Toronto, Ontario--(Newsfile Corp. - February 17, 2021) - BB1 Acquisition Corp. (TSXV: BBA.P) (the "Company" or "BB1") and Cerrado Gold Inc. ("Cerrado") are pleased to announce that the Company and Cerrado have completed the brokered private placement of subscription receipts ("Subscription Receipts") led by Cormark Securities Inc. and Haywood Securities Inc. as the co-lead agents (the "Co-Lead Agents"), and including Stifel Nicolaus Canada Inc. and H.C. Wainwright & Co., LLC (together with the Co-Lead Agents, the "Agents") for aggregate gross proceeds of $15,000,120 (the "Financing"). The Financing was completed in connection with the proposed business combination (the "Transaction") between Cerrado and BB1 previously announced in press releases of BB1 dated August 4, 2020, December 2, 2020 and February 16, 2021, which Transaction is intended to constitute BB1's "Qualifying Transaction" pursuant to Policy 2.4 of the TSX Venture Exchange (the "TSXV"). The Company, upon and subject to completion of the Transaction (the "Resulting Issuer"), will continue under the name "Cerrado Gold Inc." and trade on the TSXV under the symbol "CERT".
The Financing
Under the terms of the Financing and pursuant to an agency agreement (the "Agency Agreement") dated February 17, 2021 among Cerrado, BB1 and the Agents, Cerrado issued 11,111,200 Subscription Receipts at a price of $1.35 per Subscription Receipt (the "Offering Price") for gross proceeds of $15,000,120. The net proceeds will be used by the Resulting Issuer to fund exploration and development at Cerrado's properties in Argentina and Brazil and for general corporate working capital.
Each Subscription Receipt will be automatically exchanged, without payment of any additional consideration, for one (1) common share of Cerrado (a "Common Share") upon the satisfaction of certain escrow release conditions. On closing of the Transaction, each Common Share will then, without payment of any additional consideration or taking of any action, subsequently be exchanged for one (1) common share of the Resulting Issuer (a "Resulting Issuer Share") pursuant to the Transaction. The escrow release conditions include (i) the satisfaction or waiver of all conditions to the completion of the Transaction, and (ii) receipt of all required regulatory, corporate, and shareholder approvals, including the approval of the TSXV for the Transaction and the listing of the Resulting Issuer Shares to be issued pursuant to the Transaction.
The gross proceeds of the Financing, less certain fees and expenses of the Agents incurred in connection with the Financing, have been placed in escrow on behalf of the purchasers of Subscription Receipts, and will be released to Cerrado upon satisfaction of the escrow release conditions. If the escrow release conditions are not satisfied by 5:00 p.m. (Eastern time) on April 3, 2021, the Subscription Receipts will be cancelled and all proceeds from the sale of Subscription Receipts plus accrued interest will be returned to the purchasers.
Upon satisfaction of the escrow release conditions, the Agents shall have earned a cash commission of $900,007.20, representing 6.0% of the gross proceeds of the Financing, pursuant to the Agency Agreement. As additional compensation, the Agents also received an aggregate of 666,672 broker warrants from Cerrado (the "Compensation Warrants"), each of which entitles the holder to acquire one Common Share at the Offering Price, until February 17, 2022. Upon closing of the Transaction, the Compensation Warrants will be exchanged for warrants of the Resulting Issuer in connection with the Transaction.
Unless permitted under securities legislation, all securities issued pursuant to the Financing are subject to a hold period ending on the date that is four months and a day after the later of (i) February 17, 2021, and (ii) the date that Cerrado became a reporting issuer in any province or territory.
About BB1
The Company is incorporated under the Business Corporations Act (Ontario) and is a capital pool company listed on the TSXV. The Company has no commercial operations and has no assets other than cash. For further information please see the final prospectus of the Company dated October 5, 2018, filed on SEDAR at www.sedar.com.
About Cerrado
Cerrado is a private gold production and exploration company with gold production derived from its 100% owned Minera Don Nicolas mine in Santa Cruz province, Argentina. The company is also undertaking exploration at its 100% owned Monte Do Carmo project located in Tocantins, Brazil. For more information about Cerrado Gold please visit our website at www.ceradogold.com.
For further information, please contact:
Stephen Shefsky
Chief Executive Officer
BB1 Acquisition Corp.
(416)-366-4200
Mark Brennan
Chief Executive Officer and Co Chairman
Cerrado Gold Inc.
647-796-0023
Cautionary Notes
All information provided in this press release relating to Cerrado has been provided by management of Cerrado and has not been independently verified by management of the Company.
Completion of the Transaction is subject to a number of conditions, including but not limited to, TSXV acceptance and if applicable pursuant to TSXV requirements, majority of the minority shareholder approval. If applicable, the Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Transaction will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the management information circular, filing statement prepared in connection with the Transaction or the Company's subsequent press releases, any information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.
The TSXV has in no way passed upon the merits of the proposed Transaction and has neither approved nor disapproved the contents of this press release. Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.
This press release contains statements that constitute "forward-looking information" (collectively, "forward-looking statements") within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Any statement that discusses predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as "expects", or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "budget", "scheduled", "forecasts", "estimates", "believes" or "intends" or variations of such words and phrases or stating that certain actions, events or results "may" or "could", "would", "might" or "will" be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements. Forward-looking statements contained in this press release include, without limitation, statements regarding: the terms, conditions and completion of the Transaction; use of proceeds; conversion of the Subscription Receipts; and the business and operations of the Resulting Issuer. In making the forward-looking statements contained in this press release, the Company has made certain assumptions, including, among others, that: due diligence will be satisfactory; that applicable escrow release conditions will be satisfied; and that all applicable shareholder, and regulatory approvals for the Transaction will be obtained or received. Although the Company believes that the expectations reflected in forward-looking statements are reasonable, it can give no assurance that the expectations of any forward-looking statements will prove to be correct. Known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: results of due diligence; delay or failure to receive board, shareholder or regulatory approvals; and general business, economic, competitive, political and social uncertainties. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this press release. Except as required by law, the Company disclaims any intention and assumes no obligation to update or revise any forward-looking statements to reflect actual results, whether as a result of new information, future events, changes in assumptions, changes in factors affecting such forward-looking statements or otherwise.
Not for distribution to United States newswire services or for dissemination in the United States. This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.
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