Americas Silver Corporation (TSX: USA) (NYSE American: USAS)
(“Americas Silver” or the “Company”) is pleased to announce
developments in the pending merger transaction (the “Transaction”)
with Pershing Gold Corporation (“Pershing Gold”), including details
of the special meeting of shareholders (the “Special Meeting”), and
a general corporate update.
Pershing Gold Transaction
Update
On September 28, 2018, the Company entered into a definitive
agreement to complete a business combination with Pershing Gold.
The combination will add a shovel-ready, gold-silver development
project in Nevada that adds significant precious metal growth to
the Company’s production profile. Once completed, Relief Canyon is
expected to produce 75,000 to 90,000 ounces of gold annually at low
cash costs over an initial seven-year life and generate annual
post-tax cash flow from $25 to $30 million.1 This transformative
combination is expected to increase the Company’s precious metal
production by over 5 times with precious metals representing
greater than 60% of silver equivalent production.
Both the Americas Silver and Pershing Gold management teams and
their advisors have been working diligently to complete the
necessary regulatory requirements related to the Transaction. A
preliminary Form F-4 proxy statement/prospectus (“F-4”) was filed
on November 5, 2018, and on November 14, 2018, the Company received
clearance to request its effectiveness. The Company will file
Amendment No. 1 to the F-4 and expects it to be declared effective
prior to the end of November. Effective November 21, 2018, Americas
Silver and Pershing Gold jointly filed the required notice with the
Committee on Foreign Investment in the United States. The Company
expects that the applicable 45-day review period will commence
before the end of November.
In connection with the above, Americas Silver and Pershing Gold
have each now set their meeting date in respect of the Transaction
at January 9, 2018 and provided the requisite notice thereof. The
Company’s record date for a shareholder’s entitlement to vote at
the meeting has been set at November 30, 2018. Additional
information about the special meeting of Americas Silver
shareholders will be contained in the Company's management
information circular, which is expected to be filed and mailed to
the Company’s shareholders in mid-December and will be available on
Americas Silver's website and on its SEDAR profile at www.sedar.com
and its EDGAR profile at www.sec.gov.
Subject to the satisfaction of various conditions, including the
requisite approvals of Americas Silver’s and Pershing Gold’s
shareholders at their respective meetings to be held on January 9,
2019, the Transaction is expected to be completed shortly
thereafter. Upon completion, each holder of Pershing Gold common
stock will be entitled to receive 0.715 of an Americas Silver
common share for each share of Pershing Gold common stock held (the
“Exchange Ratio”) as of the effective time of the Transaction.
Holders of Pershing Gold preferred shares may elect to exchange
those shares for new non‐voting preferred shares of Americas
Silver, adjusted in respect of exercise price and number based on
the Exchange Ratio, or common shares of Americas Silver based on
the Exchange Ratio. Existing common shareholders of Americas Silver
and Pershing will own approximately 64% and 36%, respectively, on
an undiluted basis, following the close of the Transaction.
Corporate Update
The fourth quarter of 2018 started on a strong note as the
Company produced approximately 600,000 consolidated silver
equivalent ounces in October from its operations making October the
best month so far this year. The San Rafael mine led the way as
mill throughput steadily increased through the month to over 1,700
tonnes per day with this consistent performance continuing into
November. The strong showing combined with steady performance from
Galena have the Company on-track for its best production quarter
for the year.
The Company is in discussions with numerous interested parties
on the financing of the Relief Canyon project. An updated will be
provided to the market as to the status of the financing process
following the close of the transaction in January 2019. The Company
expects to have sufficient funding to support the newly-merged
company through to the completion of the Relief Canyon
financing.
About Americas Silver
Corporation
Americas Silver is a silver mining company focused on growth in
precious metals from its existing asset base and execution of
targeted accretive acquisitions. It owns and operates the Cosalá
Operations in Sinaloa, Mexico and the Galena Complex in Idaho, USA.
The Company holds an option on the San Felipe development project
in Sonora, Mexico.
Daren Dell, Chief Operating Officer and a Qualified Person under
Canadian Securities Administrators guidelines, has approved the
applicable contents of this news release. For further information
please see SEDAR or americassilvercorp.com.
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, Americas Silver’s and
Pershing’s expectations intentions, plans, assumptions and beliefs
with respect to, among other things, the realization of
exploration, operational, production, and development plans, the
Cosalá Operations (including Zone 120) and Galena Complex; Americas
Silver’s financing efforts; the consummation of the Transaction in
accordance with its terms; the anticipated silver and gold
production of the combined company; potential improvements in
production, cash flow, shareholder liquidity, and access to
capital; perceptions of institutional shareholders and analysists;
any potential re-rating; references to anticipated profits, risk,
realized value and return; construction, production, and
development plans at Relief Canyon Mine; the relative ownership of
shareholders in the combined company; the future management and
board of the combined company; the timing of shareholder proxies,
meetings and the closing of the Transaction; estimates and
forecasts with respect to the expected project economics for Relief
Canyon derived from the Feasibility Study, such as estimates of
average production, AISC, IRR, NPV; cash costs; the availability of
financing and the estimated construction timeline for Relief Canyon
Mine; and opportunities for expanding the Relief Canyon Mine
deposit and exploring opportunities on nearby lands. 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 Americas Silver and Pershing
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 Americas Silver or Pershing to be materially different from
those expressed or implied by such forward looking information.
With respect to the Transaction, these risks and uncertainties
include the risk that Americas Silver or Pershing may be unable to
obtain any regulatory approvals required for the Transaction, or
that regulatory approvals may delay the transaction or cause the
parties to abandon the Transaction; the risk that required
stockholder approvals may not be obtained; the risk that other
conditions to closing may not be satisfied; the length of time
needed to consummate the proposed Transaction, which may be longer
than anticipated for various reasons; the risk that the businesses
will not be integrated successfully; the diversion of management
time on transaction-related issues; the risk that costs associated
with the integration are higher than anticipated; and litigation
risks related to the Transaction. With respect to the businesses of
Americas Silver and Pershing, these risks and uncertainties include
interpretations or reinterpretations of geologic information,
unfavorable exploration results, inability to obtain permits
required for future exploration, development or production, general
economic conditions and conditions affecting the industries in
which the Company and Pershing operate; the uncertainty of
regulatory requirements and approvals; fluctuating mineral and
commodity prices, and the ability to obtain necessary future
financing on acceptable terms or at all; the ability to develop and
operate the Cosalá, Galena, Relief Canyon properties, risks
associated with the mining industry such as economic factors
(including future commodity prices, currency fluctuations and
energy prices), ground conditions and factors other factors
limiting mine access, failure of plant, equipment, processes and
transportation services to operate as anticipated, environmental
risks, government regulation, actual results of current exploration
and production activities, possible variations in ore grade or
recovery rates, permitting timelines, capital expenditures,
reclamation activities, labor relations, social and political
developments and other risks of the mining industry. Although the
Company 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.
Additional information regarding the factors that may cause actual
results to differ materially from these forward-looking statements
is available in Pershing’s filings with the Securities and Exchange
Commission, including the Annual Report on Form 10-K for the year
ended December 31, 2017, and in the Americas Silver’s filings with
on SEDAR. Neither Americas Silver nor Pershing undertake any
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. Neither Americas Silver nor Pershing
gives any assurance (1) that Americas Silver and Pershing will
achieve its expectations, or (2) concerning the result or timing
thereof. All subsequent written and oral forward-looking statements
concerning Pershing, Americas Silver, the proposed transaction, the
combined company or other matters and attributable to Pershing or
Americas Silver or any person acting on their behalf are expressly
qualified in their entirety by the cautionary statements above.
No Offer or Solicitation
This press release is for informational purposes only and does
not constitute an offer to sell or the solicitation of an offer to
buy any securities or a solicitation of any vote or approval with
respect to the proposed transaction between Americas Silver and
Pershing or otherwise, nor shall there be any sale of securities in
any jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No offer of securities
shall be made except by means of a prospectus meeting the
requirements of Section 10 of the United States Securities Act of
1933, as amended.
Participants in Merger Solicitation
Pershing, Americas Silver and certain of their respective
directors, executive officers and other members of management and
employees may be deemed to be participants in the solicitation of
proxies from the stockholders of Pershing and Americas Silver in
connection with the proposed transaction. Information about the
directors and executive officers of Pershing is set forth in its
proxy statement for its 2018 annual meeting of stockholders, which
was filed with the U.S. Securities and Exchange Commission (the
“SEC”) on April 30, 2018. Information about the directors and
executive officers of Americas Silver is set forth in its Form 6-K
for its 2018 annual meeting of shareholders, which was filed with
the SEC on April 13, 2018. These documents can be obtained free of
charge from the sources indicated below. Other information
regarding those persons who are, under the rules of the SEC,
participants in the proxy solicitation and a description of their
direct and indirect interests, by security holdings or otherwise,
will be contained in Pershing’s proxy statement/prospectus and
other relevant materials to be filed with or furnished to the SEC
when they become available.
Additional Information and Where to Find It
The proposed transaction (or certain matters related thereto)
between Americas Silver and Pershing will be submitted to the
respective stockholders of Americas Silver and Pershing for their
consideration. Americas Silver will file with the SEC a
registration statement on Form F-4 that will include a proxy
statement of Pershing that also constitutes a prospectus of
Americas Silver. Americas Silver will file an Information Circular
with the applicable Canadian securities administrators. Pershing
will deliver the proxy statement/prospectus to its stockholders as
required by applicable law. Americas Silver will deliver the
Information Circular to its stockholders as required by applicable
law. Americas Silver and Pershing also plan to file or furnish
other documents with the SEC regarding the proposed transaction.
This press release is not a substitute for any prospectus, proxy
statement, information circular or any other document which
Americas Silver and Pershing may file with or furnish to the SEC in
connection with the proposed transaction. INVESTORS AND SECURITY
HOLDERS OF AMERICAS SILVER AND PERSHING ARE URGED TO READ THE PROXY
STATEMENT/PROSPECTUS AND INFORMATION CIRCULAR AND ANY OTHER
RELEVANT DOCUMENTS THAT WILL BE FILED WITH THE SEC CAREFULLY AND IN
THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT AMERICAS SILVER, PERSHING, THE PROPOSED
TRANSACTION AND RELATED MATTERS. Investors and stockholders will be
able to obtain free copies of the proxy statement/prospectus and
information circular and other documents containing important
information about Americas Silver and Pershing, once such documents
are filed with the SEC through the website maintained by the SEC at
www.sec.gov, and with the Canadian securities administrators,
through the website at www.sedar.com. Pershing and Americas Silver
will make available free of charge at www.pershinggold.com and
www.americassilvercorp.com, respectively (in the “Investor
Relations” and “Investors” section, as applicable), copies of
materials they file with, or furnish to, the SEC and the Canadian
securities administrators.
1 For further information regarding the Relief Canyon project
please see “Technical Report and Feasibility Study for the Relief
Canyon Project, Pershing County, Nevada, U.S.A.” with an effective
date of May 24, 2018, which is available on Pershing Gold’s EDGAR
profile at https://www.sec.gov/ and on SEDAR at www.sedar.com.
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Darren BlasuttiPresident and CEO416-848-9503
Americas Gold and Silver (TSX:USA)
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