Allied Gold Corp Limited, Allied Merger Corporation and Mondavi Ventures Ltd. Announce Binding Letter of Intent for Business Combination and Financing for Minimum Proceeds of US$300,000,000

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TORONTO, May 11, 2023 (GLOBE NEWSWIRE) -- Allied Gold Corp Limited (“Allied”), Allied Merger Corporation (the “AMC”) and Mondavi Ventures Ltd. (“Mondavi”) are pleased to announce that they have entered into a binding letter agreement dated May 11, 2023 (the “Letter Agreement”) outlining the terms upon which Mondavi, an unlisted reporting issuer in Canada, will enter into a business combination with Allied and AMC pursuant to which the current shareholders of each of Allied and AMC will receive common shares of Mondavi, resulting in a reverse take-over of Mondavi (the “RTO”). The Letter Agreement was negotiated at arm’s length between representatives of Allied, AMC and Mondavi. In this news release, references to the “Resulting Issuer” are to Mondavi after the closing of the RTO, which will be the continuing public issuer carrying on the business of Allied.

Proposed Transaction

Allied, AMC and Mondavi will negotiate a definitive agreement (the “Definitive Agreement”), substantially on the terms of the Letter Agreement, in connection with completing the RTO. Although the final structure of the RTO is subject to ongoing tax and legal advice, it is currently contemplated that a newly-incorporated, wholly-owned subsidiary of Mondavi will amalgamate with Allied and AMC to form “Amalco”, which will be a wholly-owned subsidiary of Mondavi upon completion of the RTO.

As part of the RTO, and subject to any required shareholder and regulatory approvals, Mondavi will, among other things, change its name to “Allied Gold Corporation” and consolidate its common shares on a ratio to be determined. In addition, if requested by Allied and AMC, Mondavi will continue the company from British Columbia to Ontario, adopt new by-laws and other corporate policies, increase the size of and reconstitute the board of directors and adopt new security-based compensation arrangements.

Completion of the RTO is subject to a number of conditions, including, but not limited to, entering into the Definitive Agreement, which will contain representations and warranties and other terms and conditions customary for a transaction of this nature, listing the Resulting Issuer Shares (as defined below) (including the Resulting Issuer Shares issuable upon conversion of the Resulting Issuer Debentures (as defined below)) on a North American stock exchange, and closing the Financing (as defined below).

Proposed Management and Directors of Resulting Issuer

The following are the proposed officers and directors of the Resulting Issuer, with additional independent directors to include recognized industry leaders:

Peter Marrone, Chairman & Chief Executive Officer – Founder and former Chief Executive Officer of Yamana Gold Inc. (“Yamana”) until 2018 and Executive Chairman until 2023; has 30+ years of mining, business, and capital markets experience.

Daniel Racine, President and Director – Held several senior executive roles at Yamana between 2014-2023, including former President and Chief Executive Officer between 2018-2023; previously held senior roles at Agnico Eagle.

Jason LeBlanc, Chief Financial Officer – Held several senior executive roles at Yamana between 2006-2023, including former Chief Financial Officer between 2017-2023; has 20+ years of business and financial experience in mining.

Basie Maree, Chief Operating Officer – Joined Allied in 2022 with 40+ years of relevant experience including as Country Manager and General Manager of Coeur Mining, Chief Technology Officer, Managing Director, Saudi Arabia and General Manager of Africa for Barrick Gold and Head of Metallurgy for AngloGold Ashanti.

Gerardo Fernandez, Chief Development Officer – Held several senior executive roles at Yamana between 2007-2023 ranging from operations, technical services, projects, corporate development and investor relations; has 20+ years’ experience in mining.

Sofia Tsakos, Chief Legal Officer – Served as in-house counsel at Yamana between 2007-2023, including Senior Vice President, General Counsel and Corporate Secretary between 2010-2023; has 20+ years’ experience; previously a securities lawyer in the mining group at a large Bay Street law firm.

Greg Winch, Chief Geology & Strategic Officer – Joined Allied in 2013 bringing over 30 years of exploration experience; prior accomplishments include the development of Golden Pride and Lumwana copper mines in Zambia, and serving as Exploration Manager for Centamin.

Justin Dibb, Vice Chairman – Entrepreneur with 20+ years of business experience in Africa and current co-founder and Chief Executive Officer of Allied; will transition to Vice Chairman and advisor of the Resulting Issuer.

Stephan Theron, Director – Current Chief Financial Officer of Allied; 20+ years of management, mergers and acquisitions and corporate finance experience; will transition to a director of the Resulting Issuer.

Jane Sadowsky, Director – Extensive experience in investment banking with 22+ years tenure specializing in commodities, P&U, renewables, and infrastructure; she is also a senior advisor at Moelis and director of Nexa Resources.

John Begeman, Director – Professional mining engineer with 40+ years international experience, including in Mali and other African countries; currently a director of i-80 Gold and director nominee of Pan American Silver.

Dino Titaro, Director – Professional geologist with 35+ years of international experience including significant exposure to Africa and the Americas; has held executive and director roles with several public companies and is currently Chairman of Avidian Gold and a director of Golconda Gold.

Proposed Financing

It is proposed that a subscription receipt financing (the “Financing”) for minimum aggregate gross proceeds of US$300,000,000 will be conducted by AMC in connection with the completion of the RTO. The Financing will consist of a best-efforts private placement of approximately (i) US$200,000,000 in common share subscription receipts (the “CS Subscription Receipts”), and concurrently (ii) US$100,000,000 in unsecured convertible debenture subscription receipts (the “CD Subscription Receipts”, and together with the CS Subscription Receipts, the “Subscription Receipts”).

The Financing will be led by National Bank Financial Inc. (“NBF”), Stifel GMP (“Stifel GMP”), and Canaccord Genuity Corp. (“Canaccord” and together with NBF and Stifel GMP, the “Active Bookrunners”) on their own behalf and on behalf of a syndicate of agents including BMO Capital Markets, CIBC Capital Markets, Cormark Securities Inc. and SCP Resource Finance LP (collectively with the Active Bookrunners, the “Agents”).

The Agents will be granted an option (the “Agents’ Option”) to sell an additional 5% of the Subscription Receipts sold under the Financing, exercisable at the discretion of the Active Bookrunners, in whole or in part, up to 48 hours prior to the closing of the Financing.

The Subscription Receipts will be governed by the terms of a subscription receipt agreement (the “Subscription Receipt Agreement”) to be entered on the Closing Date (as defined below) between AMC, Allied, the Active Bookrunners, and a mutually agreed upon subscription receipt agent (the “Subscription Receipt Agent”).

A lock-up and standstill have been negotiated pursuant to which the Resulting Issuer, and the executive officers and directors of the Resulting Issuer who hold an equity interest in the Resulting Issuer and its affiliates immediately after closing of the RTO, and certain existing holders of common shares in Allied or AMC to be determined by the Active Bookrunners and Allied, each acting reasonably, will be locked up or held to a standstill for 180 days from the Closing Date.

Each CS Subscription Receipt will be sold at a price to be determined, and will entitle the holder, without payment of any additional consideration or further action on the part of the holder, and subject to adjustment in certain events, upon satisfaction of certain escrow release conditions (the “Escrow Release Conditions”) in accordance with the terms of the Subscription Receipt Agreement, to receive one common share of AMC, which will subsequently be exchanged for one common share of the Resulting Issuer (the “Resulting Issuer Shares”) in connection with the completion of the RTO.

Each CD Subscription Receipt will be sold, on a concurrent private placement basis, at an issue price of US$1,000 and will entitle the holder, without payment of any additional consideration or further action on the part of the holder, and subject to adjustment in certain events, upon satisfaction of the Escrow Release Conditions, to receive one unsecured convertible debenture of AMC, which will subsequently be exchanged for one unsecured convertible debenture of the Resulting Issuer (the “Resulting Issuer Debentures”) in connection with the completion of the RTO.

The terms of the convertible debentures will be negotiated and finalized in an indenture to be entered on the Closing Date between AMC, Allied, Mondavi and the Active Bookrunners, and a mutually agreed upon debenture trustee.

The net proceeds of the Financing will be used by the Resulting Issuer to carry out Allied’s planned growth strategy, including its ongoing optimization and development work, and for general corporate purposes.

The closing of the Financing is expected to occur on or about June 15, 2023, or such other date as AMC, Allied and the Agents agree (the “Closing Date”).

On the Closing Date, the gross proceeds of the Subscription Receipts, less 50% of the Agents’ commission and all of the expenses of the Agents incurred to such date (the “Escrowed Proceeds”), will be delivered to and held by the Subscription Receipt Agent and invested in an interest bearing account with a Schedule I Canadian bank until satisfaction of the Escrow Release Conditions or the Termination Date (as defined below) (the Escrowed Proceeds, together with all interest and other income earned thereon, referred to as the “Escrowed Funds”).

If (i) the Escrow Release Conditions are not satisfied prior to 90 days from the Closing Date, or such later date as may be agreed to by Allied, AMC and the Active Bookrunners (on behalf of the Agents), acting reasonably (the “Escrow Deadline”) or, (ii) if prior to the Escrow Deadline, the Definitive Agreement is terminated or AMC has advised the Subscription Receipt Agent and the Active Bookrunners, or announced to the public, that the RTO will not be completed or the Escrow Release Conditions will not be satisfied (in each case, a termination event, and the date upon which such event occurs, the “Termination Date”), within five business days following the Termination Date, the Escrowed Funds will be returned to the holders of Subscription Receipts on a pro rata basis. To the extent that the Escrowed Funds are not sufficient to satisfy the subscription price for each CS Subscription Receipt and CD Subscription Receipt, respectively, Allied will contribute such amounts as are necessary to satisfy any shortfall.

Upon satisfaction of the Escrow Release Conditions, the Subscription Receipt Agent shall release from the Escrowed Funds: (i) to the Agents, an amount equal to the balance of the Agents’ commission and all remaining expenses of the Agents not previously paid, and (ii) to the Resulting Issuer, the balance of the remaining Escrowed Funds, all in accordance with the terms of the Subscription Receipt Agreement.

The Subscription Receipts will be offered for sale to purchasers in: (i) all of the provinces and territories of Canada pursuant to available private placement exemptions; (ii) the United States on a private placement basis pursuant to available exemptions from the registration requirements under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”); and (iii) offshore jurisdictions pursuant to available prospectus or registration exemptions in accordance with applicable laws as agreed upon between AMC, Allied and the Active Bookrunners.

Other Advisors

SCP Resource Finance LP is acting as financial advisor to Allied and AMC in connection with financing matters. Cassels Brock & Blackwell LLP and Paul, Weiss, Rifkind, Wharton & Garrison LLP are acting as legal counsel to AMC, Allen & Overy LLP and McCarthy Tetrault LLP are acting as legal counsel to Allied and Borden Ladner Gervais LLP is acting as legal counsel to the Agents.

About Allied Gold Corp Limited

Allied is a private company focused on gold mining asset transformation in Africa. Allied has three mines and several development and exploration projects in Africa where it has significant operating experience. Operations are located in Côte d’Ivoire, Mali, Ethiopia and Egypt. Led by a team of mine developers with proven success in adding value to tier one assets, Allied aspires to become a mid-tier next generation gold producer in Africa and ultimately a leading senior global gold producer.

About Allied Merger Corporation

AMC is a company formed and capitalized by the former principals of Yamana Gold Inc. (“Former Yamana Principals”), Peter Marrone, Daniel Racine, Jason LeBlanc, Gerardo Fernandez and Sofia Tsakos, for the purposes of financing and assisting the development of high-quality mining opportunities and along with SummitNorth Inc., an investor in AMC, has agreed to the foregoing business and management arrangements with Allied.

About Mondavi Ventures Ltd.

Mondavi is an unlisted public company organized under the laws of the Province of British Columbia. The business of Mondavi is the investigation and evaluation of business opportunities.

FOR FURTHER INFORMATION PLEASE CONTACT:

Allied Gold Corp Limited
Stephan Theron
Email: [email protected]

Allied Merger Corporation
(On behalf of the Former Yamana Principals)
Gerardo Fernandez
Tel: +1 (647) 526-4258
Email: [email protected]

Mondavi Ventures Ltd.
Scott Ackerman
Tel: +1 (778) 331-8505

This news release does not constitute an offer to sell, or a solicitation of an offer to buy, any securities in Canada, the United States or any other jurisdiction. No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein. The securities referred to in this news release have not been and will not be registered under the U.S. Securities Act or any state securities laws and may not be offered or sold within the United States unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

Cautionary Statement Regarding Forward-Looking Information

This news release contains certain “forward-looking information” within the meaning of applicable Canadian securities legislation. Such forward-looking information is not representative of historical facts or information or current condition, but instead represents only Allied’s, AMC’s or Mondavi’s beliefs regarding future events, plans or objectives, many of which, by their nature, are inherently uncertain and outside of Allied’s, AMC’s and Mondavi’s control. Generally, such forward-looking information can be identified by the use of forward-looking terminology such as “plans”, “expects”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates”, “believes”, or the negative or variations of such words and phrases or may contain statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “will continue”, “will occur” or “will be achieved”. The forward-looking information contained herein includes, but is not limited to, information concerning the Financing and the RTO, including the structure, timing, completion, and terms and conditions thereof; the use of proceeds of the Financing; the proposed board and management of the Resulting Issuer; expectations for the effects of the Financing and the RTO; and the business of Allied.

By identifying such information and statements in this manner, Allied, AMC and Mondavi are alerting the reader that such information and statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Allied, AMC or Mondavi to be materially different from those expressed or implied by such information and statements. In addition, in connection with the forward-looking information contained in this news release, Allied, AMC and Mondavi have made certain assumptions. Among the key factors that could cause actual results to differ materially from those projected in the forward-looking information are the following: the ability to consummate the Financing and the RTO on the proposed terms and on the proposed timeline anticipated, or at all; the ability to obtain all requisite regulatory and shareholder approvals and the satisfaction of other conditions to the consummation of the Financing and the RTO on the proposed terms and schedule; the ability to satisfy any applicable listing conditions; the potential impact of the announcement or consummation of the Financing and the RTO on relationships, including with regulatory bodies, employees, suppliers, contractors and competitors; changes in general economic, business and political conditions, including changes in the financial markets; changes in applicable laws; and compliance with extensive government regulation. Should one or more of these risks, uncertainties or other factors materialize, or should assumptions underlying the forward-looking information prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected.

Although Allied, AMC and Mondavi believe that the assumptions and factors used in preparing, and the expectations contained in, the forward-looking information are reasonable, undue reliance should not be placed on such information, and no assurance or guarantee can be given that such forward-looking information will prove to be accurate. The forward-looking information contained in this news release is provided as of the date of this news release, and none of Allied, AMC or Mondavi undertakes to update any forward-looking information that is contained or referenced herein, except in accordance with applicable Canadian securities laws.