MGX Minerals Inc (MGXMF)

[TradingCharts]

VANCOUVER, BRITISH COLUMBIA / November 1, 2018 / MGX Minerals Inc. (“MGX” or the “Company”) (CSE: XMG / OTCQB: MGXMF / FSE: 1MG) is pleased to announce that it has entered into an arrangement agreement, dated October 31, 2018 (the “Arrangement Agreement”) with its wholly-owned subsidiary, MGX Renewables Inc. (formerly ZincNyx Energy Solutions Inc.) (“MGX Renewables”) whereby MGX will complete the previously announced spin-out of 40% of the common shares of MGX Renewables (“MGX Renewables Shares”) pursuant to a plan of arrangement (the “Plan of Arrangement”) under the Business Corporations Act (British Columbia). Jared Lazerson has been appointed as CEO of MGX Renewables.
As at the date hereof, there are 30,000,000 MGX Renewables Shares issued and outstanding. Under the spin-out, MGX shareholders of record on June 29, 2018 will receive one MGX Renewables Share for each 12.4163 MGX common shares (“MGX Shares”) then held (the “First Distribution”), and MGX shareholders of record on October 22, 2018 will receive one MGX Renewables Shares for each 59.8186 MGX Shares then held (the “Second Distribution” and, together with the First Distribution, the “Distribution”).
The spin-out will require certain approvals by MGX shareholders at MGX’s annual general and special meeting, expected to take place on December 20, 2018 (the “Meeting”). Further information regarding the transaction will be included in the management proxy circular to be mailed to MGX shareholders for the Meeting. Copies of the arrangement agreement and management proxy circular will be available on MGX’s SEDAR profile at www.sedar.com.
In connection with the Plan of Arrangement, MGX is also pleased to announce a non-brokered private placement by MGX Renewables of up to 12,000,000 subscription receipts (the “Subscription Receipts”) at a price of $0.25 per Subscription Receipt for aggregate gross proceeds of up to $3,000,000 (the “Subscription Receipt Offering”). Each Subscription Receipt will represent the right to automatically receive, upon closing of the Plan of Arrangement, one unit of MGX Renewables (each, a “Unit”), each Unit being comprised of one MGX Renewables Share (“Unit Share”) and one half of one MGX Renewables Share purchase warrant (each whole warrant a “Warrant”). Each Warrant will entitle the holder to acquire one MGX Renewables Share at a price per MGX Renewables Share of $0.35 until the earlier of November 30, 2020. The Warrants will contain an accelerator clause whereby, if at any time after the date of issuance and prior to the expiry of the Warrants the volume weighted average trading price of the Common Shares exceeds $0.50 for a period of ten consecutive trading days, the Corporation shall be entitled, at the option of the Corporation, to accelerate the expiry date of the Warrants by delivering written notice to the holders of Warrants, to a date that is not less than 30 days following the delivery of such written notice. The Subscription Receipt Offering is expected to close on November 30, 2018.
Following the Company’s news releases dated April 3, 2018, April 30, 2018, June 5, 2018, August 9, 2018, October 3, 2018 and October 16, 2018 (collectively, the “Prior Releases”), MGX determined that the most practical means of effecting the Distribution was by way of the Plan of Arrangement. As such, MGX no longer intends to issue any dividend-in-kind of MGX Renewables Shares to MGX shareholders and MGX no longer expects the Distribution to be made by way of MGX Renewables filing a prospectus with securities regulatory authorities. Neither the Company nor MGX Renewables has made any application to list the MGX Renewables Shares for trading on an exchange, no market currently exists for the MGX Renewables Shares, and the Prior Releases are qualified in their entirety by this news release.
This news release does not constitute an offer to sell or a solicitation of an offer to buy any securities in the United States. The MGX Renewables Shares, Subscription Receipts and any securities underlying the Subscription Receipts (the Units, Unit Shares, Warrants and Warrant Shares) 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 in the United States, unless pursuant to an exemption from such laws.
For more information on MGX Renewables, please refer to the Prior Releases and the Company’s other news releases, dated December 13, 2017, December 18, 2017, January 9, 2018, January 30, 2018, February 1, 2018, February 7, 2018 and March 12, 2018, available on the Company’s profile on SEDAR at www.sedar.com and at www.mgxminerals.com.
About MGX Renewables Inc. MGX Renewables Inc. has developed a patented regenerative zinc-air flow battery that efficiently stores energy in the form of zinc particles and contains none of the traditional high cost battery commodities such as lithium, vanadium, or cobalt. The technology allows for low cost mass storage of energy and can be deployed into a wide range of applications. https://www.thecse.com/en/listings/mining/mgx-minerals-inc