TORONTO, April 29, 2015 /CNW/ - Sulliden Mining Capital Inc. ("Sulliden" or the "Company") (TSX: SMC) and Coastal Gold Corp. ("Coastal Gold") (TSXV: COD) have signed an amendment to the definitive arrangement agreement entered into among the parties on March 1, 2015 (see Press release dated March 1, 2015) (the "Amendment Agreement") pursuant to which Sulliden will acquire all of the issued and outstanding common shares of Coastal Gold by way of a plan of arrangement under the Business Corporations Act (Ontario) (the "Transaction"). Under the Terms of the Amendment Agreement, Sulliden has included an additional cash component to its offer to acquire each outstanding Coastal Gold common share.
Pursuant to the Amendment Agreement, Sulliden will acquire each outstanding Coastal Gold common share for 0.05 of a Sulliden common share and a cash payment of CDN$0.01 per outstanding Coastal Gold common share. The implied transaction value is approximately $5.4 million, including the assumption of $1.50 million in debt. Upon completion of the Transaction, Coastal Gold will be a wholly-owned subsidiary of Sulliden. The directors of each company have unanimously approved the Amendment Agreement.
It is anticipated that the Coastal Gold special shareholder meeting to approve the Transaction will proceed as scheduled on May 6, 2015 at 10am EST.
Justin Reid, President and CEO of Sulliden commented, "We look forward to continuing the work that has already been initiated with the Coastal Gold team at Hope Brook. Sulliden's goal will be to advance the asset immediately to the next stage of development via engineering, and to continue de-risking the project. Our team along with our strong balance sheet will allow us to accomplish this."
Loan Agreement to Coastal Gold
On February 28, 2015, Sulliden and Coastal Gold entered into a loan agreement whereby Sulliden made available to Coastal Gold up to $150,000 (the "Loan"). The Loan will accrue interest at the rate of 10% per annum. Sulliden and Coastal Gold have amended the Loan to provide that it will mature on the earlier of: (i) the completion of the Transaction; (ii) termination by Coastal Gold following the acceptance of a superior proposal; and (iii) the date that is twelve months following the termination of the Agreement (the "Maturity Date"). The Loan was also amended to provide that in the event the proposed acquisition is not completed and the arrangement agreement is not terminated, Coastal Gold shall have the option at any time following six months from the date hereof to repay in full all of the principal amount of the loan outstanding together with all accrued and unpaid interest thereon by issuing common shares at a price equal to $0.05, to cover the principal amount, and in the case of accrued and unpaid interest, the amount of common shares to be issued will be subject to TSX-Venture Exchange approval.
About Sulliden Mining Capital
Sulliden Mining Capital is a venture capital company focused on investments, acquisitions and the development of brownfield, development-stage and early production-stage mining projects in the Americas.
About Coastal Gold
Coastal Gold is a mineral exploration and development company advancing the Hope Brook Gold Project located in southwestern Newfoundland.
Sulliden Mining Capital Inc.
On behalf of the Board
"Justin Reid"
President & Chief Executive Officer
Caution regarding forward-looking information:
Certain information contained in this press release, including any information relating to the Transaction (including the anticipated benefits of the Transaction), the Amendment Agreement, the amended loan and statements that address events or developments that Sulliden or Coastal Gold expects to occur, are "forward-looking information". Forward-looking information includes statements that are not historical facts and are generally, but not always, identified by the words "expects", "does not expect", "plans", "anticipates", "does not anticipate", "believes", "intends", "estimates", "projects", "potential", "scheduled", "forecast", "budget" and similar expressions, or that events or conditions "will", "would", "may", "could", "should" or "might" occur. Forward-looking information includes, but is not limited to, statements relating to completion and timing of the acquisition of Coastal Gold, the delivery of the Hope Brook PEA, the upside potential of Hope Brook and the Hope Brook mineral resource estimate and its potential to be increased. All such forward-looking information is subject to important risk factors and uncertainties, many of which are beyond Sulliden's or Coastal Gold's ability to control or predict. Forward-looking information is necessarily based on estimates and assumptions that are inherently subject to known and unknown risks, uncertainties and other factors that may cause Sulliden's or Coastal Gold's actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information. Assumptions upon which such forward-looking information is based on include the estimation of mineral resources, the availability of necessary financing and materials to continue to explore and develop Hope Brook, that Sulliden and Coastal Gold will be able to satisfy the conditions contained in the Letter of Intent, that the required approvals will be obtained from the shareholders of Coastal Gold, that all third party, court, regulatory and governmental approvals to the Transactions will be obtained, including from the Exchange and all other conditions to completion of the Transaction will be satisfied or waived. Many of these assumptions are based on factors and events that are not within the control of Sulliden and Coastal Gold and there is no assurance they will prove to be correct. Such factors include, without limitation: capital requirements; fluctuations in the international currency markets and in rates of exchange of metal prices; changes in national and local government legislation in Canada or any other country in which Sulliden and Coastal Gold currently or may in the future carry on business; taxation; controls, regulations and political or economic developments in the countries in which Sulliden and Coastal Gold do or may carry on business; competition; loss of key employees; and additional funding requirements.
Any forward-looking information speaks only as of the date on which it is made and Sulliden and Coastal Gold expressly disclaim any intention or obligation to update or revise any forward-looking information, whether as a result of new information, events or otherwise, except in accordance with applicable securities laws. Although each of Sulliden and Coastal Gold believe that the assumptions inherent in the forward-looking information are reasonable, forward-looking information is not a guarantee of future performance and accordingly undue reliance should not be put on such statements due to the inherent uncertainty therein.
SOURCE Sulliden Mining Capital
