Feb 24 2014
Braeval Mining Corporation has entered into a definitive business combination agreement with Oban Exploration Limited ("Oban"), a private company, pursuant to which Braeval will acquire all of the issued and outstanding common shares of Oban pursuant to a three-cornered amalgamation between Oban and a wholly owned subsidiary of Braeval.
As a result of the transaction, the holders of Oban common shares will receive 0.914 of a common share of Braeval (on a post consolidation basis) for each Oban common share so held. Following completion of the transaction, the amalgamated company will hold all of Oban's assets and will be a wholly owned subsidiary of Braeval.
Immediately prior to the closing of the transaction, the common shares of Braeval will be consolidated such that a holder will receive 0.318 post-consolidation common shares of Braeval for each pre-consolidation common share so held. As at February 20, 2014, there were 93,767,786 Braeval common shares issued and outstanding. Upon completion of the transactions, including the consolidation and the business combination, Braeval expects to have approximately 100 million issued and outstanding post-consolidation Braeval common shares on an undiluted basis. Approximately 70% of those shares will be held by former shareholders of Oban and 30% will be held by former shareholders of Braeval.
Following completion of the transaction, Braeval expects to change its name to "Oban Mining Corporation" and the Company will be led by the current Braeval management team. In addition, the number of directors on the new company's board will be set at six and be comprised of the five current members of the Braeval board of directors (including two members who are also members of the Oban board of directors) and one additional director who is a current member of the Oban board of directors.
The proposed business combination is expected to provide significant benefits for shareholders, including:
- pooling of cash and mineral resources and significant synergies in exploration and development;
- greater market presence;
- enhanced liquidity, capital market profile and financial strength in challenging times;
- operating efficiencies leading to significant cost reductions; and
- a strong position from which to participate in the anticipated future consolidation in the mining industry.
"We expect that the resulting issuer will be a more robust company with excellent projects and a stronger cash position which will allow us to have flexibility in the current market," said Jose Vizquerra Benavides, President and Chief Executive Officer of Braeval.