Red Pine to Acquire Remaining Interest in Wawa Gold Project, Announces Financing and Share Consolidation - Seite 2

Quentin Yarie, CEO of Red Pine stated, “Consolidating the ownership of the Wawa Gold Project has been a goal of Red Pine’s since it became involved in the project in 2014. Over the years, Red Pine has worked diligently to consolidate the ownership, first through its acquisition of Augustine Ventures Inc. in 2016, and now with the acquisition of the remaining interest held by Citabar. The Red Pine shareholders can now fully benefit from the results of our ongoing exploration and delineation of both the Surluga and Minto deposits as well as other prospective gold targets.”

Acquisition Transaction Details

Pursuant to the Agreement, Red Pine will acquire all of the outstanding securities of Wawa GP Inc., the general partner of Citabar, from 874253 Ontario Limited (“874”) as well as the limited partnership interest of Citabar from the estate of Bernard Sherman (the “Estate”), the sole limited partner of Citabar (the Estate and 874, the “Vendors”). Upon completion of the acquisition of Citabar, Red Pine will have consolidated 100% of the Wawa Gold Project.

Pursuant to the terms of the Agreement, the Vendors shall receive total consideration of $12,605,396 (the “Purchase Price”) comprised of:

1. a minimum of $8,575,905 in cash (the “Minimum Cash Consideration”) – at Red Pine’s option, the amount of cash paid may be increased to up to 100% of the Purchase Price less the Set-Off Amount (as defined below) less the NSR (the “Optional Cash Consideration”);
2. in the event that the Minimum Cash Consideration and the Optional Cash Consideration, if any, do not fully satisfy the Purchase Price less the Set-Off Amount and the NSR, the Purchase Price less the sum of the Minimum Cash Consideration, Optional Cash Consideration, Set-Off Amount and the NSR shall be satisfied by the issuance of common shares of Red Pine (the “Share Consideration”) at a deemed issue price of $0.0423, such issue price being equal to the 20-Day volume-weighted average price of Red Pine’s common shares as of the date of the Agreement. If only the Minimum Cash Consideration is paid, Red Pine will issue a total of 65,376,123 common shares to the Vendors or their affiliates, subject to a maximum limit on common shareholding of the Vendors and their affiliates at 9.99% of the pro forma outstanding securities of Red Pine on a partially diluted basis. Any portion of the Purchase Price to be satisfied through the issuance of Red Pine common shares that are not able to be issued due to such maximum ownership threshold will instead be satisfied through the payment of cash consideration to the Vendors (“Additional Cash Consideration”);
3. the set-off of $1,104,081 owed by Citabar to Red Pine in connection with certain exploration activities conducted pursuant to the Joint Venture Agreement (the “Set-Off Amount”) to be applied to the Purchase Price; and
4. Red Pine will grant a 2% NSR upon production from the Wawa Gold Project to an affiliate of the Vendors. The NSR is subject to certain buy-back provisions in favour of Red Pine which may be exercised at any time as follows: (i) 50% of the NSR can be bought back for $750,000, and (ii) a further 50% (of the remaining 1.0% NSR) can be bought back for $1 million, such that the remaining NSR would be 0.5%.

The final relative amounts of Optional Cash Consideration and Share Consideration to be provided to the Vendors shall be determined at closing by Red Pine, in its sole discretion. However, as a condition of closing the Vendors and their affiliates shall not hold more than a total of 9.99% of the pro forma outstanding securities of Red Pine on a partially diluted basis, after giving effect to any financing, as discussed below, to be completed in connection with the Transaction.