VANCOUVER, July 23, 2018 /CNW/ - Bonterra Resources Inc.
("Bonterra" or the "Company") (TSXV: BTR) (US: BONXF) (FSE: 9BR1)
and Metanor Resources Inc. ("Metanor") (TSXV: MTO) are pleased
to announce that, further to their news release dated June 18, 2018, they have entered into a
definitive arrangement agreement dated July
20, 2018 (the "Arrangement Agreement") to combine Bonterra
and Metanor (the "Transaction") to create an exciting new advanced
Canadian gold exploration and development company focused on
becoming the leader in the building out and future mining
development of the Urban Barry Quebec Gold Camp.
The Transaction contemplates that Bonterra will acquire all of
the issued and outstanding common shares of Metanor for
C$0.73 in equity consideration, at an
exchange ratio of 1.6039 Bonterra shares (the "Purchase Price") for
each Metanor share by way of plan of arrangement under the
Canada Business Corporations Act (the "CBCA"). The Purchase
Price represents a 40% premium to the 30-day VWAP of Metanor's
common shares on the TSXV on June 15,
2018 (the last unaffected trading price prior to the
announcement of the Transaction) and a premium of 30% to the
closing price as of such date. Upon completion of the Transaction,
existing Bonterra and Metanor shareholders will own approximately
58% and 42% of combined company, respectively.
Immediately prior to the completion of the Metanor acquisition,
Bonterra will spin out its Larder
Lake assets and liabilities in Ontario, Canada and $7
million in cash (the "Spin-Out") in order to create a new
exploration company ("Spinco"), by way of plan of arrangement under
the Business Corporations Act (British Columbia) (the "BCBCA").
Metanor has called a special meeting of its shareholders and
optionholders (the "Metanor Meeting") to approve the Transaction on
September 18th, 2018.
Bonterra has called a special meeting of its shareholders and
optionholders (the "Bonterra Meeting") on the same date to approve
the Spin-Out. Further information regarding the Transaction and the
Spin-Out will be contained in the management information circulars
to be sent to securityholders in connection with the Metanor
Meeting and Bonterra Meeting.
The board of directors of Metanor, following consultation with
its legal advisors and receipt of a favourable fairness opinion by
Red Cloud Klondike Strike Inc., has approved the Transaction. The
directors of Metanor will recommend that Metanor securityholders
vote in favour of the Transaction in the information circular to be
mailed to Metanor securityholders in respect of the Metanor
Meeting.
The board of directors of Bonterra, following consultation with
its financial and legal advisors and receipt of a favourable
fairness opinion by PI Financial Corp., has approved the
Transaction and the Spin-Out. The directors of Bonterra will
recommend that Bonterra securityholders vote in favour of the
Spin-Out in the information circular to be mailed to Bonterra
securityholders in respect of the Bonterra Meeting.
Highlights of the Transaction:
- Creation of an exciting precious metals growth exploration,
development and production company located in one of the best
mining jurisdictions in the world.
- The combined entity will have one of the largest contiguous
land packages located in the highly prospective Urban Barry gold camp.
- Control of three advanced high grade gold deposits (Gladiator,
Bachelor, Barry) and significant regional priority targets with
resource upside potential.
- 100% control and operator of the only permitted gold mill in
the region, that provides an expandable centralized production
facility, surrounded by greater than 15 known gold deposits within
a 100km radius.
- De-risking of the Gladiator project: Bonterra's delivery
of its updated National Instrument 43-101 resource for the
Gladiator Gold Deposit remains on schedule for 2H/2018. Metanor's
mill infrastructure provides Bonterra the opportunity to
significantly reduce the capital requirements and compress the
timelines to advance the Gladiator project to potential
production.
- Maintains strong balance sheet: The pro forma company
will have approximately C$32 million
in cash on hand, after the Spin-Out, to further advance the
Gladiator project to production, and increase production at
Bachelor and Barry.
- The creation of Spinco, a well-capitalized exploration company,
to unlock the value of Bonterra's Larder
Lake gold asset, and allow for a focused exploration effort
and advancement of these assets.
Benefits to Bonterra
- Provides Bonterra with a clear and cost-effective pathway to
bring its Gladiator deposit into production.
- Addition of the Bachelor Mine and the Barry Deposit and
associated exploration potential to its existing resource
portfolio.
- Consolidates the entire southern portion of the Urban Barry
Camp, when combined with the recently executed option agreement
with Beaufield Resources, and places Bonterra as one of the largest
landholders in the region.
- Access to and control of an expandable mill/processing
facility, centrally located in the Urban Barry Camp, further
de-risking the Gladiator Gold Deposit.
- Adds tremendous exploration potential to Bonterra's portfolio
with several high priority regional targets to explore.
- Addition of strong technical team and increased knowledge base
of this rich camp.
Benefits to Metanor
- Immediate and significant premium of approximately 40% based on
the 30-day volume weighted average price ("VWAP") on the TSX
Venture Exchange ("TSXV") on June 15,
2018 (the last unaffected trading day prior to announcement
of the Transaction).
- Superior financial strength and flexibility to simultaneously
increase production and exploration programs while leveraging and
enhancing existing infrastructures.
- Exposure to potential long-life asset to supplement current
production.
- Increased trading liquidity, enhanced value proposition and
capital markets profile.
- Increased exposure to institutional, corporate and retail
investors.
Transaction Summary and Timing
Pursuant to the Arrangement Agreement, the Transaction will take
place by way of a plan of arrangement under the CBCA whereby
Bonterra will acquire all of the issued and outstanding common
shares of Metanor. Optionholders of Metanor will receive
replacement Bonterra options, entitling them to receive on exercise
common shares of Bonterra, subject to an adjustment to reflect the
Transaction. Holders of outstanding warrants of Metanor will have
their warrants adjusted to reflect the Transaction and will not be
receiving replacement warrants. The Transaction is subject to the
approval of 662/3% of Metanor shareholders and
optionholders in attendance and voting at the Metanor Meeting.
Shareholders and optionholders of Metanor will be voting on the
approval of the Transaction only and will not be voting on the
Spin-Out.
Pursuant to the Arrangement Agreement, the Spin-Out will take
place by way of a plan of arrangement under the BCBCA whereby
Bonterra will assign its Larder
Lake property and $7 million
in cash to Spinco. Each holder of Bonterra common shares will
receive one Spinco common share for each seven Bonterra shares
held. The Spin-Out will take place immediately prior to the
Transaction and as a result shareholders of Metanor will not be
entitled to receive any interest in Spinco. The Spin-Out is subject
to the approval of 662/3% of Bonterra shareholders and
optionholders in attendance and voting at the Bonterra Meeting.
Shareholders and optionholders of Bonterra will be voting on the
approval of the Spin-Out only and will not be voting on the
Transaction.
In addition to the securityholder approvals referred to above,
pursuant to the terms of the Arrangement Agreement, the completion
of the Transaction is conditional upon a number of items,
including, without limitation: (a) each party shall have performed
and complied in all material respects with all of the covenants and
obligations thereof required to be performed by them prior to the
completion of the Transaction; (b) the representations and
warranties of each party set out in the Arrangement Agreement being
true and accurate, in all material respects; (c) the receipt of all
regulatory and other required approvals, including approval of the
TSX Venture Exchange; (d) other normal conditions precedent,
including the absence of a material adverse effect in Bonterra or
Metanor; (e) all material third party consents shall have been
obtained; (f) holders of no more than 5% of the outstanding shares
of Bonterra and no more than 5% of the outstanding shares of
Metanor shall have exercised their rights of dissent in respect of
the Transaction; and (g) the execution, delivery and continued
enforceability of required support agreements.
The Arrangement Agreement contains customary deal support
provisions, including a reciprocal break fee of C$3.75 million, payable if the Transaction is not
completed in certain circumstances. In addition, the Arrangement
Agreement includes mutual customary non-solicitation covenants
together with customary exemptions to permit each party's board of
directors to exercise its fiduciary duties, as well as a right to
match any superior proposal that may arise.
Full details of the Transaction and the Spin-Out will be
included in the management information circulars to be filed with
the regulatory authorities and mailed to Metanor's and Bonterra's
securityholders in accordance with applicable securities laws. All
securityholders are urged to read the information circulars once
they become available as they will contain additional important
information about the Transaction and the Spin-Out.
The Transaction is expected to be completed by the end of
September 2018 or such later date as
the parties may agree.
Advisors and Counsel
Sprott Capital Partners and PI Financial Corp. acted as
financial advisors to Bonterra and Miller Thomson LLP acted as
Bonterra's legal advisor.
Irwin Lowy LLP acted as Metanor's legal advisor.
About Bonterra
- Well financed with approximately $65
million raised since 2017.
- Strong Shareholder Base including: Eric Sprott, Van
Eck, Kirkland Lake Gold
- Gladiator Gold Deposit:
-
- Deposit extension and resource expansion underway with
60,000 m completed in 2017 and
70,000 m planned for 2018.
- Advancing to the completion of an updated NI 43-101 Mineral
Resource Estimate in the second half of 2018.
- Drilled dimensions of the Gladiator Gold Deposit are currently
outlined to a depth of over 1,000 m
below surface, and a strike length of 1,300
m.
- Gladiator remains open in all directions, where at least six
distinct sub-parallel zones or mineralized horizons have been
identified.
- Drilling is currently focused on the continued expansion of
Gladiator Gold Deposit and exploration targets within the
10,541-hectare Urban-Barry property.
- Larder Lake Gold Property:
-
- 100% controlled 2,221-hectare in the Cadillac-Larder Break camp
in Ontario (refer to March 17, 2016 news release highlighting
historical gold resource).
- Excellent access to three high grade gold deposits between
Kirkland Lake and Virginiatown.
- The Larder Lake project
contains a historic mineral resource set out in the below table
with three gold deposits situated along the Cadillac Break between
Kirkland Lake and Virginiatown. The combined contiguous land
package is more than 10 km in length.
Disclosure of Historical Mineral Resource Estimates:
The Larder Lake project
contains a historic estimate. In August 15,
2011, P&E Mining Consultants prepared for Kerr Mines a resource estimate as reported in a
technical report titled "43-101 Technical Report and Updated
Resource Estimates on the Larder Lake Property, Larder Lake, Ontario for Bear Lake Gold Ltd."
Bonterra considers the historical estimate to be relevant and
reliable given that it was prepared under NI 43-101 standards.
Bonterra considers this resource estimate to be historical; it has
not independently verified it. A qualified person of Bonterra has
not done sufficient work to classify the historical estimate as
current mineral resources or mineral reserves, and Bonterra is not
treating the historical estimate as current mineral resources.
*2011 Total Resource Estimate @ 2.5 g/t Au Cut-Off Utilizing
Gold Price of US$1,207/oz(1)(2), dated August 15, 2011 by P&E Mining Consultants
Bear Lake Deposit and
Cheminis Deposit
|
Classification
|
Tonnes
|
Grade (Au
g/t)
|
Contained Ounces
(Au)
|
Indicated
|
335,000
|
4.07
|
43,800
|
Inferred
|
5,141,000
|
5.55
|
917,000
|
(1)
|
Mineral resources
which are not mineral reserves do not have demonstrated economic
viability. The estimate of mineral resources may be materially
affected by environmental, permitting, legal, title, taxation,
socio-political, marketing, or other relevant issues.
|
(2)
|
The quantity and
grade of reported inferred resources in this estimation are
uncertain in nature and there has been insufficient exploration to
define these inferred resources as an indicated or measured mineral
resource and it is uncertain if further exploration will result in
upgrading them to an indicated or measured mineral resource
category.
|
Dale Ginn, P.Geo. has approved
the technical information contained in this release. Mr. Ginn is a
Director and Vice President of Exploration of Bonterra and is a
Qualified Person as defined by National Instrument 43-101.
About Metanor
Metanor Resources Inc. is an emerging gold producer having its
main assets, the Bachelor Mine and the Barry project, in addition
to over 15,000 ha of exploration property, located in the
mining-friendly jurisdiction of Quebec in the heart of the Urban-Barry
Camp.
The Bachelor mine extracts gold from a series of sub-vertical
narrow veins using an underground long-hole mining method with
access through conventional track drifts from a vertical shaft, and
the new sector below level 14 is accessed from a ramp
system. The ore is processed on site in a mill using carbon in
pulp to separate the gold from the ore. All the lodging
facilities are on site, connected to the power grid, and accessible
from a paved highway. Metanor is in the permitting process, to
increase the daily capacity of the mill from 800 tonnes per day to
2,400 tonnes per day.
The Barry project is located in the Urban-Barry camp, 110 km
east from the city of Lebel-sur-Quévillon, and 110 km south of the
Bachelor mill. 624,414 tonnes of ore grading 2.2 g/t Au for
43,970 ounces were extracted from three small pits between 2008 and
2010. The gold mineralization at the Barry project is
structurally controlled and is hosted in a sheared basalt
containing quartz-carbonate-albite veins with pyrite. Metanor has
identified three main sub-vertical shear zones and approximately
ten secondary lower dipping tension veins. These structures are
open in all directions. The Company completed construction of
a new camp in May, to accommodate the additional workers required
to proceed with the 50,000 underground bulk sample scheduled to be
completed by the Q4 in 2018.
Pascal Hamelin, P. Eng.,
President of Metanor, is the Qualified Person of Metanor as defined
under National Instrument 43-101 and has reviewed and approved the
technical information relating to Metanor contained in this news
release.
ON BEHALF OF THE RESPECTIVE BOARDS OF DIRECTORS,
Nav Dhaliwal, President &
CEO
Bonterra Resources Inc.
Greg Gibson, Interim CEO
Metanor Resources Inc.
Cautionary Statement:
Certain information contained in this press release
constitutes "forward-looking information", within the meaning of
Canadian legislation concerning the business, operations and
financial performance and condition of Bonterra and
Metanor.
Generally, these forward-looking statements can be identified
by the use of forward-looking terminology such as "plans",
"expects" or "does not expect", "is expected", "budget",
"scheduled", "estimates", "forecasts", "intends", "anticipates" or
"does not anticipate", or "believes", or variations of such words
and phrases or state that certain actions, events or results "may",
"could", "would", "might" or "will be taken", "occur", "be
achieved" or "has the potential to".
Forward looking statements contained in this press release
may include statements regarding our ability to complete the
Transaction and benefits of the Transaction and the Spin-Out, which
involve known and unknown risks and uncertainties which may not
prove to be accurate. Actual results and outcomes may differ
materially from what is expressed or forecasted in these
forward-looking statements. Such statements are qualified in their
entirety by the inherent risks and uncertainties surrounding future
expectations. Among those factors which could cause actual results
to differ materially are the following: uncertainties as to the
timing of the Transaction and satisfaction of the conditions
thereto, market conditions and other risk factors listed from time
to time in reports filed with Canadian securities regulators on
SEDAR at www.sedar.com.
Neither the TSX nor the TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release.
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SOURCE Bonterra Resources Inc.