Elemental

Jan 30, 2025

July 26, 2020 Share Elemental Royalties Limited entered into a non-binding letter of intent to acquire Fengro Industries Corp. (TSXV:FGR) in a reverse merger transaction on November 4, 2019. Elemental Royalties Ltd entered into a binding agreement to acquire Fengro Industries Corp. in a reverse merger transaction on April 27, 2020. Pursuant to the Transaction, it is currently anticipated that Fengro will undertake a consolidation of its share capital on a 209:1 basis. Holders of Elemental common shares will receive post consolidation common shares of Fengro at an exchange ratio of 4.8114 Fengro Shares for each Elemental Share held. Following such exchange, the former Elemental shareholders will hold approximately 96% of the issued and outstanding shares of the Fengro. Outstanding performance rights of Elemental entitling their holders to acquire 497,798 Elemental Shares will also be exchanged for equivalent securities of the Fengro entitling them to acquire Fengro Shares as adjusted for the exchange ratio. Pursuant to the terms of the Agreement, on May 1, 2020, Elemental completed a private placement of 0.3 million ordinary shares for gross proceeds of $0.9 million (CAD 1.3 million). Immediately prior to the completion of the Transaction it is anticipated that Elemental will have approximately 4.7 million ordinary shares issued and outstanding resulting in approximately 22.7 million Consolidated Fengro Shares being issued pursuant to the Share Exchange. Aggregate consideration for the acquisition of the ordinary shares of Elemental is approximately CAD 23.7 million. As of July 17, 2020, Fengro Industries announced that after Completion of the Transaction, an aggregate of approximately 41,856,210 Resulting Issuer Shares will be issued and outstanding. It is expected that, immediately following completion of the Transaction: (a) the current Elemental Shareholders will hold 22,664,788 Resulting Issuer Shares, representing approximately 54.1% of the outstanding Resulting Issuer Shares; (b) the current Fengro Shareholders will hold 753,707 Resulting Issuer Shares, representing approximately 1.8% of the outstanding Resulting Issuer Shares, and (c) former holders of Subscription Receipts will hold 18,437,715 Resulting Issuer Shares, representing 44.1% of the outstanding Resulting Issuer Shares. Prior to the completion of the Transaction, it is anticipated that Elemental, through a newly incorporated and wholly-owned British Columbia subsidiary will complete a brokered private placement of subscription receipts. Following the satisfaction of the escrow release conditions and the conversion of the ERL Finco subscription receipts into common shares of ERL Finco. ERL Finco will amalgamate with a newly incorporated and wholly-owned British Columbia subsidiary of Fengro with each one ERL Finco Share being exchanged for one Consolidated Fengro Share. In connection with the Transaction, Elemental intends to complete a best efforts brokered private placement offering of subscription receipts of ERL Finco for gross proceeds of approximately CAD 15 million. As of June 9, 2020, the combined aggregate size of the brokered private placement offering of subscription receipts from CAD 15 million to approximately CAD 24 million. As of June 10, 2020, the private placement offering of subscription receipts for combined aggregate gross proceeds of approximately CAD 24 million has closed. Post completion of the transaction, Fengro will carry on the business of Elemental under the name, 'Elemental Royalties Corp.' As of July 27, 2020, Fengro Industries Corp. changed its name to Elemental Royalties Corp. In connection with transaction, Fengro will pay a termination fee of CAD 0.68 million ($0.5 million) to Elemental Royalties. Upon completion of the transaction, the Directors of Fengro will be replaced by nominees of Elemental. Subject to applicable TSXV approval, on completion of the Transaction the executive management team and the board of directors of the Resulting Issuer will be comprised of the following individuals: Frederick Bell, Co-founder of Elementa will be Chief Executive Officer and Director. Peter Williams, Co-founder of Elementa will be a Director. Martin Turenne, Director. John Robins, Director. Matt Anderson, Chief Financial Officer. Greg Owen, Vice President, Operations. Richard Evans, Senior Vice President, Technical. In addition to the above, joining the Resulting Issuer's management team will be David Baker, Vice President, Business Development. The Agreement contains a number of conditions, including but not limited to, closing conditions customary to transactions of the nature of the Transaction, approvals of all regulatory bodies having jurisdiction in connection with the transaction contemplated by the Agreement and approval of the TSX Venture Exchange, including the satisfaction of its initial listing requirements, the completion of the Consolidation and the completion of the Offering. Completion of the transaction will also be subject to the completion of the sale of Fengro's Brazilian assets on the terms previously announced by Fengro. As of July 17, 2020, TSXV Venture Exchange conditionally approved the proposed business combination. The transaction is expected to close on or about July 28, 2020. Elemental Royalties Limited completed the acquisition of Fengro Industries Corp. (TSXV:FGR) in a reverse merger transaction on July 27, 2020. The resulting issuer will commence trading on the TSXV under the ticker symbol “ELE” on July 30, 2020. Computershare Trust Company of Canada acted as transfer agent for Fengro Industries Corp. Share Elemental Altus Royalties Corp. is a Canada-based precious metals royalty company. The Company has about 11 producing royalties and a diversified portfolio of pre-production and discovery stage assets. It is focused on acquiring uncapped royalties and streams over producing, or near-producing, mines operated by established counterparties, as well as generating royalties on new discoveries. The Company's portfolio includes Amancaya, Ballarat, Bonikro, Caserones, Karlawinda, Mercedes, Mt. Pleasant, Mulgarrie, South Kalgoorlie, Wahgnion, Mactung, and Cantung. Amancaya mine is located in northern Chile approximately 200km southeast of Antofagasta. Ballarat is an underground gold mine located 115 km northwest of Melbourne in Ballarat, Victoria, Australia. The Bonikro open-pit gold mine is located in Cote d'Ivoire, 230 km north-west of Abidjan and produce gold. The Caserones mine is a large, open-pit porphyry copper-molybdenum deposit, located in the Atacama region of northern Chile. Employees