Discovery Metals Corp. (“
Discovery”) (TSXV: DSV)
and Levon Resources Ltd. (“
Levon”) are pleased to
announce the successful completion of Discovery’s acquisition of
Levon, previously announced on May 30, 2019, pursuant to which
Discovery has acquired all of the issued and outstanding shares of
Levon (the “
Transaction”). With the completion of
the Transaction, Discovery is now a leading silver-focused
exploration and development company that controls several
district-scale projects in Mexico.
Summary of the Arrangement
Pursuant to a court approved statutory plan of
arrangement under the Business Corporations Act (British Columbia)
(the “Arrangement”), shareholders of Levon (the
“Levon Shareholders”) received 0.55 (the
“Exchange Ratio”) of a common share of Discovery
(each whole share, a “Discovery Share”), for every
common share of Levon held. The Supreme Court of British Columbia
granted its Final Order with respect to the Arrangement on July 31,
2019.
Upon closing of the Arrangement: (i) all
outstanding stock options of Levon were exchanged for options to
purchase Discovery Shares on the basis of the Exchange Ratio, and
will expire on August 2, 2020; (ii) all unexercised Levon share
purchase warrants were exchanged for warrants to purchase Discovery
Shares on the basis of the Exchange Ratio and will expire in
accordance with their current expiry dates; and (iii) Levon
amalgamated with Discovery’s wholly-owned subsidiary 1210573 B.C.
Ltd., and remains a wholly-owned subsidiary of Discovery
maintaining the name “Levon Resources Ltd.”
Effective on the closing of the Arrangement,
there were approximately 168 million Discovery Shares issued and
outstanding (including the conversion of the Subscription Receipts,
as described below, and the issuance of 64,412,929 Discovery Shares
issued to Levon shareholders pursuant to the Arrangement), and
Discovery’s market capitalization is approximately $66 million,
based on Discovery’s closing price on the TSX Venture Exchange on
August 1, 2019.
The Levon common shares will be delisted from
the Toronto Stock Exchange and Discovery intends to make an
application to applicable securities regulatory authorities
pursuant to which Levon will cease to be a reporting issuer.
Management and Directors
Concurrent with the closing of the Arrangement,
Vic Chevillon (Interim CEO and President of Levon) and Daniel
Vickerman (Chairman of Levon) were appointed to the board of
directors of Discovery. Discovery’s management team will continue
in their current roles, with Taj Singh continuing to serve as the
President and Chief Executive Officer and Murray John continuing in
the role of Chairman of the Board. The remaining members of
Discovery’s board of directors continue to be Dr. Mark O’Dea, Jeff
Parr, Jose Vizquerra-Benavides, Jesus Hernandez-Garza, and Dr.
Moira Smith.
Taj Singh, President and Chief Executive Officer
of Discovery, states: “We welcome all of our new shareholders.
Discovery is well-positioned in the current rising precious metals
price environment – we have a portfolio of exciting and high
potential projects, a strong team, and are well-financed. The
addition of Levon’s Dan Vickerman and Vic Chevillon to our board of
directors will provide history, experience, and insight into
Cordero, as we look to advance this project.”
Conversion of Subscription
Receipts
As announced in Discovery’s news releases dated
July 18, 2019, and July 24, 2019, Discovery recently closed a
private placement raising $9,004,770 which included 15,935,000
subscription receipts (“Subscription Receipts”) at
a price of $0.23 per Subscription Receipt. Each Subscription
Receipt was automatically converted into one Discovery Share, for
no additional consideration, on the closing of the Arrangement.
2176423 Ontario Ltd., a corporation beneficially owned by Mr. Eric
Sprott, held all of the Subscription Receipts. Taking into
consideration the Discovery Shares issued to Levon Shareholders in
connection with the Arrangement, on conversion of the Subscription
Receipts, Mr. Sprott has maintained his beneficial ownership of
approximately 19.9% of the issued and outstanding Discovery
Shares.
Cordero Project
On completion of the Arrangement, Discovery is
now the 100% owner of the Cordero Project located in one of
Mexico’s premier porphyry and carbonate replacement deposit (CRD)
districts in Chihuahua State, Mexico.
Further Details
Details of the Arrangement, including a summary
of the terms and conditions of the Arrangement Agreement, were
disclosed in a management information circular of Levon, which was
mailed to holders of Levon shares, options, and warrants on June
26, 2019, and is available on SEDAR at www.sedar.com.
About Discovery
Discovery is focused on discovering and
advancing high-grade polymetallic deposits in a land package of
approximately 150,000 hectares covering a historic mining district
in Coahuila State, Mexico. The portfolio of three large-scale,
drill-ready projects and several earlier-stage prospects, all with
shallow high-grade Ag-Zn-Pb mineralization, is situated in a
world-class carbonate replacement deposit belt that stretches from
southeast Arizona to central Mexico. The land holdings contain
numerous historical direct-ship ore workings with several
kilometers of underground development, but there was no modern
exploration or drill testing on the properties prior to the work
carried out by Discovery. In addition, Discovery is exploring one
of the world’s largest silver resources at its 100%-owned Cordero
Project in Chihuahua State, Mexico. The 37,000 hectare property
covers an entire porphyry district that hosts the announced
resource and numerous exploration targets for bulk tonnage
diatreme-hosted, porphyry-style, and carbonate replacement
deposits.
For further information please visit Discovery's website at
www.dsvmetals.com.
For Further Information:
Discovery Metals Corp.Taj Singh, President and Chief Executive
Officer,on behalf of the board of directors(416)
613-9410info@dsvmetals.com
This announcement is for informational purposes
only and does not constitute an offer to purchase, a solicitation
of an offer to sell any shares or a solicitation of a proxy.
Neither TSX Venture Exchange nor its Regulation
Services Provider (as that term is defined in the policies of the
TSX Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Cautionary Note Regarding
Forward-Looking Statements: Certain disclosures in this
release constitute forward-looking statements, including: the
delisting of the common shares of Levon from the Toronto Stock
Exchange and Levon ceasing to be a reporting issuer, and the
composition of the board of directors and management of Discovery
upon completion of the Arrangement. In making the forward-looking
statements in this release, the parties have applied certain
factors and assumptions that are based on the parties' current
beliefs as well as assumptions made by and information currently
available to the parties. Although the parties consider these
assumptions to be reasonable based on information currently
available to them, they may prove to be incorrect, and the
forward-looking statements in this release are subject to numerous
risks, uncertainties and other factors that may cause future
results to differ materially from those expressed or implied in
such forward-looking statements. Readers are cautioned not to place
undue reliance on forward-looking statements. The parties do not
intend, and expressly disclaims any intention or obligation to,
update or revise any forward-looking statements whether as a result
of new information, future events or otherwise, except as required
by law.
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