Falco Resources Ltd. (TSX-V: FPC) announces today that, in connection with the proposed plan of arrangement with Golden Queen Mining Consolidated Ltd. announced on February 11, 2020, Falco decided to increase the consideration offered to the shareholders of Golden Queen. Golden Queen’s sole asset is a cash balance estimated at approximately $4.2 million at closing of the transaction.
As a consequence of recent extraordinary events, global market conditions and decline in its share price, Falco increases its initial offer to Golden Queen Shareholders and is now proposing an exchange ratio of 1.35 common shares of Falco for each common share of Golden Queen held immediately prior to the effective time of the Arrangement.
This represents an increase of approximately 15% to the 1.18 exchange ratio initially offered by Falco to the Golden Queen Shareholders. The shareholders representing 19% of the issued and outstanding shares of Golden Queen have entered into voting and support agreements in favour of the transaction.
All other terms of the Arrangement remain unchanged and the completion of the Arrangement remains subject to obtaining required regulatory, stock exchange, court and other approvals, and satisfaction of closing conditions customary for a transaction of this nature.
The Arrangement is an arm’s length transaction within the meaning of applicable securities laws. However, while Mr. Bryan A. Coates is director of both Golden Queen and Falco, he did not participate in any deliberation of the Board of Directors of Falco. The Arrangement is deemed a non-arm’s length transaction pursuant to the TSX Venture Exchange’s policies.
Falco Resources Ltd. is one of the largest mineral claim holders in the Province of Québec, with extensive land holdings in the Abitibi Greenstone Belt. Falco owns about approximately 67,000 hectares of land in the Rouyn-Noranda mining camp, which represents 70% of the entire camp and includes 13 former gold and base metal mine sites. Falco’s principal asset is the Horne 5 Project located in the former Horne mine that was operated by Noranda from 1927 to 1976 and produced 11.6 million ounces of gold and 2.5 billion pounds of copper. Osisko Gold Royalties Ltd is the largest shareholder of the Corporation and currently owns 19.9% of the issued and outstanding shares of the Corporation. The Corporation has 207,878,736 shares issued and outstanding.
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We acknowledge the [financial] support of the Government of Canada.