Announcement • Oct 31

+ 1 more update

Reyna Silver Corp. (TSXV:RSLV) completed the acquisition of Reyna Gold Corp. (TSXV:REYG).

Reyna Silver Corp. (TSXV:RSLV) entered into an arrangement agreement to acquire Reyna Gold Corp. (TSXV:REYG) for CAD 22.2 million on August 7, 2024. Under the terms of the Agreement, each holder of REYG Shares (a “REYG Shareholder” and, collectively, the “REYG Shareholders”) will receive one (1) common share of Reyna Silver (a “RSLV Share”) for every three (3) REYG Shares held (the “Consideration”). The value of the Consideration represents an approximate 48% premium to REYG Shareholders, based on the 20 day VWAP of the RSLV Shares and the REYG Shares as of August 2, 2024 on the TSX Venture Exchange (“TSXV”). Upon completion of the Transaction, REYG Shareholders will hold approximately 10% of the issued and outstanding RSLV Shares and existing RSLV Shareholders will hold approximately 90% of the issued and outstanding RSLV Shares, excluding any shares issued in connection with the Debt Conversion. As part of the Transaction, all outstanding options of Reyna Gold will vest immediately and be exchanged for the number of options to purchase RSLV Shares based on the exchange ratio outlined in the Agreement. In addition, it is expected that immediately prior to the Transaction, up to CAD 117,000.00 in accrued amounts payable by Reyna Gold (including accrued amounts owing, directly or indirectly, to certain directors and officers of Reyna Gold for accrued directors’ fees and management fees) will be converted (the “Debt Conversions”) into REYG Shares at a price of CAD 0.05 per REYG Share. Further, all change of control payments payable to officers of Reyna Gold under executive compensation agreements will be waived in connection with the Transaction. Completion of the Transaction will, among other things, require the approval of: (i) at least two-thirds of the votes cast by the REYG Shareholders; and (ii) if required, a simple majority of the votes cast by REYG Shareholders, excluding for this purpose the votes of “related parties” and “interested parties” and other votes required to be excluded under Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions, with all votes to occur at a special meeting of REYG Shareholders expected to take place in September 2024 (the “Reyna Gold Meeting”). No shareholder vote is required by RSLV Shareholders. The Agreement includes covenants typical for transactions of this nature, including non-solicitation covenants. The Transaction is expected to close in September 2024, subject to the satisfaction (or waiver) of a number of conditions precedent, including, but not limited to receipt of all regulatory approvals, including the approval of the Supreme Court of British Columbia and the TSXV, REYG shall have completed its due diligence investigation to its satisfaction, Third Party Consents to be obtained by REYG, REYG shall have received from RSLV satisfactory evidence of the conditional approval for listing on the TSXV of the applicable RSLV Shares that the REYG Shareholders are entitled to receive pursuant to the Arrangement (as well as the RSLV Shares underlying the Replacement RSLV Options), subject only to customary listing conditions of the TSXV, RSLV shall have received the resignations from the REYG Board and senior executives in a form satisfactory to RSLV, the Key Employees shall have executed and delivered the Key Employee Agreements to RSLV, holders of no more than five percent (5%) of the REYG Shares shall have exercised Dissent Rights and assignment of the Gryphon Option Agreement and completion of the Debt Conversions. The Transaction has the full unanimous endorsement of both the boards of Reyna Gold and Reyna Silver upon the recommendation of a special committee of independent directors of each respective board with the mandate to evaluate the proposed transaction. The special committee of Reyna Gold has received advice from its advisors and has reviewed a fairness opinion from Evans & Evans, Inc., and has unanimously determined that the Transaction is in the best interests of Reyna Gold and will recommend that REYG Shareholders vote in favour of the Transaction. As per filling of September 16, 2024, the arrangement is currently anticipated to be completed on or about October 11, 2024. As of October 11, 2024, Reyna Gold announce that the shareholders of Reyna Gold have approved the acquisition of Reyna Gold by Reyna Silver on October 8, 2024. Reyna Gold and Reyna Silver also announced that Reyna Gold obtained a final order of the Supreme Court of British Columbia on October 10, 2024, approving the Transaction and finding it to be fair and reasonable to the REYG Shareholders. The Transaction remains subject to the satisfaction or waiver of customary closing conditions, including approval of the TSXV, and is expected to close on or around October 17, 2024. Following completion of the Transaction, Reyna Gold will be wholly-owned by Reyna Silver and Reyna Gold's shares are expected to be delisted from the TSX Venture Exchange (the "TSXV") and an application is expected to be made for Reyna Gold to cease to be a reporting issuer in the applicable jurisdictions. Evans & Evans, Inc. acted as financial advisor and provided a fairness opinion to Reyna Gold in connection with the Transaction. Fraser Hartley of Edwards, Kenny & Bray LLP is acting as legal counsel to Reyna Silver. Segev LLP is acting as legal counsel to the Reyna Gold special committee and Founders LLP is acting as legal counsel to the Reyna Silver special committee. DeVisser Gray LLP acted as an auditor to Reyna Gold and Reyna Silver. Nicole Chang of WT BCA LLP acte as legal advisor to Reyna Gold. Odyssey Trust Company acted as registrar and transfer agent of REYG. TSX Trust Company acted as depository and transfer agent of RSLV. Reyna Silver Corp. (TSXV:RSLV) completed the acquisition of Reyna Gold Corp. (TSXV:REYG) on October 30, 2024. In connection with the closing of the Arrangement, Reyna Silver settled CAD 41,937.50 of outstanding indebtedness relating to accrued management and director fees owing to certain directors and officers of the Reyna Silver. The indebtedness was settled by the issuance of Reyna Silver common shares at a price of CAD 0.05 per common share (the “Debt Conversion”), resulting in an aggregate of 838,750 new Company common shares being issued. All common shares issued pursuant to the Debt Conversion were converted into Reyna Silver Shares as part of the closing of the Arrangement. All of the existing directors and officers of the Company resigned from their positions in connection with the closing of the Arrangement. Immediately following the closing of the Arrangement, Reyna Silver, as sole shareholder of the Reyna Gold, appointed Michael Wood, Jorge Ramiro Monroy and Alex Langer as the directors of Reyna Gold.

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