Loncor Resources Inc.
Loncor Resources Inc.
- ISIN: CA54179W1014
- Land: .
Nachricht vom 17.05.2018 | 00:01
Loncor Provides Update on Resolute Mining Transactions
DGAP-News: Loncor Resources Inc. / Key word(s): Miscellaneous
Toronto, Ontario--(Newsfile Corp. - May 16, 2018) - Loncor Resources Inc. ('Loncor' or the 'Company') (TSX: LN) announces that the transactions with Resolute Mining Limited ('Resolute') pursuant to the binding term sheet (the 'Term Sheet') as previously announced by Loncor on April 3, 2018 (the 'Transactions'), are progressing through the due diligence phase and, assuming Resolute is satisfied with its due diligence review, the Company expects that the definitive agreements for the Transactions will be executed shortly following the special meeting of shareholders of the Company to be held on May 22, 2018 (the 'Special Meeting'). The Special Meeting will be held at the offices of Irwin Lowy LLP, 365 Bay Street, Suite 400, Toronto, Ontario, Canada.
Shareholders of the Company are encouraged to review the management information circular of the Company dated April 20, 2018 (the 'Circular'), which provides a detailed discussion of the Transactions. A copy of the Circular and related documents have been mailed to shareholders of the Company, and copies of the Circular and related documents can be obtained from SEDAR (www.sedar.com) or by contacting the Company at the contact information below. The board of directors of the Company has unanimously recommended that Loncor shareholders vote FOR the resolution approving the Transactions. The proxy voting deadline is 4:00 p.m. (Toronto time) on Friday, May 18, 2018.
As part of the series of Transactions contemplated by the Term Sheet, (a) the Company will issue 26,000,000 common shares to Resolute at a price of Cdn$0.10 per share for gross proceeds of Cdn$2,600,000 (the 'Resolute Placement'), (b) Resolute will purchase 25,000,000 common shares of Loncor held by Mr. Arnold Kondrat ('Kondrat') (who is Chief Executive Officer, President and a director of Loncor) in exchange for the issuance by Resolute to Kondrat of Cdn$2,500,000 worth of Resolute ordinary shares (capped at a maximum of 3,000,000 Resolute shares) (the 'Share Exchange'), and (c) Loncor will acquire a 100% interest in two DRC companies (the 'DRC Target Companies') holding exploration permits covering ground in the Ngayu gold belt, thereby increasing Loncor's holdings in the Ngayu gold belt from 960 square kilometres to 1,696 square kilometres. Further, the Company also intends to complete a non-brokered private placement of 1,700,000 common shares of the Company at a price of Cdn$0.10 per share for gross proceeds of Cdn$170,000 (the 'Additional Placement'). Kondrat will purchase 700,000 shares of this Additional Placement which was agreed to by the parties to provide additional cash for the Company.
The proceeds from the Resolute Placement and the Additional Placement are planned to be used by the Company to fund the exploration and development of gold exploration properties of Loncor in the Democratic Republic of the Congo (the 'DRC') and for general corporate purposes. Pursuant to the terms of the Term Sheet, Resolute has agreed to collaborate with Loncor in an effort to identify and develop ore bodies in the DRC and to maximize shareholder value for Loncor.
The Term Sheet contemplates the entering into of the following definitive agreements for the Transactions:
All Transactions are subject to completion of satisfactory due diligence, fulfilment of agreed conditions precedent, TSX and shareholder approvals and execution of the definitive agreements. In terms of the review and approval process adopted by the board of directors of the Company (the 'Board') for the Transactions, with three of the four members of the Board being independent directors (Kondrat is the fourth director), the formation of a special committee was not viewed by the independent directors as being necessary. The three independent directors of the Company reviewed the draft Term Sheet on March 31, 2018, discussed the Transactions at a Board meeting held on April 2, 2018, unanimously determined that the Transactions were in the best interests of the Company and its shareholders and, by resolutions dated April 3, 2018, unanimously approved the execution of the Term Sheet, with Kondrat abstaining from such approval as a result of his interest in the Transactions as set out above. The Term Sheet was executed on April 3, 2018. As an additional step in the review and approval process, the execution of the definitive agreements is subject to approval by the Company's three independent directors.
Upon closing of the Transactions, an advisory fee of Cdn$138,500 will be paid to Arlington Group Asset Management Limited of London, UK.
Kondrat currently holds 74,300,818 common shares of Loncor representing 46.82% of the currently outstanding common shares of Loncor on a non-diluted basis. Following the completion of the Transactions, (a) Kondrat will hold 50,000,818 common shares of Loncor representing 26.68% of the outstanding common shares of Loncor on a non-diluted basis, and (b) Resolute will hold 51,000,000 common shares of Loncor representing 27.22% of the outstanding common shares of Loncor on a non-diluted basis.
Kondrat's participation in the Additional Placement constitutes a 'related party transaction' within the meaning of Multilateral Instrument 61-101 ('MI 61-101'), as Kondrat (who is Chief Executive Officer, President, a director and the largest shareholder of the Company) is an insider of the Company. MI 61-101 requires a formal valuation and minority shareholder approval unless an exemption is available. The Company is relying on the exemption from the requirement to obtain a formal valuation for Kondrat's participation in the Additional Placement set forth in Section 5.5(a) of MI 61-101 and on the exemption from the requirement to obtain minority shareholder approval for Kondrat's participation in the Additional Placement set forth in Section 5.7(1)(a) of MI 61-101. These exemptions are available as the fair market value of the consideration with respect to Kondrat's participation in the Additional Placement does not exceed 25% of the Company's market capitalization.
About Loncor Resources Inc.
Loncor has been working with one of Africa's most successful gold mining companies, Randgold Resources (Nasdaq: GOLD), in its Ngayu Joint Venture whereby Randgold earns 65% to manage and sole fund an exploration program including delivery of a pre-feasibility study on any gold discovery that would meet Randgold's investment criteria (reference is made to Loncor's May 18, 2017 press release).
Additional information with respect to the Company's projects can be found on the Company's website at www.loncor.com.
Cautionary Note Concerning Forward-Looking Information
For further information, please visit our website at www.loncor.com, or contact: Arnold Kondrat, President & CEO, Toronto, Ontario, Tel: + 1 (416) 361 2510.
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|Company:||Loncor Resources Inc.|
|End of News||DGAP News Service|