Nov 4 2015
Mission Gold Ltd. is pleased to announce that further to its press release of October 8, 2015, it has entered into a definitive arrangement agreement with Northern Dynasty Minerals Ltd. with respect to the acquisition by Northern Dynasty of 100% of the outstanding securities of Mission Gold.
The Transaction will be implemented by way of a statutory plan of arrangement. Each common share of Mission Gold will be exchanged for 0.55 of a Northern Dynasty common share, subject to adjustment in the event that Mission Gold's working capital is less than an agreed minimum amount. Each outstanding Mission Gold warrant will be exchanged pursuant to the plan of arrangement for a warrant to acquire one Northern Dynasty common share at an exercise price increased to 110% of the applicable existing Mission Gold warrant exercise price and having the same expiry date as the original warrant term. One nominee of Mission Gold will be appointed to the board of directors of Northern Dynasty at closing.
As part of the Transaction, Mission Gold has made a secured loan facility of up to $8.4 million available to Northern Dynasty. The facility has a term of six months, provided that if the Arrangement Agreement is terminated due to a breach by Northern Dynasty, the facility will be repayable 30 days from the date of termination. The Company has received a draw down notice for an initial advance of $2,000,000 under the facility, which amount is expected to be advanced today following receipt of required documentation from Northern Dynasty.
Northern Dynasty has also entered into standard lock-up agreements with certain security holders of Mission Gold, including with holders of approximately 49% of the outstanding common shares of Mission Gold to vote in favour of the Transaction.
The Arrangement Agreement provides for, among other things, a non-solicitation covenant on the part of Mission Gold, subject to customary "fiduciary out" provisions that entitle Mission Gold to consider and accept a superior proposal, a right in favour of Northern Dynasty to match any superior proposal and, in certain circumstances, the payment of a termination fee.
The board of directors of Mission Gold received an oral opinion from its financial advisor that the Transaction is fair, from a financial point of view, to the securityholders of Mission Gold, and the Company expects to receive the fairness advisor's written opinion prior to the mailing of the information circular for the Transaction.
The Transaction is subject to the approval of the TSX Venture Exchange on the part of Mission Gold and the TSX and NYSE MKT on the part of Northern Dynasty, required approvals of the court and the Mission Gold security holders, the execution of a binding agreement for the sale of Mission Gold's Alto Parana titanium project prior to closing of the Transaction and other customary closing conditions.
The Transaction is not subject to Northern Dynasty shareholder approval.