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DENVER, CO and VANCOUVER, July 6,
2015 /CNW/ - Sandspring Resources Ltd. (SSP: TSX-V) (
"Sandspring") and PNO Resources Ltd. (PNO.H: TSX-V)
("PNO") are pleased to announce that they have entered into
a binding letter agreement dated as of July
2, 2015 (the "Letter Agreement") providing for the
acquisition (the "Acquisition") by Sandspring of PNO by way
of a three-cornered amalgamation. Sandspring and PNO are both
publicly listed companies and are at arm's length to each
other.
Sandspring is a Canadian junior mining company currently in
advanced exploration and in the process of finalizing a feasibility
study for the multi-million ounce Toroparu Gold Project in
Guyana, South America. PNO's
principal business activity is the acquisition and exploration of
natural resource properties. The Acquisition is subject to the
satisfaction or waiver of certain customary closing conditions.
Following the Acquisition, Sandspring will continue to trade
on the TSX Venture Exchange ("TSXV") and PNO will be
delisted.
Summary of the Acquisition
Pursuant to the Letter Agreement, PNO will amalgamate with a
wholly-owned subsidiary of Sandspring, and all of the issued and
outstanding common shares of PNO ("PNO Shares") will be
acquired by Sandspring from the existing holders thereof in
consideration of the issuance of one Post-Consolidation
Sandspring Share (as defined below) for each PNO Share so held (the
"Exchange Ratio"). Prior to the completion of the
Acquisition, it is proposed that Sandspring shall consolidate
its issued and outstanding common shares ("Sandspring
Shares") on the basis of one "new" common share (a
"Post-Consolidation Sandspring Share") for every three
Sandspring Shares outstanding (the "Consolidation").
At its annual and special meeting of Sandspring shareholders,
currently scheduled to be held on Sept 3,
2015, Sandspring will seek the approval of its shareholders
for the Consolidation.
Also in connection with the Acquisition, all of the outstanding
stock options and warrants of PNO will be converted to stock
options and warrants to acquire Sandspring Shares and subject
to adjustments based on the Exchange Ratio.
Private Placement and Loan
Prior to completion of the Acquisition, and as a condition
thereof, a private placement equity financing shall be completed in
PNO to raise up to gross proceeds of $3,500,000 (the "Private
Placement"). The Private Placement will consist of units
("Units") at a price of $.20
per Unit, with each Unit consisting of one PNO Share and one share
purchase warrant of PNO entitling the holder thereof to acquire one
additional PNO Share at an exercise price of $0.30 for five years. The definitive
agreement to be entered into in respect of the Acquisition will
also contemplate the advance of a loan by PNO to Sandspring
immediately following the date such definitive agreement is
executed (the "Execution Date") in an amount sufficient to
pay anticipated operating expenses over the period between the
Execution Date and the Closing Date and on terms to be determined
prior to the Execution Date.
Sandspring and PNO are arm's length parties, and there are no
current non-arm's length parties of Sandspring which are insiders
of PNO or presently hold any direct or indirect beneficial interest
in either PNO or any of its assets. There are currently no "control
persons" (as defined by the applicable regulations of the TSXV) of
Sandspring or PNO other than Crescent Global Gold Ltd. which
currently holds an aggregate of 16,675,546 Sandspring Shares
representing approximately 11.5% of all issued and outstanding
Sandspring Shares as of the date hereof and Frank Giustra and related entities who currently
hold an aggregrate of 3,336,500 PNO Shares representing
approximately 26.82% of all issued and outstanding PNO Shares as of
the date hereof. Based on the current shareholdings and present
knowledge of Sandspring and PNO, it is anticipated that following
the closing of the Acquisition, no person or company will
beneficially own, directly or indirectly, or control or direct more
than 10% of the issued and outstanding Post-Consolidation
Sandspring Shares.
Authorization to proceed with the Acquisition will require
approval by shareholders of PNO which PNO will seek at a special
shareholders meeting to be held as soon as practicable. Substantial
additional information regarding the details of the proposed
Acquisition will be included in the Notice of Special Meeting of
Shareholders for such meeting. The transaction is currently
expected to close shortly thereafter.
It is anticipated that immediately following the closing of the
Acquisition (assuming 17,500,000 Units are sold in the Private
Placement, there are no other changes to the outstanding common
shares or convertible securities of either company, and after
giving effect to the 1,000,000 common share transaction fee payable
in connection with the Acquisition), an aggregate of approximately
79,177,904 Post-Consolidation Sandspring Shares will be issued and
outstanding, of which it is anticipated that 12,441,642
Post-Consolidation Sandspring Shares will be held by former PNO
shareholders (representing 15.7% of the Post-Consolidation
Sandspring Shares), and 48,236,261 Post-Consolidation Sandspring
Shares will be held by existing Sandspring shareholders
(representing 61% of the Post-Consolidation Sandspring Shares).
Furthermore, it is anticipated that no Post-Consolidation
Sandspring Shares will be reserved for issuance pursuant to
outstanding convertible securities upon the closing of the
Acquisition, other than up to 25,942,358 Post-Consolidation
Sandspring Shares issuable upon exercise of outstanding share
purchase warrants and up to 3,958,250 Post-Consolidation Sandspring
Shares issuable upon exercise of outstanding stock options.
The Letter Agreement contains customary terms and conditions for
a transaction of this nature, including covenants applicable to
each such entity until closing of the Acquisition regarding their
respective businesses and affairs, and certain standstill
provisions.
Board of Sandspring
Following the closing of the Acquisition, it is proposed that
the board of directors of Sandspring shall be comprised of eight
members, of which five such members shall be designated by
Sandspring and three such members shall be designated by PNO.
Financial and Technical Information regarding Sandspring and
PNO
For further details concerning PNO and Sandspring, including
their respective property interests and financial information,
please refer to the annual audited financial statements of each of
PNO and Sandspring for the fiscal years ended June 30, 2014 and December
31, 2014, respectively; the interim financial statements of
Sandspring for the three month period ended March 31, 2015; and the interim financial
statements of PNO for the nine month period ended March 31, 2015, together with the accompanying
management's discussion and analysis for each such period, and the
additional public filings of each such company, all available on
SEDAR at www.sedar.com. For further details on the property
interests of Sandspring, please refer to the technical report
entitled "NI 43-101 Technical Report, Prefeasibility Study,
Toroparu Gold Project, Upper Puruni River Area, Guyana" dated effective May 8, 2013 and available on SEDAR at
www.sedar.com.
Conditions to Closing
Completion of the Acquisition is subject to a number of
conditions, including, but not limited to, negotiation and
execution of a definitive agreement, receipt of applicable
regulatory, court and requisite majority approval of shareholders
of PNO in respect of the Acquisition and of shareholders of
Sandspring in respect of the Consolidation, TSXV acceptance and
completion of the Private Placement. There can be no
assurance that the Acquisition will be completed as proposed or at
all.
Investors are cautioned that, except as disclosed in any
management information circular to be prepared in connection with
the Acquisition, any information released or received with respect
to the proposed Acquisition may not be accurate or complete and
should not be relied upon. Trading in the securities of Sandspring
and PNO should be considered highly speculative. The TSXV has
in no way passed upon the merits of the proposed Acquisition and
neither has approved nor disapproved the contents of this press
release.
About Sandspring Resources Ltd..
Sandspring Resources Ltd. was incorporated pursuant to the
provisions of the Business Corporations Act (Alberta) on September
20, 2006 and continued out of Alberta and into Ontario effective March
31, 2010. Sandspring is a Canadian junior mining
company currently moving toward a definitive feasibility study for
the multi-million ounce Toroparu Project in the Republic of
Guyana.
About PNO Resources Ltd.
PNO is a company incorporated under the laws of British Columbia and whose common shares are
listed on the NEX board of the TSX Venture Exchange under the
symbol "PNO.H". PNO's current principal activities are
seeking opportunities in the natural resource sector.
ON BEHALF OF THE BOARD OF DIRECTORS OF
SANDSPRING RESOURCES
LTD.
"Richard A.
Munson"
Per:
Richard Munson
Chief Executive Officer
ON BEHALF OF THE BOARD OF DIRECTORS OF
PNO RESOURCES LTD.
"Christy
Louth"
Per:
Christy Louth
President and Director
Additional information on Sandspring can be viewed on SEDAR
under the Company's profile at www.sedar.com or on Sandspring's
website at www.sandspringresources.com
This news release contains certain forward-looking
information and statements within the meaning of applicable
securities laws. The use of any of the words "expect",
"anticipate", "continue", "estimate", "may", "might", "will",
"project", "should", "believe", "plans", "intends" and similar
expressions are intended to identify forward-looking information
and/or statements. Forward-looking statements and/or information
are based on a number of material factors, expectations and/or
assumptions of Sandspring which have been used to develop such
statements and/or information but which may prove to be incorrect.
Although Sandspring believes that the expectations reflected in
such forward-looking statements and/or information are reasonable,
undue reliance should not be placed on forward-looking statements
as Sandspring can give no assurance that such expectations will
prove to be correct. In addition to other factors and assumptions
which may be identified herein, assumptions have been made
regarding, among other things: that the Acquisition will be
effected as currently proposed, and that all requisite shareholder,
regulatory and third party consents will be obtained in connection
therewith in form and substance acceptable to each of Sandspring
and PNO; the anticipated timing of the Acquisition and the expected
benefits of the Acquisition; that Sandspring will continue to
conduct its operations in a manner consistent with past operations;
results from drilling activities; Sandspring's future plans;
availability of financing and/or cash flow to fund current and
future plans and expenditures, including with respect to the
Private Placement; the impact of increasing competition; the
general stability of applicable economic and political
environments; the general continuance of current industry
conditions; and the timely receipt of any required regulatory
approvals. The forward-looking information and statements
included in this news release are not guarantees of future
performance and should not be unduly relied upon. Such information
and/or statements, including the assumptions made in respect
thereof, involve known and unknown risks, uncertainties and other
factors that may cause actual results and/or events to differ
materially from those anticipated in such forward-looking
information and/or statements including, without limitation: risks
associated with the failure to complete the Acquisition and/or
Private Placement, in each as currently proposed or at all; risks
associated with the uncertainty of exploration results and
estimates, the uncertainty of conducting operations under a foreign
regime, exploration risk, the uncertainty of obtaining all
applicable regulatory and/or shareholder approvals, and the
Company's dependence on Sandspring's management
personnel, and/or certain other risks detailed from time-to-time
in Sandspring's public disclosure documents.
Furthermore, the forward-looking statements contained in this news
release are made as at the date of this news release and the
Company does not undertake any obligations to publicly update
and/or revise any of the included forward-looking statements,
whether as a result of additional information, future events and/or
otherwise, except as may be required by 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 release.
SOURCE PNO Resources Ltd.