KLONDEX MINES LTD. (TSE:KDX) Files An 8-K Unregistered Sales of Equity SecuritiesItem 3.02 Unregistered Sales of Equity Securities.
As previously announced, on August 7, 2017, Klondex Mines Ltd. (the “Company”) entered into an Arrangement Agreement between the Company and Bison Gold Resources Inc., a corporation existing under the Business Corporations Act (Ontario) (“Bison”), as amended by an amending agreement entered into on September 6, 2017 (as amended, the “Arrangement Agreement”). to the Arrangement Agreement, the Company acquired all of the issued and outstanding common shares of Bison (the “Bison Shares”) to a plan of arrangement (the “Arrangement") under Section 182 of the Business Corporations Act (Ontario) between the Company and Bison. The shareholders of Bison (the “Bison Shareholders”) adopted and approved the Arrangement on October 11, 2017. The Ontario Superior Court of Justice (Commercial List) (the “Court”) issued a final order approving the Arrangement on October 16, 2017. On October 19, 2017 (the “Closing Date”), the Company’s acquisition of the equity interests of Bison was consummated by way of the Arrangement, and Bison became a wholly-owned subsidiary of the Company.
to, and subject to the terms and conditions of, the Arrangement Agreement and the Arrangement, on the Closing Date, the Company (i) paid consideration of approximately $7.0 million (CDN$8.8 million) on a fully-diluted basis by its issuance of 1,956,126 shares of its common stock (the “Company Shares”) to the Bison Shareholders, representing approximately 1.1% of the Company’s outstanding common shares, and (ii) assumed 10,000 warrants to acquire Bison Shares, which in lieu of each Bison Share now entitle the holders thereof to acquire a total of 1,242 Company Shares to the exchange ratio provided by the terms of the Arrangement Agreement. The warrants are exercisable at C$2.4155 per Company Share and expire on May 21, 2018. The warrants may not be exercised in the United States or by or on behalf of a U.S. person (as that term is defined in Regulation S promulgated under the Securities Act of 1933, as amended (the “Securities Act”)).
The issuance to the Bison Shareholders of 1,956,126 Company Shares on the Closing Date the Arrangement is exempt from the registration requirements under the Securities Act to Section 3(a)(10) thereof. Section 3(a)(10) of the Securities Act exempts the issuance of securities in exchange for one or more outstanding securities where the terms and conditions of the issuance and exchange of such securities have been approved by any court expressly authorized by law to grant such approval. The Securities and Exchange Commission has provided that the term “any court” in Section 3(a)(10) of the Securities Act includes a foreign court. As described above, the Court issued a final order approving the Arrangement on October 16, 2017.
About KLONDEX MINES LTD. (TSE:KDX)
Klondex Mines Ltd is a Canada-based gold and silver mining company. The Company focuses on exploration, development and production of over two gold and silver projects in north central Nevada, being the Fire Creek mine located in Lander County, Nevada, the Midas mine and ore milling facility located in Nevada. Its segments include Fire Creek, Midas, True North, and Corporate and other. Its over 1,000 tons per day milling facility processes mineralized materials from the Midas Mine and the Fire Creek Mine. The Midas Mine is a gold-silver vein deposit located a mile from the town of Midas, Nevada. It also owns an underground mine project located in Manitoba, Canada, which includes the Rice Lake Mine and Mill complex, and early-stage exploration properties located in the State of Nevada, the United States, and Manitoba and Ontario, Canada. The Company’s milling and processing facilities are located at Midas process ore from both Midas and Fire Creek in the State of Nevada.
