Mr. Frank Basa reports
CANADA SILVER COBALT OBTAINS INTERIM ORDER FOR SPIN-OUT OF CONIAGAS BATTERY METALS INC.
Canada Silver Cobalt Works Inc. has received an interim order from the British Columbia Supreme Court for a plan of arrangement under the
Canada Business Corporations Act
in connection with the previously announced spinout by the company of shares and warrants of its wholly owned subsidiary Coniagas Battery Metals Inc. to the shareholders of the company. It is the company's intention to develop Coniagas into a supplier to the electric vehicle (EV) market and to list Coniagas on a Canadian stock exchange.
Annual and special meeting of shareholders -- Oct. 31, 2023
Canada Silver Cobalt will hold an annual and special meeting of shareholders on Oct. 31, 2023, to approve the plan of arrangement, among other things. A copy of the company's management information circular will be available on the company's website and under the company's profile on SEDAR+. An arrangement agreement entered into between the company and Coniagas and the plan of arrangement will be annexed to the circular as schedules. If shareholders approve the plan of arrangement and related matters at the meeting, the company will seek a final order for the plan of arrangement from the British Columbia Supreme Court on Nov. 3, 2023.
Unanimous recommendation of the board of directors
The board of directors of Canada Silver Cobalt has unanimously determined that the plan of arrangement is in the best interests of the company and its shareholders and unanimously recommends that shareholders vote for the plan of arrangement and related matters at the shareholders meeting. The board of directors based its decision in part on a fairness opinion provided to it by Leede Jones Gable Inc., a copy of which will be annexed to the circular.
The company encourages all shareholders to review the circular and its schedules and to vote their shares prior to the meeting. The record date for the meeting is Sept. 19, 2023.
Plan of arrangement
The principal steps of the proposed plan of arrangement are as follows:
- The company will transfer the Graal property, located in the Saguenay-Lac-St-Jean region of Quebec, to Coniagas in exchange for 24 million Coniagas common shares and 12 million Coniagas common share purchase warrants, each of which will entitle its holder to purchase one Coniagas share at a price of 40 cents.
- As soon as practicable after the effective date of the plan of arrangement, the company will deliver an aggregate of 5,874,600 Coniagas shares and 2,937,300 Coniagas warrants on a
basis to the company's shareholders of record on a date to be selected for the distribution.
- On each of the first three anniversaries of the effective date of the plan of arrangement, the company will deliver to shareholders of record at the respective times an aggregate of 1,958,200 Coniagas shares and 979,100 Coniagas warrants, such that the company will distribute to its shareholders an aggregate of 11,749,200 Coniagas shares and 5,874,600 Coniagas warrants in four annual distributions.
All Coniagas warrants will be exercisable for a period of two years. The first tranche of the Coniagas warrants may be exercised starting on the effective date of the plan of arrangement and will expire two years thereafter. The three following tranches of Coniagas warrants will expire two years after their respective delivery dates.
Coniagas private placement and share capital
Coniagas intends to raise up to $1.25-million by way of private placement to accredited investors by issuing up to five million shares at a price of 25 cents per share. Each share will be accompanied by one warrant, which may be exercised for two years at a price of 40 cents per share. Coniagas intends to use the proceeds from the proposed private placement for exploration on the Graal property and for working capital.
It is expected that after the proposed share distribution and maximum private placement, Canada Silver Cobalt will hold approximately 55 per cent of Coniagas's outstanding shares, with 18 per cent of the shares to be held in the aggregate by the shareholders of Canada Silver Cobalt. Investors in the proposed private placement will hold approximately 15 per cent of Coniagas's outstanding shares, with the balance of approximately 12 per cent to be held by a third party vendor of certain of the claims comprising the Graal property and by directors and officers of Coniagas and others. After the three annual share distributions, the shareholders of Canada Silver Cobalt in the aggregate and the company will each own approximately 37 per cent of Coniagas's outstanding shares, subject to dilution during the period.
Updates and regulatory approval
The company will provide updates on the proposed distribution of the Coniagas shares and warrants to the shareholders of the company, including the distribution record date, and on the proposed listing of Coniagas on a Canadian stock exchange. The proposed distribution by the company of the Coniagas shares and warrants and the private placement by Coniagas are subject to regulatory approval, including that of the TSX Venture Exchange.
About Canada Silver Cobalt Works Inc.
Canada Silver Cobalt Works recently discovered a major high-grade silver vein system at Castle East located 1.5 kilometres from its 100-per-cent-owned, past-producing Castle mine near Gowganda in the prolific and world-class silver-cobalt mining district of Northern Ontario. The company has completed a 60,000-metre drill program aimed at expanding the size of the deposit with an update to the resource estimate under way.
We seek Safe Harbor.
© 2023 Canjex Publishing Ltd. All rights reserved.