Caldas Gold Corp (TSXV: CGC) is getting a new facelift. The company this morning announced that it has proposed a change of board, management, and name, while also announcing an $85 million subscription receipt offering, with the funds being contingent on the changes being implemented. The changes being implemented will have the goal of building “a major gold mining company.”
The arrangement will see a group of investors, referred to as the Aris Gold Corporation, invest $85 million into the company at a price of $2.25 per unit, for a total of 37,777,778 subscription receipts. Each unit sold will consist of one common share and one warrant, with each warrant having an exercise price of $2.75 until July 29, 2025. Upon closing, the company is to be renamed to Aris Gold Corporation.
Following the close of the transaction, Gran Colombia Gold (TSX: GCM) will own a 45% stake in the public issuer, while having two positions on the reconstituted board of directors. The new board will consist of numerous high profile industry executives, including Ian Telfer as Chair, David Garofalo, Peter Marrone, Attie Roux, Daniela Cambone and Neil Woodyer, as well as Serafino Iacono and Hernan Martinez. Neil Woodyear will also serve as the CEO of the firm, while Frank Giustra will serve as a strategic advisor to the company.
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The incoming board and management team is expected to make up much of the new investment into the company on a personal basis, having committed a total of $38 million to the financing in aggregate. Notably, the new members of the firms executive team is highly experienced, having been responsible for the founding of Equinox Gold, Goldcorp, Endeavor Mining, Wheaton Precious Metals and Yamana Gold.
A number of change of control payments and severance payments will be required to be made following the closing of the transaction to existing members of the management team, including the following.
- Mr. Iacono – US$600,000, plus severance of US$3.44 million (2% of market cap)
- Mr. Paredes – US$600,000, plus severance of US$1.72 million (1% of market cap)
- Mr. Davies – US$465,500, plus severance of US$1.72 million (1% of market cap)
- Ms. Fullerton – CA$312,000
Upon closing, Aris Gold is to have a cash position of US$190 million, along with 137.6 million issued and outstanding shares.
Caldas Gold last traded at $1.97 on the TSX Venture.
Information for this briefing was found via Sedar and Caldas Gold. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
