TORONTO, April 13, 2018 /CNW/ - Anaconda Mining Inc.
("Anaconda" or the "Company") – (TSX:ANX) is pleased
to announce that it has made a formal offer (the "Offer") to
acquire all of the issued and outstanding common shares
("Maritime Shares") of Maritime Resources Corp. (TSX-V:MAE)
("Maritime"), together with the associated rights (the
"SRP Rights") issued under the shareholder rights plan of
Maritime dated March 15, 2018, in
exchange for consideration of 0.390 of a common share of Anaconda
("Anaconda Share") for each Maritime Share (the "Offer
Consideration"). The Offer includes Maritime Shares that may
become issued and outstanding after the date hereof but prior to
the expiry time of the Offer upon the exercise, conversion or
exchange of any securities of Maritime that are exercisable for,
convertible into or exchangeable for Maritime Shares
("Convertible Securities"), other than the SRP Rights.
THE OFFER WILL BE OPEN FOR ACCEPTANCE UNTIL 5:00 PM (TORONTO
TIME) ON JULY 27, 2018, UNLESS THE
OFFER IS ABRIDGED, EXTENDED OR WITHDRAWN (the "Expiry
Time").
Holders of Maritime Shares ("Maritime Shareholders")
depositing Maritime Shares will be deemed to have deposited all SRP
Rights associated with such Maritime Shares. No additional payment
will be made for the SRP Rights and no part of the consideration to
be paid by the Company will be allocated to the SRP Rights.
The Offer, which is subject to certain terms and conditions, is
set forth in the offer to purchase and related take-over bid
circular dated April 13, 2018 (the
"Offer to Purchase and Circular"), a copy of which has been
filed with the securities regulatory authorities in Canada and is available through the Internet
at www.sedar.com and furnished to the Securities and Exchange
Commission and is available through the internet at
www.sec.gov.
The Offer Consideration represents $0.16 per Maritime Share and represents a premium
of approximately 64%, based on the 20-day volume weighted average
prices of the Maritime Shares on the TSX Venture Exchange
("TSX-V") and the Anaconda Shares on the Toronto Stock
Exchange ("TSX") immediately preceding the date the Offeror
announced its intention to make an offer to Maritime Shareholders.
All dollar amounts in this news release are in Canadian dollars,
unless otherwise specified.
Anaconda is committed to honouring all obligations, including
royalty unit obligations with arm's length parties. For many of the
reasons noted below under Benefits of the Offer to Maritime
Shareholders, Anaconda believes these parties will realize greater
value from these arrangements compared to Maritime's existing
business plan.
"Anaconda has a clear growth strategy in Atlantic Canada, which includes acquiring gold
projects that could benefit from the experience of our management
team and the substantial infrastructure we already have in place.
By accepting the Offer, Maritime Shareholders have the opportunity
to realize a significant premium and participate in the upside of
not only the Green Bay Project, but also Anaconda's projects. As a
larger gold producer and developer, and a leader in Atlantic Canada, the pro forma company will
have a greater market presence, leading to higher liquidity, lower
cost of capital, and expanded financing options. With this
combination, Maritime Shareholders will finally be able to realize
the value that has eluded them to date."
~ Dustin Angelo, President and
CEO, Anaconda Mining Inc.
BENEFITS OF THE OFFER TO MARITIME SHAREHOLDERS
Anaconda believes that the Offer is compelling, and represents a
superior alternative to continuing the course set by the current
Maritime Board and management of Maritime, for the following
reasons:
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Significant
premium to Maritime Shareholders – The Offer Consideration
represents $0.16 per Maritime Share and represents a premium of
approximately 64%, based on the 20-day volume weighted average
prices of the Maritime Shares on the TSX-V and the Anaconda Shares
on the TSX immediately preceding the date the Offeror announced its
intention to make an offer to Maritime Shareholders.
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Development of
Maritime's Green Bay Property will be substantially accelerated and
significant capital and operating cost synergies can be
achieved – Maritime Shareholders will benefit from the
Company's well trained workforce, disciplined management team, and
proven infrastructure at the Point Rousse Project:
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Maritime's Green Bay
Property cannot be placed into production unless Maritime is first
able to permit and construct a mill and tailings facility, which
would take extensive capital (that is not available to Maritime)
and time;
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Maritime's
pre-feasibility technical report titled "Pre-Feasibility Technical
Report, Green Bay Property" with an effective date of March 2, 2017
(the "Green Bay Property Technical Report"), provides for
the transport of ore from the Green Bay Property to the Nugget Pond
Mill for processing, which would require Maritime to enter into a
toll milling agreement with the current operators of the mill,
Rambler Metals and Mining PLC ("Rambler Metals"), thereby
incurring additional costs and time. In addition, for the existing
Nugget Pond Mill to be available to process ore from the Green Bay
Property, Rambler Metals would have to either divert its current
processing operations to another mill or build a new grinding
circuit. Construction of a new grinding circuit would require
capital that Rambler does not currently have available;
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By using the
Company's Pine Cove Mill, which is already operating and has
available capacity to process additional ore, the Green Bay
Property can reach production sooner than Maritime's ability
to construct a stand-alone facility or make use of the Nugget Pond
Mill;
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Haulage and
associated transportation costs should be materially reduced by
using the Pine Cove Mill rather than the Nugget Pond Mill for
processing ore. Pine Cove Mill is the closest operating mill to the
Green Bay Property and is located approximately 50 kilometres
closer than the Nugget Pond Mill;
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Milling cost at the
Company's Pine Cove Mill has averaged approximately $20 per tonne,
which is approximately 40% lower than the processing cost of $32.89
per tonne quoted in the Green Bay Property Technical
Report;
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The Point Rousse
Project's in-pit tailings facility is fully permitted and has
approximately 15 years of capacity (based on current throughput
rates) whereas permitting and additional tailings construction work
would still be required for use of the Nugget Pond Mill;
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The Company expects
that it would achieve similar recovery rates as historic results of
ore processed at the Nugget Pond Mill by using a whole ore leach
process at the Pine Cove Mill to process ore from the Green Bay
Property;
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As an existing gold
producer, the pro forma company would leverage certain
administrative and managerial functions at the Point Rousse Project
for the benefit of the Green Bay Property; and
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Improved economics
should lead to larger mineral resource and mineral reserve
estimates in the future.
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Continued
participation in a growing gold producer and developer in Atlantic
Canada – Maritime Shareholders will continue to benefit from
any future increases in value associated with development of
Maritime's Green Bay Property. Maritime Shareholders will
also benefit from the current production and cash flow being
generated by the Company from its Point Rousse Project as well as
the value being created through the development and mineral
resource expansion potential of the Goldboro Project in Nova
Scotia. Maritime Shareholders will own approximately 23.9% of
Anaconda if the Offer is successful.
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Mitigates Maritime
Shareholders' exposure to single asset risks – The Green Bay
Property is Maritime's only material property and Maritime
Shareholders are therefore exposed to significant single asset
permitting, development and financing risk. Maritime
Shareholders can benefit from diversification and mitigate such
risk through access to additional mineral projects provided by the
Company.
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Provides exposure
to an enlarged mineral resource and mineral reserve portfolio and
growth fueled by established gold production with strong re-rating
potential – The pro forma company would have a significantly
larger mineral reserve and mineral resource portfolio with growth
potential in both Newfoundland and Nova Scotia. Combining
current production at the Point Rousse Project with the development
of the Goldboro Project and the Green Bay Property would create a
substantial production growth profile that should result in a
re-rating of the stock in line with producer
multiples.
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Enhanced market
profile to support increased liquidity, lower cost of capital and
increased financing options – Maritime Shareholders will
receive Anaconda Shares, which are listed and trade on the TSX,
which represents a significantly larger group of investors and
capital. Moreover, the market capitalization of the combined
entity is initially expected to be in excess of $54 million, prior
to the potential for a significant re-rating, which should provide
greater capital markets presence, additional analyst coverage and
liquidity, which has the potential to reduce the cost of capital
and expand financing options. Shares listed on the TSX versus
the TSX-V and those with larger market capitalizations generally
trade with less volatility.
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Experienced Board
and Management – Anaconda has an experienced board of directors
and management team:
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Approximately 10
years of gold production experience in Newfoundland and Labrador,
generating significant project level cash flow;
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Successful
development of several gold mines, specifically in Newfoundland and
Labrador, as well as other jurisdictions;
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Extensive experience
with the provincial permitting process;
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Long-standing,
positive relationships with the Newfoundland and Labrador
government, local communities and suppliers;
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High quality
corporate governance, operational cost control and cash
management;
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Extensive capital
markets and capital raising experience necessary for mine
development; and
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Strong corporate
culture with a track record of capitalizing on innovative
opportunities such as selling mine waste rock from the Company's
Pine Cove pit as a construction aggregates product.
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Prudent stewards
of shareholders' capital – The Company has been able to
significantly increase its market capitalization through prudent
investment in mineral properties and capital expenditures. Since
July 6, 2016, when it first submitted a formal letter of intent
with a premium offer to Maritime, the Anaconda Shares issued and
outstanding have increased approximately 138% while the Company's
market capitalization has risen over 225%. In contrast, the
issued and outstanding Maritime Shares increased approximately 104%
since July 2016 and the market capitalization of Maritime has only
increased in value by approximately 85%, effectively generating a
loss of shareholder value in real terms over nearly the past two
years.
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Commitment to
social and environmental responsibility – The Company has built
a brand name and reputation as a socially responsible operator in
Atlantic Canada, particularly in Newfoundland. The Company's
commitment to social and environmental responsibility is a
conscious part of its daily operating protocol and has been
recognized by regional and national organizations.
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Support of
Maritime Shareholders – The Company has entered into Lock-up
Agreements with Maritime Shareholders holding 12.2% of the issued
and outstanding Maritime Shares.
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Potential for
downward share price impact if the Offer is not accepted – The
Offer represents a significant premium to the market price of
Maritime Shares prior to the public announcement of the Company's
interest to acquire Maritime. If the Offer is not successful and no
competing transaction is made, the Company believes the trading
price of Maritime Shares may decline to pre-Offer levels or
lower.
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CONDITIONS OF THE OFFER
The Offer is conditional upon the specified conditions being
satisfied, or where permitted, waived at the Expiry Time or such
earlier or later time during which Maritime Shares may be deposited
under the Offer, excluding the 10-day Mandatory Extension Period or
any extension thereafter, including: (i) there having been validly
deposited under the Offer, and not withdrawn, that number of
Maritime Shares representing more than 50% of the outstanding
Maritime Shares; (ii) there having been validly deposited under the
Offer and not withdrawn, that number of Maritime Shares
representing at least 66 2/3% of the outstanding Maritime Shares
(calculated on a fully diluted basis); (iii) certain regulatory
approvals and other third party consents having been obtained that
Anaconda considers necessary in connection with the Offer; (iv)
there not having occurred, prior to the expiry date of the Offer,
any event, change, circumstance, development or occurrence that
constitutes a material adverse effect or could give rise to a
material adverse effect; and (v) approval of Anaconda shareholders
to issue the Anaconda Shares pursuant to the Offer. Anaconda
expects that it will call a meeting of its shareholders to consider
a resolution to approve the issuance of the Anaconda Shares in
connection with the Offer prior to the Expiry Time.
The Offer is subject to certain other conditions in addition to
those listed above. A more detailed discussion of the conditions to
the consummation of the Offer can be found in the Offer to Purchase
and Circular.
Subject to the terms and conditions of the Offer, the Company
will take up the Maritime Shares immediately following the Expiry
Time and pay for the Maritime Shares deposited under the Offer as
soon as possible, but in any event not later than three (3)
business days after taking up such Maritime Shares.
Subject to applicable laws, the Company reserves the right to
withdraw, vary the terms of, extend, or terminate the Offer and to
not take up and pay for any Maritime Shares deposited to the Offer
unless each of the conditions of the Offer is satisfied or waived,
as applicable, at or prior to the Expiry Time.
ADDITIONAL DETAILS OF THE OFFER
Full details of the Offer are included in the Offer to Purchase
and Circular, the related letter of transmittal, and the notice of
guaranteed delivery (collectively, the "Offer Documents"),
which are filed on SEDAR at www.sedar.com and have been mailed to
Maritime Shareholders, holders of Convertible Securities, and other
persons who are entitled to receive those documents under
applicable laws.
The Depositary and Information Agent for the Offer is Kingsdale
Advisors. Questions and requests for assistance, including
assistance with respect to tendering your Maritime Shares, together
with the associated SRP Rights, to the Offer, or requests for
additional copies of the Offer Documents, may be directed to
Kingsdale Advisors by telephone at 1-855-682-2031 (toll free in
North America), or 416-867-2271
(collect calls outside North
America), or by email at
contactus@kingsdaleadvisors.com.
CONFERENCE CALL
Anaconda is hosting a conference call on Monday, April 16, 2018 at 10:00 am EDT for investors and interested parties
to discuss the Offer. The purpose of the call is to review the
Offer, explain the rationale, and answer any questions about the
Offer.
The call-in information is as follows:
Local access – Toronto:
416-764-8646
Toll free – North America:
1-888-396-8049
ADVISORS
Anaconda's financial advisor is PI Financial and its legal
advisors are Cassels Brock &
Blackwell LLP in Canada, and Neal,
Gerber & Eisenberg LLP in the United
States. The Depositary and Information Agent for the Offer
is Kingsdale Advisors.
NOTICE TO MARITIME SHAREHOLDERS IN THE UNITED STATES
The Offer is made for the securities of a foreign
company. The Offer is subject to disclosure requirements of a
foreign country that are different from those of the United States. Financial statements
included in, or incorporated by reference into, the Offer to
Purchase and Circular, if any, have been prepared in accordance
with foreign accounting standards that may not be comparable to the
financial statements of United
States companies.
It may be difficult for you to enforce your rights and any
claim you may have arising under the federal securities laws, since
the Company is located in a foreign country, and some or all of its
officers and directors may be residents of a foreign
country. You may not be able to sue a foreign company or its
officers or directors in a foreign court for violations of the U.S.
securities laws. It may be difficult to compel a foreign company
and its affiliates to subject themselves to a U.S. court's
judgment.
You should be aware that the Company may purchase securities
otherwise than under the Offer, such as in open market or privately
negotiated purchases.
The Offer will not be made in, nor will deposits of
securities be accepted from a person in, any jurisdiction in which
the making or acceptance thereof would not be in compliance with
the laws of such jurisdiction.
FILING OF AMENDED MD&A
Anaconda has filed an amended annual management's discussion and
analysis as at and for the seven month period ended December 31, 2017 ("MD&A"). The
MD&A has been updated to reflect a third year of Selected
Annual Information, which was omitted from the initial
filing.
ABOUT ANACONDA MINING INC.
Anaconda is a TSX-listed gold mining, exploration and
development company, focused in the prospective Atlantic Canadian
jurisdictions of Newfoundland and
Nova Scotia. The Company operates
the Point Rousse Project located in the Baie Verte Mining District
in Newfoundland, comprised of the
Pine Cove open pit mine, the fully-permitted Pine Cove Mill and
tailings facility, the Stog'er Tight Mine and the Argyle deposit,
as well as approximately 5,800 hectares of prospective gold-bearing
property. Anaconda is also developing the Goldboro Project in
Nova Scotia, a high-grade Mineral
Resource.
The Company also has a pipeline of organic growth opportunities,
including the Great Northern Project on the Northern Peninsula and
the Tilt Cove Property on the Baie Verte Peninsula.
QUALIFIED PERSON
Gordana Slepcev, P. Eng., Chief Operating Officer, Anaconda, is
a "qualified person" as such term is defined in National Instrument
43-101 and has reviewed and approved the technical information and
data included in this news release.
FORWARD-LOOKING INFORMATION
This news release contains "forward-looking information"
within the meaning of applicable Canadian and United States securities legislation.
Forward-looking information includes, but is not limited to, the
Offer, the completion of the Offer and related transactions, the
Company's future exploration, development and operational plans,
including the development of the Green Bay Property, the reduction
in haulage and transportation costs, the speed and ability to place
the Green Bay Property into production, expected processing
recovery rates, the ability to leverage synergies, potential
increases in the Company's value and production growth profile, the
potential re-rating of the stock in line with producer multiples,
and exposure to increased liquidity, lower cost of capital and
increased financing options. Generally, forward-looking information
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", or "be
achieved". Forward-looking information is based on the opinions and
estimates of management at the date the information is made, and is
based on a number of assumptions 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
Anaconda to be materially different from those expressed or implied
by such forward-looking information, including risks associated
with the exploration, development and mining such as economic
factors as they effect exploration, future commodity prices,
changes in foreign exchange and interest rates, actual results of
current production, development and exploration activities,
government regulation, political or economic developments,
environmental risks, permitting timelines, capital expenditures,
operating or technical difficulties in connection with development
activities, employee relations, the speculative nature of gold
exploration and development, including the risks of diminishing
quantities of grades of resources, contests over title to
properties, and changes in project parameters as plans continue to
be refined as well as those risk factors discussed in the Offer to
Purchase and Circular and annual information form for the seven
month period ended December 31, 2017,
both available on www.sedar.com. Although
Anaconda 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. There can
be no assurance that such information will prove to be accurate, as
actual results and future events could differ materially from those
anticipated in such information. Accordingly, readers should not
place undue reliance on forward-looking information. Anaconda does
not undertake to update any forward-looking information, except in
accordance with applicable securities laws.
SOURCE Anaconda Mining Inc.