Lupaka Gold Corp. ("
Lupaka" or the
“
Company") (TSX-V: LPK, FRA: LQP) is pleased to
announce that it intends to issue contingent value rights (each, a
“
CVR”) to its shareholders and take certain other
measures to facilitate the growth of the Company.
Contingent Value Rights
Each CVR will entitle the holder to receive a
pro rata portion of any net amount available for distribution if
the Company receives a cash award in the Company’s ongoing
arbitration proceedings with the Republic of Peru (the
“Arbitration”). The net amount will be calculated
by deducting from the Award proceeds certain amounts including the
fees of the Company’s Arbitration counsel and other payables and
amounts to be retained by the Company for working capital and other
corporate purposes, and a de minimus threshold will be applied to
determine if a payment will be made to the CVR holders.
The Company anticipates issuing the CVRs by way
of a one-time special dividend to shareholders holding common
shares of the Company as of May 18, 2022 (the
“Record Date”). Each shareholder
on the Record Date will receive one CVR for each common share of
the Company held. The Company expects the CVRs to be governed by
the terms of an indenture to be entered into between the Company
and Computershare Trust Company of Canada.
The issuance of the CVRs by the Company will
crystallize the entitlement of current shareholders to a portion of
an Arbitration award received by the Company, if any, and prevent
dilution of this entitlement through future share issuances of the
Company. The issuance of the CVRs is also expected to provide the
Company with an enhanced ability to raise equity financing and
pursue acquisitions and development of mineral properties.
The CVR issuance remains subject to approvals
including the approval of the TSX Venture Exchange (the
“Exchange”). There can be no assurance that the
CVRs will be issued. The Company advises that the arbitration
continues to progress per the agreed to schedule and that there
have been no material developments in the status of the Arbitration
since the Company’s most recent update on October 7, 2021.There can
be no assurances that the Company will be successful in its
Arbitration claim or receive any Arbitration award. Further, even
if an Arbitration award is received by the Company, there can be no
assurances that the award will be in an amount sufficient to result
in any payment to the CVR holders. The Company anticipates issuing
the CVRs by way of a dividend. Shareholders should obtain their own
tax advice.
Annual General and Special Meeting to
Approve Consolidation and Articles Amendment
In order to further prepare the Company to
pursue new projects and development of its properties, including
additional financing, the Company will be asking shareholders to
approve a consolidation of the common shares in the capital of the
Company at an annual general and special meeting (the
“Meeting”) of shareholders to be held on June 10,
2022 (the “Meeting Date”).
The Company intends to consolidate its
outstanding common shares on the basis of one (1)
post-consolidation common share for every ten (10)
pre-consolidation common shares (the
“Consolidation”). The Company will seek
shareholder approval for the Consolidation at the Meeting as
required by the Company’s Articles and will further seek amendment
to the Company’s Articles to permit future subdivisions or
consolidations of the Company’s share capital to be carried out by
resolution of the board of directors of the Company.
As of the date hereof, the Company has
160,277,702 common shares outstanding and, upon completion of the
Consolidation, the Company will have approximately 16,027,770
post-consolidation common shares issued and outstanding. The board
of directors believes it is in the best interest of the Company to
approve the Consolidation and the amendment to the Company’s
Articles.
The Company believes that the Consolidation will
increase the Company’s flexibility and competitiveness in the
marketplace and make the Company’s securities more attractive to a
wider audience of potential investors, thereby resulting in a more
efficient market for its common shares. The Consolidation will
affect all shareholders of the Company uniformly and affect all of
the Company’s stock options and warrants issued and outstanding at
the effective date. At the time of the Consolidation, the number,
exchange basis or exercise price of all stock options and warrants
issued and outstanding will be adjusted to reflect the
Consolidation.
The Consolidation and the proposed amendment to
the Company’s Articles is subject to shareholder and regulatory
approval, including the approval of the Exchange.
Neither the TSX Venture Exchange nor its
Regulation Service Provider (as the term is defined in the policies
of the TSX Venture Exchange) accepts responsibility for the
adequacy of this news release.
About Lupaka Gold Lupaka is an
active Canadian-based company focused on creating shareholder value
through identification and development of mining assets.
FOR FURTHER INFORMATION PLEASE
CONTACT:
Gordon Ellis, C.E.O.gellis@lupakagold.comTel:
(604) 985-3147
or visit the Company’s profile at www.sedar.com
or its website at www.lupakagold.com
Forward Looking Information
This press release contains forward-looking
statements and information that are based on the beliefs of
management and reflect Lupaka’s current expectations. When used in
this press release, the words "estimate", "project", "belief",
"anticipate", "intend", "expect", "plan", "predict", "may" or
"should" and the negative of these words or such variations thereon
or comparable terminology are intended to identify forward-looking
statements and information.
The forward-looking statements and information
in this press release include information relating to the
completion of the CVR issuance, Consolidation and amendment to the
Company’s Articles, settling the terms of and executing the
Indenture, and the timing of the foregoing as well as any future
payment of an Arbitration award.
Such statements and information reflect the
current views of Lupaka. By their nature, forward-looking
statements involve known and unknown risks, uncertainties and other
factors, which may cause our actual results, performance or
achievements, or other future events, to be materially different
from any future results, performance or achievements expressed or
implied by such forward-looking statements. Such factors include,
among others, the following risks: there is no assurance that
Lupaka will obtain any award or settlement proceeds from the
Arbitration and all requisite approvals for the proposed CVR
Issuance, Consolidation and amendment to the Company’s Articles
(including the approval of shareholders or the TSXV); there is no
assurance that the Company and Computershare will settle the terms
of the Indenture in respect; new laws or regulations could
adversely affect the completion of the proposed transactions, and
consequently the business and results of operations of the
Company.
There are a number of important factors that
could cause the Company’s actual results to differ materially from
those indicated or implied by forward-looking statements and
information. Such factors include, among others: Lupaka not begin
successful in the Arbitration; Lupaka not obtaining all requisite
approvals for completion of the proposed CVR issuance,
Consolidation and amendment to the Company’s Articles; the Company
and Computershare failing to settle the terms of the Indenture;
changes in equity markets; results of operating activities;
unanticipated costs and expenses; fluctuations in commodity prices;
and general market and industry conditions. The Company cautions
that the foregoing list of material factors is not exhaustive. When
relying on the Company's forward-looking statements and information
to make decisions, investors and others should carefully consider
the foregoing factors and other uncertainties and potential
events.
The Company has assumed that the material
factors referred to in the previous paragraph will not cause such
forward-looking statements and information to differ materially
from actual results or events. However, the list of these factors
is not exhaustive and is subject to change and there can be no
assurance that such assumptions will reflect the actual outcome of
such items or factors. The forward-looking information contained in
this press release represents the expectations of Lupaka as of the
date of this press release and, accordingly, is subject to change
after such date. Readers should not place undue importance on
forward looking information and should not rely upon this
information as of any other date. While Lupaka may elect to, it
does not undertake to update this information at any particular
time except as required in accordance with applicable laws.
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