Sirocco Mining and Canada Lithium to be known as RB Energy
TORONTO (miningweekly.com) – Following the business combination of Canada Lithium and fellow Canadian iodine producer Sirocco Mining, the new entity would be known as RB Energy, and not Li-On Minerals Inc as proposed in a notice of a special shareholder meeting and management information circular dated December 24, the companies announced on Tuesday.
The two firms in December announced a friendly business combination aimed at significant market and growth synergies and overall cost savings.
Canada Lithium, which is developing the advanced Quebec Lithium project in Quebec, was offering 294-million common shares, worth about $120-million, to acquire Sirocco.
Sirocco shareholders would receive 1.175 Canada Lithium shares for each Sirocco share, and the arrangement valued each Sirocco share at C$0.48, which represented a premium of about 23% to the 20-day volume-weighted average share price on the TSX on Tuesday.
Following the transaction, Canada Lithium shareholders would hold about 58% of the combined company, while current shareholders of Sirocco would hold about 42%.
Separately, Sirocco had also agreed to provide Canada Lithium with a bridge loan of up to $10-million, for which Sirocco could choose to receive repayment in cash or Canada Lithium shares.
Each party had agreed to a $4-million deal termination fee under certain circumstances.
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