Mr. Morgan Poliquin reports
ALMADEX PROVIDES UPDATE ON SPINOUT TRANSACTION AND NEWCREST INVESTMENT
Further to Almadex Minerals Ltd.'s news release dated Feb. 26, 2018, the company has mailed and filed its notice of special meeting of shareholders and the related management information circular which describes, amongst other things, the proposed spinout of Almadex's early-stage exploration projects, royalty interests and certain other assets, into a new public company. The circular and other meeting materials are available on SEDAR and on the company's website.
In addition, Almadex is pleased to report that Newcrest International Pty. Ltd. has placed the aggregate subscription price of $19,074,425 into escrow, in return for 19.9 per cent of the issued and outstanding shares of Almadex following closing of the spinout transaction.
At the meeting, shareholders of Almadex will be asked to consider and, if thought fit, to pass, with or without variation, a special resolution to approve a statutory plan of arrangement under Section 288 of the Business Corporations Act (British Columbia). It is intended that, as part of the spinout transaction, shareholders will receive shares of Spinco by way of a share exchange, pursuant to which each existing share of Almadex is exchanged for one new share of Almadex and one share of Spinco.
There will be no change to Almadex securityholders' existing interests in Almadexas a result of the spinout transaction.
The plan of arrangement will, pursuant to the terms of Almadex warrants certificates and indentures, amend the terms of warrants to provide replacement warrants to acquire the same number of Almadex shares and Spinco shares. Almadex optionholders will exchange their options for replacement options to acquire the same number of Almadex shares and Spinco shares. The exercise prices of the replacement warrants and options will be determined in accordance with the plan of arrangement.
Spinco will hold the following key assets:
A portfolio consisting of interests in 19 exploration projects;A 1.75-per-cent net smelter return royalty on the company's El Cobre property in Mexico;A 2-per-cent NSR royalty on the Tuligtic property in Mexico, which hosts the Ixtaca gold-silver development project which is operated by Almaden Minerals Ltd.;A portfolio of 16 additional NSR royalties on exploration projects in Mexico, Canada and the United States identified through the company's past prospect generator activities;Up to four million shares of Almadex as well as certain other marketable securities;1,597 ounces of gold bullion; Approximately $6-million in cash.
The El Cobre gold/copper porphyry project will remain in Almadex.
It is currently anticipated that upon closing of the spinout transaction, Almadex will have 72,070,998 shares issued and outstanding, of which 14,342,129 will be held by NIPL and four million will be held by Spinco. Spinco is anticipated to have 53,728,869 shares issued upon completion of the spinout transaction.
The board of directors of Almadex has determined that the plan of arrangement is in the best interests of Almadex and is fair to the shareholders and unanimously recommends that the shareholders vote in favour of the special resolution.
The board notes that the plan of arrangement is expected to allow Almadex to focus on the development of its El Cobre project, will allow the market to value the El Cobre project independently of Almadex's earlier-stage assets, and will accelerate development of Almadex's non-El Cobre assets. The executive officers and directors of Almadex, collectively holding approximately 3,424,359 Almadex shares, representing approximately 6.4 per cent of the issued and outstanding Almadex shares, have entered into support and voting agreements whereby they have agreed to vote all of their Almadex shares in favour of the plan of arrangement.
Spinco has applied to list its common shares on the TSX Venture Exchange. Listing will be subject to Spinco fulfilling all the listing requirements of the TSX-V.Spinco does not have any of its securities listed or quoted, and has not applied to list or quote any of its securities on a United States marketplace.
Shareholders as of the record date of March 29, 2018, have the right to vote by proxy or in person at the meeting to be held May 8, 2018, at 11 a.m. PT at the offices of Borden Ladner Gervais LLP, 1200 Waterfront Centre, 200 Burrard St., Vancouver, B.C. The plan of arrangement will also be subject to, among other things, approval of the TSX-V and the Supreme Court of British Columbia. Subject to satisfactory outcome of the above items, Almadex expects the closing date of the plan of arrangement to be sometime in mid-to-late May, 2018. Further details of the proposed spinout transaction are contained in the circular.
The circular
The circular contains, among other things, details concerning the plan of arrangement, reasons for the board's recommendation, requirements for completion of the spinout transaction, the procedure for receiving new Almadex securities and Spinco securities under the plan of arrangement, how registered shareholders may exercise their dissent rights, procedures for voting at the meeting and other matters.Shareholders are urged to carefully review the circular and accompanying materials as they contain important information regarding the plan of arrangement and its consequences to shareholders.
Your vote is important
How to vote
A proxy or voting instruction form will accompany the meeting materials you receive. Instructions on how to vote are provided in the circular and the accompanying materials.
Shareholders are encouraged to vote before 11 a.m. PT on May 4, 2018.
How to receive the consideration
If you are a registered shareholder, the company also encourages you to complete and return the letter of transmittal included in the meeting materials together with the certificate(s) (if any) representing your existing Almadex shares and any other required documents and instruments to Computershare Investor Services Inc. If you are a registered shareholder, the letter of transmittal must be completed and returned to Computershare (regardless of whether your shares are represented by physical share certificates or held in a Direct Registration System account) in order for you to exchange your existing shares for new Almadex shares and Spinco shares.Provided you have completed and returned the letter of transmittal to Computershare in accordance with its instructions, once the plan of arrangement is completed, new Almadex shares and Spinco shares will be issued and DRS statements representing such shares will be distributed to you. If you hold your Almadex shares through a broker or other intermediary, please contact that broker or other intermediary for instructions and assistance.Assuming that all conditions to completion of the plan of arrangement are satisfied, it is anticipated that the plan of arrangement will become effective sometime in mid-to-late May, 2018.
About Almadex Minerals Ltd.
Almadex Minerals is an exploration company that holds a large mineral portfolio consisting of projects and NSR (net smelter return) royalties in Canada, the United States and Mexico.
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