Decision Day
Monarch Gold files infocirc re Dec. 30 meeting
2020-12-08 09:13 ET - News Release
Mr. Jean-Marc Lacoste reports
MONARCH GOLD ANNOUNCES MAILING OF MANAGEMENT INFORMATION CIRCULAR FOR PROPOSED ARRANGEMENT WITH YAMANA GOLD
Monarch Gold Corp. has filed its management information circular and related materials for the annual and special meeting of shareholders and optionholders of Monarch to be held on Dec. 30, 2020, in connection with the proposed arrangement with Yamana Gold Inc.
The Transaction
As announced on November 2, 2020, Monarch entered into an arrangement agreement (the "Arrangement Agreement") with Yamana pursuant to which Yamana will acquire the Wasamac property and the Camflo property and mill through the acquisition of all of the outstanding shares of Monarch (other than the shares already owned by Yamana) for total consideration of approximately C$200 million or C$0.63 per Monarch share on a fully diluted basis. Under the Arrangement, Monarch will first complete a spin-out to its Shareholders through a newly-formed company, Monarch Mining Corporation ("SpinCo"), which will hold the remaining mineral properties and certain other assets and liabilities of Monarch. Pursuant to the Arrangement, Monarch Shareholders will receive, in respect of each common share of Monarch (a "Monarch Share") held:
$0.192 in cash from Yamana;
0.0376 of a common share of Yamana (each whole share, a "Yamana Share"); and
0.20 of a common share of SpinCo (each whole share, a "SpinCo Share");
(collectively, the "Consideration").
Benefits to Monarch Shareholders of the Arrangement Agreement
Significant Premium to Monarch Shareholders . Yamana has offered Monarch Shareholders a significant premium to the Monarch Share price. The Consideration to be received by the Monarch Shareholders, based on the closing price of the Yamana Shares on the Toronto Stock Exchange (the "TSX") on October 30, 2020 (being the last trading day prior to the announcement of the Arrangement), represents a premium of approximately 43% based on the closing price of the Monarch Shares on the TSX on October 30, 2020 and a premium of 43% to the volume weighted average price of the Monarch Shares on the TSX for the 20-day period ending on October 30, 2020.
Continued Exposure to the Acquisition Properties . Monarch Shareholders, through their ownership of Yamana Shares, will participate in the value associated with the exploration, development and operation of the acquisition properties, supported by Yamana's technical, operational and financial capability.
Benefits of Owning Yamana Shares . The Yamana Shares to be received by Monarch Shareholders in the Arrangement offer Monarch Shareholders an opportunity to own shares in a high-quality, low-cost gold producer, as well as exposure to Yamana's portfolio of well diversified assets in safe jurisdictions throughout the Americas.
Continued Exposure to Other Monarch Assets . Monarch Shareholders, through their ownership of SpinCo Shares, will have continued exposure to the other Monarch assets being transferred to SpinCo.
Access to Capital and Enhanced Capital Markets Exposure . Yamana has a strong balance sheet with sufficient cash and liquidity to advance its assets. The management team and board of directors of Yamana have high visibility in the mining industry and significant relationships with key sector investors and analysts that should help to attract strong retail and institutional support for Yamana and the Wasamac Property.
Board Recommendation
The Board of directors of Monarch unanimously (with Mr. Yohann Bouchard who, having declared his interest as an officer of Yamana, did not participate in the meetings or vote with respect to the Arrangement or the Arrangement Agreement) determined that the Arrangement is fair to the Monarch Shareholders, that the Arrangement and the entering into of the Arrangement Agreement are in the best interests of Monarch and recommends that Monarch Securityholders vote FOR the resolution approving the Arrangement.
The Meeting
The Meeting will be held on December 30, 2020 at 9:30 a.m. (Eastern time). In light of the recent coronavirus (COVID-19) pandemic and in order to address potential issues arising from the unprecedented public health impact of COVID-19, comply with applicable public health directives that may be in force at the time of the Meeting and to limit and mitigate risks to the health and safety of our communities, Monarch Securityholders, employees, directors and other stakeholders, the Meeting will be held in a virtual format, which will be conducted via live webcast online at https://web.lumiagm.com/201893367 (password: monarch2020).
Securityholder Questions and Assistance
If you have questions or need assistance in your consideration of the Arrangement, or with the completion and delivery of your proxy, please contact Monarch's shareholder communications advisor and proxy solicitation agent, Laurel Hill Advisory Group, by telephone at 1.877.452.7184 toll-free in Canada (+1.416.304.0211 for international calls) or by e-mail at assistance@laurelhill.c