Bluerock Ventures (BCR.H-V) June 27, '14 has entered into a letter agreement effective June 26, 2014, with Rush Valley Gold Corp. (RVG), which will result in a reverse takeover of Bluerock by RVG by way of a three-cornered amalgamation. The acquisition, if completed, will constitute the company's qualifying transaction (as defined in exchange Policy 2.4). RVG is an arm's-length party, and, as such, the acquisition will not be subject to shareholder approval.
The letter agreement will be followed by the negotiation of a definitive agreement setting forth the detailed terms of the acquisition and containing the terms and conditions set out in the letter agreement and such other terms and conditions as are customary for transactions of the nature and magnitude contemplated in the letter agreement.
Proposed acquisition
Pursuant to the terms of the letter agreement, it is currently contemplated that the acquisition will be effected by way of a three-cornered amalgamation under a plan of arrangement, whereby a new wholly owned subsidiary of the company, to be incorporated under the laws of British Columbia (Bluerock Subco), will amalgamate with RVG. Under the amalgamation, the company will acquire all of the then-outstanding 26.83 million common shares of RVG, which will be exchanged for common shares of the company together with the other common shares exchanged on a one-for-one basis under the private placement (described below), with all of the issued and outstanding shares of RVG being amalgamated with the Bluerock Subco to form an amalgamated company (Amalco), which will hold rights as a lessee, through RVG's wholly owned U.S. subsidiary, Rush Valley Gold (U.S.) Corp., to approximately 5,700 acres in the West Mercur (Camp Floyd) mining district of Tooele county, Utah, United States.
As a result of the acquisition, Amalco will become a wholly owned subsidiary of the company, which will have indirectly acquired the property rights. Upon completion of the acquisition, the company expects to change its name to Rush Valley Gold Corp. or such other name acceptable to RVG and the applicable regulatory authorities.
The common shares issued to investors under the private placement will be exchanged for common shares of the resulting issuer and therefore will not be subject to a four-month hold.
Proposed private placement
The parties intend that RVG will, prior to the acquisition and subject to exchange approval, complete a private placement of units of RVG for minimum gross total proceeds of up to $2-million and maximum gross proceeds of $3-million, $500,000 of which will be conducted on a brokered basis. The price per unit will be determined by RVG and the lead agent, and is anticipated to be not be less than 10 cents per unit. Each unit will comprise one common share and one-half of one share purchase warrant. Each warrant will be exercisable for a period of 36 months from the date of issuance at a price of 20 cents per share. The parties are currently involved in discussions with a prospective agent with the intention of settling the terms of an engagement letter in connection with the brokered portion of the private placement. The parties anticipate that the agent will be paid customary compensation for its services.
The proceeds of the private placement will be used to finance the business plan of theresulting issuer on closing of the acquisition, and for general working capital purposes.
Following completion of the private placement and the acquisition, the resulting issuer is expected to have a total of 40 million common shares issued and outstanding assuming completion of a minimum private placement, and 60 million common shares issued and outstanding assuming completion of maximum private placement.
Conditions to closing the acquisition
The closing of the acquisition will be subject to several conditions, including, but not limited to, the following:
- The execution of the definitive agreement;
- The receipt of all regulatory, corporate and third party approvals, including the approval of the exchange, and compliance with all applicable regulatory requirements and conditions necessary to complete the acquisition;
- The completion of the private placement at a minimum offering price of 10 cents;
- The completion of the name change;
- The maintenance of the company's listing on the exchange;
- The confirmation of the representations and warranties of each party to the definitive agreement as set out in such agreement;
- The absence of any material adverse effect on the financial and operational condition of the assets of each of the parties to the definitive agreement;
- The delivery of standard completion documentation, including, but not limited to, legal opinions, officers' certificates, and certificates of good standing or compliance;
- Other mutual conditions precedent customary for a transaction such as the acquisition.
It was also agreed that upon closing of the acquisition, the seed shareholders of the company will transfer and sell a total of 1.17 million common shares of the company, which are subject to escrow pursuant to the policies of the exchange, to the designated principals of RVG. Following the sale and transfer of the escrowed shares, those shares will remain subject to escrow pursuant to the policies of the exchange.
Directors, officers and other insiders
On completion of the acquisition, it is anticipated that the board of the resulting issuer will consist of a minimum of four members, and that the directors, senior officers and insiders of the resulting issuer will be:
Glenn Laing, chief executive officer and director
Mr. Laing has held the positions of president, CEO, chief operating officer and a director of Ecuador Gold and Copper Corp. since July, 2012, and has held those same positions with Phoenix Gold Resources Corp. since April 23, 2014. In addition, he was president, CEO, COO and a director of GB Minerals Ltd. (formerly Plains Creek Phosphate Corp.) from February, 2011, to February, 2013. Mr. Laing has over 31 years of experience in the mining and financial industries. He holds a bachelor of science, engineering (mining geology), from the University of Witwatersrand, Johannesburg, and a master of science (mining engineering) from the Colorado School of Mines, United States. Mr. Laing has held the positions of managing director, president and CEO of numerous publicly listed natural resource companies for the last 27 years. Since 1999, Mr. Laing has been president of Silverbridge Capital Inc., a private corporate finance advisory firm specializing in the mining, oil and gas, and alternative energy sectors.
David Mako, president, COO and director
Mr. Mako has been the principal of Catena Resources, a private mining exploration and consulting company, since June, 2000. He is also the sole owner of Ashley Woods LLC, which holds property interests in the West Mercur project area. Previously, Mr. Mako was engaged in educational fields, but from February, 1986, to June, 2000, he was an exploration geologist in Nevada and Utah for Barrick Gold Corp., before leaving his position as vice-president, U.S. exploration, of Barrick. Together with his 14 years at Barrick, he has over 19 years of professional geological experience, before beginning his consulting and educational endeavours. Mr. Mako holds a master of science in geology from the University of Wisconsin and a bachelor of science in geology from Kent State University.
Paul Jones, director
Mr. Jones has been a director of Ecuador Gold and Copper Corp. since February, 2013, has been a director of Phoenix Gold Resources Corp. since April 23, 2014, was a director of GB Minerals Ltd. (formerly Plains Creek Phosphate Corp.) from February, 2011, to June, 2013, and has served in numerous other engineering, operations, senior management and consulting positions, as well as a director of public and private companies active in the Americas, Africa and Asia, during his career in the mining industry, which spans over 50 years. Mr. Jones is a "legion of honour" member of the Society of Mining Engineers, where he has been a member since 1958, and is a member and officer of the Mining and Metallurgical Society of America. In February, 2004, Mr. Jones received the William Lawrence Saunders gold medal from the American Institute of Mining, Metallurgical and Petroleum Engineers in recognition of his service to the public and the mining industry. He is also chairman of the board of the National Mining Hall of Fame & Museum in the United States.
Rosalie Moore, director
Ms. Moore is currently a consulting geologist/analyst and is a director of Dolly Varden Silver Corp. Previously, she was a partner and analyst at Geologic Resource Partners LLC (2006 to 2011) and held executive and/or board roles with several companies, including Corazon Gold Corp., Kiska Metals Corp. (formerly Geoinformatics Exploration Inc.), Wealth Minerals Ltd., Bear Creek Mining Corp. and Pan American Silver Corp. Ms. Moore worked as a mining analyst with Yorkton Securities (1996 to 1997), served as the manager of geology for Diamond Fields Resources through the development and buyout of the Voisey's Bay nickel-cobalt-copper discovery in Labrador (1994 to 1996), and served as a senior geologist managing gold exploration on the Ivanhoe property on the Carlin trend in Nevada with Touchstone Resources (1987 to 1993). Ms. Moore holds a master of science and a bachelor of science in geology from Kent State University.
Sean Choi, chief financial officer and corporate secretary
Mr. Choi is the CFO and corporate secretary of Ecuador Gold and Copper Corp., has been the controller and a finance manager for that company since January, 2011, and has held those same positions with Phoenix Gold Resources Corp. since April 23, 2014. Mr. Choi is a chartered professional accountant and a chartered accountant and has three years of public accounting experience, and has five years of accounting and financial reporting experience in the mining industry in Canada. Mr. Choi holds a bachelor of administrative and commercial studies from the University of Western Ontario.
Sponsorship
Sponsorship of a qualifying transaction of a capital pool company is required by the exchange unless an exemption from the sponsorship requirement is available. The company will apply for an exemption from the sponsorship requirement. There is no assurance that the company would be able to obtain such an exemption.
General
On closing of the qualifying transaction, the resulting issuer will be listed as a Tier 2 mining issuer on the exchange. In accordance with exchange policies, the company's common shares have been halted from trading and will remain so until the documentation required by the exchange for the qualifying transaction can be provided to the exchange. The company's common shares may remain halted until completion of the qualifying transaction. The completion of the qualifying transaction is subject to the approval of the exchange. |
