(TheNewswire)
Vancouver, British Columbia - TheNewswire - July 12, 2023 - Margaret Lake Diamonds Inc. (TSXV:DIA) (OTC:DDIAF) (FSE:M85A)("DIA" or the "Company") ispleased to announce that it has signed a non-binding letter of intentdated June 26 th , 2023 (the " LOI ") withEmerging Goldfields Resources Ltd. (" Emerging "), anarm’s length private company incorporated under the Business Corporations Act (Alberta) (the " ABCA "), which sets forth the generalterms and conditions of a proposed reverse takeover transaction (the" ProposedTransaction "). In addition, and inconnection with the Proposed Transaction, the parties have agreed touse their "commercially reasonable efforts" to causeEmerging to complete a private placement of units of Emerging(" Units ") (the " Proposed Private Placement ").
The Proposed Transaction will, pursuant to the policiesof the Exchange, constitute a 'reverse takeover' of the Company. Thecorporation resulting from the Proposed Transaction (the" ResultingIssuer ") will carry on the business ofEmerging as currently constituted and be listed for trading on theExchange as a Tier 2 mining issuer and the Frankfurt Stock Exchangeunder the name "Emerging Goldfields Resources Ltd.", or suchother name as the parties may agree.
Pursuant to the terms of the LOI, it is intended thatDIA and Emerging will enter into a business combination by way of ashare exchange, merger, amalgamation, arrangement, or other similarform of transaction. The final structure of the business combinationis subject to receipt by the parties of tax, corporate, and securitieslaw advice and will be agreed to and superseded by a definitiveagreement (the " Definitive Agreement ") between DIA andEmerging with such agreement to include representations, warranties,conditions and covenants typical for a transaction of thisnature.
Overview of Emerging
Emerging is a private corporation incorporated underthe ABCA carrying on business as a mineralexploration company focused on the acquisition, exploration, anddevelopment of mineral properties in Armenia. Emerging, through itsUK wholly owned subsidiary, Goldfield Holdings Ltd., holds a 80%working interest in Armenian companies Vayk Gold LLC, Geghi Gold LLCand Copper Plus LLC.
Emerging has an 80% interest in a portfolio of gold-silver deposits having a combined43-101-compliant M&I attributable Au resources of 2.37 M ounces ofAu and 15.82 million ounces Ag consisting of three polymetallicgold-silver deposits in Armenia, all with significant resource growthpotential.
* See Endnote on resource estimateand reference to technical reports
Capitalization of DIA
Each issued and outstandingcommon share the capital of DIA (the " Margaret Common Shares ") at the time of closing, will be exchanged into onecommon share of the resulting issuer (each a " Newco Common Share ") on a 1:1 basis, such that all of the issued andoutstanding Margaret Common Shares will be exchanged for 4,741,230 Newco Common Shares and theoutstanding warrants to purchase Margaret Common Shares (the" Margaret Warrants ") shall each be exchanged for one replacementwarrant (" Newco Warrant "), exercisable on a 1:1 basis so that all of theissued and outstanding Margaret Shares will be exchanged for 4,741,230 Newco CommonShares, the outstanding Margaret Warrants will be exchanged for 4,157,313 Newco Warrants.
Capitalization of Emerging
Each issued and outstandingcommon shares in the capital of Emerging (each an " Emerging Share ")at the time of closing will be exchanged into one Newco Common Shareon a 1:1 basis and the outstanding warrants to purchase EmergingShares (the " EmergingWarrants ") shall eachbe exchanged for one Newco Warrant , exercisable on a 1:1 basis so that all of the issued andoutstanding Emerging Shares will be exchanged for 59,800,000 Newco Common Shares , eachoutstanding Emerging Warrant will be exchangedfor 600,000 NewcoWarrants.
Additionally, each issued andoutstanding common shareand warrant issued pursuant to the Proposed Private Placement shall be exchanged intoone Newco Common Share and one Newco Warrant on a 1:1basis .
Terms of the ProposedTransaction
The LOI serves as an agreement in principle concerninga business combination between DIA and Emerging that will result in areverse takeover of DIA. The Proposed Transaction will take the formof a business combination between DIA and Emerging whereby the DIASecurities and Emerging Securities will be exchanged on a 1:1 basisfor an equivalent security of the Resulting Issuer (other thanEmerging Shares or Margaret Common Shares held by shareholders whoexercise their dissent rights, if applicable.
Pursuant to the rules of the TSXV, a halt in trading isexpected to continue until the completion of the Proposed Transaction.Sponsorship pursuant to rules of the TSXV may be required and Margaret may apply for awaiver. Margaret has not yet engaged a sponsor.
The completion of the Proposed Transaction is alsosubject to several other conditions set out in the LOI, includingapproval by the directors of the Company and Emerging, satisfactorycompletion of due diligence, applicable regulatory approvals, andapplicable shareholder approvals. A more comprehensive news releasewill be issued by DIA disclosing details of the Proposed Transaction,including financial information respecting Emerging, the names andbackgrounds of all persons who will constitute insiders of theResulting Issuer, and information respecting sponsorship, once anagreement has been finalized and certain conditions have been met,including:
i. satisfactory completion of duediligence; and
ii. execution of the DefinitiveAgreement.
The Exchange may require some or all of the NewcoCommon Shares issued to the holders of the Emerging Shares to be heldin escrow pursuant to the requirements of the Exchange. The Proposed Transaction is subject to, satisfactorycompletion of due diligence, the execution of a Definitive Agreement,among other details, final approval of the Exchange and standardclosing conditions.
Proposed Private Placement
Pursuant to the LOI, the parties have agreed to usetheir "commercially reasonable efforts" to cause Emerging tocomplete the Proposed Private Placement at a price per Unit of $0.30to raise gross proceeds of up to CAD $1,500,000 or such other amountas the Parties may agree to. The Parties may engage an agent orsyndicate of agents (the " Agents ") for the Proposed PrivatePlacement. A commission may be paid to the Agents or to individualregistrants (including selling group members). The Agents may also begranted broker warrants of the number of Private Placement CommonShares sold by the Agents (including selling group members) in theProposed Private Placement, with each broker warrant entitling theholder thereof to purchase one common share of the Resulting Issuer ata price equal to the price paid per Private Placement Common Share.Further particulars of the Proposed Private Placement will bedisseminated in a news release to be issued upon finalization of itsterms.
Each Unit is expected to have a subscription price ofCAD$0.30 per Unit and is expected to be comprised of one (1) commonshare in the capital of Emerging (an "Emerging Share"), andone Common Share purchase warrant of Emerging (a "EmergingWarrant"). Each Emerging Warrant entitles the holder thereof topurchase one (1) Emerging Share (a "Warrant Share", togetherwith the Emerging Shares, the Emerging Warrants, and the BonusEmerging Shares (defined below), the "Securities") at aprice of CAD$0.60 per Emerging Share expiring three (3) years from thecompletion of a going public transaction. In the event that Emerginghas not completed a going public transaction within four (4) monthsfollowing the closing date (the "Bonus Deadline"), thesubscriber shall have the right to be issued by Emerging, and Emergingshall issue to the subscriber, for no additional consideration fromthe subscriber, such number of additional Emerging Shares as is equalto 10% of the number of Emerging Shares comprising the Units purchasedby and issued to the subscriber pursuant to the subscriberssubscription agreement at the closing time (such additional EmergingShares, the " BonusShares ")
On behalf of the Board
Margaret Lake Diamonds Inc.
"Yari Nieken"
President, Chief Executive Officer, Chairman
Tel: 604.328.0425 | Email: ynieken@gmail.com
Disclaimer forForward-Looking Information
Statements in this press releaseregarding DIA's business which are not historical facts are"forward-looking statements" that involve risks anduncertainties, such as terms and completion of the proposedtransaction. Since forward-looking statements address future eventsand conditions, by their very nature, they involve inherent risks anduncertainties. Actual results in each case could differ materiallyfrom those currently anticipated in such statements.
Completion of the ProposedTransaction is subject to a number of conditions, including but notlimited to, execution of a binding Definitive Agreement relating tothe Proposed Transaction, Exchange acceptance and where applicable,shareholder and regulatory approvals. Where applicable, the ProposedTransaction cannot close until the required shareholder approval isobtained. There can be no assurance that the Proposed Transaction willbe completed as proposed or at all.
Investors are cautioned that, exceptas disclosed in the management information circular or filingstatement to be prepared in connection with the Proposed Transaction,any information released or received with respect to the ProposedTransaction may not be accurate or complete and should not be reliedupon. Trading in the securities of a DIA should be considered highlyspeculative.
The TSX Venture Exchange Inc. has inno way passed upon the merits of the Proposed Transaction and hasneither approved nor disapproved the contents of this pressrelease.
Qualified Person Statement
The technical information in thisnews release related to the Vayk Gold LLC, Geghi Gold LLC and CopperPlus LLC assets is based on, and fairly represents, information in the43-101 report. compiled by Mr. Ricardo A. Valls, M. Sc., P. Geo, anindepdent and qualified person as defined by NI 43-101. Mr. Vallsconfirms that he has reviewed this press release and that thescientific and technical information concerning the deposit isconsistent with the 43-101 report.
Trading in the listed securities ofDIA will remain halted pursuant to Policy 5.2 Section 2.5 of theExchange.
MineralResource
1. Azatek
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Based on technical report titled“NI 43-101 Technical Report, Azatek Deposit, Armenia” with aneffective date of January 15, 2023, Ricardo A. Valls, M. Sc., P.Geo.,Valls Geoconsultant, Toronto, Ontario
2. Voskedzor
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Based on technical report titled“Updated Technical Report, Geghi Ore Belt, Kapan, Armenia” with aneffective date of January 15, 2023, Ricardo A. Valls, M. Sc., P.Geo.,Valls Geoconsultant, Toronto, Ontario
3. Archut
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Based on technical report titled“Update of the Technical Report of the Lernajur Project and theArchut Target, Lori, Armenia” with an effective date of January 15,2023, Ricardo A. Valls, M. Sc., P.Geo., Valls Geoconsultant, Toronto,Ontario
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Mineral resources are not mineralreserves and do not have demonstrated economic viability. There is nocertainty that all or any part of the mineral resources will beconverted into mineral reserves. The estimate of mineral resources maybe materially affected by environmental permitting, legal, title,taxation, sociopolitical, marketing, or other relevantissues.
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The above global resource estimatetable is provided for informational purposes only and is not intendedto represent the viability of any project on a standalone or globalbasis. The exploration and development of each project, projectgeology and the assumptions and other factors underlying eachestimate, are not uniform and will vary from project to project.Please refer to the technical report for each respective project, asreferenced herein, for detailed information respecting each individualproject.
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All quantities are rounded to theappropriate number of significant figures; consequently, sums may notadd up due to rounding.
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