Loncor Gold Inc. has announced a special meeting for shareholders to discuss a significant acquisition proposal involving Chengtun Mining Group Co., Ltd. The proposal, revealed on October 14, outlines a plan in which Chengtun intends to acquire all outstanding common shares of Loncor for a cash payment of Cdn$1.38 per share. This strategic financial move aims to provide shareholders with immediate liquidity and assurance of value.
The meeting is set for December 11 at 11:00 a.m.
Toronto time, taking place at the offices of Dickinson Wright LLP in Toronto, Ontario. Shareholders will receive comprehensive meeting materials by mail, including an information circular and proxy forms, which are essential for understanding their rights and the implications of the proposed arrangement.
Table of Contents:
Details of the acquisition arrangement
The proposed acquisition features a cash offer that indicates a premium compared to recent trading prices of Loncor shares. Specifically, the offer represents an approximate 48% premium over the 60-day volume weighted average price (VWAP) prior to the announcement. This arrangement not only ensures immediate liquidity for shareholders but also reduces risks associated with share dilution and market fluctuations.
Voting requirements and shareholder agreements
To validate the arrangement, shareholders must approve the resolution during the meeting. The approval requires at least 66 2/3% of votes cast by shareholders in attendance or represented by proxy. Additionally, a simple majority is necessary, excluding certain shareholders’ votes as outlined by the Multilateral Instrument 61-101, which aims to protect minority security holders during significant transactions.
Currently, shareholders holding approximately 37% of Loncor’s outstanding shares have committed to voting in favor of the arrangement, reflecting strong support for this strategic initiative.
Regulatory and legal considerations
Beyond shareholder approval, the transaction requires endorsement from the Ontario Superior Court of Justice. The Court will evaluate the arrangement’s fairness, ensuring it meets both substantive and procedural standards before issuing a final order. Should the shareholders approve the resolution, the company plans to seek the Court’s approval in line with the Ontario Business Corporations Act.
Company insights and future outlook
Loncor Gold is a key player in the Canadian gold exploration sector, focusing on the Ngayu Greenstone Gold Belt in the Democratic Republic of the Congo (DRC). With over two decades of expertise, the company emphasizes responsible and effective resource management. The Imbo Project, which includes the Adumbi deposit, boasts substantial mineral resources, positioning Loncor favorably in the market.
Chengtun Mining Group, the purchaser in this transaction, specializes in energy metal resources and has identified gold as a crucial area for future growth. Their operations in the DRC include the Kalongwe copper-cobalt mine, underscoring their commitment to expanding their portfolio in precious metals.
As the meeting approaches, shareholders are encouraged to thoroughly review the information circular. This document provides crucial insights into the arrangement and aids in making informed voting decisions. It is essential for both registered and non-registered shareholders to follow the outlined procedures for casting their votes to ensure their voices are heard.
Your participation is vital. The upcoming special meeting represents a pivotal moment for Loncor Gold as it navigates this potential acquisition. Shareholders are urged to actively engage in this process and consult with their financial and legal advisors if necessary.
