December 30, 2022 – Karus Gold Corp. (“Karus” or the “Company”), a gold exploration company focused on the South Cariboo Gold District in British Columbia, announces it has entered into a definitive binding agreement (the “Agreement”) to be acquired by Kenadyr Metals Corp. (TSX-V: KEN; OTC-MKTS: KNDYF) (“Kenadyr”) on the same terms previously announced on November 16, 2022.
Per the Agreement, Kenadyr will acquire 100% of the issued and outstanding common shares of Karus (the “Karus Common Shares”) via a Kenadyr issuance of common shares resulting in a reverse takeover by Karus (the “Proposed Transaction”). The resulting issuer will be Kenadyr Metals Corp., a Tier 2 TSX-V listed company. All dollar amounts are Canadian.
Proposed Transaction Highlights
- Values Karus at $19.7 million and Kenadyr at $1.1 million, post debt-for-equity
- Combined company to trade on TSX-V and OTC exchanges following closing
- Contingent on a minimum $2 million financing and other customary approvals
- Provides a path forward for the continued development of the South Cariboo Gold Project
- Led by a strong experienced leadership team that includes:
- CEO Tim McCutcheon to take the South Cariboo Gold project forward
- Independent non-Executive Chair Stuart “Tookie” Angus
- Independent Board of Scott Trebilcock, David Whittle and Yulia Chekunaeva
- Retains experienced exploration team led by Michael Tucker
The Proposed Transaction
Under the terms of the Agreement, current shareholders of Karus will receive common shares of Kenadyr (“Kenadyr Common Shares”), equal to an aggregate of approximately 39,091,346 Kenadyr Common Shares post-Consolidation (as defined below). The Proposed Transaction values Karus at $19.7 million (including certain payables settled in Kenadyr Common Shares) and values Kenadyr at $1.1 million pre-Concurrent Financing (as defined below) and after various debt settlements in Kenadyr Common Shares that Kenadyr will settle prior to or concurrent at closing.
As a condition of the Proposed Transaction, Kenadyr will complete a private placement (the “Concurrent Financing”) for gross proceeds of a minimum $2,000,000 at an effective price of $0.50 per Kenadyr Common Share post-Consolidation. In addition, Kenadyr intends to complete a private placement of flow-through common shares (the “Concurrent Flow-Through Financing”). The Agreement specifies that gross proceeds of a maximum of $5,000,000 may be raised under the Concurrent Financing and Concurrent Flow-Through Financing. Additional information on the terms of the Concurrent Financing and Concurrent Flow-Through Financing will be disclosed once finalized.
Prior to the closing of the Proposed Transaction, Kenadyr will complete a consolidation of Kenadyr Common Shares on the basis of one (1) post-consolidation Kenadyr Common Share for every ten (10) pre-consolidation Kenadyr Common Shares (the “Consolidation”).
No loans or advances have been made between Karus and Kenadyr. There is no finder’s fee connected with the Proposed Transaction.
