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- Total of C$13.3 million raised
in private placement
- C$4.3 million raised at final
closing
MONTREAL, May 21, 2020 /CNW Telbec/ - Guerrero Ventures
Inc. (TSXV: GV) ("Guerrero"
or the "Company") is pleased to announce that it has
held a third and final closing of its previously-announced private
placement of subscription receipts ("Subscription Receipts")
at which it issued 4,733,509 Subscription Receipts at an issue
price of C$0.90, representing gross
proceeds to Guerrero of
approximately C$4.3 million.
This fully subscribed private placement is in response to strong
interest following the closing of the first and second tranches,
which closed on April 2, 2020 and
April 24, 2020, respectively. The
Company issued a total of 14,777,778 Subscription Receipts in the
private placement for aggregate gross proceeds of approximately
C$13.3 million.
"This marks the successful achievement of our objective to raise
$13.3 million and is an
important step in bringing us closer to the launch of Nomad Royalty
Company, a new global acquisition-driven precious metals
royalty company" said Vincent
Metcalfe, Chief Executive Officer of the Company.
Each Subscription Receipt entitles its holder to receive,
without payment of any additional consideration or further action
on the part of the holder, one common share of the Company upon
satisfaction or waiver of certain escrow release conditions (the
"Escrow Release Conditions"), which include the closing of
the Transaction (as defined below) and raising C$13.3 million in the private placement.
The private placement was effected through a syndicate of
securities dealers composed of Scotiabank and BMO Capital Markets
as Joint Bookrunners, and including CIBC Capital Markets, RBC
Capital Markets, Canaccord Genuity Corp., Desjardins Capital
Markets, Haywood Securities Inc. and National Bank Financial Inc.
(collectively, the "Agents").
The gross proceeds from the sale of the Subscription Receipts,
less 50% of the Agents' commission and Agents' expenses payable on
the closing date of the private placement, are being held in escrow
by Computershare Trust Company of Canada in accordance with a subscription
receipt agreement dated April 2, 2020 among Guerrero, Computershare Trust Company of
Canada, Scotiabank and BMO Capital
Markets. The escrowed funds will be released to the Company upon
satisfaction or waiver of the Escrow Release Conditions,
including completion of the Transaction, on or before August 3, 2020. If the Transaction does not close
by August 3, 2020 or is terminated
prior thereto, the gross proceeds and pro rata
entitlement to interest earned on the escrowed proceeds will be
returned to holders of the Subscription Receipts.
At the final closing, Guerrero
paid the Agents a cash commission representing 6% of the gross
proceeds raised, excluding funds received from an insider of the
Company and a strategic investor. Fifty percent of the cash
commission has been deposited in escrow and will be released to the
Agents upon satisfaction or waiver of the Escrow Release
Conditions.
Subject to satisfaction or waiver of the Escrow Release
Conditions, the Company will use the net proceeds from the private
placement for working capital purposes and to pay a portion of the
cash consideration to Yamana Gold Inc. and one of its affiliates in
connection with the previously-announced proposed transaction
involving the acquisition by Guerrero from funds related to Orion Resource
Partners (USA) LP and from Yamana
Gold of two portfolios comprising an aggregate of ten royalty,
stream and gold loan assets for total consideration of US$268 million and US$65
million, respectively, pursuant to definitive purchase
agreements dated February 23, 2020
(the "Transaction").
At the final closing, an officer and director of Guerrero as well as a control person of the
Company (collectively, the "Insiders") purchased an
aggregate of 453,622 Subscription Receipts for total proceeds of
C$408,259.80. The issuance of
Subscription Receipts to the Insiders constitutes a related party
transaction but is exempt from the formal valuation and minority
approval requirements of Multilateral Instrument 61-101 -
Protection of Minority Security Holders in Special
Transactions as Guerrero's
securities are not listed on any stock exchange identified in
Section 5.5(b) thereof and neither the fair market value of the
Subscription Receipts issued to the Insiders nor the fair market
value of the entire private placement exceeds 25% of Guerrero's market capitalization. Guerrero did not file a material change report
with respect to the participation of the Insiders at least 21 days
prior to the final closing of the private placement as the
Insiders' participation was not determined at that time.
Under applicable securities legislation, the Subscription
Receipts issued at the final closing are subject to a four-month
hold period, expiring on September 22,
2020.
About Guerrero Ventures
Guerrero is a publicly listed company with a
focus on acquiring mineral assets that will provide the opportunity
to enhance shareholder value.
Completion of the Transaction is subject to a number of
conditions, including, but not limited to, TSX Venture Exchange
acceptance and, if applicable, disinterested shareholder approval.
Where applicable, the Transaction cannot close until the required
shareholder approval is obtained. There can be no assurance that
the Transaction will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the
filing statement of the Company dated May 15, 2020
prepared in connection with the Transaction, any information
released or received with respect to the Transaction may not be
accurate or complete and should not be relied upon. Trading in the
securities of the Company should be considered highly
speculative.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Investors are cautioned that, except as disclosed in the
Company's public filings, any information released or received with
respect to the Transaction may not be accurate or complete and
should not be relied upon.
This news release does not constitute an offer to sell or the
solicitation of an offer to buy any securities in any
jurisdiction.
Notice on Forward-looking Statements
This news release
contains statements that may constitute "forward-looking
information" within the meaning of applicable Canadian securities
legislation. Forward-looking information may include, among
others, statements regarding the future plans, costs, objectives or
performance of the Company and its business, or the assumptions
underlying any of the foregoing. In this news release, words
such as "may", "would", "could", "will", "likely", "believe",
"expect", "anticipate", "intend", "plan", "estimate" and similar
words and the negative form thereof are used to identify
forward-looking statements. Forward-looking statements should
not be read as guarantees of future performance or results, and
will not necessarily be accurate indications of whether, or the
times at or by which, such future performance will be
achieved. The forward-looking events and circumstances
discussed in this press release, including completion of the
Transaction, may not occur and could differ materially as a result
of known and unknown risk factors and uncertainties affecting the
Company, including risks regarding royalty, stream and gold loan
assets, risks related to the COVID-19 pandemic, the ability of the
Company's management to manage and to operate the business of the
Company, and the equity markets generally. Forward-looking
information is based on information available at the time and/or
management's good-faith belief with respect to future events and
are subject to known or unknown risks, uncertainties, assumptions
and other unpredictable factors, many of which are beyond the
control of the Company. These risks, uncertainties and
assumptions include, but are not limited to, those that will be
described in the Company's continuous disclosure documents to be
filed, and which will be available, on SEDAR at www.sedar.com, and
could cause actual events or results to differ materially from
those projected in any forward-looking statements. The
Company does not intend, nor does it undertake any obligation, to
update or revise any forward-looking information contained in this
news release to reflect subsequent information, events or
circumstances or otherwise, except if required by applicable
laws.
SOURCE Guerrero Ventures Inc.