Upon completion of the Transaction, it is expected that the shareholders of Zacapa (the "Zacapa Shareholders") will hold approximately 12% of Outcrop's issued and outstanding common shares. The board of Outcrop will remain the same.
The Transaction constitutes a "related party transaction" subject to TSXV Policy 5.9 – Protection of Minority Security Holders in Special Transactions and Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions ("MI 61-101").
Anticipated Benefits of the Transaction
- Combined entities will further strengthen Outcrop's exploration and development pipeline and reduce jurisdictional risk;
- Consolidation of the two companies will create a well-capitalized exploration company and will reduce operating and overhead costs; and
- Combined entities will likely increase shareholder liquidity, trading and capital markets exposure.
Anticipated Benefits for Zacapa Shareholders
- Opportunity for Zacapa shareholders to hold shares of a larger, more diversified company with a history of stronger access to markets and capital to further development of the Zacapa properties;
- There are limited conditions, no break fees or expense reimbursement and a short timeline to closing the Transaction;
- The Zacapa board established the independent Special Committee to consider the proposed Transaction as well as alternatives and the Agreement was negotiated at arm's length between the Special Committee and Outcrop; and
Evans & Evans, Inc. has provided an oral fairness opinion that the Transaction is fair to the shareholders of Zacapa.
Pursuant to the terms of the Agreement, the Transaction is expected to be completed by way of a three-cornered amalgamation under the provisions of the Business Corporations Act (
Outcrop and Zacapa are committed to consummating the Transaction in an expedited manner and it is anticipated that a special meeting of Zacapa Shareholders (the "Meeting") to approve the proposed Transaction will be held in
As of the date hereof,
Further information regarding the Transaction will be contained in a management information circular to be mailed to Zacapa Shareholders in connection with the Meeting. All Zacapa Shareholders are urged to read the management information circular once available, as it will contain important additional information concerning the Transaction. Following completion of the Transaction, the company formed by the amalgamation of Zacapa and
Due to the non-arm's length nature of the Transaction, a special committee (the "Special Committee") consisting of
The Board of Directors of Outcrop (excluding conflicted directors) have determined that the Transaction is in the best interests of Outcrop and have approved the Transaction.
Further details regarding the terms and conditions of the Transaction are set out in the Agreement, which will be publicly filed by Outcrop and Zacapa under their respective profiles on www.sedarplus.ca.
Outcrop is advancing the Santa Ana high-grade silver deposit with exploration activities aiming to expand the current mineral resource. The Santa Ana project is being advanced by a highly disciplined and seasoned professional team with decades of experience in
Zacapa is a mineral exploration company engaged in gold and copper exploration in world class jurisdictions in the southwest
Neither the
Forward Looking Statements – This news release includes forward-looking statements that are subject to risks and uncertainties. All statements within, other than statements of historical fact, are to be considered forward looking, including, but not limited to, the timing of the Zacapa Shareholder Meeting and approval of Zacapa Shareholders, closing of the proposed Transaction and the anticipated benefits of the Transaction. Although Outcrop and Zacapa believe the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in forward-looking statements. Factors that could cause actual results to differ materially from those in forward-looking statements include market prices, exploitation and exploration successes, continued availability of capital and financing, and general economic, market or business conditions and regulatory, shareholder and administrative approvals, processes and filing requirements. There can be no assurances that such statements will prove accurate and, therefore, readers are advised to rely on their own evaluation of such uncertainties. We do not assume any obligation to update any forward-looking statements.
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