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Kerr Mines (TSX:KER) has announced that it has agreed to sell 8 million common shares in the capital of Bonterra Resources (TSXV:BTR) at a price of $02.5 per Bonterra share for gross proceeds of $2 million. As quoted in the press release: Kerr agreed to sell 4,000,000 Bonterra Shares to each of Braydon Capital Corporation, …
Kerr Mines (TSX:KER) has announced that it has agreed to sell 8 million common shares in the capital of Bonterra Resources (TSXV:BTR) at a price of $02.5 per Bonterra share for gross proceeds of $2 million.
As quoted in the press release:
Kerr agreed to sell 4,000,000 Bonterra Shares to each of Braydon Capital Corporation, a company controlled and owned by Claudio Ciavarella who is a director of the Company (“Braydon“) and Trans Oceanic Minerals Company Ltd., a company controlled by Fahad Al Tamimi, the Company’s Chairman of the board of directors (“TOMCL“). Completion of the transaction remains subject to final acceptance by the TSX.
“Proceeds from the sale of our non-core assets will be used to execute our strategy aimed at re-starting production at our flagship Copperstone mine,” said Chris Hopkins, Interim President and CEO of Kerr Mines. “Efforts at dewatering, mine rehabilitation and production re-start planning are now underway. We look forward to providing regular updates as key milestones are achieved.”
The sale of the Bonterra Shares to each of Braydon and TOMCL constitutes a related party transaction as each of Braydon and TOMCL are insiders of the Company. However, such related party transaction is exempt from the formal valuation and minority approval requirements of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101“) on the basis of the “Fair Market Value Not More Than 25% of Market Capitalization” exemptions contained in ss. 5.5(a) and 5.7(1)(a) of MI 61-101. In particular, at the time the transaction was agreed to, neither the fair market value of the Bonterra Shares to be acquired by each of Braydon and TOCML nor the fair market value of the consideration paid by each of Braydon and TOCML for such Bonterra Shares exceeded 25% of the Company’s market capitalization.