/NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES
OR DISSEMINATION IN THE U.S./
VANCOUVER, BC, Feb. 22, 2021 /CNW/ - Sierra Madre Developments
Inc. (the "Company") (TSXV: SMG.H) is pleased to provide
additional details on its proposed acquisition (the "Business
Combination") of Goldshore Resources Ltd. ("Goldshore")
and the concurrent financing for gross proceeds of up to
$25,000,000 (the "Concurrent
Financing"). The Business Combination and Concurrent Financing
were announced by the Company and Goldshore in a news release dated
January 26, 2021 (the "Initial
News Release").
About the Concurrent Financing
As disclosed in the Initial News Release, the Company and
Goldshore have entered into an engagement letter with Eventus
Capital Corp. (the "Lead Agent"), as lead agent and sole
bookrunner, on its own behalf and on behalf of a syndicate of
agents including Canaccord Genuity Corp., Laurentian Bank
Securities Inc., Haywood Securities Inc., and Desjardins Securities
Inc. (collectively with the Lead Agent, the "Agents"), in
respect of a private placement of subscription receipts (the
"Subscription Receipts") and flow-through subscription
receipts (the "Flow-Through Subscription Receipts" and
together with the Subscription Receipts, the "Offered
Securities") for gross proceeds of up to $25,000,000.
The Initial News Release disclosed that all of the Offered
Securities would be offered by Goldshore. However, the Company
wishes to announce that the Flow-Through Subscription Receipts will
be offered by the Company (constituting the "Sierra Madre
Financing"). The Subscription Receipts will be offered by
Goldshore.
The Company will offer up to 13,333,333 Flow-Through
Subscription Receipts at a price of $0.75 per Flow-Through Subscription Receipt. Each
Flow-Through Subscription Receipt will be automatically exercised,
for no additional consideration, into one flow-through common share
of the Company (a "Flow-Through Share").
The Flow-Through Subscription Receipts will be issued on a
"flow-through" basis and will consist of "flow-through shares" as
defined in subsection 66(15) of the Income Tax Act
(Canada) (the "Tax Act").
The Company will incur resource exploration expenses which will
constitute "Canadian exploration expenses" as defined in subsection
66.1(6) of the Tax Act and "flow through mining expenditures" as
defined in subsection 127(9) of the Tax Act, in an amount equal to
the amount raised pursuant to the sale of Flow-Through Subscription
Receipts and the Company will renounce the Canadian exploration
expenses (on a pro rata basis) to each subscriber with an effective
date of no later than December 31,
2021 in accordance with the Tax Act.
In connection with the Sierra Madre Financing, the Agents will
be entitled to receive a cash fee (the "Agents' Commission")
equal to 6% of the aggregate gross proceeds of the Sierra Madre
Financing (provided that the cash commission for president's list
subscribers will be 4%) and such number of compensation options
(the "Compensation Options") equal to 6% of the number of
Flow-Through Subscription Receipts sold under the Sierra Madre
Financing (provided that the compensation options for president's
list subscribers will be 4%). Each Compensation Option will be
exercisable for one common share in the capital of the Company for
a period of two years from the date of closing of the Sierra Madre
Financing at a price of $0.75 per
share.
The gross proceeds from the sale of Subscription Receipts, will
be held by the subscription receipt agent in a non-interest bearing
account pending satisfaction or waiver (to the extent such waiver
is permitted) of the escrow release conditions. The Agents'
Commission and any additional reasonable expenses of the Agents
will be released from escrow to the Lead Agent, on behalf of the
Agents, and the escrowed amount will be released from escrow to the
Company upon satisfaction of the escrow release conditions.
The Flow-Through Shares will be subject to a four-month hold
period from the date of issuance. Closing of the Sierra Madre
Financing is subject to the approval of the TSX Venture
Exchange.
All other details of the Concurrent Financing are as set out in
the Initial News Release.
About Goldshore
Goldshore is a private company incorporated under the
Business Corporations Act (British
Columbia) with a mandate to identify and evaluate mining
related projects in North America.
To date, Goldshore has raised approximately $4 million, identified and evaluated a number of
projects and negotiated an asset purchase agreement dated
January 25, 2021 with Wesdome Gold
Mines Ltd. ("Wesdome") and Moss Lake Gold Mines Ltd., a
subsidiary of Wesdome, pursuant to which Goldshore will acquire a
100% interest in the Moss Lake gold project (the "Moss Lake
Project"), located in Ontario,
Canada. Goldshore does not have any material non-cash assets
other than the Moss Lake Project. Following completion of the
Business Combination, the Company will not have any business
interests other than the Moss Lake Project.
The following selected financial information is taken from the
unaudited financial statements of Goldshore for the period from the
date of incorporation (October 23,
2020) to January 31, 2021:
|
Date of
incorporation (October 23, 2020) to January 31, 2021
(Unaudited)
|
Assets
|
$3,982,504
|
Liabilities
|
$130,211
|
Shareholders'
Equity
|
$3,852,293
|
Revenues
|
-
|
Net Profit
(Loss)
|
$(142,119)
|
Further details regarding Goldshore and the Business Combination
are disclosed in the Initial News Release.
Sierra Madre Developments Inc.
"Hani
Zabaneh"
Hani Zabaneh
CEO & Director
Cautionary Note Regarding Forward-Looking Statements
This news release contains statements that constitute
"forward-looking statements." Such forward looking statements
involve known and unknown risks, uncertainties and other factors
that may cause the Company's actual results, performance or
achievements, or developments to differ materially from the
anticipated results, performance or achievements expressed or
implied by such forward-looking statements. Forward looking
statements are statements that are not historical facts and are
generally, but not always, identified by the words "expects,"
"plans," "anticipates," "believes," "intends," "estimates,"
"projects," "potential" and similar expressions, or that events or
conditions "will," "would," "may," "could" or "should" occur.
Forward-looking statements in this document include, among
others, statements relating to expectations regarding the
completion of the Business Combination (including all required
approvals), the Concurrent Financing (including the size of the
Concurrent Financing and the use of the proceeds therefrom) and
other statements that are not historical facts. By their nature,
forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause our actual results,
performance or achievements, or other future events, to be
materially different from any future results, performance or
achievements expressed or implied by such forward-looking
statements. Such factors and risks include, among others: that
there is no assurance that the parties hereto will obtain the
requisite director, shareholder and regulatory approvals for the
Business Combination, and there is no assurance that the Business
Combination will be completed as anticipated, or at all; there is
no assurance that the Concurrent Financing will be completed or as
to the actual offering price or gross proceeds to be raised in
connection with the Concurrent Financing; following completion of
the Business Combination, the Company may require additional
financing from time to time in order to continue its operations
which may not be available when needed or on acceptable terms and
conditions acceptable; compliance with extensive government
regulation; domestic and foreign laws and regulations could
adversely affect the Company's business and results of operations;
the stock markets have experienced volatility that often has been
unrelated to the performance of companies and these fluctuations
may adversely affect the price of the Company's securities,
regardless of its operating performance; and the impact of
COVID-19.
The forward-looking information contained in this news release
represents the expectations of the Company as of the date of this
news release and, accordingly, is subject to change after such
date. Readers should not place undue importance on forward-looking
information and should not rely upon this information as of any
other date. The Company does not undertake any obligation to update
these forward-looking statements in the event that management's
beliefs, estimates or opinions, or other factors, should
change.
This news release does not constitute an offer to sell, or a
solicitation of an offer to buy, any securities in the United States. The securities have not
been and will not be registered under the United States Securities
Act of 1933, as amended (the "U.S. Securities Act") or any
state securities laws and may not be offered or sold within
the United States or to U.S.
Persons unless registered under the U.S. Securities Act and
applicable state securities laws or an exemption from such
registration is available.
Completion of the transaction is subject to a number of
conditions, including but not limited to, Exchange 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
management information circular or 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 the Company should be considered highly speculative.
The TSX Venture Exchange Inc. has in no way passed upon the
merits of the proposed transaction and has neither approved nor
disapproved the contents of this news release.
SOURCE Sierra Madre Developments Inc.