PRESS RELEASE
NR 2015-9
For Immediate Release
December 7, 2015
Vancouver, British Columbia
SUNRIDGE RECEIVES CONDITIONAL APPROVAL FROM EXCHANGE TO SELL ITS 60%
INTEREST IN ASMARA MINING SHARE COMPANY
Pdf:
http://www.sunridgegold.com/i/pdf/2015-12-04_NR_43r4s.pdf
http://www.stockwatch.com/News/Item.aspx?bid=Z-C:SGC-2332656&symbol=SGC®ion=C
Sunridge Gold receives TSX-V OK to sell Asmara interest
2015-12-07 07:29 ET - News Release
Mr. Michael Hopley reports
SUNRIDGE RECEIVES CONDITIONAL APPROVAL FROM EXCHANGE TO SELL ITS 60% INTEREST IN ASMARA MINING SHARE COMPANY
Sunridge Gold Corp. has received conditional approval from the TSX Venture Exchange to sell its 60-per-cent interest in the Asmara project as reported in a Sunridge news release on Nov. 6, 2015. On that day the company reported that it had executed a share purchase agreement (SPA) to sell its interest in the Asmara Mining Share Company (AMSC), holder of the Asmara project in Eritrea, to Sichuan Road & Bridge Mining Investment Development Corp. Ltd. (SRBM) for a purchase price of $65-million (U.S.) cash (at current exchange rates approximately $85-million). In addition, SRBM has assumed the obligation to pay Sunridge the remaining principal of the deferred payment of $13.33-million (U.S.) (approximately $17.4-million) owed to the company by Eritrean National Mining Corp. (ENAMCO). The deferred payment will paid in two instalments with the first installment of $6-million (U.S.) paid on closing the SPA, and the second and final instalment of $7.33-million (U.S.) paid six months after closing the SPA.
The obligations of the parties to complete the transaction are subject to conditions described below being satisfied or waived prior to closing. Once the final cash payment from SRBM is received by Sunridge, and all transaction costs and other obligations of the company have been settled, the company plans a cash distribution of all remaining funds by way of return of capital to shareholders.
The conditions to closing include:
Sunridge shareholders approving the transaction at a meeting to be called and held on Jan. 22, 2016;
Receipt of the remaining final regulatory approvals within China, including but not limited to Sichuan provincial government, Sichuan State-Owned Asset Supervision and Administration Commission of the State Council (SASAC), National Development and Reform Commission, the Ministry of Commerce, and the State Administration of Foreign Exchange;
Receipt of final regulatory approvals in Canada, including the TSX Venture Exchange and receipt from the Ministry of Energy and Mines of the government of Eritrea of notice of its approval of the transaction.
Final approval from the TSX Venture Exchange will be granted upon receipt of Sunridge shareholder approval and the other closing conditions being met.
Shareholder vote
The sale of the shares of AMSC represents the sale of substantially all the assets of the company and therefore will require the approval of at least two-thirds of the votes cast by the shareholders of Sunridge at the special shareholder meeting called for Vancouver on Jan. 22, 2016.
The board of directors of Sunridge will be recommending to the shareholders at the shareholder meeting that Sunridge should distribute the resulting net cash as a return on capital to shareholders in two tranches and that, after satisfying all of its liabilities, Sunridge should dissolve its corporate existence.
Shareholders of record at Dec. 18, 2015, will be entitled to vote at the shareholder meeting. The proxy materials for the shareholder meeting will be mailed and filed on SEDAR, and the company's website by Dec. 24, 2015.
The amount of net cash available to be distributed to shareholders is subject to a number of risks and uncertainties, including the timing of closing the SPA, transaction costs, settlement of obligations of the company, taxation, currency exchange rates, and stock option and share purchase warrant exercises, which make it impossible to be definitive at this time; however, management currently expects that the aggregate amount of the distributions to shareholders will be not less than 35 cents per share, payable in two distributions. The obligations of the company that must be settled prior to Sunridge's voluntary dissolution will include payment of the severance packages to its terminated employees, exercise and payment of the $1.5-million (U.S.) option to purchase and cancel the 2-per-cent net-profits royalty interest on the Asmara project held by the Perry estate, settlement of the WMC (Overseas) Pty. Ltd. entitlement to the first $860,000 (U.S.) of revenue derived from the sale of any minerals mined from the Debarwa licence, payment of applicable income taxes and any other applicable taxes or other liabilities. After the settlement of such obligations, all of the directors except one will resign, and the company will go on care and maintenance for approximately six months until the receipt of the final $7.33-million (U.S.) portion of the deferred payment, plus accrued interest, required to be paid six months after closing the SPA.
The first distribution will be distributed shortly after closing the SPA (outside date for the closing is currently Feb. 29, 2016) and the second tranche approximately six months later, after receipt of the final instalment of the deferred payment.
Shortly after closing the SPA, the board will determine and publicly announce the record date for, and the expected amount of, the first distribution. The company will likely delist its shares from trading on the TSX Venture Exchange on or about that record date. The second tranche distribution will be distributed to shareholders of record after the final proceeds from the SPA are in hand and all obligations of the company are settled. The company will then voluntarily dissolve.
Warrantholder vote
The company currently has outstanding 60,972,954 common share purchase warrants that are subject to a warrant indenture dated Oct. 18, 2012, and a supplemental warrant indenture dated Oct. 21, 2013, and are listed for trading on the TSX Venture Exchange under the symbol SGC.WT. Each warrant is exercisable to acquire one common share of the company at an exercise price of 35 cents until Oct. 18, 2017. The warrant indenture includes covenants by the company that until the expiry date, it will use reasonable commercial efforts to maintain its corporate existence and carry on its business in the ordinary course, and, that, subject to certain exceptions, it will maintain the listing of the warrants and its common shares on the TSX Venture Exchange.
In light of the sale of the sole material asset of the company and its intended voluntary dissolution, the board has carefully considered and looked to balance the interests of the shareholders and the holders of the warrants in arriving at the proposed treatment of the warrantholders, which the board considered fair and reasonable to all parties.
The company has called an extraordinary meeting of the warrantholders pursuant to the terms of the warrant indenture, for Jan. 22, 2016, at which the company will put forward a special resolution of the warrantholders to approve, subject to completion of the transactions under the SPA, that the company will be authorized to delist the warrants, wind up its business, complete the distributions and voluntarily dissolve, and that any warrants that have not been exercised on or before the delisting date will be automatically cancelled, in consideration for the payment to the holders of such warrants of a cash amount of two cents per warrant.
Warrantholders of record at Dec. 18, 2015, will be entitled to vote at the warrantholder meeting. The proxy materials for the warrantholder meeting will be mailed and filed on SEDAR, and the company's website by Dec. 24, 2015.
We seek Safe Harbor
Received on Mon Dec 07 2015 - 07:44:02 EST