On February 9, 2017, Sprott Resource Corp. (“SRC”) and Adriana Resources Inc. (now re-named Sprott Resource Holdings Inc.) (the “Company”) completed a business combination by way of a court approved plan of arrangement under the Canada Business Corporations Act (the “Arrangement”). Under the Arrangement, the Company acquired 100 per cent of the outstanding common shares of SRC and SRC became a wholly-owned subsidiary of the Company. Holders of common shares of SRC received 3.0 common shares of the Company for each SRC share held.
In connection with the Arrangement, (i) on February 8, 2017, shareholders of the Company were issued one-quarter of a common share purchase warrant in respect of each common share held, and (ii) the Company completed private placements of common shares and warrants to Sprott Inc., a fund management by a subsidiary of Sprott Inc. and Term Oil Inc. (a corporation controlled by Arthur Richards (Rick) Rule IV, Chairman of Sprott US Holdings Inc.), for aggregate gross proceeds of $15 million.
Immediately following the completion of the Arrangement and related transactions, the Company changed its name from Adriana Resources Inc. to Sprott Resource Holdings Inc. and the board of directors and management of the Company were reconstituted to consist of the board and management of SRC, with the addition of Mr. Rule as Chief Investment Officer and Michael Harrison, former President and CEO of the pre-Arrangement Company, as Managing Director.
The common shares and warrants of the Company are listed on the Toronto Stock Exchange and trade under the symbols “SRHI” and “SRHI.WT” respectively.
As a result of the Arrangement, the Company has initiated its transition from a private equity firm to a diversified holding company focused on holding businesses in the natural resource industry that it believes can generate sustainable free cash flow. Based in Toronto, the Company is part of the Sprott Group of Companies and is managed by a team of experienced resource investment professionals. The Company’s current holdings are concentrated in the mining, energy and agriculture sectors.
On April 20, 2017, Sprott Resource Holdings Inc. completed a further equity financing by way of a public “best efforts” marketed offering of units under a short form prospectus, selling 120,000,000 units at a price of $0.25 per unit for gross proceeds of $30,000,000. Each unit consisted of one common share and one common share purchase warrant. The agents for the Offering were Sprott Capital Partners, a division of Sprott Private Wealth LP, and Haywood Securities Inc.
SRC and the post-Arrangement Company were represented by Arthur Einav and Sarah-Jane Martin.
Blake, Cassels & Graydon LLP acted as external Canadian counsel to SRC and the post-Arrangement Company with a team that included Jeffrey Lloyd, John Wilkin, Catherine Youdan, Rob Seager, Alex MacMillan, Raees Nakhuda, and Yousaf Khan (M&A/securities), Chris Van Loan and Casey Richardson-Scott (tax) and Ryan Morris (litigation).
Paul, Weiss, Rifkind, Wharton & Garrison LLP acted as US counsel to SRC and the post-Arrangement Company with a team that included Andrew Foley and Christian Kurtz (M&A/securities).
Stikeman Elliott LLP acted as Canadian counsel to the Company with a team that included Jay Kellerman, Mikhel Voore, Steven Bennett and Andrew Chan (M&A/securities) and Dean Kraus (tax).
Skadden, Arps, Slate, Meagher & Flom LLP acted as US counsel to the Company with a team that included Christopher Morgan and Annabelle Gardere (M&A/securities) and Eric Sensenbrenner, Jared Binstock and Brooke Johnson (tax).
Baker & McKenzie LLP acted as Canadian counsel to the agents in connection with the public offering with a team that included Sonia Yung, Ora Wexler and Ashley Staley.