Under the terms of the Amalgamation Agreement, TCI and Grafton will complete the Transaction by way of a three-cornered amalgamation whereby Subco and Grafton will amalgamate, each common share of Grafton will be exchanged for 0.3443 common shares of the Resulting Issuer (“Resulting Issuer Shares“), on a post-Consolidation basis (as defined below), at a deemed price of $0.44 per Resulting Issuer Share, and each convertible, exchangeable or exercisable security of Grafton will be exchanged for a convertible, exchangeable or exercisable security of the Resulting Issuer on substantially the same economic terms and conditions as the original convertible, exchangeable or exercisable security of Grafton (or adjusted in accordance with the terms of such securities to reflect the completion of the Transaction).
The Transaction remains subject to certain customary conditions, including but not limited to, the approval of the TSX Venture Exchange (the “TSXV“), the completion of the non-brokered private placement and the brokered private placement led by Eight Capital (for aggregate minimum gross proceeds of $7.0 million), the approval of the Transaction by the shareholders of Grafton, and the consolidation of the common shares of TCI on a 40-for-1 basis (the “Consolidation“). TCI and Grafton intend to apply to have the Resulting Issuer Shares listed on the TSXV and for the Resulting Issuer to satisfy the criteria for an oil and gas exploration or reserves company. Completion of the Transaction is expected to occur in April or May of 2024.
The brokered private placement of subscription receipts of Grafton led by Eight Capital is expected to close on or about March 15, 2024.
Please see the press release dated January 11, 2024 for more information. Additional details regarding the Transaction will be made available in a filing statement that will be filed with the TSXV and be available on TCI’s profile on SEDAR+ at www.sedarplus.com.
Sponsorship of a “New Listing” made in the context of a “Reverse Takeover” is required by the TSXV in accordance with Policy 2.2 of the TSXV Corporate Finance Manual, unless exempt in accordance with applicable TSXV policies or unless the TSXV provides a waiver. TCI intends to apply for an exemption or waiver from sponsorship requirements; however, there is no assurance that TCI will obtain this exemption.
Westgate will be focused on the emerging Mannville Stack fairway located in East-Central Alberta and West Central Saskatchewan, where known accumulations of medium and heavy oil are being “unlocked” via the application of modern drilling techniques utilizing multi-lateral horizontal drilling. The application of these modernized multi-lateral drilling techniques have yielded some of the strongest oil well economics throughout Western Canada.
Westgate’s proposed management and board have extensive experience leading and building successful energy companies, starting with identifying high-quality assets. Common amongst the collective successes of the leadership group is targeting robust, large oil in place assets and achieving growth through successful drilling as well as strategic merger and acquisition opportunities. This proven blueprint of delivering shareholder value is foundational to the formation of Westgate. Westgate will be uniquely positioned as one of a select few publicly listed, pure-play high-growth junior oil companies, focused on the Mannville Stack fairway.
Completion of the Transaction is subject to a number of conditions, including but not limited to, TSXV acceptance and if applicable, disinterested shareholder approval. Where applicable, the Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Transaction will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the filing statement to be prepared in connection with the Transaction, any information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of TCI should be considered highly speculative.
The TSXV has in no way passed upon the merits of the Transaction and has neither approved nor disapproved the contents of this news release.
In this press release, all references to “$” are to Canadian dollars.
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