, in accordance with the terms of such warrants, to receive Alpha shares on the exercise of such warrants.
Upon closing of the transaction, Cavu will also appoint a nominee to the board of Alpha.
Additional details on the transaction
Completion of the transaction will, among other things, require the approval of: (i) at least two-thirds (66-2/3 per cent) of the votes cast by the Cavu shareholders; (ii) at least two-thirds (66-2/3 per cent) of the votes cast by the Cavu securityholders voting as a single class; and (iii) if required, a simple majority of the votes cast by Cavu shareholders, excluding for this purpose the votes of related parties and interested parties, and other votes required to be excluded under Multilateral Instrument 61-101 -- Protection of Minority Security Holders in Special Transactions, with all votes to occur at a special meeting of Cavu securityholders expected to take place in November, 2022. No shareholder vote is required by Alpha shareholders. The agreement includes covenants typical for transactions of this nature, including non-solicitation covenants.
The transaction is expected to close in the fourth quarter of 2022, subject to the satisfaction (or waiver) of a number of conditions precedent, including, but not limited to, receipt of all regulatory approvals, including the approval of the Supreme Court of British Columbia and Canadian Securities Exchange acceptance of the transaction.
The transaction has the full endorsement of both the boards of Cavu and Alpha. The board of directors of Cavu has received advice from its advisers, including a fairness opinion from Evans & Evans Inc., and has unanimously determined that the transaction is in the best interests of Cavu and will recommend that Cavu securityholders vote in favour of the transaction.
Directors and officers of Cavu collectively holding 5.95 per cent of the currently outstanding Cavu shares have entered into customary support agreements with Alpha to vote their securities in favour of the transaction.
Full details of the transaction will be included in the management information circular of Cavu describing the matters to be considered at the Cavu meeting, which is expected to be mailed to the Cavu securityholders in October, 2022. Copies of the management information circular and the agreement will be made available on SEDAR under the profile of Cavu.
Evans & Evans Inc. has provided a fairness opinion to Cavu in connection with the transaction. Cozen O'Connor LLP is acting as legal counsel to Alpha and Segev LLP is acting as legal counsel to Cavu in connection with the transaction.
About Alpha Copper Corp.
Alpha is focused on contributing to the green economy by finding and developing copper resource assets in stable jurisdictions. The company is positioned to earn a 60-per-cent interest in the Indata copper-gold project located in north-central British Columbia and a 100-per-cent interest in the Okeover copper-molybdenum project located near the coastal community of Powell River, B.C.
About Cavu Energy Metals Corp.
Cavu Energy Metals is a mining company engaged in the acquisition, exploration and development of mineral projects containing metals used in green technologies and the renewable energy sector. The company is currently focused on the exploration of its Hopper copper-gold project in the Yukon and recently acquired Star copper-gold porphyry project in British Columbia.
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