October 10, 2019
NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
Toronto, Canada – October 10, 2019 – Anconia Resources Corp. (TSXV: ARA) (“Anconia” or the “Company”) and Avalon Investment Holdings Ltd. (“Avalon”) are pleased to announce the execution of a definitive amalgamation agreement dated October 9, 2019 (the “Agreement”). The proposed transaction contemplated by the Agreement (the “Transaction”), affirms Anconia’s agreement to acquire all of the issued and outstanding securities of Avalon, by means of a three-cornered amalgamation between Anconia, Avalon, and a subsidiary to be incorporated under the Companies Act of Barbados which will be wholly owned by Anconia (“Anconia Subco”). The resulting entity from this completed Transaction (the “Resulting Issuer”), will continue domestic activities and precious metals exploration and development, focused primarily on the exploration of Avalon’s Omai Gold Mine project in Guyana.
The Transaction constitutes a “reverse takeover” of Anconia under the policies of the TSX Venture Exchange (the “Exchange”), and its completion is subject to the approval of the Exchange and certain other conditions as described below. Anconia intends to apply to the Exchange to have the common shares of the Resulting Issuer listed and posted for trading on the Exchange. The Transaction is an arm’s length transaction. Completion of the Transaction is subject to certain conditions including the approval of shareholders of Anconia (“Anconia Shareholders”), and is expected to close no later than January 31, 2020. Matters to be approved by Anconia Shareholders will be described in further detail in a management information circular (the “Circular”) of Anconia relating to an annual and special meeting of Anconia Shareholders expected to be held in December 2019.
Avalon is a privately held Barbados corporation, based in Christ Church, Barbados, with a wholly-owned operating subsidiary, Avalon Gold Exploration Inc. (“Avalon Exploration”), which is engaged in the acquisition, exploration and potential development of precious metal mineral properties in Guyana. Avalon was incorporated on February 22, 2018 and is currently operated by its President, Michael Smith, of Naples, Florida. There are no Control Persons of Avalon as defined in the Securities Act (Ontario). Avalon Exploration holds a 100% interest in a newly issued prospecting license in Guyana, which covers 4,590 acres of licensed area, including the site of the past producing Omai Gold Mine, and provides for an exclusive right to use certain existing infrastructure at the Omai Gold Mine for any future mining operations, subject to entering into specific lease agreements therefor. In addition, Avalon also holds an option to acquire a 100% interest in a prospecting license known as “Kaburi South”, covering approximately 5,235 acres, located adjacent to Troy Resources Limited’s Karouni mine in Guyana.
“This is the perfect time for our companies to join,” said President of Avalon, Michael Smith. “This amalgamation, truly creates synergy for the re-development of the Omai Gold Mine by combining Avalon’s well established local relationships and management infrastructure with Anconia’s strong leadership, exploration and operations expertise”. “Merging our histories, technical expertise and resources, I believe we are well equipped to deliver exceptional operations and exploration activities and consequently delivering significant shareholder value.” said Chief Executive Officer of Anconia, Jason Brewster.
FINANCING CLOSING DATE
Avalon and Anconia announced that Avalon would be raising funds by private placement in their joint press release on May 24, 2019. Avalon intends to close the said private placement financing on October 17, 2019, wherein all proceeds the financing are to be used towards developing Avalon’s projects in Guyana.
Pursuant to the Transaction, Anconia will issue common shares (“Anconia Shares”) to the holders of common shares in the capital of Avalon (“Avalon Shares”) on the basis of one post-Consolidation (as defined below) Anconia Share for each one Avalon Share. Anconia and Avalon anticipate that approximately 108,000,000 million post-Consolidation Anconia Shares will be issued pursuant to the Transaction, based on the current capital structure of Avalon. In addition, all securities convertible into Avalon Shares that are outstanding and unexercised immediately prior to closing are to be exchanged for economically equivalent and otherwise substantially similar securities convertible into Anconia postConsolidation Shares. Anconia, Avalon, and Anconia Subco will amalgamate to form the Resulting Issuer. The parties anticipate that, upon completion of the Transaction, the Avalon shareholders will hold approximately 108,000,000 Anconia post-Consolidation Shares, representing 93% of the issued and outstanding Anconia post-Consolidation Shares on an undiluted basis, and 139,069,900 Anconia postConsolidation Shares, representing approximately 94% of the issued and outstanding Anconia postConsolidation Shares on a fully diluted basis. The foregoing shareholdings contemplate the closing of Avalon’s private placement financing on October 17, 2019.
The Transaction is subject to a number of terms and conditions, including, but not limited to, the approval of Anconia Shareholders in connection with the Transaction, including the Consolidation; the completion of the Transaction on or before January 31, 2020 and the approval of the Exchange and other applicable regulatory authorities.
Trading in the Anconia Shares will remain halted pending the satisfaction of all applicable requirements of Policy 5.2 of the Exchange. There can be no assurance that trading of Anconia Shares will resume prior to the completion of the Transaction. Anconia will hold a meeting of its shareholders to vote on the Transaction and will require that a majority of the votes of its shareholders vote in favour of the Transaction in order to proceed with it. Further details concerning the Transaction (including additional financial information) and other matters will be announced if and when a definitive agreement is reached.
Upon completion of the Transaction, Anconia will change its name to “Omai Gold Mines Corp.” or such other name as Avalon and Anconia may otherwise determine, and the parties anticipate that the Exchange will assign a new trading symbol for the Resulting Issuer.
The completion of the Transaction is subject to the prior completion by Anconia of a consolidation of its share capital on the basis of one post-consolidation common share for each 15 pre-consolidation common shares (the “Consolidation”).
Matters to be approved by Anconia’s shareholders in connection with the Transaction, including the proposed name change and Consolidation will be sought from Anconia’s shareholders at its annual and special meeting to be held on a date to be announced by Anconia and intended to be described in further detail in a management information circular relating to such meeting. Avalon has entered into voting agreements with holders of 24,131,452 Anconia Shares (or 20.5% of the current number of issued and outstanding Anconia Shares) to vote in favour of the Transaction.
OFFICERS, DIRECTORS, AND INSIDERS OF THE RESULTING ISSUER
The following individuals are proposed to be appointed or elected as directors of the Resulting Issuer:
- Denis Clement – B.Comm., LL.B., LL.M., Director, Chairman and Interim Chief Executive Officer
- Terry Lyons – MBA, ICD.D, Director
Three additional proposed directors of the Resulting Issuer will be named and announced at a later date.
In addition to Mr. Clement, the following individuals are proposed to be appointed as officers of the Resulting Issuer:
- Jason Brewster – BA, MSc, VP Operations and Corporate Development
- Dennis Lapoint – BA, M.Sc., Ph.D, Geologist, VP Exploration
- Harvey McKenzie, – CPA, Chief Financial Officer
BOARD OF ADVISORS
The Resulting Issuer will have a board of advisors to assist its board of directors, initially comprised of the following individuals:
- Nathan Tribble B.Sc. P.Geo.
- Charles Gargano
- John Reynolds
Anconia and Avalon will provide further details in respect of the proposed Transaction including a summary of financial information, contemplated financings, and additional nominees for management and the Board of Advisors of the Resulting Issuer, if and when a definitive agreement is reached. Trading in the Anconia Shares will remain halted pending the satisfaction of all applicable requirements of Policy 2.4 of the Exchange. There can be no assurance that trading of Anconia Shares will resume prior to the completion of the Transaction.
Anconia is a base and precious metals exploration and development company, with two exploration properties in Nunavut and Ontario, Canada. The Nunavut property consists of a group of claims covering 4 approximately 32 square kilometers, which has two volcanogenic massive sulphide (VMS) base metal occurrences. Anconia drilled both of these occurrences and confirmed extensive base metal mineralization at both locations, which were named the Atlas and Zac showings. Anconia has one further option payment totaling $50,000 remaining on the Nunavut property. In Ontario, Anconia has the Grenfell property in the Kirkland Lake area, which consists of 16 patented claims and 2 staked claims. The Grenfell property hosts a gold occurrence that was subject to some surface and underground exploration work in the 1920’s approximately 4 kilometres west of the Macassa Mine along the trend of the main Kirkland Lake mineralization. The property is 100% owned by Anconia.
For further information, please see our website www.omaigoldmines.com or contact:
Anconia Resources Corp.
President and CEO
Avalon Investment Holdings Ltd.
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