/NOT FOR DISTRIBUTION TO
The Offerings were undertaken in conjunction with the previously announced transaction (the "Business Combination"), which will result in the reverse takeover of Sierra Madre by Goldshore (the resulting entity being the "Resulting Issuer"). As previously announced, Goldshore also entered into an agreement to acquire the interest of Wesdome Gold Mines Ltd. (the "Proposed Acquisition") in the
The Offerings and the Business Combination were originally announced by way of press releases on
"We are truly excited by the proposed Business Combination with Sierra Madre and acquisition of the
Each Subscription Receipt entitles the holder to receive one common share in the capital of Goldshore (a "Goldshore Share") for no additional consideration upon satisfaction of the Escrow Release Conditions (as defined below). Each Flow-Through Subscription Receipt entitles the holder to receive one flow-through common share in the capital of Sierra Madre (a "Sierra Madre Share"), to be issued as a "flow-through share" as defined in subsection 66(15) of the Income Tax Act (
Sierra Madre will incur (or be deemed to incur) resource exploration expenses which will constitute "Canadian exploration expenses" as defined in subsection 66.1(6) of the Tax Act and "flow through mining expenditures" as defined in subsection 127(9) of the Tax Act, in an amount equal to the amount raised pursuant to the sale of Flow-Through Subscription Receipts and Sierra Madre will renounce the Canadian exploration expenses (on a pro rata basis) to each subscriber with an effective date of no later than
The gross proceeds of (a) the sale of Subscription Receipts, less 50% of the Agents' cash commission (as described below) and certain expenses of the Agents, and (b) the sale of the Flow-Through Subscription Receipts, have been deposited in escrow until the satisfaction of the Escrow Release Conditions (the "Escrowed Amount").
If the Escrow Release Conditions have not been satisfied prior to
The remaining Escrow Release Conditions are summarized as follows: confirmation that all conditions to the completion of the Proposed Acquisition have been satisfied or waived; confirmation that all conditions to the completion of the Business Combination have been satisfied or waived, (other than the such conditions to be satisfied at completion of the Business Combination); receipt of all approvals required for completion of the Business Combination; the Resulting Issuer Shares being conditionally approved for listing on the TSX-V; counsel to the Resulting Issuer having delivered a standard legal opinion; Goldshore, Sierra Madre and the Resulting Issuer not being in breach of covenants or obligations under the transaction agreements; and Goldshore, Sierra Madre and the Lead Agent having delivered a release notice to the escrow agent.
In connection with the Offerings, the Agents are entitled to a cash fee equal to 6% of the aggregate gross proceeds of the Offerings (4% for president's list subscribers) (50% of which such cash fee payable in respect of the sale of Subscription Receipts was paid to the Agent's on closing of the Offering) and were issued such number of compensation options (the "Compensation Options") equal to 6% of the number of
The Subscription Receipts are subject to an indefinite hold period, and the Flow-Through Subscription Receipts are subject to a four-month statutory hold period expiring on
Upon satisfaction of the Escrow Release Conditions, it is expected that the net proceeds from the Offerings will be used to advance development of the Moss Lake gold project located in
"Galen McNamara"
CEO & Director
Sierra Madre Developments Inc.
"Hani Zabaneh"
CEO & Director
Cautionary Note Regarding Forward-Looking Statements
This news release contains statements that constitute "forward-looking statements." Such forward looking statements involve known and unknown risks, uncertainties and other factors that may cause Sierra Madre's, Goldshore's and the Resulting Issuer's actual results, performance or achievements, or developments to differ materially from the anticipated results, performance or achievements expressed or implied by such forward-looking statements. Forward looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects," "plans," "anticipates," "believes," "intends," "estimates," "projects," "potential" and similar expressions, or that events or conditions "will," "would," "may," "could" or "should" occur.
Forward-looking statements in this document include, among others, statements relating to expectations regarding the completion of the Business Combination (including all required approvals), the listing on the TSX-V, the use of proceeds from the Offerings, the satisfaction of the Escrow Release Conditions, payment of the Agents' commission from escrow, the conversion of the
The forward-looking information contained in this news release represents the expectations of Sierra Madre and Goldshore as of the date of this news release and, accordingly, is subject to change after such date. Readers should not place undue importance on forward-looking information and should not rely upon this information as of any other date. Neither Sierra Madre nor Goldshore undertakes no obligation to update these forward-looking statements in the event that management's beliefs, estimates or opinions, or other factors, should change.
This news release does not constitute an offer to sell, or a solicitation of an offer to buy, any securities in
Completion of the transactions are subject to a number of conditions, including but not limited to, TSX-V 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 management information circular or filing statement to be prepared in connection with the transactions, any information released or received with respect to the transactions may not be accurate or complete and should not be relied upon. Trading in the securities of Sierra Madre (and the Resulting Issuer) should be considered highly speculative.
The TSX-V has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this news release.
SOURCE
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