ELMGF - Element79 Announces Proposed Spin Out and Merger
(TheNewswire)
VANCOUVER, BC / T heNewswire / January 13, 2025 – Element79 GoldCorp. (CSE: ELEM) (OTC: ELMGF) (FSE: 7YS) ("Element79", orthe "Company”) is excited to announcethat, in connection with its proposed spin out transaction, it hasentered an arrangement agreement dated January 10, 2025 (the" ArrangementAgreement "), with its majority ownedsubsidiary, Synergy Metals Corp. (" Synergy "), andthat it has also entered into a merger agreement dated January 10,2025 (the " MergerAgreement "), with Synergy, Synergy’swholly owned subsidiary, 1515041 B.C. Ltd. (" Synergy SubCo "), and 1425957 B.C. Ltd.(" 142 "), as further described below.
Arrangement
On July 17, 2023, the Company transferred all rightsand data related to the " Dale Property ", being 90 unpatentedmining claims located approximately 100 km southwest of Timmins,Ontario, to its newly incorporated subsidiary, Synergy. In exchangefor this transfer, the Company was issued 2,000,000 Class “A”common voting shares in the capital of Synergy (" Synergy Shares ").
In anticipation of the reverse takeover of Synergy by142 under the Merger Agreement, described below, the ArrangementAgreement has been entered by the Company, whereby 1,000,000 of the 2,000,000 Synergy Shares held by theCompany will be distributed to the shareholders of the Company (the" CompanyShareholders ") on a pro-rata basis (the" Spin-OutArrangement "). In consideration foradministrative support provided by the Company in connection with thearrangement transaction and Synergy's proposed subsequent applicationto list on the Canadian Securities Exchange and pursuant to theArrangement Agreement, Synergy will issue an additional 10,000 SynergyShares to the Company, which will also be distributed to the CompanyShareholders as part of the Spin-Out Arrangement. The Spin-OutArrangement will be a court ordered arrangement under the Business Corporations Act (British Columbia), and will be subject to approval by theCompany Shareholders, as well as the British Columbia Supreme Court.It is anticipated that the Company will publish and distribute aninformation circular in respect of the meeting of the CompanyShareholders to be held to vote on the Spin-Out Arrangement.
The Company currently holds approximately 60.24% of theSynergy Shares, excluding the 10,000 Synergy Shares to be issued tothe Company under the Arrangement Agreement, and following thecompletion of the proposed Spin-Out Arrangement the Company isanticipated to hold approximately 30.03% of the Synergy Shares, whilethe Company Shareholders will hold approximately 30.33% of the SynergyShares.
Merger
Subsequent to the Spin-Out Arrangement, Synergyproposes to acquire all of the issued and outstanding common shares inthe capital of 142 (" 142Shares ") in exchange for an equivalentnumber of Synergy Shares by way of a three cornered amalgamationwhereby Synergy SubCo and 142 will amalgamate under the provisions ofthe Business Corporations Act (British Columbia) (the " Amalgamation ") to continue as one corporationpursuant to the terms of the Merger Agreement. As consideration forthe 142 Shares, shareholders of the 142 Shares (" 142 Shareholders ") will receive, pursuant to the Merger Agreement, oneSynergy Share for each 142 Share held.
Following completion of the Amalgamation under theMerger Agreement, the issued and outstanding Synergy Shares will beheld (i) approximately 86.35% by the former 142 Shareholders(excluding participants in the Concurrent Financing (defined herein)),(ii) approximately 4.02% by the Company Shareholders, (iii)approximately 3.98% by the Company (iv) approximately 5.25% by otherexisting holders of Synergy Shares, and (v) 0.40% by participants inthe Concurrent Financing. As such, the Amalgamation will constitute areverse take over of Synergy by 142. Holders of warrants to purchase142 Shares (" 142Warrants ") will also receive onereplacement warrant to purchase a Synergy Share for each 142 Warrantheld. There are currently 21,000,000 142 Warrants outstanding.
The Amalgamation will be subject to approval by the 142Shareholders, as well as Synergy (being the sole shareholder ofSynergy SubCo). The Amalgamation's closing willalso be subject to 142's completion of a private placement of 100,000142 Shares at a price of $0.10 per 142 Share for gross proceeds of aminimum of $10,000, or an amount otherwise agreed by Synergy and 142(the " ConcurrentFinancing "). Upon completion of theAmalgamation, Synergy intends to make an application that the SynergyShares be listed and posted for trading on the Canadian SecuritiesExchange.
The Company is expected to hold 1,000,000 SynergyShares after the Amalgamation, all of which will be subject to escrowon the same terms of as insiders of Synergy after the Amalgamation.
Together, the Spin-Out Arrangement and the Amalgamationare intended to effect a reorganization of the Company's currentbusiness into two separate corporate entities. The Company willmaintain its business as a gold exploration company with the objective of exploring and ultimately developinggold projects in Peru and the USA, while Synergy will be anexploration Company focused on the Dale Property.
About Element79 Gold Corp.
Element79 Gold is a mining company actively exploringand developing its portfolio of assets, including the high-grade,past-producing Lucero project in Arequipa, Peru, and properties alongthe Battle Mountain Trend in Nevada. The Company also holds an optionto acquire the Dale Property in Ontario and is advancing the plan ofarrangement spin-out process for its majority owned subsidiary,Synergy Metals Corp.
For further details on this announcement and theCompany’s projects, please visit www.element79.gold
Contact Information
For corporatematters, please contact:
James C. Tworek, Chief Executive Officer
E-mail: jt@element79.gold
For investorrelations inquiries, please contact:
Investor Relations Department
Phone: +1.403.850.8050
E-mail: investors@element79.gold
Cautionary Note Regarding ForwardLooking Statements
This press contains "forward ? looking information" and"forward-looking statements" under applicable securitieslaws (collectively, "forward ? looking statements"). These statements relate to futureevents or the Company's future performance, business prospects oropportunities that are based on forecasts of future results, estimatesof amounts not yet determinable and assumptions of management madeconsidering management's experience and perception of historicaltrends, current conditions and expected future developments.Forward-looking statements include, but are not limited to, statementswith respect to: the completion of the Spin-Out Arrangement, thecompletion of the Amalgamation, the completion of the ConcurrentFinancing, the Company's business strategy; future planning processes;exploration activities; the timing and result of explorationactivities; capital projects and exploration activities and thepossible results thereof; acquisition opportunities; and the impact ofacquisitions, if any, on the Company. Assumptions may prove to beincorrect and actual results may differ materially from thoseanticipated. Consequently, forward-looking statements cannot beguaranteed. As such, investors are cautioned not to place unduereliance upon forward-looking statements as there can be no assurancethat the plans, assumptions or expectations upon which they are placedwill occur. All statements other than statements of historical factmay be forward ? lookingstatements. Any statements that express or involve discussions withrespect to predictions, expectations, beliefs, plans, projections,objectives or future events or performance (often, but not always,using words or phrases such as "seek","anticipate", "plan", "continue","estimate", "expect", "may","will", "project", "predict","forecast", "potential", "target","intend", "could", "might","should", "believe" and similar expressions) arenot statements of historical fact and may be "forward ? lookingstatements". \
Neither the Canadian SecuritiesExchange nor the Market Regulator (as that term is defined in thepolicies of the Canadian Securities Exchange) accepts responsibilityfor the adequacy or accuracy of this release.
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