12:05:54 EST Fri 27 Jan 2023
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Centurion obtains interim court OK for cannabis spinout

2022-06-24 20:53 ET - News Release

Mr. David Tafel reports

CENTURION ANNOUNCES UPDATE ON CANNABIS SPINOUT TRANSACTION, SHARE CONSOLIDATION, AND CHANGE OF TRANSFER AGENT

Centurion Minerals Ltd. has provided an update to shareholders on progress regarding previously announced plans that include:

  • Distributing shares to its shareholders in a wholly owned subsidiary (SpinCo) created to complete the previously announced, HAI Beverage/CannaEden Group cannabis transaction;
  • Completing the required steps to enable the company to resume trading in the near term, continuing as a mineral exploration issuer and providing near-term liquidity for shareholders.

The company has entered into an arrangement agreement with SpinCo pursuant to which the parties intend to complete a spinout transaction by way of a court-approved plan of arrangement under the Business Corporations Act (British Columbia). Additionally, on June 24, 2022, the company received an interim order from the Supreme Court of British Columbia regarding approval of the arrangement. The interim order sets out the conditions that must be met to apply for a final order of the court approving the arrangement and includes the holding of the annual general and special meeting of shareholders of the company to approve the arrangement.

Spinout and arrangement details

The purpose of the arrangement is to reorganize the company and its assets and operations into two separate companies: the company and SpinCo. The board of directors of the company believes this will provide shareholders with additional investment choices, and enhanced value as the company and SpinCo will be solely focused on the pursuit and development of their respective business operations and assets.

Pursuant to the arrangement agreement, and in accordance with the plan of arrangement, among other things:

  1. The company's cannabis agreements and $182,135.71 of cannabis-related liabilities will be transferred to SpinCo, all as more fully set forth in the circular (defined herein);
  2. In consideration of the foregoing, SpinCo will transfer to the company, the respective number of: (i) common shares in the capital of SpinCo equal to the number of common shares of the company outstanding at the record date (defined herein) of the arrangement. The company will retain its remaining assets and working capital and continue as a mineral exploration company;
  3. The authorized share structure of the company will be reorganized and altered by (i) renaming and redesignating all of the issued and unissued CTN shares as Class A shares; and (ii) creating a new class of "common shares without par value." Thereafter, each Class A share outstanding as at Aug. 17, 2022 (the share distribution date) (excluding any Class A shares held by shareholders dissenting to the arrangement), will be exchanged for: (i) one new CTN share; and (ii) one common share of SpinCo.

Upon the arrangement becoming effective, SpinCo will cease to be a wholly owned subsidiary of the company and the shareholders, as of the share distribution date, will hold 100 per cent of the outstanding SpinCo shares.

The foregoing description is qualified in its entirety by reference to the full text of the plan of arrangement which will be filed on SEDAR. The arrangement is subject to approval of the court, the shareholders and the TSX Venture Exchange, and there can be no assurance that such approvals will be obtained or that the arrangement will be completed on the terms contemplated, or at all. Further information regarding the arrangement will be contained in a management information circular that the company will prepare, file and mail to the shareholders in connection with the meeting. All securityholders of the company are urged to read the circular once available as it will contain additional important information concerning the arrangement.

Meeting details

The meeting will be held on Aug. 12, 2022, at 10 a.m. (Vancouver time) at 10th floor, 595 Howe St., Vancouver, B.C., V6C 2T5. In addition to consideration of the arrangement, shareholders will be asked to (i) fix the number of directors for the ensuing year at four; (ii) elect directors for the ensuing year; (iii) appoint Manning Elliott LLP, chartered accountants, as the company's auditor for the ensuing fiscal year at a remuneration to be fixed by the board; and (iv) approve the company's new long-term incentive plan.

Only shareholders of record at the close of business on June 28, 2022, will be entitled to vote at the meeting. The arrangement is subject to shareholder approval of not less than 66.67 per cent of the votes cast at the meeting.

Board of directors' recommendation

The board approved the arrangement, concluding that it is in the best interests of the company and its shareholders and recommends that shareholders vote in favour of the arrangement at the meeting. In reaching this conclusion, the board considered, among other things, the benefits to the company and its shareholders, as well as the financial position, opportunities, and outlook for the future potential and operating performance of the company and SpinCo respectively.

Final order

The arrangement is subject to receipt of the final order of the court, which the company will seek after the meeting and subject to receipt of the requisite shareholder approval for the arrangement. The hearing in respect of the final order is currently scheduled to take place on Aug. 17, 2022.

Share consolidation

Centurion is in the process of applying to the TSX-V for approval to consolidate the company's issued and outstanding share capital on 1:2 basis (for every two common shares presently held, shareholders will receive one postconsolidated common share). The company's name and trading symbol will remain the same.

The company currently has 33,639,473 common shares outstanding which will, on a postconsolidation basis, result in approximately 16,819,736 common shares outstanding.

The company's new Cusip No. is: 15643T404 and the ISIN is: CA 15643T4046.

A letter of transmittal will be mailed to shareholders holding physical certificates by the company's transfer agent (Endeavor Trust Company), advising that the consolidation has taken effect and shareholders should surrender their existing (preconsolidation) common share certificates, for new (postconsolidation) common share certificates. No fractional common shares of the company shall be issued in connection with the consolidation and the number of common shares to be received by a shareholder shall be rounded down to the nearest whole number of common shares.

Centurion will apply to the TSX-V for a resumption of trading as a mineral exploration issuer following the Aug. 12, 2022, meeting.

Change of transfer agent

Effective June 24, 2022, the company has replaced Computershare Trust Company of Canada as the registrar and transfer agent of the company's common shares with Endeavor Trust Corp. Shareholders do not need to take any action with respect to the change in registrar and transfer agent services.

All inquiries and correspondence relating to the shareholder records, transfer of shares, loss certificates or change of address should now be directed to Endeavor Trust, through its office in Vancouver.

About Centurion Minerals Ltd.

Centurion Minerals is a Canadian-based company with a focus on mineral asset development in the Americas. The company's lead investment has been its interest in the Ana Sofia Agri-Gypsum fertilizer project.

We seek Safe Harbor.

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