TSX Venture Exchange Symbol: CW.H
TORONTO, Aug. 29, 2011 /CNW/ - Carlaw Capital III Corp. ("Carlaw" or the "Corporation") is pleased to announce that it has received conditional approval from the TSX Venture Exchange (the "Exchange") relating to the previously announced proposed qualifying transaction (the "Transaction") with Galane Gold Mines Ltd. ("Galane"). The Transaction is currently scheduled to close on or about August 30, 2011. A Filing Statement prepared in accordance with the requirements of the Exchange in connection with the Transaction has been filed with the Exchange and the applicable Canadian securities regulators on SEDAR and is available at www.sedar.com.
BACKGROUND
On May 9, 2011, the Corporation entered into an acquisition agreement (the "Acquisition Agreement") with Galane pursuant to which the Corporation has agreed to acquire all of the issued and outstanding Galane common shares (the "Galane Common Shares") by way of a "three-cornered amalgamation" (the "Amalgamation") pursuant to the Business Corporations Act (Ontario) (the "Act"). Pursuant to the Acquisition Agreement, a wholly-owned subsidiary of the Corporation incorporated under the Act (the "Carlaw Sub") will amalgamate with Galane, whereby Galane and the Carlaw Sub will form a new amalgamated corporation and the separate existence of Galane and the Carlaw Sub will cease. The surviving amalgamated corporation will be a wholly-owned subsidiary of the Corporation.
Although the Transaction will result in Galane becoming a wholly-owned subsidiary of the Corporation, the Transaction will constitute a reverse take-over by Galane of the Corporation inasmuch as the former shareholders of Galane will own a substantial majority of the outstanding common shares in the capital of the Corporation (the "Common Shares") and all of the members of the board of directors will be designees of Galane.
Upon completion, the Transaction will constitute the Corporation's "qualifying transaction" pursuant to the policies of the Exchange.
THE QUALIFYING TRANSACTION
The Corporation entered into the Acquisition Agreement with Galane pursuant to which the Corporation has agreed to acquire all of the issued and outstanding Galane Common Shares. On or immediately prior to the Amalgamation, the Corporation will consolidate (the "Consolidation") its outstanding share capital at a ratio of 4:1. As consideration for the acquisition of all of the outstanding Galane Common Shares and after taking into account the Consolidation, the Corporation will issue (i) one Common Share for each one Galane Common Share outstanding immediately prior to the Amalgamation; and (ii) one Carlaw warrant to purchase Common Shares ("Carlaw Warrant") for each one Galane warrant to purchase Galane Common Shares ("Galane Warrant") outstanding immediately prior to the Amalgamation.
Assuming satisfaction of the Release Conditions (as defined below under the section heading "Galane Private Placement") and the completion of the Galane Private Placement, there will be 44,420,500 Galane Common Shares issued and outstanding, Galane Warrants outstanding to purchase up to 11,538,003 Galane Common Shares and Galane Broker Warrants outstanding to purchase up to 1,888,980 Galane Common Shares.
Upon completion of the Qualifying Transaction, satisfaction of the Release Conditions and closing of the Gallery Acquisition (as defined below under the section heading "Gallery Acquisiton"): (i) an aggregate of 45,108,000 Common Shares will be issued and outstanding; (ii) an aggregate of 13,426,983 Carlaw Warrants representing the right to acquire up to an aggregate of 13,426,983 Common Shares will be outstanding; and (iii) 123,750 Carlaw Options representing the right to acquire up to an aggregate of 123,750 Common Shares will be outstanding.
There are also: (i) 3,125,000 Common Shares issuable upon the closing of the NLE Acquisition (as defined below under the section heading "NLE Acquisition"); (ii) 8,750,000 Common Shares which may be issuable as contingent shares pursuant to the NLE Acquisition; and (iii) up to 2,500,000 Common Shares which may be issuable to certain officers of Galane pursuant to performance agreements to be executed concurrently with the closing the Transaction based on exploration milestones set out therein.
The Transaction is subject to compliance with all necessary regulatory approvals and certain other terms and conditions. It is anticipated that upon completion of the Transaction, the resulting issuer (the "Resulting Issuer") will meet the Tier 1 listing requirements of the Exchange for a mining issuer.
GALANE PRIVATE PLACEMENT
On August 5, 2011, Galane completed a brokered private placement (the "Galane Private Placement") of an aggregate of 20,545,500 subscription receipts (the "Galane Subscription Receipts") at a subscription price of $0.80 per Galane Subscription Receipt for aggregate gross proceeds of $16,436,400.
The gross proceeds from the Galane Private Placement, less certain expenses of the Galane Private Placement, have been deposited with Equity Financial Trust Company and Aird Berlis LLP until the satisfaction of the following conditions (the "Release Conditions"):
| (a) | All conditions precedent to the closing of the acquisition (the "Gallery Acquisition") by Galane, through a wholly owned subsidiary, of all of the issued and outstanding shares of Gallery Gold Pty Ltd. ("Gallery Gold") from IAMGOLD Corporation ("IAMGOLD") have been met; |
| (b) | All conditions precedent to the closing of the Transaction have been met; and |
| (c) | Conditional approval by the Exchange of the Transaction and for the listing of the Common Shares issuable in connection with the Transaction shall have been obtained. |
Following the satisfaction or waiver of the Release Conditions and release of the proceeds from the Galane Private Placement to Galane, each Galane Subscription Receipt shall convert into one Galane Common Share (credited as fully paid) and one-half of one Galane Warrant being exercisable for one Galane Common Share for a period of 18 months from the date of issuance at a price equal to $1.10 per share. At the effective time of the completion of the Transaction, the Galane Common Shares and Galane Warrants acquired upon conversion of the Galane Subscription Receipts will be exchanged for Common Shares and Carlaw Warrants without payment of any additional consideration. In the event that the Release Conditions have not been satisfied or waived prior to 5:00 p.m. (Toronto time) on November 3, 2011, the subscription funds shall be returned to the applicable holders of the Galane Subscription Receipts together with any interest earned thereon, and such Galane Subscription Receipts shall be automatically cancelled and be of no further force and effect.
Upon satisfaction of the Release Conditions, the agent in connection with Galane Private Placement (the "Galane Agent") will receive cash commission in the amount of $1,511,184. In addition, the Galane Agent will be granted broker warrants to acquire up to 1,888,980 Common Shares at a price of $0.80 per Common Share at any time until February 5, 2013. The Galane Agent is also entitled to be reimbursed for its legal fees and expenses incurred in connection with the Galane Private Placement.
GALLERY ACQUISITION
Galane entered into a share purchase agreement (the "Gallery Share Purchase Agreement") dated May 6, 2011, as amended and restated on August 4, 2011, with IAMGOLD pursuant to which a wholly-owned subsidiary of Galane agreed to acquire all of the issued and outstanding shares of Gallery Gold (the "Gallery Acquisition") from IAMGOLD. Gallery Gold, through its subsidiaries, owns the rights to conduct activities prescribed under mining and prospecting licenses relating to the Mupane mining property (the "Mupane Property") which is located near the town of Francistown in the Republic of Botswana. The Mupane Property will constitute the "Principal Property", and is expected to be the "Qualifying Property" (as such terms are defined in the Policies of the Exchange) of the Resulting Issuer. The Gallery Acquisition is expected to close on or prior to the closing of the Transaction.
The Gallery Acquisition will result in Galane indirectly owning the issued and outstanding shares of three Botswana incorporated subsidiaries, namely: (i) a 100% interest in a Botswana corporation, Mupane Gold Mining (Pty) Ltd. which owns the rights to conduct activities prescribed under Mining Licenses 2003/26L, 87/3 and 2010/95L and Prospecting License PL 040/2011 which comprise part of the Mupane Property (as described hereafter); (ii) a 100% interest in a Botswana corporation, IAMGOLD Botswana (Pty) Ltd. which owns the rights to conduct activities prescribed under Mining License 94/2L which comprises part of the Mupane Property; and (iii) an 85% interest in a Botswana corporation, Shashe Mines (Pty) Ltd.
Subject to purchase price adjustments set out in the Gallery Share Purchase Agreement, the consideration payable to IAMGOLD for the issued and outstanding shares of Gallery Gold is US$30,000,000 (the "Gallery Purchase Price"), payable as follows:
| (a) | US$5,900,000 in immediately available funds; |
| (b) | US$5,800,000 as a debt owing to IAMGOLD; and |
| (c) | US$18,300,000 which is expected to be satisfied by the subscription by IAMGOLD, and the delivery by Galane to IAMGOLD of, 21,875,000 Galane Common Shares at a deemed issuance price of $0.80 per share and an aggregate of 1,265,253 Galane Warrants. |
The Carlaw Warrants to be issued to IAMGOLD have an adjustment mechanism to provide that, if the NLE Acquisition is completed, then the number of Common Shares in which the Carlaw Warrants held by IAMGOLD are excersiable shall be adjusted upwards to be equal to be 49.9% of the Common Shares outstanding upon completion of the NLE Acquisition (assuming only the exercise by IAMGOLD of the Carlaw Warrants and no other convertible securities of Carlaw).
The Gallery Acquisition is subject to certain conditions to closing, as set out in the Gallery Share Purchase Agreement.
NLE ACQUISITION
Following closing of the Transaction, Galane, through a wholly owned subsidiary, proposes to acquire all of the issued and outstanding shares of The Northern Lights Exploration Company (Pty) Ltd., a Botswana company ("NLE"). NLE holds certain prospecting licenses with respect to mining properties located near the Mupane Property. Acquisition of NLE (the "NLE Acquisition") is subject to certain material conditions precedent, including Exchange approval, as set out in the NLE Share Purchase Agreement and is expected to be completed after the completion of the Qualifying Transaction.
INFORMATION ON GALANE
Galane was incorporated on November 15, 2010 under the OBCA under the name of 2263720 Ontario Limited, filed articles of amendment on November 29, 2010 to change its name to "Mupane Gold Mines Ltd." and filed articles of amendment on May 9, 2011 to change its name to "Galane Gold Mines Ltd". The head and registered office of Galane is located at 181 Bay Street, Suite 1800, Toronto, ON M5J 2T9.
On completion of the Gallery Acquisition and NLE Acquisition, Galane will be a mineral production and exploration company whose mission is to implement the technical expertise of developed mineral-exploration jurisdictions, such as that of Canada, in resource-rich Africa.
SELECTED FINANCIAL STATEMENT INFORMATION
The following tables present selected financial statement information on the financial condition and results of operations for the Corporation, Galane and Gallery Gold. Such information is derived from the unaudited interim financial statements of the Corporation as at March 31, 2011, the audited financial statements of Galane as at March 31, 2011 and the unaudited interim financial statements of Gallery Gold as at March 31, 2011. The information provided herein should be read in conjunction with such financial statements, which have been prepared in accordance with IFRS, and which are available on SEDAR at www.sedar.com.
|
Carlaw March 31, 2011(1) |
Galane March 31, 2011(1) |
Gallery Gold March 31, 2011 |
|
| Balance Sheet | |||
| Current Assets | US$390,627 | US$258 | US$22,777,279 |
| Total Assets | US$390,627 | US$258 | US$44,851,409 |
| Current Liabilities | US$77,856 | US$233,440 | US$12,783,405 |
| Total Liabilities | US$77,856 | US$233,440 | US$26,180,053 |
| Shareholders' Equity (deficit) | US$312,771 | (US$233,182) | US$18,671,356 |
Note:
| (1) | Converted to United States dollars based on an exchange rate of $1:00 per US$1.031, being the Bank of Canada closing exchange rate as at March 31, 2011. |
DIRECTORS AND OFFICERS OF THE RESULTING ISSUER
The board of directors upon completion of the Transaction will be comprised of the following persons: Ravi Sood, Philip Condon, Amar Bhalla, Ian Egan and Charles Byron. Brief biographies for the proposed directors and officers of the Resulting Issuer are set out below:
Philip Condon, Chief Executive Officer and Director (Age 46)
Mr. Condon has broad international primary industry experience covering project development through to operational management over 25 years. Responsibilities have included senior corporate management (GM, CEO), project management, engineering and operations management, maintenance management, training and consulting across a wide variety of development projects at all levels of corporate involvement from the workshop floor to the board room of publicly listed companies within Australia, Ghana, Indonesia, United States and Oman. He is experienced in project development, completion, operational start-ups and the effective and efficient management of operational mining corporations. Mr. Condon holds a Bachelors Degree in Engineering (mechanical) from New South Wales University, a Masters of Business Administration from Deakin University and is a member of the Australian Institute of Company Directors.
Ravi Sood, Chairman (Age 35)
Mr. Sood was the Chief Executive Officer of Navina Asset Management Inc. ("Navina"), an asset management firm headquartered in Toronto, Canada, where he led the investment activities of Navina and its predecessor company, Lawrence Asset Management Inc., since its founding in 2001. Mr. Sood has been a founder of, and the principal investor in several successful resource-based businesses in Africa and currently serves as a director of several public and private companies operating in the agriculture, mining, and oil gas sectors. Mr. Sood was educated at the University of Waterloo (B.Mathematics) where he was a Descartes Fellow and the recipient of numerous national awards.
Amar Bhalla, Director (Age 34)
Mr. Bhalla is the President of Capit Investment Corp., an investment management firm focused on private equity and venture capital. In the past nine years, Mr. Bhalla has been involved in a variety of business segments. He previously served as Chief Executive Officer of Crescent Logic Inc., a Toronto-based software firm. Prior to joining Crescent Logic, Mr. Bhalla allocated capital in both public and private ventures on behalf of Toronto-based investment groups. Mr. Bhalla received his C.F.A. designation in September 2004 and received his B.A. degree from McGill University in June 1999.
Ian Egan, Director (Age 64)
Mr. Egan has been involved in the mining industry for more than 35 years, holding senior management positions at BHP Limited, Mineral Deposits Limited, Utah Mining Australia Limited and NL Industries Inc. He has been a director of Kenmare Resources plc, a mining company listed on the Main Board of the London Stock Exchange, since July 1998. Mr. Egan is part of the management team that developed the Kenmare Moma titanium minerals mine in Mozambique, which is one of the largest of its type in the world. Mr. Egan is also a director of Soria Moria Pty Limited, which provides consulting services to the international mining industry. Among other board positions, Mr. Egan has served as a director of Ok Tedi Mining Limited and Orbital Corporation Limited. He has considerable experience in the areas of financial and operational controls, joint ventures and mergers and acquisitions. He is a Fellow of the Australasian Institute of Mining and Metallurgy (FAusIMM) and a Fellow of CPA Australia (FCPA). He holds a BEc in Accounting and Law from the University of Sydney and an MEc in Industry Economics from the University of Sydney.
Charles Byron, Director (Age 61)
Mr. Byron is the founder, managing director and a consulting geologist of The Northern Lights Exploration Co. (Pty) Ltd. He has over 30 years of geological experience, mainly in Archaean gold exploration and mining, and also in base metals. From 1995 to 2005, Mr. Byron was the Exploration Manager, General Manager and Resident Director of Gallery Gold Botswana (Pty) Ltd. He has also previously held positions with Falconbridge Limited, Phelps Dodge Corporation, Southern Sphere Mining and Development, and Eersteling Gold Mining Company Limited. Mr. Byron is the author or co-author of several published scientific papers and extended abstracts, and his professional designations include an M. AusIMM from the Australasian Institute of Mining and Metallurgy and an M. GSSA from the Geological Society of South Africa. Mr. Byron obtained his B.Sc.(Hons) from the University of Natal, Pietermaritzburg, South Africa.
SIGNIFICANT CONDITIONS TO CLOSING
The completion of the Transaction is subject to a number of conditions precedent. The following is a summary of the significant conditions (in addition to the Release Conditions described above under "Galane Private Placement"):
| (a) | the parties entering into any necessary transaction documents which shall not be inconsistent with the terms and conditions set forth in the Acquisition Agreement and reasonably acceptable to the other parties and their respective counsel; |
| (b) | receipt of final approval of the Exchange and all required approvals and consents to the Transaction and all related matters; and |
| (c) | no material adverse change shall have occurred in the business, results of operations, assets, liabilities, financial condition or affairs of the Corporation or Galane, financial or otherwise, between the date of signing the Acquisition Agreement and the completion of the Transaction. |
There can be no assurance that the Transaction will be completed as proposed or at all.
SPONSORSHIP
The Exchange has granted an exemption from the requirement to retain a sponsor in connection with the Transaction.
ARM'S LENGTH QUALIFYING TRANSACTION
The control persons of Galane are not (and their associates and affiliates are not) control persons of the Corporation. Accordingly, the acquisition by the Corporation of all the issued and outstanding shares of Galane is not a Non-Arm's Length Qualifying Transaction for the purposes of Exchange policies. As a result, the Transaction will not be subject to approval of the shareholders of the Corporation and therefore no meeting of the shareholders of the Corporation is required as a condition to the completion of the Transaction.
INSIDERS OF THE RESULTING ISSUER
To the knowledge of the directors and executive officers of the Corporation or Galane, no person will beneficially own, directly or indirectly, or exercise control or direction over voting securities carrying more than 10% of the voting rights attached to any class of voting securities of the Resulting Issuer after completion of the Transaction, except for IAMGOLD who will hold 21,875,000 Common Shares, representing approximately 48.5% of the issued and outstanding Common Shares and Sprott Asset Management L.P. who will hold 5,875,000 Common Shares, representing approximately 13% of the issued and outstanding Common Shares.
ABOUT CARLAW CAPITAL III CORP.
The Corporation is a capital pool company in accordance with Exchange policies, and at present, the Corporation does not own any assets other than cash or cash equivalents. To date, the Corporation has not conducted any active business operations except as described herein. Since its incorporation, the principal activities of the Corporation have consisted of the financing of the Corporation through the Corporation's IPO, the initial listing of the Common Shares on the Exchange, the identification of potential acquisitions, the negotiation of the Acquisition Agreement and efforts to implement the Qualifying Transaction.
Completion of the Transaction is subject to a number of conditions, including but not limited to, satisfactory due diligence reviews, negotiation and execution of definitive transaction documentation, availability of prospectus and registration exemptions or obtaining exemptive relief, obtaining any necessary governmental and third party approvals and final Exchange acceptance. 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 filing statement to be prepared in connection with the Transaction, any information released or received with respect to the transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.
The Exchange has in no way passed upon the merits of the Transaction and has neither approved nor disapproved the contents of this press release.
Certain information in this press release may contain forward-looking statements. This information is based on current expectations that are subject to significant risks and uncertainties that are difficult to predict. Actual results might differ materially from results suggested in any forward-looking statements. Neither the Corporation nor Galane assumes any obligations to update the forward-looking statements, or to update the reasons why actual results could differ from those reflected in the forward looking-statements unless and until required by securities laws applicable to the Corporation. Additional information identifying risks and uncertainties is contained in filings by the Corporation with the Canadian securities regulators, which filings are available at www.sedar.com.
The Corporation's Common Shares will remain halted until such time as permission to resume trading has been obtained from the Exchange. The Corporation is a reporting issuer in Alberta, British Columbia and Ontario.
NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.