LABRADOR IRON MINES LIMITED
Notice of Special Meeting of Shareholders
and
Information Memorandum
of
LABRADOR IRON MINES LIMITED
Thursday, March 30, 2023
11:00 AM (Toronto Time)
AMALGAMATION
of
LABRADOR IRON MINES LIMITED
and
LABRADOR IRON MINES HOLDINGS LIMITED
These materials are important and require your attention. If you are in doubt as to how to make decisions, you should consult your investment dealer, broker, lawyer, or other professional advisor.
This document does not constitute an offer or a solicitation of proxies.
55 University Avenue, Suite 1805, Toronto, Ontario, Canada M5J 2H7
Telephone: 647-728-4106
Email:info@LabradorIronMines.ca
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Labrador Iron Mines Limited
Dear LIM Shareholder,
You are invited to attend a Special Meeting of Shareholders of Labrador Iron Mines Limited ("LIM") to be held on Thursday, March 30, 2023, at 11:00 a.m. at Suite 1805, 55 University Avenue, Toronto, Ontario.
At the Special Meeting, you will be asked to consider a special resolution to approve the Amalgamation of LIM with Labrador Iron Mines Holdings Limited ("LIMH"), which already holds 52% of the shares of LIM, involving the issue of shares of LIMH to LIM shareholders, such that LIM will, once again, be a wholly owned subsidiary of LIMH.
LIM has been working to advance development of its Houston Project through various initiatives, including discussing an off-take agreement, construction financing and product sale components; and advancing commercial negotiations with construction contractors, equipment vendors, rail, port and logistics counterparties; and planning metallurgical test work.
To fund these initiatives, LIM has been seeking near term working capital financing and has been seeking a potential private placement of equity. To date, it has proven difficult to attract investor interest. There are many reasons and explanations, of which the more frequently mentioned are that LIM's corporate structure is complex, and LIMH only holds 52% of the Houston Project.
To try to address some of these issues, it is now proposed to simplify the group corporate structure by combining LIMH with LIM in a three-way, statutory amalgamation whereby LIM shareholders would receive new shares of LIMH and LIMH would hold 100% of LIM. In summary, the proposal is to put the group structure back the way it was prior to the CCAA reorganization in 2015.
The number of LIMH Shares to be issued in exchange for LIM Shares is calculated to equate to the relative percentage interest of each company in the underlying assets such that shareholders of LIM, other than LIMH, will continue to hold, indirectly, the same percentage interest in the assets of LIM.
The Business Corporations Act, Ontario requires that the Amalgamation be approved by a special resolution of the shareholders of LIM, which is a resolution passed by a 2/3 majority of the votes cast at a meeting of shareholders.
The attached Notice of Meeting and accompanying Information Memorandum contain a detailed description of the Amalgamation, as well as information regarding LIM and LIMH, and certain pro forma and other information on LIMH after giving effect to the Amalgamation, including discussion of various risk factors.
I believe that the amalgamation of LIM and LIMH is in the best interests of LIM Shareholders for numerous reasons, in particular that the shares of LIMH are traded on a public stock market and combining LIMH and LIM will simplify the corporate structure and create the best prospects for long-term value for shareholders.
I strongly support the Amalgamation and will be voting my own shares in LIM in favor of the Amalgamation, and I recommend that you do the same.
John F. Kearney | |
Chairman of the Board | March 16, 2023 |
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LABRADOR IRON MINES LIMITED
55 University Avenue
Suite 1805
Toronto, Ontario M5J 2H7
NOTICE OF SPECIAL MEETING
NOTICE IS HEREBY GIVEN THAT a special meeting (the "Meeting") of the shareholders of Labrador Iron Mines Limited ("LIM") will be held at 55 University Ave, Suite 1805, Toronto, Ontario M5J 2H7, on Thursday, March 30, 2023 at the hour of 11:00 a.m. (Toronto time), for the following purposes:
-
to consider and, if deemed advisable, approve, with or without variation, a special resolution (the
"Amalgamation Resolution") authorizing the amalgamation of LIM with 5035020 Ontario Limited
("Subco"), a wholly-ownedsubsidiary of Labrador Iron Mines Holdings Limited ("LIMH"), resulting in the indirect acquisition by LIMH of all of the issued and outstanding securities of LIM not already held by LIMH, all on the terms and subject to the conditions contained in an Amalgamation Agreement dated March 16, 2023 among LIMH, Subco and LIM, a copy of which is attached as Schedule "A" to the accompanying information memorandum (the "Information Memorandum"), all as more particularly set forth in the Information Memorandum, substantially in the form of resolution set forth in Schedule "B" to the Information Memorandum; and - to transact such further or other business as may properly come before the Meeting and any adjournments thereof.
AND TAKE NOTICE that registered shareholders of LIM who dissent in respect of the Amalgamation Resolution in accordance with Section 185 of the Business Corporations Act (Ontario) ("OBCA") will be entitled to be paid the fair value of their shares in accordance with Section 185 of the OBCA. Strict compliance with the provisions of Section 185 of the OBCA will be required in order to exercise such rights of dissent. See "Dissent Rights to the Amalgamation Resolution for LIM Shareholders" under the heading "Rights of Dissenting Shareholders" in the accompanying Information Memorandum for a summary of the procedure to exercise such rights of dissent and Schedule "C" for the full text of Section 185 of the OBCA.
The accompanying Information Memorandum provides additional information relating to the matters to be considered at the Meeting. Any adjournment of the Meeting will be held at a time and place to be specified at the Meeting.
Only shareholders of LIM of record at the close of business on March 16, 2023 will be entitled to receive notice of and vote at the Meeting. If you are unable to attend the Meeting in person, and wish to have your vote recorded, please contact LIM by email at info@LabradorIronMines.cato make arrangements for alternate or proxy voting.
DATED this 16th day of March, 2023.
By order of the board of Labrador Iron Mines Limited
"John F. Kearney"
John F. Kearney
Chairman
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TABLE OF CONTENTS | |
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS | 6 |
GENERAL VOTING INFORMATION | 9 |
PURPOSE OF THE MEETING | 9 |
VOTING | 9 |
REVOCABILITY OF PROXY | 9 |
RECORD DATE AND VOTING OF SHARES | 9 |
PRINCIPAL HOLDERS OF VOTING SECURITIES | 10 |
INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON | 10 |
THE AMALGAMATION | 10 |
APPROVAL OF AMALGAMATION RESOLUTION | 10 |
PRINCIPAL FEATURES OF THE AMALGAMATION | 11 |
EFFECT OF THE AMALGAMATION | 11 |
AMALGAMATION AGREEMENT | 12 |
REASONS FOR THE AMALGAMATION | 13 |
RISK FACTORS OF THE AMALGAMATION | 14 |
CONDUCT OF THE MEETING AND APPROVAL OF THE AMALGAMATION | 14 |
SHAREHOLDER APPROVAL OF THE AMALGAMATION | 14 |
PROCEDURE FOR EXCHANGE OF LIM SHARES | 15 |
FRACTIONAL SHARES | 15 |
FEDERAL INCOME TAX CONSIDERATIONS | 15 |
UNITED STATES INCOME TAX CONSIDERATIONS | 16 |
SECURITIES LAWS CONSIDERATIONS | 16 |
RELATED PARTY TRANSACTION | 16 |
CANADIAN SECURITIES LAWS | 16 |
U.S. SECURITIES LAWS | 17 |
EFFECTIVE DATE AND CONDITIONS | 17 |
EFFECTIVE DATE | 17 |
CONDITIONS TO THE AMALGAMATION BECOMING EFFECTIVE | 17 |
MUTUAL CONDITIONS: | 17 |
ADDITIONAL CONDITIONS IN FAVOUR OF LIM: | 17 |
ADDITIONAL CONDITIONS IN FAVOUR OF LIMH: | 17 |
RIGHTS OF DISSENTING SHAREHOLDERS | 18 |
INFORMATION ABOUT LABRADOR IRON MINES HOLDINGS LIMITED | 20 |
NAME AND INCORPORATION | 20 |
HOUSTON DSO PROJECT | 21 |
PRELIMINARY ECONOMIC ASSESSMENT - HOUSTON PROJECT | 22 |
SCHEFFERVILLE PROJECTS | 26 |
ELIZABETH TACONITE PROPERTY | 26 |
DESCRIPTION OF SECURITIES - LIMH SHARES | 28 |
LIMH CAPITALIZATION | 28 |
PRIOR ISSUE OF SECURITIES OF LIMH | 28 |
INFORMATION ABOUT LABRADOR IRON MINES LIMITED | 29 |
DESCRIPTION OF SECURITIES - LIM SHARES | 29 |
LIM CAPITALIZATION | 29 |
PRIOR SALES | 29 |
GENERAL DEVELOPMENT OF THE BUSINESS | 29 |
INFORMATION CONCERNING THE COMBINED COMPANY | 31 |
INTER-CORPORATE RELATIONSHIPS | 31 |
OPERATIONS OF THE COMBINED COMPANY - LIMH | 32 |
RESALE RESTRICTIONS | 32 |
PRINCIPAL HOLDERS OF VOTING SECURITIES POST-AMALGAMATION | 32 |
UNAUDITED PRO-FORMA FINANCIAL INFORMATION | 32 |
REGISTRAR AND TRANSFER AGENT | 34 |
AUDITORS | 34 |
MATERIAL CONTRACTS | 34 |
RISKS FACTORS AND UNCERTAINTIES | 35 |
APPROVALS | 45 |
SCHEDULE A | A-1 |
AMALGAMATION AGREEMENT | 1 |
SCHEDULE B | B-1 |
AMALGAMATION RESOLUTION | 1 |
SCHEDULE C | C-1 |
DISSENTING SHAREHOLDER RIGHTS | 1 |
SCHEDULE D | D-1 |
LABRADOR IRON MINES HOLDINGS LIMITED AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR | |
ENDED MARCH 31, 2022 | 1 |
SCHEDULE E | E-1 |
LABRADOR IRON MINES HOLDINGS LIMITED UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL | |
STATEMENTS FOR THE THREE AND NINE MONTHS ENDED DECEMBER 31, 2022 | 1 |
SCHEDULE F | F-1 |
LABRADOR IRON MINES LIMITED AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED | |
MARCH 31, 2022 | 1 |
SCHEDULE G | G-1 |
LABRADOR IRON MINES HOLDINGS LIMITED PRO FORMA CONSOLIDATED STATEMENT OF FINANCIAL POSITION | |
AS AT DECEMBER 31, 2022 | 1 |
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Labrador Iron Mines Holdings Limited published this content on 17 March 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 17 March 2023 17:22:08 UTC.