MANAGEMENT AND BOARD
Post-Merger, the combined company's management and board will reflect the collective strengths of both companies, having years of experience in the global resource sector and strong expertise in western Africa and Australian uranium landscape. Karl Kottmeier will become Chief Executive Officer, Douglas Ford will become Chief Financial Officer, Richard Patricio will become Chief Operating Officer and Bryan Hyde will become Chief Technical Officer of the company. Richard Homsany will remain Executive Vice President, Australia. Subject to the approval of the shareholders of Mega, the nine member board will be led by Sheldon Inwentash as Chairman and include Karl Kottmeier, Richard Patricio, Edward Ford, Allen Ambrose, Anthony Grey, Michael Sweatman, Phil Williams and Douglas Reeson.
OVERVIEW OF PORTFOLIO
The combined company will have a portfolio of strategic assets which will be the key drivers of growth and value creation and include:
The 100%-owned, flagship Falea project comprises three permits, totalling 225 km2 in southwestern Mali and is a polymetallic, flat-lying deposit containing potentially viable quantities of uranium, silver and copper. Rockgate commenced a pre-feasibility study on the Falea project in 4Q 2012 which is anticipated to be completed by the end of 2013.
Three, resource-compliant uranium projects with additional interests in exploration properties covering approx. 5,800 km2 throughout Queensland, South Australia, Northern Territory and Western Australia. Lake Maitland (100%-owned(1), W. Australia) hosts 20.7 Mlbs U3O8 Indicated at a grade of 0.05% and 1.6 Mlbs U3O8 Inferred at a grade of 0.04% and is currently in the feasibility stage. Ben Lomond (100%-owned, Queensland) hosts 7.9 Mlbs U3O8 Indicated at a grade of 0.27% and 2.8 Mlbs U3O8 Inferred at a grade of 0.21% and is currently in pre-feasibility while Maureen (100%-owned, Queensland) hosts 5.9 Mlbs U3O8 Indicated at a grade of 0.09% and 0.4 Mlbs U3O8 Inferred at a grade of 0.11%.
The combined company will have approximately $22 million of cash at closing of the transaction. In the current uranium market, the combined company's mining assets will require minimal investment and, as such, the cash on hand is anticipated to be more than sufficient to advance both Falea through PFS and Lake Maitland DFS and predevelopment and maintain the other Australian assets while remaining able to undertake investment in new opportunities.
Shareholders can expect to benefit from a portfolio of advanced resource equity positions (approx. $12 million) which management believes are currently significantly undervalued in the market and potentially represent a strong sample of the next stage of uranium development assets globally.
SUMMARY OF THE TRANSACTION
It is anticipated that the Merger will be completed by way of a three-cornered amalgamation, or a plan of arrangement, resulting in Rockgate becoming a wholly-owned subsidiary of Mega at closing. As part of the transaction, it is also proposed that Mega will effect a 10-for-1 consolidation of the Mega Shares prior to the Merger. Subject to completion of the prior consolidation of the Mega Shares (the "Mega Consolidated Shares"), Rockgate shareholders will receive 2.2 Mega Consolidated Shares for each ten (10) common shares of Rockgate held (subject to rounding).
The transaction is subject to completion of due diligence, the execution of a definitive agreement substantially on the terms set out in the LOI, and the approval of Rockgate shareholders and Mega Shareholders (as to the issuance of the Mega Shares under the Merger and the 10-for-1 share consolidation), at meetings to be held as soon as practicable following execution of the definitive agreement, in addition to other customary closing conditions, including receipt of all regulatory and stock exchange approvals. Mega and Rockgate have also agreed to reciprocal non-solicitation restrictions, including rights to match any superior proposals, and for the payment of a C$1 million reciprocal break fee under certain circumstances.
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