LOMBARD STREET CAPITAL CORP. ANNOUNCES LETTER OF INTENT FOR QUALIFYING TRANSACTION WITH LITHIUM AFRICA RESOURCES CORP.
LOMBARD STREET CAPITAL CORP. ANNOUNCES LETTER OF INTENT FOR QUALIFYING TRANSACTION WITH LITHIUM AFRICA RESOURCES CORP. |
| [31-March-2025] |
/NOT FOR DISTRIBUTION TO THE U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/ TORONTO, March 31, 2025 /CNW/ - Lombard Street Capital Corp. (TSXV: LSC.P) (the "Corporation"), a capital pool company listed on the TSX Venture Exchange ("TSXV"), has entered into a non-binding letter of intent (the "Letter of Intent") dated March 30, 2025 with Lithium Africa Resources Corp. ("LARC") in respect of a proposed business combination transaction pursuant to which Lombard will acquire all of the issued and outstanding securities of LARC (the "Proposed Transaction"). It is anticipated that the Proposed Transaction will constitute the qualifying transaction of Lombard in accordance with Policy 2.4 - Capital Pool Companies of the Corporate Finance Manual of the TSX Venture Exchange (the "TSXV"). The resulting company following the completion of the Proposed Transaction is referred to herein as the "Resulting Issuer". The Proposed Transaction will not constitute a Non-Arm's Length Transaction (as such term is defined in the policies of the TSXV). About LARC LARC is a private company existing under the laws of the Cayman Islands. LARC has an established 50/50 joint venture partnership with GFL International Co., Ltd. ("GFL") to jointly advance exploration in Africa (the "LAR-GFL JV") and through the LAR-GFL JV, LARC has an indirect 50% interest in a portfolio of hardrock pegmatite districts across a number of prospective African regions covering over 2,500 km2 of exploration assets in Ivory Coast, Guinea, Mali and Zimbabwe; separately LARC is working in collaboration with Morocco's National Office of Hydrocarbons and Mining to explore in the Bir El Mami area, located in the Dakhla-Oued Ed-Dahab region (collectively the "Properties"). A detailed description of the Properties will be included in a subsequent press release. Summary of the Proposed Qualifying Transaction The Letter of Intent contemplates that LARC and Lombard will negotiate and enter into a definitive agreement in respect of the Proposed Transaction on or before June 1, 2025 (the "Definitive Agreement"), pursuant to which it is anticipated that Lombard will acquire all of the issued and outstanding ordinary shares of LARC (the "LARC Shares") and shareholders of LARC will receive Lombard common shares ("Lombard Shares") in exchange for their LARC Shares. The Proposed Transaction will be structured as a three-cornered amalgamation, plan of arrangement or other structure based on the advice of the parties' respective advisers and taking into account various securities, tax, operating and other considerations. As of the date hereof, LARC has 1,581,192 LARC Shares outstanding. Prior to completion of the Proposed Transaction, LARC proposes to effect a split of the issued and outstanding LARC Shares, on a fully diluted basis, on the basis of approximately ten (10) post-split LARC Shares for every one (1) pre-split LARC Share issued and outstanding (the "LARC Share Split"). Prior to completion of the Proposed Transaction, Lombard proposes to effect a consolidation of the issued and outstanding Lombard Shares, on a fully diluted basis, on the basis of one (1) post-consolidation Lombard Share for every twenty-four (24) pre-consolidation Lombard Share issued and outstanding (the "LSC Consolidation"). Upon completion of the Proposed Transaction, it is presently anticipated that an aggregate of approximately 20,016,086 Resulting Issuer common shares ("Resulting Issuer Shares") will be issued and outstanding (excluding any Resulting Issuer Shares to be issued pursuant to the Concurrent Financing), and:
It is anticipated that the Resulting Issuer will continue the business of LARC under a name to be determined by LARC (the "Name Change"). The business of the Resulting Issuer will be primarily focused on the exploration of the Properties. Certain Lombard Shares to be issued pursuant to the Proposed Transaction are expected to be subject to restrictions on resale or escrow under the policies of the TSXV, including the securities to be issued to principals (as defined under the TSXV policies). The completion of the Proposed Transaction is subject to a number of terms and conditions, including and without limitation to the following: negotiation and execution of the Definitive Agreement; there being no material adverse changes in respect of either Lombard or LARC; the parties obtaining all necessary consents, orders, regulatory and shareholder approvals, including the conditional approval of the TSXV; completion of the Name Change, LARC Share Split, LSC Consolidation, LARC Private Placement, the Lombard Continuation (as defined below) and any other required corporate changes requested by LARC, acting reasonably; completion of the Concurrent Financing (as defined below); completion of a thorough business, legal and financial review by each party of the other party; and other standard conditions of closing for a transaction in the nature of the Proposed Transaction. There can be no assurance that all of the necessary regulatory and shareholder approvals will be obtained or that all conditions of closing will be met. LARC Private Placement In connection with the Proposed Transaction, LARC is in the process of undertaking a private placement offering (the "LARC Private Placement") for total gross proceeds of no more than C$6,000,000 (US$4,206,576), comprised of up to 210,329 units of LARC (the "LARC Units") at a price of US$20 per LARC Unit. Each LARC Unit will be comprised of (i) one LARC Share, (ii) one LARC Share purchase warrant (each LARC Share purchase warrant, a "Warrant") entitling the holder thereof to acquire one additional LARC Share (each, a "Warrant Share") at a price of US$26 per Warrant Share for a period of five (5) years following the date of issuance, and (iii) one special warrant of LARC (each, a "LARC Special Warrant"). Each Special Warrant will entitle the holder thereof to receive, without payment of any further consideration and without further action on the part of the holder, and subject to customary adjustment provisions, 0.15 additional LARC Shares (the "Penalty Shares"). The Special Warrants shall be automatically exercised, with no further action on the part of the holder (and for no additional consideration), on the first business day immediately following the date that is six months following the closing date of the LARC Private Placement (the "Trigger Date"). In the event the Proposed Transaction is completed on or before 5:00 p.m. (ET) on the Trigger Date, the Special Warrants will expire, and the Penalty Shares will not be issued. The LARC Shares, LARC Warrants and LARC Special Warrants will be issued on a pre-LARC Share Split basis. In connection with the LARC Private Placement, LARC intends to pay certain brokers a cash commission of 7.00% of the gross proceeds of the LARC Private Placement and such number of broker warrants equal to 7% of the number of LARC Units issued under the LARC Private Placement, with each broker warrant being exercisable for a period of three years from the date of issuance to acquire one LARC Share for US$20.00. The LARC Private Placement is not subject to a minimum number of Units. Following the completion of the Proposed Transaction, the Resulting Issuer is anticipated to have cash on hand of approximately C$7 million, which shall be used towards the exploration and development of LARC's asset portfolio. On the terms of the LARC GFL JV, funding provided by LARC into the Properties is expected to be matched by GFL. LARC intends to use the net proceeds of the LARC Private Placement and the Concurrent Financing for (i) exploration of the Properties, and (ii) general corporate and working capital purposes. Completion of the LARC Private Placement and Concurrent Financing are a condition of the completion of the Proposed Transaction. Concurrent Financing Prior to or concurrently with the closing of the Proposed Transaction, it is anticipated that LARC will complete a concurrent financing (the "Concurrent Financing") of subscription receipts (each a "Subscription Receipt") at a price of not less than C$2.80 per Subscription Receipt (on a post-LARC Share Split basis), for minimum gross proceeds of C$2,000,000. Each Subscription Receipt shall convert into one LARC Share or a LARC unit (post-LARC Share Split) immediately prior to the closing of the Proposed Transaction. The terms of the Concurrent Financing, including whether it will be a brokered or non-brokered offering, are being determined by the Corporation and LARC in the context of the market. Further details regarding the Concurrent Financing, once finalized, will be included in a subsequent press release in accordance with the policies of the TSXV. Information Concerning Lombard Lombard is a capital pool company and its common shares are listed for trading on the TSXV under the symbol "LSC.P". Subject to legal advice, prior to completion of the Proposed Transaction, the Corporation will continue to the Cayman Islands in accordance with the applicable requirements under the laws of Canada and the Cayman Islands (the "LSC Continuation"). Filing Statement In connection with the Proposed Transaction and pursuant to the requirements of the TSXV, Lombard will file a filing statement or a management information circular on its issuer profile on SEDAR+ (https://www.sedarplus.ca/), which will contain details regarding the Proposed Transaction, Lombard, the Properties, the Concurrent Financing, and the Resulting Issuer. Sponsorship of Qualifying Transaction Sponsorship of a qualifying transaction of a capital pool company is required by the TSXV unless exempt in accordance with TSXV policies. Lombard intends to apply for an exemption from the sponsorship requirements. Reinstatement to Trading In accordance with the policies of the TSXV, the Lombard Shares are currently halted from trading and will remain so until such time as the TSXV determines, which, depending on the policies of the TSXV, may not occur until completion of the Proposed Transaction. Further Information Further details about the Proposed Transaction and the Resulting Issuer will be provided in subsequent press releases as the Proposed Transaction advances and in the disclosure document to be prepared and filed in connection with the Proposed Transaction. Investors are cautioned that, except as disclosed in the disclosure document to be prepared in connection with the Proposed Transaction, any information released or received with respect to the Proposed Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative. The TSX Venture Exchange Inc. has in no way passed upon the merits of the Proposed Transaction. ABOUT THE CORPORATION The Corporation is a CPC that has not commenced commercial operations and has no assets other than cash. Except as specifically contemplated in the CPC Policy, until the completion of its Qualifying Transaction, the Corporation will not carry on business, other than the identification and evaluation of businesses or assets with a view to completing a Qualifying Transaction. Information concerning LARC has been provided to the Corporation by LARC for inclusion in this press release. Completion of the Proposed Transaction is subject to a number of conditions, including but not limited to, TSXV acceptance and if applicable pursuant to Exchange Requirements (as that term is defined in the policies of the TSXV), majority of the minority shareholder approval. Where applicable, the Proposed Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Proposed Transaction will be completed as proposed or at all. Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the Proposed Transaction, any information released or received with respect to the Proposed Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative. The TSXV has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release. Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release. The securities referenced herein have not been, nor will be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons absent U.S. registration or an applicable exemption from U.S. registration requirements. This release does not constitute an offer for sale of securities in the United States. CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION: This news release includes certain "forward-looking statements" under applicable Canadian securities legislation. Forward-looking statements in this press release relate to, among other things, the Proposed Transaction and certain terms and conditions thereof; the business of LARC, information concerning the Properties, the commissioning of an updated NI 43-101 compliant technical report with respect to the Properties, the terms, use of proceeds and completion of the LARC Private Placement and the Concurrent Financing, and the terms thereof; TSXV sponsorship requirements and intended application for exemption therefrom; completion of the Name Change, LARC Share Split, LSC Consolidation and LSC Continuation; matching of the Resulting Issuer's funds by GFL; shareholder, director and regulatory approvals; and future press releases and disclosure. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: general business, economic, competitive, political and social uncertainties; delay or failure to receive regulatory approvals; the listing of the Resulting Issuer on the Exchange; and completion of a Qualifying Transaction. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The Corporation disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. This news release shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any state in the United States in which such offer, solicitation or sale would be unlawful. The securities referred to herein have not been and will not be registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. SOURCE Lombard Street Capital Corp. | ||
Company Codes: TorontoVE:LSC.P |
