…Osino says it’s a superior offer to the N$4 billion which was offered by Dundee Precious Metals
Osino Resources Corp. has announced that it has received a proposal from a foreign-based mining company for the acquisition of all of the issued and outstanding common shares of the Company and all of the issued and outstanding securities convertible into Common Shares for cash consideration of C$1.90 for each Common Share by way of a plan of arrangement.
Osino is a Canadian gold exploration and development company focused on the fast-tracked development of its wholly owned, Twin Hills Gold Project in central Namibia.
The company also said that the Board of Directors of the Company has unanimously determined, after consultation with its financial and legal advisors, and based upon the unanimous recommendation of the special committee of the Board, that the New Offer constitutes a “Superior Proposal” in accordance with the terms of the arrangement agreement between the Company and Dundee Precious Metals Inc. dated December 17, 2023.
“Superior Proposal Key Terms Pursuant to the terms of the New Offer, the Company’s shareholders would receive cash consideration of C$1.90 for each Common Share, valuing Osino at approximately C$368 million (about N$5.1 billion). The New Offer contemplates that the offeror will provide the Company with a loan comprising of (i) US$10 million facility concurrently with the execution of the arrangement agreement to enable the continued, fast-tracked development of the Twin Hills gold project and to fund other liquidity needs of the Company and (ii) an advance in an amount equal to the termination fee payable by the Company in the event of a termination of the DPM Arrangement Agreement as a result of the New Offer. The New Facility will be convertible into Common Shares at C$1.39 per Common Share (i) at the Offeror’s option at any time; and (ii) in the event the reverse termination fee is payable by the Offeror,” said Heye Daun, President and CEO.
Based on the closing price of the DPM common shares on the Toronto Stock Exchange as of February 16, 2024, the Superior Proposal represents a premium of approximately 32% to the implied value of the consideration offered pursuant to the DPM Arrangement Agreement and approximately 68% premium to the unaffected share price one trading day prior to announcement of the DPM Arrangement Agreement. Except for the consideration being offered and certain buyer-specific regulatory closing conditions, the arrangement agreement that would be entered into with the Offeror is substantially the same as the DPM Arrangement Agreement. Commensurate with the increase in consideration, the proposed arrangement agreement with the Offeror provides for an increase in the termination fee to US$9.55 million, which is payable in certain circumstances by the Company to the Offeror and the repayment of amounts owing under the New Facility. The proposed arrangement agreement with the Offeror also includes a reverse termination fee in the amount of US$9.55 million which is payable by the Offeror to the Company in certain specified circumstances.
In accordance with the DPM Arrangement Agreement, the Company notified DPM today that, among other matters, it considers the New Offer to be a Superior Proposal under the DPM Arrangement Agreement and that the five business day matching period commenced, during which DPM has the right, but not the obligation, to propose to amend the terms of the DPM Arrangement Agreement in order for the New Offer to cease to be a Superior Proposal. Following delivery of the notice, the Company received notice from DPM advising that DPM will not propose to amend the terms of the DPM Arrangement Agreement in light of the Superior Proposal.
The Offeror and the Company have confirmed their readiness and intention to execute the proposed arrangement agreement promptly following a termination of the DPM Arrangement Agreement. The Company is in the process of settling logistical matters including payment of the termination fee to DPM in anticipation of the termination of the DPM Arrangement Agreement in accordance with its terms. Further details regarding the DPM Arrangement Agreement and the Superior Proposal will be provided once available in due course.
In the event the DPM Arrangement Agreement is terminated, the Company will provide notice to securityholders of the cancellation of the special meeting of securityholders (currently scheduled for March 1, 2024). In the event the proposed arrangement agreement is executed, the Company will provide a new date and time on which a special meeting is expected to be held in connection with the Superior Proposal, including information as to the timing of the delivery of new meeting materials to securityholders in connection therewith and the filing of the new meeting materials on SEDAR+.
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