(MENAFN- Newsfile Corp)
Calgary, Alberta--(Newsfile Corp. - October 4, 2024) - Legacy Gold Mines Ltd. (TSXV: LEGY) (formerly Prestwick Capital Corporation Limited) (the " Company ") is pleased to announce that is has closed its previously announced "Qualifying Transaction" (the " Transaction ") effective October 3, 2024, with the result that the Company is now a Tier 2 mining issuer under the policies of the TSX Venture Exchange (the " Exchange "), holding an option (the " Option ") to acquire a 100% undivided interest in and to the mineral claims comprising the Baner gold project located in Idaho County, Idaho, USA (the " Baner Gold Project ").
Change of Name and Stock Symbol, Resumption of Trading
Trading in the common shares of the Company is expected to begin on the Exchange under the Company's new name "Legacy Gold Mines Ltd." and new stock symbol "LEGY", on Tuesday, October 8, 2024.
Qualifying Transaction
In closing the Transaction, the Company acquired the Option and paid or issued (as applicable) to Champion Electric Metals Inc. (" Champion "), (a) $75,000, (b) 1.1 million common shares of the Company (" Common Shares ") issued at a deemed price of $0.235 per share, and (iii) warrants to purchase up to 200,000 Common Shares at $0.30 per share for two (2) years from the date of issuance.
The Company can exercise the Option and keep it in good standing by making additional cash payments and issuing securities to Champion, as follows:
Paying or issuing (as applicable) to Champion within 18 months from the completion of the Transaction ("
Payment #1 Date "):
$350,000;
200,000 Common Shares; and
warrants to purchase up to 200,000 Common Shares at the last closing price for the Common Shares prior to the date of issuance, for two (2) years from the date of issuance.
Paying or issuing (as applicable) to Champion within 12 months from the Payment #1 Date ("
Payment #2 Date "):
$500,000; and
warrants to purchase up to 200,000 Common Shares at the last closing price for the Common Shares prior to the date of issuance, for two (2) years from the date of issuance.
During the term of the Option, the Company will have the exclusive right to manage and operate all work programs carried out on the Baner Gold Project in its sole discretion. The Company will also be responsible for maintaining the Baner Gold Project in good standing through such time.
Upon satisfaction of the payments and securities issuances above, the Option will be deemed to be exercised and a 100% undivided interest in the Baner Gold Project will be transferred to the Company, free and clear of all encumbrances, subject to a 1% net smelter return royalty (the " NSR ") in favour of Champion. The Company may buy-back the NSR in consideration for payment of $7.5 million to Champion.
The Company and Champion, along with an escrow agent, have entered into an escrow agreement providing for voluntary escrow of the securities of the Company issued to Champion as follows: (i) the Common Shares issued to Champion upon completion of the Transaction (including any Common Shares issued on exercise of the warrants issued on that date) will be subject to voluntary escrow until the Payment #1 Date; and (ii) the Common Shares issued to Champion on the Payment #1 Date (including any Common Shares issued on exercise of the warrants issued on that date) will be subject to voluntary escrow until the Payment #2 Date.
Board and Management
Effective October 3, 2024, Brian Hinchcliffe has been appointed as Executive Chairman and Chief Executive Officer of the Company and Andrew Dunlop has been appointed Chief Financial Officer and Corporate Secretary.
Effective October 4, 2024, Mike Sutton has been appointed VP, Exploration of the Company.
The Board of Directors of the Company is Brian Hinchcliffe, Mike Sutton Trevor Gabriel and John Gravelle.
Biographies of board members and management are available in the Company's Filing Statement dated September 19, 2024 (the " Filing Statement ") issued in connection with the Transaction. A copy of the Filing Statement can be obtained from the Company's SEDAR+ profile at .
Conversion of Subscription Receipts
In connection with the completion of the Transaction, the escrow release conditions associated with the 13,500,000 subscription receipts (the " Subscription Receipts ") issued by the Company on August 29, 2024 were satisfied (the " Concurrent Financing "). As a result, the Subscription Receipts were automatically converted for no further consideration into 13,500,00 Common Shares and the gross proceeds of the Concurrent Financing ($2.7 million) were released to the Company.
See the Company's August 30, 2024 press release for further information regarding the Concurrent Financing, and as disclosed therein in detail: (i) a cash finder's fees of $40,000; and (ii) the issuance of finders warrants to acquire up to 200,000 Common Shares at $0.20 per share for 24 months from the date of issuance, are now payable and issuable, as applicable, by the Company as a result of completion of the Transaction.
In addition, the Subscription Receipts purchased under the Concurrent Financing by current related parties to the Company were automatically converted into Common Shares as follows: (i) 480,000 Common Shares were issued to Brian Hinchcliffe, a senior officer and director of the Company, on conversion of the Subscription Receipts purchased by him; (ii) 200,000 Common Shares were issued to Trevor Gabriel, a director of the Company, on conversion of the Subscription Receipts purchased by him; (iii) 500,000 Common Shares were issued to Mike Sutton, an officer and director of the Company effective October 4, 2024, on conversion of the Subscription Receipts purchased by him; (iv) 1,500,000 Common Shares were issued to Al Brimacombe, an insider of the Company because he currently holds more than 10% of the issued and outstanding Common Shares, on conversion of the Subscription Receipts purchased by him; and (v) 1,375,000 Common Shares were issued to Zila Corporation, an insider of the Company because it currently holds more than 10% of the issued and outstanding Common Shares, on conversion of the Subscription Receipts purchased by it.
Ten (10) "Pro Group" members (as defined in Exchange Policy 1.1) who subscribed for an aggregate of 2,109,500 Subscription Receipts under the Concurrent Financing, had their Subscription Receipts automatically converted into 2,109,500 common shares of the Company.
Transaction Finders Shares, Escrowed Securities and Transfer Within Escrow
On closing the Transaction, the Company issued 150,000 Common Shares to Mike Sutton as a finder fee for the Transaction, which Common Shares are held in escrow pursuant to an escrow agreement with Alliance Trust Company, as escrow agent. These Common Shares will be released from escrow based on the Exchange's Tier 2 - Value escrow schedule as follows: 10% upon issuance of the Exchange bulletin granting final approval for the Transaction (the " Final Bulletin "); 15% on the date that is six months after the date of the Final Bulletin; 15% on the date that is 12 months after the date of the Final Bulletin; 15% on the date that is 18 months after the date of the Final Bulletin; 15% on the date that is 24 months after the date of the Final Bulletin; 15% on the date that is 30 months after the date of the Final Bulletin; and 15% on the date that is 36 months after the date of the Final Bulletin.
In accordance with the policies of the Exchange, there are an aggregate of 9,050,100 Common Shares held in escrow pursuant to another escrow agreement with Alliance Trust Company, as escrow agent. These Common Shares will be released from escrow based on the Exchange's CPC escrow schedule as follows: 25% upon issuance of Final Bulletin and an additional 25% every six months thereafter. Of these Common Shares, now that the Transaction has been completed, 500,000 Common Shares are to be sold and transferred within escrow to Mike Sutton by certain founding shareholders of the Company.
Additional Information
Any reference to "$" in this press release is to Canadian dollars.
Additional information about the Company and the Transaction is available on SEDAR+ at under the Company's profile. The summary of the Transaction set out above is qualified in its entirety by reference to the description of the Transaction in the Filing Statement.
For further information, please contact:
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