Canadian mineral exploration company Miata Metals has signed a non-binding letter of intent (LOI) to acquire 100% of the issued and outstanding shares of domestic peer 79North.
Under the agreement, Miata proposed to issue nine million common shares, constituting around a 22% stake, to 79North shareholders.
Post-acquisition, 79North will operate as a wholly owned subsidiary of Miata.
Miata will also extend a $200,000 (C$273,818) secured bridge loan to 79North to facilitate the settlement of its liabilities and transaction costs before the closing.
This loan will be repayable upon the completion of a private placement.
In addition, Miata has committed to issuing one million shares to an arm’s length finder upon closing the acquisition. These shares will be subject to a four-month and one-day resale restriction under securities legislation.
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The acquisition’s finalisation is contingent upon due diligence, definitive agreement execution, 79North shareholder and stock exchange approvals, and other typical closing conditions for such transactions.
Concurrently with the acquisition, Miata plans to conduct a private placement of up to five million units at $0.30 each, aiming to raise up to $1.5m.
Each unit will comprise one Miata share and a half warrant, with each full warrant allowing the purchase of an additional Miata share at $0.50 for 24 months post-issue.
Should Miata’s share price close above $0.50 for more than ten consecutive days, the company reserves the right to accelerate the warrants.
The proceeds from the private placement are earmarked for the acquisition and bridge loan closing costs, initial exploration activities in Suriname, development of the Cabin Lake Property and general corporate requirements.
Finder fees may be paid in relation to the private placement, which is subject to Canadian Securities Exchange approval. All securities issued will be subject to a four-month and one-day hold period under Canadian securities laws.
