GK Resources and Syntholene Energy Announce Brokered Private Placement of up to C$4.0 Million
July 09, 2025 8:00 AM EDT | Source: GK Resources Ltd.
Vancouver, British Columbia--(Newsfile Corp. - July 9, 2025) - GK Resources Ltd. (TSXV: NIKL.H) ("GK") and Syntholene Energy Corp ("Syntholene") (together, the "Companies") are pleased to announce that they have entered into an engagement letter agreement with Canaccord Genuity Corp. ("Canaccord"), as the sole lead manager and sole bookrunner, on behalf of a syndicate of agents including Haywood Securities Inc. and Ventum Financial Corp. (together, the "Agents"), in connection with a commercially reasonable efforts basis, private placement offering (the "Offering") of up to 53,333,333 subscription receipts (the "Subscription Receipts") of an affiliate of Syntholene ("FinCo") at a price of C$0.075 per Subscription Receipt (the "Offering Price") for aggregate gross proceeds of up to C$4,000,000.
The Companies have granted the Agents an option, exercisable at any time prior to the Closing Date (as defined below), to increase the size of the Offering by up to 15%.
The Offering is being conducted in connection with the proposed reverse take-over ("RTO") transaction between GK and Syntholene, will result in the common shares of the resulting entity (the "Resulting Issuer") being listed on the TSX Venture Exchange (the "Exchange"). Upon completion of the RTO, the current business of Syntholene will become the business of the Resulting Issuer. In connection with the RTO, FinCo will complete an amalgamation (the "Amalgamation") with a newly-incorporated, wholly-owned subsidiary of GK. Pursuant to the Amalgamation, each one common share of FinCo (a "FinCo Share") will be exchanged for one common share of the Resulting Issuer (a "Common Share").
The net proceeds of the Offering will be used to advance Syntholene's engineering and development programs, including the construction of its effects-test facility in Iceland, and for general working capital purposes.
Each Subscription Receipt will entitle the holder thereof, without payment of any additional consideration and without further action on the part of the holder, upon the satisfaction of the Escrow Release Conditions (as defined below) to receive one FinCo Share.
The Offering is anticipated to close on or before September 15, 2025, or such other date as the Companies and Canaccord may agree upon (the "Closing Date"). The closing of the Offering is subject to certain conditions including, but not limited to, the receipt of all necessary regulatory and other approvals, including the approval of the Exchange.
On the Closing Date, the gross proceeds of the Offering less 50% of the Commission (as defined below) and all of the estimated expenses of the Agents payable by the Companies (the "Escrowed Proceeds") will be delivered to and held by an escrow agent (the "Escrow Agent") mutually acceptable to the Companies and Canaccord and invested in an interest bearing account (the Escrowed Proceeds, together with all interest and other income earned thereon, are referred to herein as the "Escrowed Funds").
Upon the satisfaction of the following conditions (collectively, the "Escrow Release Conditions") the Escrow Agent will release from the Escrowed Funds: (i) to the Agents, the remaining 50% of the Commission, and (ii) to FinCo, all remaining Escrowed Funds:
- completion of the RTO;
- the Common Shares being approved for listing on the Exchange;
- the receipt of all regulatory, shareholder and third-party approvals, if any, required in connection with the RTO;
- counsel to the Resulting Issuer having delivered an opinion addressed to the Agents confirming, among other things, that the securities of GK issued in connection with the exchange of the securities of FinCo pursuant to the Amalgamation will be free of any statutory hold periods in Canada upon the issue thereof;
- satisfaction or waiver of all conditions precedent to the completion of the Amalgamation; and
- each of the Companies will not be in breach or default of any of its covenants or obligations and all conditions with respect to the Offering will have been fulfilled.
If the Escrow Release Conditions are not satisfied on or before October 31, 2025 (the "Escrow Deadline") or, if prior to such time, the definitive agreements in respect of the RTO are terminated or Syntholene has advised the Escrow Agent and the Agents, or announced to the public, that the RTO will not be completed, starting on the second business day following such date, the Escrowed Funds plus accrued interest will be used by Syntholene to repurchase the Subscription Receipts at a redemption price per Subscription Receipt equal to the Offering Price plus a pro rata amount of any interest accrued in respect of the Escrowed Funds to the date of redemption.
The Agents will receive a commission (the "Commission") equal to 6% of the aggregate gross proceeds of the Offering payable in cash or Subscription Receipts, or any combination of cash or Subscription Receipts at the option of Canaccord. The Commission will be reduced to 3% on the portion of the Offering made available to purchasers identified by Syntholene (the "President's List").
The Agents will also receive warrants (the "Agents' Warrants") exercisable at any time prior to the date that is 24 months from the date the Escrow Release Conditions are satisfied to acquire that number of Common Shares which are equal to 6% of the number of Subscription Receipts sold under the Offering, at the Offering Price. The number of Agents' Warrants will be reduced to 3% on the portion of the Offering made available to purchasers on the President's List. Pursuant to a finder's fee agreement, a certain finder will be entitled to a fee equal to 1% of the gross proceeds raised from certain purchasers on the President's List.
This news release does not constitute an offer to sell or a solicitation of an offer to buy nor will there be any sale of any of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful, including any of the securities in the United States of America. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "1933 Act") or any state securities laws and may not be offered or sold within the United States or to, or for account or benefit of, U.S. Persons (as defined in Regulation S under the 1933 Act) unless registered under the 1933 Act and applicable state securities laws, or an exemption from such registration requirements is available.
About Syntholene
Syntholene is commercializing a new pathway for high-efficiency fuel synthesis paired to dedicated, high temperature geothermal resources. The target output is molecularly-pure synthetic fuel, produced at a lower cost than fossil fuels, for the first time. The company's mission is to deliver the world's first truly high-performance, low-cost, and carbon-neutral synthetic fuel through its scalable modular production system.
Syntholene's fuels are drop-in substitutable for conventional fossil fuels and can be used in existing engines, turbines, and pipelines without retrofit, enabling seamless integration. Syntholene's power-to-liquid strategy harnesses high-temperature geothermal energy to power proprietary processes for hydrogen production and fuel synthesis. Syntholene has secured a 20MW energy offtake option partnership to support an effects-test and commercial scaleup targeting deployment in Q4 2025.
Syntholene's founding team includes experienced developers of advanced energy infrastructure, including the Terrestrial Energy IMSR reactor, the Caldera green steel hydrogen facility, and the Senreq Syngas waste-to-energy plant. Syntholene's engineers and executives bring decades of expertise in system design, infrastructure deployment, and regulatory navigation.
Founded by experienced operators in energy technology, capital markets, and process engineering, Syntholene is developing a scalable, modular production platform designed to accelerate commercialization of low-cost carbon-neutral fuels across global markets.
About GK Resources Ltd.
GK is a reporting issuer incorporated under the laws of British Columbia and listed on the TSXV under the symbol NIKL. GK is backed by the Inventa Capital group.
Forward-Looking Statements
Certain information set forth in this news release contains "forward‐looking statements" and "forward‐looking information" within the meaning of applicable Canadian securities legislation and applicable United States securities laws (referred to herein as forward‐looking statements). Except for statements of historical fact, certain information contained herein constitutes forward‐looking statements which includes, but is not limited to, statements with respect to: the closing of the RTO, including receipt of all necessary approvals, and the timing thereof; the future financial or operating performance of the Companies; information concerning the anticipated sale and distribution of Subscription Receipts pursuant to the Offering; the Resulting Issuer's intended use of the net proceeds from the sale of Subscription Receipts; the ability to satisfy the Escrow Release Conditions, the anticipated benefits and impacts of the Offering; and future development plans.
Forward-looking statements are often identified by the use of words such as "may", "will", "could", "would", "anticipate", "believe", "expect", "intend", "potential", "estimate", "budget", "scheduled", "plans", "planned", "forecasts", "goals" and similar expressions. Forward-looking statements are based on a number of factors and assumptions made by management and considered reasonable at the time such information is provided. Assumptions and factors include: the successful completion of the RTO, the Offering, the integration of the Companies, and realization of benefits therefrom; the Companies' ability to carry out the business plan of the Resulting Issuer, including but not limited to an effects-test and commercial scaleup targeting deployment in Q4 2025; and the Companies' ability to continue raising necessary capital to finance operations. Forward‐looking statements necessarily involve known and unknown risks and uncertainties, which may cause actual performance and financial results in future periods to differ materially from any projections of future performance or result expressed or implied by such forward‐looking statements. These risks and uncertainties include, but are not limited to: risks related to the RTO, including, but not limited to, the ability to obtain necessary approvals in respect of the RTO and to consummate the RTO; integration risks; and general business, economic and competitive uncertainties. Although the Companies have attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in the forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended.
There can be no assurance that forward‐looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. The Companies undertake no obligation to update forward‐looking statements if circumstances or management's estimates or opinions should change except as required by applicable securities laws. The forward-looking statements contained herein are presented for the purposes of assisting investors in understanding the Companies' plans, objectives and goals, including with respect to the RTO, and may not be appropriate for other purposes. Forward-looking statements are not guarantees of future performance and the reader is cautioned not to place undue reliance on forward‐looking statements.
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