Barrick Gold Corporation (NYSE:GOLD) (TSX:ABX) announced that it has agreed to subscribe for 21,265,370 units of Hercules Silver Corp. in a non-brokered private placement at a price of $1.10 per Unit, for total consideration of $23,391,907. Each Unit is comprised of one common share and 0.32 of a common share purchase warrant, where each whole warrant will entitle the holder for a period of two years to acquire one Hercules common share at a price of $1.32 per common share.
Barrick currently owns 5,291,500 common shares of Hercules, representing approximately 2.73% of Hercules’ issued and outstanding common shares on a non-diluted basis. Following the Private Placement, Barrick will hold 26,556,870 common shares of Hercules and 6,804,918 warrants, representing approximately 12.33% of Hercules’ issued and outstanding common shares on a non-diluted basis, and 15.02% on a partially-diluted basis. Closing of the Private Placement will occur on or before November 8, 2023 or such other date as may be agreed by the Barrick and Hercules, subject in each case to customary closing conditions, including receipt of all necessary approvals, including the approval of the TSX Venture Exchange.
In connection with the Private Placement, Barrick and Hercules will enter into an investor rights agreement. Pursuant to the Investor Rights Agreement, provided that Barrick maintains an ownership interest in Hercules of at least 5%, Barrick will be entitled to anti-dilution and information rights, as well as a right of first refusal in respect of the sale by Hercules of any interest in its 100% owned Hercules Silver Project, located in Washington County, Idaho. Barrick will also, for a period of three years from the date of the Investor Rights Agreement, either vote its Hercules common shares in accordance with the recommendations of the board or management of Hercules, or abstain from voting on such matters, and be subject to a standstill which will prohibit Barrick from acquiring more than 19.9% of the outstanding Hercules common shares, subject to certain exceptions. Barrick will also be providing certain technical support and expertise to Hercules for the 2024 season and program.
Barrick is acquiring the Units for investment purposes. Barrick may, depending on market conditions and other factors, acquire additional common shares or other securities of Hercules, or dispose of some or all of the common shares or other securities of Hercules that it owns at such time.
An early warning report will be filed by Barrick in accordance with applicable securities laws.
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