TORONTO,
Dec. 18, 2014 /CNW/ - Scorpio
Mining Corporation ("Scorpio Mining") (TSX: SPM) and U.S. Silver
& Gold Inc. ("U.S. Silver & Gold") (TSX: USA)(OTCQX: USGIF) are pleased to announce
that their respective shareholders have approved the previously
announced plan of arrangement to complete a merger of equals that
will combine their respective businesses (the "Transaction").
Shareholders of each company approved the Transaction at
their respective special meetings of shareholders held today with
over 99% of the votes cast in favour of the Transaction in each
case.
"On behalf of the Board of the newly combined
company, I would like to extend my thanks to all the U.S. Silver
& Gold and Scorpio Mining shareholders who overwhelmingly
supported this Transaction," said Darren
Blasutti, who will assume the role of President and Chief
Executive Officer of the combined company upon closing of the
transaction. "We are pleased that the shareholders recognized
the inherent value that this Transaction will create, and we are
excited to take advantage of future opportunities as a combined
company. As a combined organization, we offer shareholders a
leading junior silver producer in the Americas with a strong
balance sheet, industry-leading silver leverage and a track record
of reducing costs on a sustainable basis."
"I would also like to extend my thanks to the
Board of Directors, Management teams and advisors of both
companies. Their hard work helped us move from the signing of an
exclusivity agreement to the receipt of shareholder approval in
under two months," said Mr. Blasutti.
U.S. Silver & Gold will seek final approval
of the Transaction from the Ontario Superior Court of Justice on
December 22, 2014. Assuming the
receipt of such final approval and the satisfaction of certain
other customary conditions, closing of the Transaction is expected
to occur on or about December 23,
2014.
Under the terms of the Transaction, shareholders
of U.S. Silver & Gold will receive 1.68 common shares of
Scorpio Mining for each share of U.S. Silver & Gold held.
Shareholders of Scorpio Mining will not have to exchange their
shares of Scorpio Mining in the Transaction. Upon completion of the
Transaction, former shareholders of Scorpio Mining will own
approximately 59% and former shareholders of U.S. Silver & Gold
will own 41% of the outstanding shares of the combined
company. The combined company will continue under the name of
Scorpio Mining Corporation and intends to apply to the relevant
securities regulatory authorities so that U.S. Silver & Gold
can cease to be a reporting issuer in the applicable
jurisdictions. In addition, U.S. Silver & Gold will be
delisted from the TSX and withdrawn from the OTCQX. Scorpio
Mining has applied to have its shares listed on the OTCQX from and
after closing of the Transaction.
Any questions regarding delivery of the share
consideration in connection with the Transaction should be directed
to Equity Financial Trust Company ("Equity"), the depositary for
U.S. Silver & Gold, via telephone at 1-866-393-4891 x205 (toll
free in North America) or
416-361-0930 x205 or via email at
TMXEInvestorServices@tmx.com. In addition, Shorecrest Group
Ltd. ("Shorecrest") has been retained in connection with the
Transaction by Scorpio Mining and U.S. Silver & Gold to assist
in communicating with shareholders. Shareholders with
questions can contact Shorecrest at 1-888-637-5789, collect call
outside North America at
1-647-931-7454 or email at info@shorecrestgroup.com.
About Scorpio Mining Corporation
Scorpio Mining Corporation is a Canadian-based silver producer with
significant base metal by-product credits. The 100% owned Nuestra
Señora Mine in the Cosalá District of Sinaloa State, Mexico, has flexible mining methods and
diversified metal production. It has a fully mechanized underground
operation and a processing facility permitted for expansion to
4,000 tonnes per day. The plant produces zinc, copper and lead
concentrates - two of which contain a significant silver component
that contributes ~50% of the revenue from metal payable. Scorpio
Mining's opportunity for growth lies within the Cosalá District,
where Scorpio controls approximately 24,000 hectares covering
multiple exploration targets, advanced deposits and historically
producing mines. Scorpio Mining continues to focus on internal
growth through development of its deposits and aggressive
exploration programs.
About U.S. Silver & Gold Inc.
U.S.
Silver & Gold Inc. is a silver and gold mining company focused
on profitable production from its existing asset base and execution
of targeted accretive acquisitions. It owns and operates the Galena
Mine Complex in the heart of the Silver
Valley/Coeur d'Alene Mining District, Shoshone County, Idaho, which produces
high-grade silver and is the second most prolific silver mine in
U.S. history, delivering over 250 million ounces to date. U.S.
Silver & Gold also owns the Drumlummon Mine Complex in
Lewis and Clark County,
Montana.
Cautionary Statement on Forward-Looking
Information
This news release contains "forward-looking
information" within the meaning of applicable securities laws.
Forward-looking information includes, but is not limited to,
expectations, intentions, plans, assumptions and beliefs with
respect to, among other things, the Transaction, the combined
company following completion of the Transaction and its operations,
and the assumption for the reduction of total resources at El Cajón
utilized by U.S. Silver & Gold for purposes of evaluating the
Transaction. Often, but not always, forward-looking information can
be identified by forward-looking words such as "anticipate",
"believe", "expect", "goal", "plan", "intend", "estimate", "may",
"assume" and "will" or similar words suggesting future outcomes, or
other expectations, beliefs, plans, objectives, assumptions,
intentions, or statements about future events or performance.
Forward-looking information is based on the opinions and estimates
of the applicable company as of the date such information is
provided and is subject to known and unknown risks, uncertainties,
and other factors that may cause the actual results, level of
activity, performance, or achievements of the applicable company to
be materially different from those expressed or implied by such
forward looking information. This includes the ability to develop
and operate the properties of the combined company, risks
associated with the mining industry such as economic factors
(including future commodity prices, currency fluctuations and
energy prices), failure of plant, equipment, processes and
transportation services to operate as anticipated, environmental
risks, government regulation, actual results of current exploration
activities, possible variations in ore grade or recovery rates,
permitting timelines, capital expenditures, reclamation activities,
social and political developments and other risks of the mining
industry. Although each of Scorpio Mining and U.S. Silver &
Gold has attempted to identify important factors that could cause
actual results to differ materially from those contained in
forward-looking information, there may be other factors that cause
results not to be as anticipated, estimated, or intended. Readers
are cautioned not to place undue reliance on such information. By
its nature, forward-looking information involves numerous
assumptions, inherent risks and uncertainties, both general and
specific those contribute to the possibility that the predictions,
forecasts, and projections of various future events will not occur.
Each of Scorpio Mining and U.S. Silver & Gold undertakes no
obligation to update publicly or otherwise revise any
forward-looking information whether as a result of new information,
future events or other such factors which affect this information,
except as required by law. Readers are also cautioned that
the assumption for the reduction in total resources at El Cajón
utilized by U.S. Silver & Gold for purposes of evaluating the
Transaction is an assumption of U.S. Silver & Gold only, and is
not a statement of, or otherwise endorsed by, Scorpio Mining, and
the actual reduction in total resources at El Cajón may differ
materially from the assumption of U.S. Silver & Gold, including
because the concession boundaries underlying the El Cajón deposit
have not yet been confirmed by the Dirección General de Regulación
Minera and the technical work to determine resources based on such
confirmed boundaries has not yet been conducted. Scorpio
Mining intends to prepare an updated mineral resource estimate for
its El Cajón deposit and a revised technical report, prepared in
accordance with National Instrument 43-101 - Standards of
Disclosure for Mineral Projects, following the Dirección General de
Regulación Minera's final confirmation of the concession boundaries
underlying the El Cajón deposit. There can be no assurance
that the Transaction will receive the required court approval or
that the Transaction will be completed.
SOURCE U.S. Silver & Gold Inc.