NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR RELEASE, PUBLICATION, DISTRIBUTION OR DISSEMINATION DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES.
VANCOUVER, BC / ACCESSWIRE / October 31, 2023 / Mawson Gold Limited ("Mawson" or the "Company") (TSX:MAW)(Frankfurt:MXR)(OTC PINK:MWSNF) is pleased to announce thenext stage of the shareholder value creation by the separation of its four assets into three separate companies, which Mawson expects will unlock value for all shareholders of the Company (the "Shareholders").
Transaction Highlights:
The foregoing transactions have the support of major Shareholders, including Pierre Lassonde, Darren Morcombe and Konwave AG, one of Europe's largest gold funds. |
Michael Hudson, Executive Chairman states, "Mawson's management and Board have successfully acquired, discovered and developed four key assets of significant value. These assets are the:
1. Rajapalot Au-Co PEA-stage 1Moz at 3.0g/t AuEq inferred project in Finland;
2. 51% SXG-share holding, based on the Sunday Creek Au-Sb asset in Australia (currently valued at C$74 million);
3. Skellefteå Au discovery in Sweden; and
4. majority of Sweden's conventional historic uranium resources (combined 22.7Mlb U3O8).
"The structure was appropriate for the early-stage development allowing cost sharing and minimizing dilution for our Shareholders. The discovery success means Mawson should now be restructured to release the value and make each project financeable, in their respective markets, at appropriate costs of capital with Shareholders to be treated equally with transparency.
"The Springtide Transaction allows Rajapalot to be funded separately and highlights the significant value of this asset. At the end of the mandatory ASX-escrow, it is our intention for Shareholders to directly own SXG Shares to avoid the holding discount and overhang in the SXG market via an in-specie distribution. The Swedish assets in Mawson remain an extremely leveraged option on the potential for the anticipated Swedish regulation changes regarding uranium exploration and development.
"Importantly, the restructuring has support of major Shareholders including Pierre Lassonde, Darren Morcombe and Konwave AG, one of Europe's largest gold funds."
Springtide Transaction Details: Finland
The Company has entered into a share purchase agreement (the "Agreement") with Springtide, a special purpose private Ontario corporation with minimal share capital owned by Mr. Darren Morcombe, who is an existing Shareholder holding less than 8% of the issued and outstanding Mawson Shares. Springtide was established for the purpose of completing the Springtide Transaction and currently has no assets or liabilities.
Pursuant to the Agreement, Mawson has agreed to sell all of the issued shares and inter-company debt of its wholly-owned Finnish subsidiary, Mawson Oy, which holds Rajapalot, for total consideration of C$6,500,000. Pursuant to the Agreement, the Springtide Transaction is subject to certain conditions including: (a) Springtide undertaking the Transaction Financing of a minimum of C$15 million initially only with Shareholders, from proceeds of which Mawson will receive C$6.5 million cash as consideration for the sale of Rajapalot; (b) Springtide allocating the balance of the proceeds of the Transaction Financing of approximately C$8.5 million for resource expansion at Rajapalot and for general working capital; (c) the special committee (the "Special Committee") of the Board having received a written fairness opinion that that the Springtide Transaction is fair, from a financial point of view, to the Shareholders and such opinion shall not have been withdrawn; and (d) the price of gold not having dropped by more than 5% below a price of USD$1,850 per ounce. Springtide has also agreed to use its reasonable best efforts to complete a go public event by March 31, 2024, and to qualify the securities issued pursuant to the Transaction Financing under the prospectus to be filed in connection with such go public event.
Upon closing of the Springtide Transaction, it is expected that Ms. Noora Ahola, Mawson's interim CEO and ESG Leader in Finland, will be appointed Springtide's CEO, Mr. Neil MacRae, a newly appointed director of Mawson, will be appointed as Executive Chairman of Springtide, and Mr. Michael Hudson, Mawson's current Executive Chairman will assume the role of interim CEO of Mawson until a new CEO is appointed.
Neil MacRae is a capital markets professional with 29 years of experience in investor relations, commodities trading and corporate development within the global mining industry. Upon his appointment as Springtide's Executive Chairman, Neil will be responsible for overseeing the global capital markets strategy for Springtide and focus on the development and implementation of a strategic marketing plan to create awareness for Springtide and increase shareholder value. Neil holds a Bachelor of Arts degree from the University of Calgary and started his career in 1994 with Mitsui & Co. (Canada) Ltd. Over the years, Neil has held various management and investor relations roles with companies such as First Majestic Silver Corp, Sherwood Copper Corp (merged with Capstone in 2008), Farallon Mining Ltd. (sold to Nyrstar in 2011), NovaGold Resources Inc. and Santacruz Silver Mining Ltd.
The Springtide Transaction will constitute a sale of all or substantially all of the undertaking of the Company and will require the approval of 662/3% of the votes cast by the Shareholders on the resolution to authorize same. It is anticipated that the Company will hold the Meeting on December 7, 2023. The Springtide Transaction is expected to close on December 18, 2023, and is subject to customary conditions including but not limited to regulatory approval.
The Springtide Transaction was reviewed and evaluated by the Special Committee comprising of one independent director of the Board which was advised by Evans & Evans Inc. ("Evans & Evans") as its financial advisor. Evans & Evans also delivered an oral fairness opinion to the Special Committee and to the Board that the Springtide Transaction is fair, from a financial point of view, to the Shareholders. Evans & Evans is also expected to deliver a written fairness opinion to the Board.
The Board has determined, based in part on the recommendation of the Special Committee and the fairness opinion that the Springtide Transaction is in the best interest of Mawson and is fair, from a financial point of view to the Shareholders. The Board has unanimously approved the Agreement and resolved to recommend that the Shareholders vote in favour of the Springtide Transaction.
The Transaction Financing referred to herein has not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or any U.S. state securities laws, and may not be offered or sold in the "United States" (as such term is defined in Regulation S under the U.S. Securities Act) unless registered under the U.S. Securities Act and applicable U.S. state securities laws or an exemption from such registration is available. This news release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.
Voluntary Delisting from TSX
The Company will voluntarily delist the Mawson Shares from the TSX and will apply to list the Mawson Shares on the TSXV as a Tier 2 mining exploration issuer to advance its option and joint venture agreement (the "Option Agreement") to earn up to an 85% interest in the Skellefteå North Gold Project ("Skellefteå North") and other projects in Sweden. See the Company's news releases dated January 17, 2022 and October 11, 2022 for more information on Skellefteå North.
Southern Cross Gold Ltd Australia
The Company anticipates distributing all of the 93,750,000 SXG Shares it holds of its current 51% majority-owned subsidiary, Southern Cross, to the Shareholders by way of the Arrangement after the expiry of the 2-year ASX-escrow period on May 16, 2024. Pursuant to the Arrangement, among other matters, Shareholders will receive the SXG Shares held by Mawson on a pro-rata basis. The Arrangement will be subject to the approval by 662/3% of the votes cast by Shareholders at the Arrangement Approval Meeting to be called by Mawson after the expiry of the escrow period, regulatory approval in Canada and Australia, as well as court approval. Further details of the Arrangement, including, without limitation, the applicable ratio for the number of SXG Shares to be received by Shareholders, the record date and date of the Arrangement Approval Meeting, will be provided in due course.
Sweden - Uranium Projects (Subject to Regulatory Change)
During March 2023, the Company, through a wholly owned holding company, Euro Canna Holdings Limited ("Euro Canna"), acquired six exploration licenses: Björklund nr 1 & 2, Björkråmyran nr 3, Kvarnån nr 5, Nöjdfjället nr 1, and Skuppesavon nr 2 for 16,138 hectares. All these exploration licenses are granted and are located through central and northern Sweden to explore for zirconium, scandium, yttrium and lanthanum and other lanthanides (rare earths) ("Euro Canna Projects"). The Euro Canna Projects also host the majority of Sweden's conventional hardrock historic uranium resources (combined 22.7Mlb U3O8 (see below)).
Although Sweden benefits from having 40% of its electricity supply generated by nuclear energy, a uranium exploration and mining moratorium has been in place in the country since May 2018. The Swedish Government has indicated a positive stance on re-evaluating and lifting the moratorium. Exploration, development and mining of the Euro Canna Projects is still possible under the current Swedish Minerals Act; however, recovery of uranium in a mining scenario would not be permitted under the current mineral legislation.
Sweden's current center-right coalition government has also indicated strong support to expand nuclear power in Sweden. There are currently six operating nuclear reactors in Sweden that supply approximately 40% of the country's electricity. The Swedish Government has called for the possible restart of Ringhals nuclear power plant Units 1 and 2, as well as to prepare for the construction of new reactors.
These Swedish assets are considered a valuable option on the potential for Sweden regulation changes regarding uranium exploration and development.
