Item 1.01 Entry Into A Material Definitive Agreement.






The Purchase Agreement

On January 13, 2020, Mudrick Capital Acquisition Corporation, a Delaware corporation ("Parent"), entered into a Purchase Agreement (the "Purchase Agreement") with MUDS Acquisition Sub, Inc., a Delaware corporation and an indirect wholly owned subsidiary of Parent ("Acquisition Sub"), and Hycroft Mining Corporation, a Delaware corporation ("Seller"). The Purchase Agreement and the transactions contemplated thereby will constitute a "Business Combination" as contemplated by Parent's Amended and Restated Certificate of Incorporation (the "Charter").





The Business Combination

Subject to the terms and conditions set forth in the Purchase Agreement, the parties thereto intend to consummate a business combination transaction (the "business combination") pursuant to which Seller will sell to Acquisition Sub, and Acquisition Sub will purchase from Seller, all of the issued and outstanding equity interests of Seller's subsidiaries and substantially all of Seller's other assets (collectively, the "Transferred Assets").





Consideration

Subject to the terms and conditions set forth in the Purchase Agreement, in consideration for the Transferred Assets and in connection with the consummation of the business combination, Acquisition Sub will deliver, or cause to be delivered on its behalf, to Seller (a) a number of shares of Parent's Class A common stock, par value $0.0001 per share (the "Parent Class A Common Stock") equal to (i) (A) $325,000,000, plus (B) the value of the Surrendered Shares (as defined below) valued at $10.00 per share, minus (C) the sum of the 1.5 Lien Share Payment Amount and the 1.5 Lien Cash Payment Amount (each as defined below), minus (D) the sum of the Excess Notes Share Payment Amount and the Excess Notes Cash Payment Amount (each as defined below), divided by (ii) $10.00, which Seller will promptly distribute to its stockholders and (b) the Excess Notes (as defined below) and Seller's 1.5 lien notes acquired by Acquisition Sub in connection with the consummation of the business combination and pursuant to the transactions described below. In addition, (x) Parent and Acquisition Sub will assume certain of Seller's liabilities, including Parent's assumption of certain debt obligations of Seller, and (y) Acquisition Sub will pay off, or cause to be paid off, Seller's other outstanding indebtedness for borrowed money, on Seller's behalf, including under Seller's first lien debt and promissory note.

As described in the Purchase Agreement, on October 4, 2019, Seller, as borrower, certain subsidiaries of Seller, as guarantors, Sprott Private Resource Lending II (Collector), LP, as lender, and Sprott Resource Lending Corp., as arranger, executed a multi-tranche Credit Agreement (the "Sprott Credit Agreement"), pursuant to which Seller will incur indebtedness with an original principal amount not in excess of $110,000,000 in connection with the consummation of the business combination. Pursuant to the terms of the Purchase Agreement, Parent will assume the Sprott Credit Agreement in connection with the consummation of the business combination and will issue to Sprott Private Resource Lending II (Collector), LP a number shares of Parent Class A Common Stock equal to 1% of Parent's post-closing shares outstanding. In addition, concurrently with the consummation of the business combination, Parent and a subsidiary of Seller will enter into a Royalty Agreement with Sprott Private Resource Lending II (CO) Inc. (the "Sprott Royalty Agreement" and, together with the Sprott Credit Agreement, the "Sprott Agreements"), pursuant to which, among other things, such subsidiary will receive $30,000,000 and will incur a 1.5% net smelter royalty payment obligation relating to the Hycroft mine, the principal asset of Seller's subsidiaries being acquired in the business combination.

Representations, Warranties and Covenants

Each of Parent, Acquisition Sub and Seller have made representations, warranties and covenants that are customary for a transaction of this nature. The representations and warranties contained in the Purchase Agreement terminate and are of no further force or effect as of the consummation of the business combination.





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The Purchase Agreement contains additional covenants of the parties, including, among others, covenants providing for (a) the parties to conduct their respective businesses in the ordinary course through the consummation of the business combination, (b) Parent and Seller to cease discussions regarding alternative transactions, (c) Parent and Seller to jointly prepare (and for Parent to file with the Securities and Exchange Commission (the "SEC")) a registration statement on Form S-4 (the "Registration Statement") for the purpose of registering under the Securities Act the shares of Parent Class A Common Stock to be issued to Seller and promptly distributed to Seller's stockholders in connection with the business combination (which Registration Statement will constitute a joint proxy statement/prospectus for the purpose of (i) soliciting proxies from Parent's stockholders to vote in favor of adoption and approval of the Purchase Agreement and certain other matters at a special meeting called therefor and (ii) soliciting proxies from Seller's stockholders in favor of the adoption and approval of the Purchase Agreement and the transactions contemplated thereby (including the business combination) at a special meeting called therefor), (d) the protection of, and access to, confidential information of the parties and (e) the parties to use commercially reasonable efforts to obtain necessary approvals from governmental agencies.





Governance

In connection with the consummation of the transactions contemplated by the Purchase Agreement, Parent will amend and restate its Charter such that Parent will have a single-tier board that will consist of seven (7) directors. Each of the directors will serve for a one year term and until his or her successor is elected or, if earlier, upon such director's resignation, removal or death.

Conditions to Consummation of the Business Combination

The consummation of the transactions contemplated by the Purchase Agreement is subject to customary closing conditions for special purpose acquisition companies, including, among others: (a) approval by Parent's stockholders and the Company's stockholders, (b) Parent having at least $5,000,001 of net tangible assets as of the effective time of the consummation of the business combination, (c) the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, (d) the listing of the shares of Parent Class A Common Stock to be issued in connection with the closing of the transactions contemplated by the Purchase Agreement on The Nasdaq Stock Market LLC ("NASDAQ") and the effectiveness of the Registration Statement, (e) the consummation of the PIPE (as defined below), (f) the consummation of the transactions contemplated by the (i) the Exchange Agreement, (ii) the Forward Purchase, (iii) the 1.25 Lien Exchange Agreement, (iv) the Second Lien Conversion Agreement and (v) the Parent Sponsor Letter Agreement . . .

Item 3.02 Unregistered Sales of Equity Securities.

The disclosure set forth above under the heading "Subscription/Backstop Agreement" in Item 1.01 of this Current Report is incorporated by reference into this Item 3.02. The shares of Parent Class A Common Stock to be issued in the PIPE in connection with the closing will not be registered under the Securities Act of 1933, as amended (the "Securities Act"), in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder.

Item 7.01 Regulation FD Disclosure.

On January 14, 2020, Parent and Seller issued a joint press release announcing the execution of the Purchase Agreement. The press release is attached hereto as Exhibit 99.1.

The information in this Item 7.01, including the information presented in Exhibit 99.1, is being furnished by Parent and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to liabilities under that section, and shall not be deemed to be incorporated by reference into the filings of Parent under the Securities Act or the Exchange Act, except as expressly set forth by specific reference in such filings. The submission of the information set forth in this Item 7.01 shall not be deemed an admission as to the materiality of any information in this Item 7.01, including the information presented in Exhibit 99.1, that is provided solely in connection with Regulation FD.





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Forward-Looking Statements

This Current Report includes "forward-looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as "forecast," "intend," "seek," "target," "anticipate," "believe," "expect," "estimate," "plan," "outlook," and "project" and other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. Such forward-looking statements may include estimated financial information, including with respect to revenues, earnings, performance, strategies, prospects and other aspects of the businesses of Parent, Seller or the combined company after completion of the business combination, and are based on current expectations that are subject to known and unknown risks and uncertainties, which could cause actual results or outcomes to differ materially from expectations expressed or implied by such forward-looking statements. These factors include, but are not limited to: (1) the occurrence of any event, change or other circumstances that could result in the proposed business combination not being completed at all or on the expected timeline, including as a result of the termination of the Purchase Agreement or the failure to obtain approval of Parent's stockholders or other conditions to closing in the Purchase Agreement; (2) the ability to meet applicable NASDAQ listing standards; (3) the risk that the proposed business combination disrupts current plans and operations of Seller's business as a result of the announcement and consummation of the transactions described herein; (4) the ability to recognize the anticipated benefits of the proposed business combination, which may be affected by, among other things, competition, the ability of the combined company to grow and manage growth profitably, maintain relationships with customers and suppliers and retain its management and key employees; (5) costs related to the proposed business combination; (6) changes in applicable laws or regulations; (7) the possibility that Seller's business may be adversely affected by other economic, business, and/or competitive factors; and (8) other risks and uncertainties indicated from time to time in the definitive version of the Registration Statement, including those under "Risk Factors" therein, and other documents filed or to be filed with the Securities and Exchange Commission by Parent. Investors are cautioned not to place undue reliance upon any forward-looking statements, which speak only as of the date made. Parent and Seller undertake no commitment to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise. Anyone using the presentation does so at their own risk and no responsibility is accepted for any losses which may result from such use directly or indirectly. Investors should carry out their own due diligence in connection with the assumptions contained herein. The forward-looking statements in this current report speak as of the date of its filing. Although Parent may from time to time voluntarily update its prior forward-looking statements, it disclaims any commitment to do so whether as a result of new information, future events, changes in assumptions or otherwise except as required by applicable securities laws.





Disclaimer

This Current Report shall neither constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which the offer, solicitation, or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction. This Current Report relates to a proposed business combination between Parent and Seller.

Additional Information About the Business Combination

In connection with the proposed business combination between Parent and Seller, Parent intends to file the Registration Statement with the SEC and will mail a definitive Registration Statement and other relevant documentation to Parent's stockholders. Parent's stockholders and other interested persons, including Seller's stockholders, are advised to read, when available, the preliminary Registration Statement and the amendments thereto that will be filed with the SEC and the definitive Registration Statement and documents incorporated by reference therein filed with the SEC and mailed to such stockholders as these materials will contain important information about Parent, Seller and the proposed business combination. The definitive Registration Statement will be mailed to Parent's stockholders and to Seller's stockholders, in each case, as of the applicable record date to be established for voting on the proposed business combination, when it becomes available.

Parent's stockholders will also be able to obtain free copies of the preliminary and definitive Registration Statements (if and when available) and other documents containing important information about Parent, Seller and the proposed business combination, without charge, at the SEC's website at http://sec.gov, once such documents are filed with the SEC, or by directing a request to: Mudrick Capital Acquisition Corporation, 27 Madison Avenue, 6th Floor, New York, New York 10022.

Participants in the Solicitation

Parent and its directors, executive officers and other members of its management and employees and Seller and its directors and management may be deemed to be participants in the solicitation of proxies from Parent's stockholders in connection with the proposed business combination. Stockholders are urged to carefully read the Registration Statement when it becomes available, because it will contain important information about Parent, Seller and the proposed business combination. The Registration Statement will also contain information regarding the persons who may, under the rules of the SEC, be deemed participants in the solicitation of Parent's stockholders in connection with the proposed business combination, including information about Parent's directors and executive officers, which will be set forth in the Registration Statement when it becomes available.

Item 9.01 Financial Statements and Exhibits.






(d) List of Exhibits.

The Exhibit Index is incorporated by reference herein.

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