Yorktown Funds and Weston Entities Acquire Common Shares of Battery Mineral Resources Corp. (Formerly Fusion Gold Ltd.) in Connection with Reverse Takeover

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New York, New York–(Newsfile Corp. – February 16, 2021) – Yorktown Energy Partners IV, L.P. (“Yorktown IV“), Yorktown Energy Partners VI, L.P. (“Yorktown VI“) and Yorktown Energy Partners XI, L.P. (“Yorktown XI” and together with Yorktown IV and Yorktown VI, the “Yorktown Entities“), each of which is a limited partnership managed by Yorktown Partners LLC (“Yorktown Partners“), and Weston Energy, LLC (“Weston Energy“) and Weston Energy II, LLC (“Weston II” and, together with Weston Energy, the “Weston Entities“), each of which is considered to be controlled by Yorktown XI under applicable securities laws in Canada, jointly announced today that they have exchanged their common shares (“BMR Shares“) of Battery Mineral Resources Corp. (“BMR“), a British Columbia corporation, for common shares (“Issuer Shares“) of Fusion Gold Ltd. (“Issuer“) in connection with the amalgamation (“Amalgamation“) of BMR and 1234525 B.C. Ltd. (“1234525“), which was, immediately prior to the Amalgamation, a wholly-owned subsidiary of the Issuer. The Amalgamation was completed on February 12, 2021, and constituted:

  • a reverse takeover of the Issuer;
  • the Qualifying Transaction of the Issuer for purposes of Policy 2.4 of the TSX Venture Exchange; and
  • a “going public” transaction for BMR.

In connection with the Amalgamation, the corporate name of the Issuer was changed to “Battery Mineral Resources Corp.”.

On February 12, 2021, immediately prior to the Amalgamation, Weston Energy acquired an aggregate of 3,200,000 Issuer Shares from two principals of the Issuer, January Vandale and David De Witt, pursuant to share purchase agreements, dated December 23, 2019, between Weston Energy and each of January Vandale and David De Witt (the “Weston Share Purchase Transaction“). Those Issuer Shares were subsequently (but prior to the Amalgamation) consolidated into 1,600,000 Issuer Shares.

Prior to the Weston Share Purchase Transaction, the Weston Entities did not own any securities of the Issuer. The 1,600,000 (post-consolidation) Issuer Shares acquired by Weston Energy in connection with the Weston Share Purchase Transaction represented approximately 1.2% of the outstanding shares of the Issuer immediately following the Amalgamation. Immediately prior to the Amalgamation, none of the Yorktown Entities owned any securities of the Issuer (except that Yorktown XI may (as a result of Yorktown XI’s control of Weston Energy for purposes of applicable securities laws in Canada) be considered to have had deemed beneficial ownership of the 1,600,000 (post-consolidation) Issuer Shares acquired by Weston Energy in connection with the Weston Share Purchase Transaction). Upon completion of the Amalgamation:

  • Yorktown IV acquired 19,500,000 Issuer Shares in exchange for 19,500,000 BMR Shares;
  • Yorktown VI acquired 6,300,000 Issuer Shares in exchange for 6,300,000 BMR Shares; and
  • Yorktown XI acquired 4,200,000 Issuer Shares in exchange for 4,200,000 BMR Shares (not including any Issuer Shares of which Yorktown XI may be considered a deemed beneficial owner as a result of Yorktown XI’s control of Weston Energy for purposes of applicable securities laws in Canada),

which represented 14.39%, 4.65% and 3.10%, respectively, of the outstanding Issuer Shares immediately following the Amalgamation.

In addition, upon completion of the Amalgamation:

  • Weston Energy acquired 63,001,000 Issuer Shares in exchange for 63,001,000 BMR Shares; and
  • Weston II acquired 7,000,000 Issuer Shares in exchange for 7,000,000 BMR Shares,

which represented 46.5% and 5.17%, respectively, of the outstanding Issuer Shares immediately following the Amalgamation.

A majority of the outstanding voting shares of Weston Energy and Weston II are owned by Yorktown XI, and each of Weston Energy and Weston II is considered to be controlled by Yorktown XI under applicable securities laws in Canada. Accordingly, under applicable securities laws in Canada:

  • Yorktown XI is deemed to beneficially own the Issuer Shares owned by Weston Energy and Weston II, respectively; and
  • each of Weston Energy and Weston II is deemed to beneficially own the Issuer Shares owned by the other.

After completion of the Weston Share Purchase Transaction and the Amalgamation, Weston Energy owns 64,601,000 Issuer Shares, which represented approximately 47.68% of the outstanding Issuer Shares immediately following the Amalgamation, and the Yorktown Entities and the Weston Entities own an aggregate of 101,601,000 Issuer Shares, which represented approximately 75% of the outstanding shares of the Issuer immediately following the Amalgamation.

The purchase price of the 3,200,000 (pre-consolidation) Issuer Shares acquired by Weston Energy in connection with the Weston Share Purchase Transaction was CDN$0.08 per share ($256,000 in the aggregate), which was paid in cash at closing of the Weston Share Purchase Transaction on February 12, 2021. For purposes of the Amalgamation, each Issuer Share acquired by Yorktown IV, Yorktown VI, Yorktown XI, Weston Energy and Weston II (in exchange for a BMR Share) had an ascribed value of CDN $0.65 per share ($12,675,000, $4,095,000, $2,730,000, $40,950,650 and $4,550,000 in the aggregate, respectively).

Pursuant to an Agreement of Purchase and Sale, dated August 31, 2020, between each of the Yorktown Entities and BMR (the “Transfer Agreement“), the Yorktown Entities are entitled to receive up to 30 million additional BMR Shares (at an ascribed price of CDN $0.65 per share (subject to adjustment)) if BMR receives proceeds in excess of $10 million on account of its ownership of common shares of ESI Energy Services Inc., in certain circumstances (a “Contingent Event“) contemplated by the Transfer Agreement (provided the Contingent Event occurs prior to March 31, 2021). There is no certainty that a Contingent Event will occur by March 31, 2021. The Transfer Agreement further provides that, following the Amalgamation (as a result of which the business of BMR is now wholly-owned by the Issuer), each of the Yorktown Entities will accept, in lieu of additional BMR Shares, a number of Issuer Shares determined in accordance with the Transfer Agreement and based on the exchange ratio utilized for purposes of the Amalgamation.

The percentage calculations set out in this News Release do not:

  • give effect to the issuance of any Issuer Shares to Yorktown IV, Yorktown VI or Yorktown XI following the occurrence of a Contingent Event, as provided for in the Transfer Agreement; or
  • include any shares issuable upon the exercise of outstanding options to purchase up to 75,000 Issuer Shares.

The acquisition of Issuer Shares by Weston Energy in connection with the Weston Share Purchase Transaction and the acquisition by the Yorktown Entities and Weston Entities of Issuer Shares in connection with the Amalgamation were undertaken in connection with the reverse takeover of the Issuer by BMR, which represented a going public transaction for BMR. The reverse takeover transaction was supported by each of the Yorktown Entities, the Weston Entities and BMR. Each of the Yorktown Entities and the Weston Entities may, from time to time, in the future increase or decrease its direct or indirect ownership, control or direction over the Issuer Shares or other securities of the Issuer through market transactions, private agreements, or otherwise, including by effecting dispositions of securities of the Issuer for cash or other consideration. As noted above, the Yorktown Entities may receive up to 30,000,000 additional Issuer Shares following the occurrence of a Contingent Event, as provided for in the Transfer Agreement. Following completion of the Amalgamation, the directors and officers of the Issuer resigned and were replaced by the following nominees of BMR: (i) Lazaros Nikeas – Chief Executive Officer and Director; (ii) Jack Cartmel – Chief Financial Officer; (iii) John Kiernan – Director; (iv) Stephen Dunmead – Director; (v) Peter Doyle – VP, Exploration; and (vi) Henry Sandri – Chief Commercial Officer.

The 30,000,000 Issuer Shares issued to the Yorktown Entities in connection with the Amalgamation, the 70,001,000 Issuer Shares issued to the Weston Entities in connection with the Amalgamation, and the 1,600,000 (post-consolidation) Issuer Shares acquired by Weston Energy in connection with the Weston Share Purchase Transaction are held in, and will be released from, escrow in accordance with the policies of the TSX Venture Exchange. If any Issuer Shares are issued to any of the Yorktown Entities following the occurrence of a Contingent Event, as provided for in the Transfer Agreement, those Issuer Shares will also be deposited into escrow in accordance with the policies of the TSX Venture Exchange.

For purposes of the Weston Share Purchase Transaction (which involved the acquisition of an aggregate of 3,200,000 (pre-consolidation) Issuer Shares, at a purchase price of CDN$0.08 per share), Weston Energy relied upon the “private agreement” exemption set out in Section 4.2(1) of National Instrument 62-104 – Take-over Bids and Issuer Bids. The Weston Share Purchase Transaction was undertaken with two vendors (January Vandale and David De Witt); neither Weston Energy nor any other person acting jointly or in concert with Weston Energy made an offer to any other holders of Issuer Shares to acquire Issuer Shares from such holders. The CDN$0.08 per share purchase price at which Issuer Shares were acquired in connection with the Weston Share Purchase Transaction did not exceed 115% of the market price of the Issuer Shares as of the date the applicable agreements of purchase and sale were entered into (December 23, 2019).

The Yorktown Entities and Weston Entities intend to file a report under National Instrument 62-103 – The Early Warning System and Related Takeover Bid and Insider Reporting Issues setting out additional information concerning the share acquisition transactions described in this News Release. For further information and to obtain a copy of such report, please contact Mr. Robert Signorino at Yorktown Partners LLC, 20th Floor 410 Park Ave., New York, NY 10022-4407 or by telephone at (212) 515-2100.

About the Yorktown Group

Each of the Yorktown Entities is a limited partnership formed under the laws of Delaware. Yorktown Partners manages the investment activities of various limited partnerships within the Yorktown group (a private equity investment group) and, in that capacity, may be viewed as having control and direction over securities owned (including deemed beneficial ownership) by each of the Yorktown Entities. Accordingly, Yorktown Partners may also be considered a joint actor in relation to the various share acquisition transactions described in this News Release.

The head office of Yorktown Partners and each of the Yorktown Entities is located at 20th Floor 410 Park Ave., New York, NY 10022-4407. The head office of each of Weston Energy and Weston II is located at Suite 730, 410 Park Ave., New York, NY 10022-4407.

Yorktown IV, Yorktown VI, Yorktown XI, Weston Energy, Weston II and BMR (which amalgamated with 1234525 in connection with the Amalgamation) may be considered joint actors in relation to the share acquisition transactions described in this News Release. Other entities within the Yorktown group (as noted below) may be considered joint actors with Yorktown IV, Yorktown VI, Yorktown XI, Weston Energy, Weston II and BMR, in relation to the to the share acquisition transactions described in this News Release.

Yorktown IV Associates LLC is the sole general partner of Yorktown IV. As a result, Yorktown IV Associates LLC may be deemed to have the power to vote or direct the voting, or to dispose or direct the disposition, of securities owned by Yorktown IV. Yorktown IV Associates LLC disclaims beneficial ownership of the securities owned by Yorktown IV in excess of its pecuniary interests therein. However, Yorktown IV Associates LLC is deemed to beneficially own securities owned by Yorktown IV under applicable securities laws in Canada.

Yorktown VI Company L.P. is the sole general partner of Yorktown VI. Yorktown VI Associates LLC is the sole general partner of Yorktown VI Company L.P. As a result, Yorktown VI Associates LLC may be deemed to have the power to vote or direct the voting, or to dispose or direct the disposition, of securities owned by Yorktown VI. Yorktown VI Company L.P. and Yorktown VI Associates LLC disclaim beneficial ownership of the securities owned by Yorktown VI in excess of their pecuniary interests therein. However, Yorktown VI Company L.P. and Yorktown VI Associates LLC are deemed to beneficially own securities owned by Yorktown VI under applicable securities laws in Canada.

Yorktown XI Company L.P. is the sole general partner of Yorktown XI. Yorktown XI Associates LLC is the sole general partner of Yorktown XI Company L.P. As a result, Yorktown XI Associates LLC may be deemed to have the power to vote or direct the voting, or to dispose or direct the disposition, of securities owned by Yorktown XI. Yorktown XI Company L.P. and Yorktown XI Associates LLC disclaim beneficial ownership of the securities owned by Yorktown XI in excess of their pecuniary interests therein. However, Yorktown XI Company L.P. and Yorktown XI Associates LLC are deemed to beneficially own securities owned by Yorktown XI under applicable securities laws in Canada.

Although the Yorktown Entities are, in relation to the various share acquisition transactions described in this News Release, considered joint actors under applicable securities laws in Canada, none of the Yorktown Entities is a beneficial owner of securities owned (either legally or beneficially) by either of the other Yorktown Entities.

About the Issuer (Battery Mineral Resources Corp., formerly Fusion Gold Ltd.)

As a result of the Amalgamation, the Issuer is now, indirectly (through the wholly-owned subsidiary that resulted from the amalgamation of BMR and 1234525), engaged in the business of exploring for various minerals (including cobalt) required to meet the anticipated growth in demand for the raw materials used in the lithium-ion battery and energy storage sector. The Issuer has indirect interests in cobalt, lithium and graphite projects in the United States and South Korea. The head office of the Issuer is located at Suite 1400, 400 Burrard Street, Vancouver, British Columbia V6C 3A6.

Forward-Looking Information

This news release contains “forward-looking information”. All statements, other than statements of historical fact, that address activities, events, or developments that the Yorktown Entities or the Weston Entities believe, expect, or anticipate will, may, could or might occur in the future are “forward-looking information”. Forward-looking information contained herein may include, but is not limited to, statements with respect to the occurrence of a Contingent Event (as contemplated by the Transfer Agreement), information concerning the holding and release from escrow of various Issuer Shares deposited into escrow in connection with the Amalgamation, information concerning the deposit into escrow of any Issuer Shares acquired by any of the Yorktown Entities following the occurrence of a Contingent Event, and information concerning future increases or decreases in the ownership, control or direction over Issuer Shares or other securities of the Issuer. Forward-looking information contained herein reflects the current expectations or beliefs of the Yorktown Entities and Weston Entities and is based certain assumptions. Such forward-looking information is subject to a variety of known and unknown risks, uncertainties and other factors that could cause the actual events or results to differ materially from any future events or results expressed or implied by the forward-looking information contained herein. Having regard to those risks, uncertainties and other factors readers should not place undue reliance on the forward-looking information contained herein. The forward-looking information contained in this News Release is provided as of the date hereof and, except as may be required under applicable securities laws, the Yorktown Entities and the Weston Entities disclaim any intent or obligation to update or revise such forward-looking information, whether as a result of new information, future events or results or otherwise. None of the forward-looking information included in this News Release is (and should not be considered to be) a guarantee of any future outcome.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/74522