Red Pine to Acquire Remaining Interest in Wawa Gold Project, Announces Financing and Share Consolidation
NOT FOR DISTRIBUTION TO UNITED STATES NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
TORONTO, Feb. 23, 2021 (GLOBE NEWSWIRE) -- Red Pine Exploration Inc. (TSX-V: RPX) ("Red Pine" or the "Company") is pleased to announce that it has entered into a definitive securities purchase
agreement (the “Agreement”) with the holders of the partnership interests in Citabar Limited Partnership (“Citabar”), which will result in Red Pine consolidating a 100% ownership in the Wawa Gold
Project located near Wawa, Ontario (the “Transaction”). All amounts in this press release are denominated in Canadian dollars.
- Red Pine to consolidate 100% ownership in the Wawa Gold Project, which has historically been subject to fragmented ownership
- Transaction to be completed based on the market-implied read-through value of Citabar’s interest
- Red Pine to conduct a private placement of subscription receipts for gross proceeds of a minimum of $11.2 million and a maximum of approximately $15.0 million to fund the cash consideration for the Transaction and expenses incurred and liabilities assumed in connection with the Transaction and to fund working capital and general corporate purposes (pursuant to the terms of the Transaction)
- Pursuant to the terms of the Transaction, Red Pine will also use best efforts to complete a $5 million flow-through subscription receipt financing to aggressively explore the consolidated property, which hosts numerous historic mines and untested targets, in addition to the potential at depth
- In advance of the closing of the Transaction and the financing the Company will complete a 10:1 share consolidation
- Red Pine will strengthen its Board of Directors with the appointment of Paul Martin as Chair
Red Pine and Citabar are parties to an amended and restated joint venture agreement effective August 7, 2015 (the “Joint Venture Agreement”) in respect of the Wawa Gold Project. Red Pine holds a 63.31% interest and Citabar holds a 36.69% interest in the Wawa Gold Project.
Total aggregate consideration for the Transaction is $12,605,396 in a combination of cash, common shares of Red Pine and the set-off of approximately $1.1 million in amounts owed by Citabar to Red Pine. The purchase price also includes the grant to the Vendors of a 2% net smelter return royalty (“NSR”) on production from the Wawa Gold Project, of which 1.5% of the 2% NSR is subject to a buyback for a total cost of $1.75 million. The Transaction is subject to a minimum of approximately $8.6 million in cash and a maximum ownership by the Vendors (as defined below) and their affiliates of 9.99% of the pro forma outstanding securities of Red Pine on a partially diluted basis. Additional details of the Transaction are provided below.