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Omni to Acquire 100% Ownership of Northshore Gold Property near Schreiber

Jun 16, 2020

Omni Commerce Corp. has entered into a letter of intent with Balmoral Resources Ltd., a 100% subsidiary of Wallbridge Mining Company Limited, an Ontario corporation which has its common shares listed on the Toronto Stock Exchange. Omni has agreed to acquire Balmoral's right, title and interest in and to its 44% joint venture interest in the Northshore Gold Property, located in the Schreiber-Hemlo Greenstone Belt, 115 km west of Hemlo and 200 km east of Thunder Bay, on the terms in the LOI. Omni announced on June 1, 2020, that it entered into a definitive mineral property purchase agreement with CBLT Inc. ("CBLT") to acquire CBLT's 56% joint venture interest in the Property. Upon completion of the transactions with Balmoral and CBLT, Omni would own 100% of the Property.

Northshore Gold Property

The Northshore Gold Property is located within the Hemlo-Schreiber greenstone belt in the world-famous Hemlo Gold Camp, south of the former producing Winston Lake copper-zinc-gold-silver deposit. The Property is approximately 4 kilometres south of the town of Schreiber, Ontario and approximately 70 kilometres west along the Trans-Canada Highway from the Hemlo gold deposit. The Property is 322 hectares and is prospective for gold mineralization. CBLT owns a 56% interest in the Property pursuant to a joint venture agreement with Balmoral, which owns the remaining 44% interest in the Property (the "Joint Venture"). See Omni's news release dated April 27, 2020 for a description of the Property.

"Omni is pleased to enter into terms which upon completion will see us unify 100% ownership of the Northshore Project", concluded John Veltheer, Omni CEO.

Summary of Transaction

The LOI is a non-binding agreement which sets out the principal terms on which the parties have agreed to complete the Transaction. Subject to satisfactory due diligence and successful additional negotiations, the parties intend to enter into a definitive agreement with respect to the Transaction (the "Definitive Agreement") on or before June 30, 2020. Omni paid a $17,500 non-refundable cash deposit to Balmoral on execution of the LOI, and has agreed to pay an additional $17,500 non-refundable cash deposit to Balmoral upon execution of the Definitive Agreement (collectively, the "Deposits").

On completion of the Transaction (the "Closing"), Omni has agreed, among other things, to pay $220,000 in cash to Balmoral (which amount will be in addition to the Deposits) and issue to Balmoral an aggregate of 1,333,333 common shares in the capital of Omni (each, an "Omni Share") on a post-Consolidation (as defined herein) basis at a price equal to the price of the Sub Receipts (as defined herein) (collectively, the "Consideration Shares"). Prior to the Closing, Balmoral will execute and deliver to Omni a voluntary escrow agreement, to be effective as of the Closing (the "Escrow Agreement"). The Escrow Agreement will provide, among other things, that all Consideration Shares will be deposited into escrow, with an escrow agent to be determined by Omni in its sole discretion and at the expense of Omni, and with the Consideration Shares to be released from escrow as to 25% on each of the days which is four, six, eight and 12 months after the Closing. Balmoral will be entitled to vote any Consideration Shares that are held in escrow, but will not be entitled to transfer, option or otherwise encumber any of such Consideration Shares without the prior written consent of Omni. This voluntary escrow will be in addition to any escrow required by the policies of any stock exchange.

In addition, under the terms of the LOI, Omni has agreed to consolidate its total issued and outstanding common shares (each, an "Omni Share") on the basis of five pre-consolidation Omni Shares for one post-consolidation Omni Share (collectively, the "Consolidation") prior to Closing. Omni has also agreed to raise gross proceeds of not less than $1.5 million through the private placement (the "Financing") of subscription receipts of Omni (each, a "Sub Receipt"). Each Sub Receipt will be issued at a subscription price of $0.60 per Sub Receipt on a post-Consolidation basis and will consist of one Omni Share and one common share purchase warrant (each, a "Financing Warrant"), with each Financing Warrant entitling the holder to acquire one additional post-Consolidation Omni Share at an exercise price of $1.00 per post-Consolidation Omni Share for a period of 2 years.

Tags: Northern Ontario / Investment / Gold / All Articles