Fiddlehead Announces Closing of South Ferrier, Strachan Assets Acquisition and $23.2 Million in Financings

/THIS NEWS RELEASE IS NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/

CALGARY, AB, Aug. 29, 2024 /CNW/ - Fiddlehead Resources Corp. ("Fiddlehead" or the "Company") is pleased to announce the completion of the previously announced acquisition ("Acquisition") of the South Ferrier, Strachan area assets ("Assets") in Alberta from a senior Canadian producer ("Vendor"). In addition, the Company announces the closing of the previously announced underwritten private placement of subscription receipts at a price of $0.20 per subscription receipt for aggregate gross proceeds of $10.2 million ("Offering") and a secured credit facility with a private lender for $13.0 million (the "Credit Facility", together with the Offering, the "Financings").

The total cash purchase price of the Acquisition of approximately $18.8 million at closing (the "Purchase Price") was funded by the net proceeds of the Offering, led by Research Capital Corporation as the sole underwriter and sole bookrunner (the "Underwriter"), and the Credit Facility. In addition to the Purchase Price, the Company shall pay to the Vendor an additional $1.25 million in cash by December 31, 2025.

In connection with the completion of the Acquisition and the Financings, 1487477 B.C. Ltd, a wholly owned subsidiary of Fiddlehead ("FinanceCo") and 1487448 B.C. Ltd. amalgamated such that all the outstanding FinanceCo securities were exchanged for Fiddlehead securities on equivalent terms. The common shares of Fiddlehead ("Fiddlehead Shares") and the Fiddlehead Warrants (as defined herein) have been conditionally approved for listing (the "Listing") and are expected to be listed on the TSX Venture Exchange ("TSXV") shortly.  

Equity Financing Details

Pursuant to the Offering, 48,400,000 subscription receipts (the "FinanceCo Subscription Receipts") of FinanceCo for ‎gross proceeds of $9.68 million and 2,600,000 subscription receipts of Fiddlehead (the "Fiddlehead Subscription Receipts") ‎for gross proceeds of $0.52 million (together with the FinanceCo Subscription Receipts, the "Subscription Receipts") ‎were issued, totalling $10.2 million in aggregate gross proceeds.‎

Subsequent to the completion of the Offering and satisfaction of certain escrow release conditions, the subscription receipts of FinanceCo Subscription Receipts and Fiddlehead Subscription Receipts were each exchanged for one unit of Fiddlehead ("Fiddlehead Unit").

Each Fiddlehead Unit will consist of one Fiddlehead Share and one common share purchase warrant of Fiddlehead ("Fiddlehead Warrant"). Each Fiddlehead Warrant entitles the holder thereof to purchase one Fiddlehead Share at an exercise price of $0.24 per Fiddlehead Share at any time up to 60 months following the satisfaction or waiver of the Escrow Release Conditions.

The net proceeds of the Offering were used to fund the Purchase Price, and the remaining amounts for general corporate and working capital purposes.

Upon Listing, the underlying securities issued in exchange for FinanceCo Subscription Receipts will be free trading, without restrictions, and the Fiddlehead Shares and Fiddlehead Warrants issued in exchange for Fiddlehead Subscription Receipts will be subject to a hold period of not longer than 4 months and 1 day from the date of issuance.  Those Fiddlehead Warrants issued in exchange for Fiddlehead Subscription Receipts will be listed on the TSXV following its statutory hold period.

In connection with the Offering, the Underwriter received an aggregate cash commission equal to 8.0% of the gross proceeds from the Offering. The Underwriter was also issued broker warrants (the "Broker Warrants") equal to 8.0% of the number of Subscription Receipts sold under the Offering. In addition, the Underwriter received an advisory fee of $26,960 and 134,800 advisory broker warrants on the same terms as the Broker Warrants. Each Broker Warrant is exercisable to ultimately acquire one Fiddlehead Unit at an exercise price equal to the issue price of the Subscription Receipts for a period of 60 months following the satisfaction or waiver of the Escrow Release Conditions.

Related Party Transaction

Certain insiders of the Company (the "Participating Insiders") participated in the Offering and acquired an ‎‎aggregate of 2,525,000 Subscription Receipts. The participation of the Participating Insiders constitutes a "related ‎party transaction", ‎as such term is defined in Multilateral Instrument 61-101 — Protection of Minority ‎Shareholders in Special Transaction ("MI ‎‎61-101"). The Company is relying on exemptions from the formal ‎valuation and minority shareholder approval requirements ‎provided under sections 5.5(a) and 5.7(1)(a) of MI ‎‎61-101 on the basis that the fair market value of the Participating ‎Insiders' participation in the Offering does ‎not exceed 25% of the market capitalization of the Company, as ‎determined in accordance with MI 61-101. The ‎Company did not file a material change report more than 21 days before the ‎closing date of the Offering due ‎to the limited time between the launch and closing date, and as the details of ‎the Offering were not settled ‎until shortly prior to closing the Offering. ‎

The securities described herein 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 accordingly, may not be offered or sold within the United States except in compliance with the registration requirements of the U.S. Securities Act and applicable state securities requirements or pursuant to exemptions therefrom. This press release does not constitute an offer to sell or a solicitation to buy any securities in any jurisdiction.

Additional Information

Additional information concerning the Acquisition will be provided in subsequent news releases and in Fiddlehead's listing application to be prepared and filed in connection with the Listing, which will be available under Fiddlehead's SEDAR+ profile at www.sedarplus.ca.

Completion of the Listing is subject to a number of conditions, including but not limited to, final TSXV acceptance.

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. 

Cautionary Note Regarding Forward Looking Information

This press release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. Any statements that are contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are often identified by terms such as "may", "should", "anticipate", "will", "estimates", "believes", "intends" "expects" and similar expressions which are intended to identify forward-looking information or statements. More particularly and without limitation, this press release contains forward looking statements and information concerning: the Acquisition; financial and operating forecasts with respect to the Assets; and Listing on the TSXV. Fiddlehead cautions that all forward-looking statements are inherently uncertain, and that actual performance may be affected by a number of material factors, assumptions and expectations, many of which are beyond the control of Fiddlehead, including expectations and assumptions concerning Fiddlehead, the Acquisition, the timely receipt of all required TSXV and regulatory approvals and exemptions (as applicable) and the satisfaction of other closing conditions in accordance with the terms of the Definitive Agreement. The reader is cautioned that assumptions used in the preparation of any forward-looking information may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted as a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of Fiddlehead. The reader is cautioned not to place undue reliance on any forward-looking information. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this press release are expressly qualified by this cautionary statement.

The forward-looking statements contained in this press release are made as of the date of this press release, and Fiddlehead does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by securities law.

THIS PRESS RELEASE, REQUIRED BY APPLICABLE CANADIAN LAWS, IS NOT FOR DISTRIBUTION TO U.S. NEWS SERVICES OR FOR DISSEMINATION IN THE UNITED STATES, AND DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO SELL ANY OF THE SECURITIES DESCRIBED HEREIN IN THE UNITED STATES. THESE SECURITIES HAVE NOT BEEN, AND WILL NOT BE, REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO U.S. PERSONS UNLESS REGISTERED OR EXEMPT THEREFROM.

This news release shall not constitute an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction.

SOURCE Fiddlehead Resources Corp.

For further information contact: Fiddlehead Resources Corp., Brent Osmond, CEO and Chairman, Phone No.: [phone], Email: [email protected]