OTTAWA, CANADA: BWA Group plc, the NEX Exchange Growth Market traded investment company, has conditionally agreed to acquire the whole of the issued share capital of Kings of the North Corp (KOTN), a Canadian mineral company owning or having rights to five mining projects, mainly in Quebec. [the_ad id=”31605″]All these resource areas are focussed predominantly on gold. KOTN is presently majority owned by St-Georges Eco-Mining Corp, a company listed on the Canadian Stock Exchange. The consideration payable for the acquisition is CAD 7.5 million.
The consideration is expected to be satisfied by the issue to St-Georges Eco-Mining Corp (SX) and the other minority vendors of the sterling equivalent of CAD7.5 million in nominal amount of unlisted, unsecured, convertible, interest-free loan notes in BWA, with an initial repayment date three years after issue.
The Convertible Notes will include restrictions on conversion such that St-Georges Eco-Mining Corp (SX) and the other minority vendors will not be able to own or control more than 29% of the voting rights of BWA. The Convertible Notes will be convertible into BWA shares at a rate equivalent to 0.5p per BWA share or, if higher, the market price of a BWA share at the time of conversion.
As part of the acquisition, it is proposed that BWA will subscribe for CAD 300,000 worth of shares in SX at a price calculated by reference to the market price of the SX shares at the time of issue, subject to a minimum price of CAD$0.10 per SX share. The current sterling cost of such shares would be approximately £170,000. The subscription price for the SX shares would be satisfied in cash.
The acquisition is conditional, amongst other things, on approval by BWA?s shareholders and on BWA raising a minimum of £500,000 by means of an issue of new ordinary shares.