Norvista Capital Corporation (“
Norvista”) (TSX-V:
NVV) is very pleased to announce the sale of its three Manitoba
assets to Rockcliff Metals Corporation
(“
Rockcliff”) (TSX-V: RCLF). The aggregate
purchase price is $13,258,000 and as consideration Norvista and its
80% owned subsidiary, Akuna Minerals Inc.
(“
Akuna”), will receive a total of 88,386,667
shares of Rockcliff at a deemed value of $0.15 per share.
Concurrent with the asset sale Rockcliff will also complete an
equity financing of up to $30,000,000 with a cornerstone investment
from London based private equity firm Greenstone Resources II LLP
(“
Greenstone”) in the amount of US $15,000,000.
Upon completion of the asset sale and the concurrent financing (the
“
Transaction”) Norvista and its affiliates will
own approximately 30% of the Rockcliff shares outstanding and
Greenstone will own approximately 42%.
This transformative event will reorganize
Rockcliff into a well capitalized, vertically integrated resource
company with a portfolio of pre-development and exploration
properties as well as access to a concentrate production facility.
With a strong shareholder base Rockcliff will now be well
positioned to undertake major mineral exploration and mine
development programs over the next several years in the prolific
Flin Flon – Snow Lake base metals mining camp in Manitoba. The
Transaction is a reverse take-over for the purposes of the policies
of the TSX Venture Exchange (“TSX-V”). The Board
of Directors of each of Norvista and Rockcliff unanimously support
the Transaction. As at the date of this announcement 53% of
Norvista shareholders and 36.8% of Rockcliff shareholders have
provided irrevocable undertakings and consents to vote in support
of the Transaction. The Transaction is expected to close in April,
2019.
Don Christie, the President and CEO of Norvista,
commented, “Norvista has spent a considerable amount of time and
effort over the last several years assembling its Manitoba asset
portfolio and working with a number of groups to find the optimal
mix of both operating and financial partners. We are convinced that
Rockcliff and Greenstone have the vision and the resources to
unlock significant value in our key assets and in Rockcliff’s
extensive portfolio of more advanced and early stage exploration
properties. Investors can now track the increase in the value of
these assets through our significant holding of Rockcliff shares.
Manitoba is a top-tier global mining jurisdiction and we are very
enthusiastic about the prospects of Rockcliff becoming a base
metals producer. The Transaction unquestionably provides the right
combination of organization, stewardship, financial support and
expertise to make this a successful venture.”
Mark Sawyer, a Senior Partner and a co-founder
of Greenstone, commented, “Greenstone is delighted to be a
cornerstone investor in Rockcliff. We have confidence in the
potential of Rockcliff and the ability of management to undertake
mineral development in the Province of Manitoba. Our goal is to
make Rockcliff a significant base metal development and production
company.”
Ken Lapierre, President and CEO of Rockcliff,
commented, “This is a transformational moment in Rockcliff’s 13
year history. Gaining the confidence of private equity firm
Greenstone, as well as purchasing a leased mill complex and the
advanced stage Talbot and Tower copper assets from Norvista is a
testament to both companies’ vision of growth and confidence in
Rockcliff’s ability to succeed in this well-endowed mineral belt.
With the support of our new partners and the continued support of
our existing shareholders we now have the ability to unlock the
full potential of our extensive property portfolio. We look forward
to completing this transaction and commencing exploration and
development.”
Transaction Overview
The Transaction will transform Rockcliff into a
well capitalized base metals focused mine developer and explorer
with high-grade deposits, access to a concentrate production
facility and a significant land package of highly prospective
exploration properties all located in Manitoba.
Manitoba is one of the most permitting friendly
jurisdictions in Canada. Should the economic viability and
technical feasibility of the projects be established the
Transaction will allow Rockcliff to execute a “Hub and Spoke”
development strategy from a centralized milling facility and
transition into a copper-focused producer with low capital costs to
production. Upon completion of the Transaction, the assets
comprising the Hub and Spoke strategy are as follows:
Talbot Option
Agreement: Rockcliff will be assigned the option
agreement between Norvista and Hudbay Minerals Inc. and will
receive an earn-in option to acquire a minimum 51% ownership
interest in the Talbot Property. The Property hosts the Talbot
copper deposit, a high-grade 4.2 million tonne National Instrument
43-101 Standards of Disclosure for Mineral Projects (“NI 43-101”)
Inferred mineral resource grading 1.61% Cu, 1.4% Zn, 1.77 g/t Au
and 27.96 g/t Ag as disclosed in the Rockcliff press release dated
January 19, 2018. Mineral resources are not mineral reserves and do
not have demonstrated economic viability.
Tower Deposit:
After acquiring Norvista’s interest in the Tower Property Rockcliff
will have a 100% ownership interest in the Tower Property,
including the Tower deposit, a high-grade 1.08 million tonne NI
43-101 Indicated mineral resource grading 3.73% Cu, 1.05% Zn, 0.55
g/t Au and 17.28 g/t Ag plus a 1.25 million tonne NI 43-101
Inferred mineral resource grading 2.0% Cu, 1.02% Zn, 0.27 g/t Au
and 9.78 g/t Ag as disclosed in the Rockcliff press release dated
March 30, 2015. Mineral resources are not mineral reserves
and do not have demonstrated economic viability. The Tower Deposit
is located approximately 40 kilometres east of the Talbot
Deposit.
Bucko Mill Lease: Norvista, as
Lessee, will be assigning its rights in the Buckco Mill Lease to
Rockcliff. The initial term of the lease is for a
period of 7 years and will give Rockcliff full access to the Bucko
Lake mill and tailings storage facilities located approximately 115
kilometres north east of the Tower Deposit near Wabowden,
Manitoba.
Property Holdings:
Rockcliff currently holds approximately 4,000 square kilometres of
exploration property in the prolific Flin Flon – Snow Lake
greenstone belt, home to the largest Paleoproterozoic Volcanogenic
Massive Sulphide district in the world. This extensive property
portfolio specifically includes:
Rail Property: Rockcliff
currently owns a 100% ownership interest in the Rail Property,
hosting the Rail deposit, a high grade
822,000 tonne NI 43-101 Indicated mineral resource grading 3.04%
Cu, 0.99% Zn, 0.7 g/t Au and 9.3 g/t Ag as disclosed in the
Rockcliff press release dated July 24, 2018. Mineral resources are
not mineral reserves and do not have demonstrated economic
viability.
Historical Deposits: Rockcliff
also owns six historical underexplored base metal deposits, all
open along strike and at depth with significant growth
potential.
The Talbot Report is currently filed on the
SEDAR profile for Rockcliff and the Tower Report is currently filed
on the SEDAR profile for Former Rockcliff (as defined below).
The mineral resource estimate relating to the Talbot Property is
viewed as current. The mineral resource estimate relating to
the Tower Property is not viewed as current and will be
updated. Norvista did not prepare its own resource estimate
for the Tower Property as required by NI 43-101. Norvista
will be relying on the existing technical reports and the updated
technical report to support the disclosure of resource estimates it
has made as the existing property owner.
Norvista has sought shareholder approval for the
Transaction by way of written consent, and written consents have
been obtained from shareholders holding 53% of the issued and
outstanding shares of Norvista. As a result, shareholder
approval has been obtained in satisfaction of regulatory
requirements. Rockcliff will be calling an Annual and Special
Meeting of the shareholders of Rockcliff (the
“Meeting”) for mid April 2019 to seek shareholder
approval for the Transaction. Full particulars of the Transaction
will be included in the management information circular (the
“Management Information Circular”) mailed to
shareholders in respect of the Meeting. Further particulars of the
timing of the Meeting will be provided in a subsequent press
release.
Red Cloud Klondike Strike Inc. has been engaged
by the Board of Directors of Rockcliff, pursuant to an engagement
letter dated February 8, 2019, to prepare an opinion as to the
fairness, from a financial point of view, of the Transaction to the
shareholders of Rockcliff (the “Fairness
Opinion”). Further particulars of the Fairness Opinion
will be provided in due course. The Fairness Opinion will be
disclosed in and included with the Management Information
Circular.
Asset Acquisition
Rockcliff has entered into asset purchase
agreements with Norvista and Akuna. Pursuant to the agreement with
Norvista, Rockcliff will be assigned the Talbot Option Agreement
and the Bucko Mill Lease Agreement for aggregate share
consideration valued at $9,943,500. Norvista will receive
66,290,000 Rockcliff common shares at a deemed value of $0.15 per
share. Pursuant to the agreement with Akuna, Rockcliff will acquire
a 100% interest in certain mining claims located in the Province of
Manitoba, known as the Tower Project for share consideration valued
at $3,314,500. Akuna will receive 22,096,667 Rockcliff common
shares at a deemed value of $0.15 per share. Akuna is 80%
owned by Norvista.
History of the Tower Property and the
Talbot Property
Tower Property: Pursuant to an agreement dated
February 21, 2008 between Pure Nickel Inc. (“Pure
Nickel”) and Rockcliff Resources Inc. (“Former
Rockcliff”), the predecessor of Rockcliff, Former
Rockcliff acquired an option to earn a 70% interest in the Tower
Property in consideration for the expenditure of $4 million. Former
Rockcliff earned a 50% interest in the Tower Property after
spending $2,000,000 on the property and Former Rockcliff and Pure
Nickel entered into a joint venture agreement dated March 26, 2012,
as amended, with respect to the further exploration and development
of the Tower Property. Former Rockcliff had the option to earn a
further 20% interest in the Tower Property for the expenditure of a
further $2,000,000. In January 2013, Former Rockcliff commissioned
and received the Tower Report. In 2014, Former Rockcliff earned its
70% interest in the Tower Property. In June of 2015, Former
Rockcliff sold its 70% interest in the Tower Property to Akuna
pursuant to the terms of an agreement dated April 10, 2015 (the
“Tower Purchase Agreement”) that required
completion of certain milestones for Akuna to earn its further
interest in the Tower Property from Former Rockcliff. Akuna
acquired a 30% interest in the Tower Property from Pure Nickel
pursuant to an agreement dated April 10, 2015 in consideration for
a cash payment of $1,000,000 and a further payment of $500,000 in
the event that the Tower Property achieves nameplate production.
Pursuant to the Tower Purchase Agreement, as amended, Akuna earned
a further 14% interest in the Tower property from Rockcliff.
Rockcliff is acquiring an aggregate 44% interest in the Tower
Property from Akuna to hold a 100% interest in the Tower Property
pursuant to the terms of the Transaction.
Talbot Property: Pursuant to an agreement dated
April 14, 2014 between Former Rockcliff and a predecessor of Hudbay
Minerals Inc. (the “Talbot Agreement”), Former
Rockcliff acquired the option to earn a 51% working interest in the
Talbot Property by expending an aggregate of $6,120,000 over six
years. Rockcliff had incurred expenditures sufficient to satisfy
the first four years of expenditures under the Talbot Agreement
plus all but approximately $205,000 of the 5th years expenditure by
the spring of 2018. The expenditures required for the sixth year
are $2,270,000 and must be completed by April 14, 2020. Pursuant to
an agreement dated May 3, 2018 between Rockcliff and Norvista (the
“Talbot Purchase Agreement”), Rockcliff assigned
the rights and obligations under the Talbot Agreement to Norvista
in consideration for the payment of $200,000 in cash, the
commitment to spend $205,000 on the Talbot Property prior to April
14, 2019 and with certain other consideration to be paid in respect
of the commencement of construction of the Tower Project. Norvista
is assigning all of its rights and obligations in the Talbot
Agreement back to Rockcliff and Rockcliff is releasing Norvista
from its remaining obligations under the Talbot Purchase Agreement
pursuant to the Transaction.
Rockcliff Board of Directors
The Board of Directors of Rockcliff will
initially consist of five members, being Don Christie on behalf of
Norvista, Mark Sawyer on behalf of Greenstone, Ken Lapierre on
behalf of Rockcliff and two other independent non-executive
directors to be announced prior to the closing of the Transaction.
There will also be further announcements regarding senior officers
of Rockcliff to be appointed upon completion of the
Transaction.
Rockcliff Flow Through Financing, Greenstone Investment
& Additional Financing
In connection with the Transaction and as part
of the reorganization effort, Greenstone will fund US$15,000,000 of
a total equity financing package for Rockcliff of up to
$30,000,000 comprised of the following
tranches:
- Flow-through Financing.
Rockcliff will undertake a flow-through equity financing of
approximately $19,862,600 (the “FT
Financing”) consisting of approximately 82,760,833 common
shares of Rockcliff that qualify as flow-through shares (the
“FT Shares”) for purposes of the Income Tax Act
(Canada) (the “Tax Act”) priced at $0.24 per FT
Share. The FT Shares are part of a donation arrangement structured
by PearTree Securities Inc. Greenstone will acquire the 82,760,833
shares indirectly through the donation arrangement at $0.15 per
share for a total cost of approximately $12,414,126 (the
“Greenstone Commitment”), with the flow-through
investors retaining the tax benefits of the flow-through share
structure.
- Greenstone Investment.
Greenstone will complete a hard dollar equity financing of
approximately $7,472,875 consisting of
approximately 49,819,167 common shares of Rockcliff priced at $0.15
per share (the “Greenstone Subscription”).
- Additional Financing. Concurrently with the Greenstone
Subscription and the Greenstone Commitment, Rockcliff intends to
complete an additional best efforts financing of up to
$2,601,500 (the “Additional
Financing”) from existing shareholders of
Rockcliff (see heading “Existing Shareholder Offering” below) and
third party accredited investors. The Additional Financing will
comprise a $1,601,500 hard dollar financing consisting of Rockcliff
common shares (“Rockcliff Shares”) priced at $0.15
per share and a $1,000,000 flow-through financing consisting of
common shares of Rockcliff that qualify as flow-through shares for
purposes of the Tax Act (the “Additional FT
Shares”) priced at $0.20 per Additional FT Share. Red
Cloud Klondike Strike Inc. will act as a finder in respect of the
Additional Financing.
The Greenstone Subscription and the Additional
Financing will proceed by way of an offering of subscription
receipts of Rockcliff (each, a “Subscription
Receipt”) issued at a price of $0.15 per regular
Subscription Receipt and at a price of $0.20 per flow-through
Subscription Receipt. Release of the funds to be held in escrow
pursuant to the Subscription Receipts financings will be
conditional upon receipt of Rockcliff shareholder approval to the
Transaction, the closing of the Asset Acquisition (referred to
below) and regulatory approval to list the shares issued pursuant
to the Transactions (the “Conditions”). Upon
satisfaction of the Conditions, each Subscription Receipt will, for
no additional consideration, be automatically exercised into one
Rockcliff Share.
Rockcliff shall use the proceeds of the FT
Financing, the Greenstone Subscription and the Additional Financing
to:
- Complete infill drilling and a pre-feasibility study to
potentially advance the Talbot project to a construction
decision;
- Complete infill drilling and a pre-feasibility study to
potentially advance the Tower project to a construction
decision;
- Complete 95,000 metres of exploration drilling across the
Talbot, Tower, Rail, Bur, Freebeth, Lon, Morgan, Pen, Tramping and
Copperman properties and targets identified across the SLS#1 to
SLS#5 properties; and
- General working capital in accordance with a work program and
budget agreed upon between Rockcliff, Norvista and Greenstone.
Proceeds from the sale of the FT Shares and the
Additional FT Shares will be used by Rockcliff over the period
ending December 31, 2020 for exploration activities that will
qualify as “Canadian Exploration Expenses” (within the meaning of
the Tax Act).
Pursuant to an investor rights agreement between
Rockcliff and Greenstone dated February 20, 2019, into which
the parties have entered in connection with the Greenstone
Commitment and the Greenstone Subscription, Greenstone shall be
granted certain investor rights, including: (i) for as long
as Greenstone holds at least 10% of issued and outstanding
Rockcliff Shares, the right to participate in future offerings of
securities of Rockcliff (each an “Offering”) so as
to maintain Greenstone’s pre-Offering ownership percentage in
Rockcliff; (ii) the right to nominate a representative to
Rockcliff’s project steering committee in respect of
Rockcliff mineral exploration properties; (iii) for as long as
Greenstone holds at least 10% of issued and outstanding Rockcliff
Shares, the right to nominate one member of the board of directors
of Rockcliff; and (iv) a right to nominate customers in respect of
off-take arrangements for production from Rockcliff’s
properties.
Transaction Approval
These transactions including the release of
funds pursuant to the Subscription Receipts are conditional on the
completion of the Transaction and the receipt of requisite
shareholder and stock exchange approvals, including the approval by
shareholders of Rockcliff of the change of control of Rockcliff
resulting from the completion of the Transaction, and the approval
of the shareholders of Norvista of the asset sales. Securities
issued pursuant to the FT Financing, the Greenstone Subscription
and the Additional Financing will be subject to a statutory four
month and one day hold period from the closing of the Subscription
Receipts financings. Securities issued pursuant to the FT Financing
and the Asset Acquisition will be subject to a statutory four month
and one day hold period from the Closing of the Transaction. The
Asset Acquisition Shares and the shares acquired by Greenstone
pursuant to the Greenstone Commitment and the Greenstone
Subscription shall be subject to escrow in accordance with the
terms of National Policy 46-201 - Escrow for Initial Public
Offerings, to be released on the basis that Rockcliff is deemed to
be an emerging issuer as defined therein.
The Transaction which qualifies as a
“reverse-take-over” of Rockcliff under the policies of the TSX-V,
will be subject to TSX-V approval. Rockcliff is arm’s length to
Greenstone. Rockcliff and Norvista are "non-arm's length parties"
as Bruce Durham and Donald Christie serve on the respective boards
of directors of both Rockcliff and Norvista. Rockcliff will require
shareholder approval of the Transaction pursuant to the policies of
the TSX-V, as Greenstone and Norvista will both become “control
persons” of Rockcliff on closing. Rockcliff will apply to the TSX-V
for a waiver from the requirement to engage a sponsor with respect
to the Transaction; however, there is no assurance that a waiver
will be granted. Rockcliff intends to include any additional
information regarding sponsorship in a subsequent press release.
The Transaction is also subject to satisfaction of certain other
closing conditions customary in transactions of this nature.
Full details of the Transaction will be included
in the management information circular of Rockcliff to be mailed to
its shareholders and posted on www.sedar.com. It is anticipated
that the meeting of Rockcliff shareholders and the closing will
take place by the end of April 2019.
Bruce Durham, P.Geo., Chief Operating Officer
and a director of Norvista, is a Qualified Persons as defined by
National Instrument 43-101 - Standards of Disclosure for Mineral
Projects. Mr. Durham is responsible for the scientific and
technical data presented herein and has reviewed, prepared and
approved this press release.
About Norvista
Norvista is a resource-based merchant bank with
an investment portfolio of four core investments located in Canada,
the United States and Mexico. Norvista’s investee companies have
projects located in excellent mining jurisdictions and are involved
in both base and precious metals exploration and development.
Norvista holds significant equity ownership positions in its
investee companies and is actively involved in the management of
these companies through a combination of senior officer positions
and/or board representation. The investee company projects
represent a balance between later stage exploration and
pre-production projects and are self-financing. Norvista maintains
and increases its ownership positions in its core holdings through
participation in issuer financings as well as share acquisitions in
the open market.
About Rockcliff
Rockcliff is a Canadian resource exploration
company focused on base metals, gold and royalties in the Snow Lake
area of Manitoba, Canada. Rockcliff is the largest junior
landholder in the Flin Flon-Snow Lake greenstone belt which is home
to the largest Paleoproterozoic VMS district (copper, gold, zinc,
silver) in the world and also contains gold mines and deposits. Its
extensive portfolio of properties totals over 4,000 square
kilometres. It includes 9 of the highest-grade undeveloped VMS
deposits and 5 lode-gold properties including the historic
Rex-Laguna gold mine, Manitoba’s first and highest-grade gold
mine.
About Greenstone
Greenstone is a private equity fund specializing
in the mining and metals sector with approximately US$430 million
in committed long-term capital. With more than 100 years collective
experience, predominantly fulfilling senior roles within mining
companies, financial institutions and principal investing,
Greenstone understands the sector, its value drivers and inherent
risks. As such Greenstone is able to make long term investments
which better aligns itself to management decision making.
Early Warning Reports
Assuming the completion of the Asset
Acquisition, Norvista, Akuna and Norvista Capital 1 Limited
Partnership which previously jointly beneficially controlled
4,761,904 Rockcliff Shares, or approximately 1.5% of the issued and
outstanding Rockcliff Shares, will have acquired 88,386,667
Rockcliff Shares or approximately 28.0% of the issued and
outstanding common shares of Rockcliff for an aggregate value of
$13,258,000. Assuming the completion of the Greenstone Subscription
and the Greenstone Commitment, Greenstone, which previously owned
no Rockcliff Shares, will have acquired 132,580,000 Rockcliff
Shares or approximately 42.0% of the issued and outstanding common
shares of Rockcliff for the aggregate value of $US15 million.
Each of Norvista, Akuna and Greenstone will be
acquiring the securities of Rockcliff as part of the Transaction
and for investment purposes, the completion of which is subject to,
among other things approval of the shareholders of Rockcliff.
Depending on market and other conditions, each of Norvista, Akuna
and Greenstone may from time to time in the future increase or
decrease their respective ownership, control or direction over the
Rockcliff securities as circumstances warrant. For the purposes of
this notice, the Head Office of each of Norvista and Akuna is 141
Adelaide St. West, Suite 1660, Toronto, Ontario M5H 3L5; and the
Head Office of Greenstone is East Wing, Trafalgar Court Les
Banques, St Peter Port, Guernsey.
In satisfaction of the requirements of the
National Instrument 62-104 - Take-Over Bids And Issuer Bids and
National Instrument 62-103 - The Early Warning System and Related
Take-Over Bid and Insider Reporting Issues, Early Warning Reports
in respect of acquisition of Rockcliff Shares by Norvista and Akuna
and by Greenstone will be filed under Rockcliff’s SEDAR Profile at
www.sedar.com.
TSX-V Approvals
Completion of the transactions described herein
is subject to a number of conditions, including but not limited to,
TSX-V acceptance and shareholder approval for both Rockcliff and
Norvista. Where applicable, the transactions described herein
cannot close until the required shareholder approval is obtained.
There can be no assurance that the transactions described herein
will be completed as proposed or at all.
Investors are cautioned that, except as
disclosed in the management information circular or filing
statement to be prepared in connection with the transactions
described herein, any information released or received with respect
to the transactions described herein may not be accurate or
complete and should not be relied upon. Trading in the securities
of Rockcliff should be considered highly speculative.
The TSX Venture Exchange Inc. has in no way
passed upon the merits of the proposed transaction and has neither
approved nor disapproved the contents of this news release.
For further information, please
contact:
Norvista Capital
Corporation
Don Christie
Off: (416) 504-4171 dchristie@norvistacapital.com
Cautionary Note Regarding
Forward-Looking Statements: This press release contains
“forward-looking information” within the meaning of applicable
Canadian securities laws. Any statements that express or involve
discussions with respect to predictions, expectations, beliefs,
plans, projections, objectives, assumptions or future events or
performance (often, but not always, identified by words or phrases
such as “believes”, “anticipates”, “expects”, “is expected”,
“scheduled”, “estimates”, “pending”, “intends”, “plans”,
“forecasts”, “targets”, or “hopes”, or variations of such words and
phrases or statements that certain actions, events or results
“may”, “could”, “would”, “will”, “should” “might”, “will be taken”,
or “occur” and similar expressions) are not statements of
historical fact and may be forward-looking statements.
Forward-looking information in this news release includes, but is
not limited to, the closing of the Transaction, anticipated
exploration and development of Rockcliff’s Manitoba properties,
satisfaction of closing conditions for the Transaction and
Additional Financing approval of the TSX-V, approval by the
shareholders of Rockcliff and the potential for exploration.
This news release includes forward-looking
statements that are subject to risks and uncertainties.
Forward-looking statements involve known and unknown risks,
uncertainties, and other factors that could cause the actual
results of Rockcliff to be materially different from the historical
results or from any future results expressed or implied by such
forward-looking statements. All statements contained in this news
release, other than statements of historical fact, are to be
considered forward-looking. Although Rockcliff believes the
expectations expressed in such forward-looking statements are based
on reasonable assumptions, such statements are not guarantees of
future performance and actual results or developments may differ
materially from those in the forward-looking statements.
Accordingly, readers should not place undue reliance on
forward-looking information. Rockcliff does not undertake to update
any forward-looking information except in accordance with
applicable securities laws.
Neither 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 news release.
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