Outcrop Silver & Gold Corp (TSXV: OCG) and Zacapa Resources (TSXV: ZACA) have elected to come together as a single company via an all-share transaction.
The transaction is being pushed as means of strengthening Outcrop’s exploration and development pipeline while reducing operating and overhead expenses for the two firms. For Zacapa, the move is said to be an opportunity to “hold shares of a larger, more diversified company with a history of stronger access to markets.”
The transaction will see a subsidiary of Outcrop merge with Zacapa, resulting in Zacapa shareholders receiving one share of Outcrop for every four shares of Zacapa held. The company notably did not identify the premium ascribed to Zacapa shares.
Upon closing, Zacapa shareholders will hold 12% of the resulting company.
The transaction is considered to be a related party transaction on a number of fronts. Outcrop’s CEO, Ian Slater, is the Chairman of Zacapa, while the two companies share a CFO, Sunil Sharma, as well as a corporate secretary, Melissa Martensen, and a director, Jay Sujir. Collectively, five members of Outcrop’s management owns 15.27% of Zacapa.
The two firms are looking to close the transaction “in an expedited manner,” with a shareholder meeting for Zacapa slated to be held in October. If approved, the transaction would look to close shortly thereafter.
No break fees are included under the terms of the merger.
Outcrop Silver & Gold last traded at $0.19 on the TSX Venture.
Information for this briefing was found via Sedar and the companies mentioned. 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.
