Kaizen Discovery and Ivanhoe Electric Complete Arrangement

Rhea-AI Summary

Kaizen Discovery Inc. announces the completion of its acquisition by Ivanhoe Electric Inc., making Kaizen a wholly-owned subsidiary of IE. The acquisition involved the issuance of one share of common stock of IE for every 127 Common Shares. The Common Shares are expected to be de-listed from the TSX Venture Exchange, and the Company is expected to cease to be a reporting issuer in the applicable jurisdictions.

Insights

Financial Analyst

The acquisition of Kaizen Discovery Inc. by Ivanhoe Electric Inc. represents a significant consolidation within the mining and exploration industry. The financial implications are multifold. Firstly, the transaction enhances Ivanhoe Electric's asset portfolio, which could lead to potential operational synergies and cost savings. The exchange ratio of one IE share for every 127 Kaizen shares reflects the valuation metrics that investors should scrutinize. Such metrics are often derived from due diligence on assets, growth potential and the prevailing market conditions.

From a shareholder perspective, the delisting of Kaizen from the TSX Venture Exchange implies that investors will now have to look to IE's performance on the NYSE American and TSX for future growth and dividends. The consolidation could also affect liquidity and marketability of the shares for former Kaizen shareholders, given the change in the trading platform and share structure.

Long-term, the acquisition could be beneficial if IE successfully integrates Kaizen's assets and leverages them for increased production or discovery. However, the success of such acquisitions is not guaranteed and depends on the management's execution and the intrinsic value of the acquired assets.

Market Research Analyst

The completion of this acquisition is a strategic move that could potentially alter the competitive landscape of the mining sector. Ivanhoe Electric's consolidation of Kaizen's shares to achieve 100% ownership suggests a bullish outlook on the exploration and mining sector, possibly indicating underlying value in Kaizen's projects or resources that IE intends to capitalize on.

Analyzing the broader market impact, this acquisition could signal to the market that there may be undervalued assets within the sector, possibly leading to a re-evaluation of similar companies by investors. It could also trigger further industry consolidation as companies strive to build economies of scale and increase their resource bases to compete more effectively.

It's important to monitor the post-acquisition phase for integration efficiency and any potential cultural or operational challenges that may arise. The success of the acquisition will be measured by IE's ability to realize the projected value and synergies from Kaizen's assets.

Legal Expert

The acquisition process followed a plan of arrangement under the Business Corporations Act (British Columbia), which is a court-approved process that allows for a flexible way of reorganizing a company's capital structure. This method is often faster and requires less shareholder approval than a traditional takeover bid, providing a smoother transition of control.

For Ivanhoe Electric, the completion of this process without any disclosed hurdles suggests a well-negotiated arrangement with Kaizen's board and compliance with regulatory requirements. The cessation of Kaizen as a reporting issuer will relieve the company of the obligations and costs associated with public company reporting, which could result in cost savings for IE.

It is essential for stakeholders to understand the legal ramifications of the acquisition, such as changes in shareholder rights and the implications of the company's removal from the stock exchange. These changes can have significant impacts on investor decision-making and the governance landscape of the acquired entity.

(Newsfile Corp. - February 6, 2024) - Kaizen Discovery Inc. (TSXV: KZD) (otherwise "Kaizen" or "the Company") announces today the completion of the acquisition by Ivanhoe Electric Inc. (NYSE American: IE) (TSX: IE) ("IE")  of all of the issued and outstanding common shares of the Company (the "Common Shares") not already beneficially owned by IE pursuant to a plan of arrangement under the Business Corporations Act (British Columbia) (the "Arrangement").

Immediately prior to the closing of the Arrangement, IE beneficially owned 54,428,971 Common Shares, representing 82.54% of the issued and outstanding Common Shares on a non-diluted basis. Following the closing of the Arrangement, IE beneficially owns 69,229,659 Common Shares, representing 100% of the issued and outstanding Common Shares on a fully diluted basis. The Company is now a wholly-owned subsidiary of IE. IE acquired the Common Shares in consideration for the issuance of one share of common stock of IE for every 127 Common Shares issued and outstanding immediately prior to the closing of the Arrangement.

It is expected that the Common Shares will be de-listed from the TSX Venture Exchange effective at the close of business on February 7, 2024. An application is also expected to be made for the Company to cease to be a reporting issuer in the applicable jurisdictions following closing of the Arrangement.

For more information about the Arrangement, please refer to the Company's management information circular dated December 20, 2023, which is available on SEDAR+ at www.sedarplus.com under Kaizen's issuer profile.

About Kaizen

Kaizen is a Canadian mineral exploration and development company with exploration projects in Peru. Kaizen's head office is located at 606 - 999 Canada Place, Vancouver, British Columbia, Canada, V6C 3E1. More information on Kaizen is available at www.kaizendiscovery.com.

About Ivanhoe Electric

Ivanhoe Electric is a U.S. company that combines advanced mineral exploration technologies with electric metals exploration projects predominantly located in the United States. Ivanhoe Electric's head office is located at 450 E Rio Salado Parkway, Suite 130, Tempe, Arizona 85281. More information on Ivanhoe Electric is available at www.ivanhoeelectric.com.

ON BEHALF OF THE COMPANY
Terry Krepiakevich, Chairman of the Special Committee

Information contact

Ran Li +1-604-689-8765
info@kaizendiscovery.com

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/196953

FAQ

What is the latest acquisition announcement by Kaizen Discovery Inc.?

Kaizen Discovery Inc. has announced the completion of its acquisition by Ivanhoe Electric Inc., making Kaizen a wholly-owned subsidiary of IE.

What was the consideration for the acquisition of Common Shares by IE?

IE acquired the Common Shares in consideration for the issuance of one share of common stock of IE for every 127 Common Shares issued and outstanding.

When will the Common Shares be de-listed from the TSX Venture Exchange?

The Common Shares are expected to be de-listed from the TSX Venture Exchange effective at the close of business on February 7, 2024.

What is the expected status of the Company following the closing of the Arrangement?

An application is expected to be made for the Company to cease to be a reporting issuer in the applicable jurisdictions following closing of the Arrangement.