Announcement • Jan 19
Balkan Metals Corp. completed the acquisition of Medgold Resources Corp. (TSXV:MED) in a reverse merger transaction.
Balkan Metals Corp entered into a non-binding arm’s length letter of intent to acquire Medgold Resources Corp. (TSXV:MED) for CAD 2.1 million in a reverse merger transaction on November 23, 2022. Balkan Metals Corp entered into a definitive amalgamation agreement to acquire Medgold Resources Corp. in a reverse merger transaction on January 27, 2023. Under the terms of agreement, Balkan Metals will reimburse certain of Medgold’s expenses related to the Transactions in consideration of the issuance by Medgold to Balkan Metals of Convertible Debentures (see description below under the heading “Other Key Terms of the Transactions”) in the maximum aggregate principal amount of CAD 150,000, Medgold will consolidate its common shares on a 16:1 basis, Medgold will settle up to CAD 330,000 in accounts payable by issuing up to 1,650,000 post-consolidation common shares of the Company at a deemed price of CAD 0.20 per share, Balkan Metals will arrange a private placement financing in Medgold to raise CAD 2 million. Medgold Shareholders immediately prior to the closing of the Transactions will receive a contingent value right (a “CVR”), with the CVR entitling the holders thereof to receive a pro-rata portion of cash payment, or at the election of the Company, an equivalent amount of Resulting Issuer Shares equal to CAD 8 for every ounce of gold mineral reserves set out in an independent feasibility study that the Resulting Issuer may prepare in respect of the Tlamino Gold Project in south Serbia (comprised of exploration permits currently held by Medgold) and in consideration for the transfer to Medgold of 100% of the issued shares of Balkan Metals, Medgold will issue an aggregate of 26,264,266 post-consolidation common shares to the shareholders of Balkan Metals, being one Medgold Share for each Balkan Metals Share. The other key terms of the Transaction are as follows: In consideration of the exclusivity Medgold has granted to Balkan Metals pursuant to the LOI, Balkan Metals has made a non-refundable cash payment to Medgold in the amount of CAD 20,000 at the signing of the LOI. Balkan Metals is to make an additional non-refundable payment of CAD 30,000 to Medgold upon execution of a definitive agreement, expected to be signed by December 15, 2022. Balkan Metals has agreed to provide interim working capital financing to Medgold until April 30, 2023, by way of unsecured convertible debentures (the “Convertible Debentures”) in the maximum aggregate principal amount of CAD 150,000. The principal amounts of the Convertible Debentures shall bear interest at a rate of 5% per annum, such interest to be payable only if the LOI is terminated and the Acquisition will not complete. Medgold shall have the right to prepay the principal amount owing under the Convertible Debentures without penalty. The principal amount outstanding under the Convertible Debentures shall be convertible at Balkan Metals’ option into common shares of Medgold prior to completion of the Transactions at a price equal to the lesser of CAD 0.05 and the lowest conversion price permitted by the Exchange. Concurrently with closing of the Transaction, Balkan Metals is to arrange and close a private placement (the “Concurrent Financing”) of a minimum of 10,000,000 units (the “Units”) of the Resulting Issuer, at an expected minimum price of CAD 0.20 per Unit, to raise minimum gross proceeds of CAD 2,000,000. The net proceeds of the Concurrent Financing will be used by the Resulting Issuer to fund exploration of its Serbian properties (and principally, the Timok East Project) and for working capital and general corporate purposes. A finder’s fee may be paid in respect of the Concurrent Financing. As of December 6, 2023, the concurrent financing will consist of 18 million units of Balkan Metals at a price of CAD 0.10 per unit for aggregate gross proceeds of a minimum of CAD 1.8 million (the “Minimum Financing”). The name of the Company will be changed to “Balkan Metals Corp.” The resulting issuer will be renamed as “Electrum Metals Group Corp.” As a part of transaction, it is anticipated the upon completion of the transactions, the Company (the “Resulting Issuer”) will have a maximum of 48,005,248 common shares issued and outstanding, of which approximately 58% will be owned by the former Balkan Metals Shareholders. As per amended concurrent financing as of December 6, 2023, After the completion of the Acquisition, and assuming the completion of the Minimum Financing, the Resulting Issuer will have 59,713,077 common shares outstanding on a non-diluted basis and 83,008,602 common shares outstanding on a fully diluted basis. A waiver of the sponsorship requirements of the Exchange will be sought. It is intended that upon completion of the transactions, the Resulting Issuer will have at least three directors, a majority of whom are not executive officers or employees. Elena Clarici will be appointed as Director, Executive Chair and Chief Executive Officer of the Resulting Issuer and will be joined on the Board by Michael Thomsen. Medgold will have the right to appoint one representative to the Resulting Issuer Board. The intended Chief Financial Officer and other officers of the Resulting Issuer will be determined in the coming weeks. Upon completion of the Acquisition, Ralph Rushton will remain on the Board of Directors and Kevin Bales will continue as CFO of the resulting company. Elena Clarici will be appointed as Director, Executive Chair and CEO of the resulting company, and Michael Thomsen will be appointed as a director.The transactions are subject to receipt of Exchange acceptance, the Resulting Issuer Shares to be issued shall have been accepted for listing by the TSXV, approval by the Medgold and Balkan Metals shareholders and arranging the proposed CAD 2 million private placement financing, As of December 21, 2022, Medgold and Balkan Metals have amended the letter of intent to reflect the following: (i) Both have agreed to extend their due diligence period until January 15, 2023, and (ii) the parties have agreed that Balkan Metals shall provide by January 1, 2023 a first tranche of interim funding to Medgold of at least CAD 0.05 million as requested by Medgold, provided that Medgold has obtained TSXV approval. As of July 13, 2023, Medgold Resources Corp. has received conditional acceptance from the TSX Venture Exchange for the proposed reverse takeover transaction. The TSXV's final acceptance of the Acquisition is subject to Medgold's completion of all remaining filing requirements of the TSXV. As of May 30, 2023, Balkan Metals shareholders have approved the Acquisition. The LOI may be terminated by either party should it not be satisfied with the results of its due diligence investigations of the other party on or before January 15, 2023. Parties have extended the deadline for closing the Acquisition to July 31, 2023. As of September 5, 2023, Medgold Resources shareholders approved the transaction. As of December 6, 2023, the transaction is expected to close on or about December 31, 2023. Susan Tomaine of Blake, Cassels & Graydon LLP acted as legal advisor to Medgold while Brett Kagetsu of Gowling WLG International Limited acted as legal advisor to Balkan.Balkan Metals Corp. completed the acquisition of Medgold Resources Corp. (TSXV:MED) in a reverse merger transaction on January 18, 2024. Pursuant to the terms of an amalgamation agreement entered into between Medgold, BMC and 1397383 B.C. Ltd., a wholly-owned subsidiary of Medgold (“MergeCo”) dated January 27, 2023, as amended (the “Amalgamation Agreement”), the Company completed a three-cornered amalgamation (the “Amalgamation”) under the Business Corporations Act (British Columbia) with BMC and MergeCo pursuant to which BMC and MergeCo amalgamated and the Company issued 54,888,763 common shares of the Company post –Consolidation (the “Resulting Issuer Shares”) to BMC shareholders in exchange for their common shares of BMC. In connection with the Transaction, BMC completed the Private Placement consisting of the sale of 21,600,000 subscription receipts (“Subscription Receipts”) at a price of CAD 0.10 per Subscription Receipt to raise gross proceeds of CAD 2,160,000. Concurrently with the completion of the transaction, the individuals who were appointed as directors or officers of Electrum: Elena Clarici as President, Chief Executive Officer and Director, Michael Thomsen as Director, Eric Rasmussen as Director, Ralph Rushton as Director, Kevin Bales as Chief Financial Officer and Brett Kagetsu as Corporate Secretary. Also concurrently with the completion of the Transaction, Jeremy Crozier resigned as President, Chief Executive Officer and director, Michael Skead resigned as a director, and Sally Whittall resigned as Corporate Secretary of Medgold. The Transaction remains subject to receipt of final approval from the TSXV and fulfillment of all of the requirements of the TSXV in order to obtain such approval. Until final approval of the TSXV is obtained and a Final Exchange Bulletin is issued which is expected on or about January 19, 2024, trading in the Resulting Issuer Shares will remain halted. Resumption of trading is expected on or about January 23, 2024.
