Serengeti Resources Inc. (TSX-V: SIR)
(“
Serengeti”) and Sun Metals Corp. (TSX-V: SUNM)
(“
Sun Metals”) are pleased to announce that they
have entered into an agreement with PI Financial Corp. and Haywood
Securities Inc. as co-lead underwriters, on behalf of a syndicate
of underwriters (collectively, the
"
Underwriters"), to increase the size of the
previously announced bought deal financing to an aggregate of
72,000,000 subscription receipts (the “
Subscription
Receipts”) at a price of $0.125 per Subscription Receipt
(the “
Issue Price”) for gross proceeds of
$9,000,000 (the “
Offering”). The Offering is being
conducted in connection with the previously announced merger
transaction between Serengeti and Sun Metals to create a premier
Canadian multi-asset copper-gold developer (the
“
Transaction”) whereby Serengeti will acquire all
of the shares of Sun Metals on the basis of 0.43 common shares of
Serengeti (on a pre-consolidation basis) for each share of Sun
Metals held (the “Exchange Ratio”).
In addition, Sun Metals has granted the
Underwriters an option to purchase up to an additional 10,800,000
Subscription Receipts at the Issue Price, for additional gross
proceeds of up to $1,350,000, exercisable in whole or in part at
any time prior to the closing date of the Offering.
The Subscription Receipts will be issued
pursuant to a subscription receipt agreement (the
“Subscription Receipt Agreement”) to be entered
into by Sun Metals, the Underwriters, and a licensed Canadian trust
company as subscription receipt agent to be agreed upon. Pursuant
to the Subscription Receipt Agreement, the gross proceeds of the
Offering (less 50% of the Underwriters’ cash commission and all of
the Underwriters’ expenses) (the “Escrowed Funds”)
will be held in escrow pending satisfaction of certain conditions,
including, amongst others, (a) the satisfaction or waiver of each
of the conditions precedent to the Transaction; and (b) the receipt
of all required shareholder and regulatory approvals in connection
with the Transaction and the Offering, including the condition
approval of the TSX Venture Exchange (the “Escrow Release
Conditions”). If the Escrow Release Conditions have not
been satisfied on or prior to March 31, 2021, the holders of
Subscription Receipts will be returned a cash amount equal to the
Issue Price of the Subscription Receipts and any interest that has
been earned on the Escrowed Funds.
Upon the satisfaction of the Escrow Release
Conditions, each Subscription Receipt will automatically convert
into one unit of Sun Metals (each a “Unit”) which
shall be exchanged or adjusted into securities of Serengeti at the
Exchange Ratio upon completion of the Transaction, (on a
post-Serengeti share consolidation basis as previously announced).
Each Unit will consist of one common share of Sun Metals (each a
“Common Share”) and one-half of one common share
purchase warrant (each a "Warrant"). Each Warrant
will be exercisable to acquire one common share of Sun Metals (each
a “Warrant Share”) for a period of 24 months from
the closing of the Offering, at an exercise price of $0.18, subject
to acceleration in the event that the volume weighted average
trading price of the common shares of Sun Metals on the TSX Venture
Exchange is equal to or greater than $0.30 for 20 consecutive
trading days, all as to be adjusted by the Exchange Ratio upon
completion of the Transaction.
Proceeds from the issue and sale of the
Subscription Receipts will be used by Sun Metals and Serengeti to
advance their collective portfolio of copper-gold exploration and
development assets in British Columbia, and for general working
capital purposes. The closing of the Offering is expected to occur
on or around December 17, 2020.
The Subscription Receipts to be issued under the
Offering will be offered by way of a private placement in all the
provinces of Canada and in the United States on a private placement
basis pursuant to exemptions from the registration requirements of
the United States Securities Act of 1933, as amended (the “U.S.
Securities Act”). The Subscription Receipts and the Common Shares,
Warrants and Warrant Shares underlying the Subscription Receipts,
will be subject to a statutory four-month hold period in accordance
with Canadian securities legislation, or until such securities are
exchanged or adjusted pursuant to the Arrangement. The Offering is
subject to approval of the TSX Venture Exchange.
This press release does not constitute an offer
to sell or a solicitation of an offer to buy the Subscription
Receipts in the United States. The Subscription Receipts and the
Common Shares, Warrants and Warrant Shares have not been and will
not be registered under the U.S. Securities Act, or any state
securities laws and may not be offered or sold within the United
States except pursuant to an available exemption from the
registration requirements of the U.S. Securities Act and applicable
state securities laws.
About Serengeti
Serengeti is a mineral exploration company
managed by an experienced team of professionals with a solid track
record of exploration success. The Company is currently advancing
its majority-owned, advanced Kwanika copper-gold project and
exploring its extensive portfolio of properties in north-central
British Columbia. Additional information can be found on the
Company’s website at www.serengetiresources.com.
About Sun Metals
Sun Metals is advancing its 100% owned flagship,
high-grade Stardust Project located in north-central British
Columbia, Canada. Stardust is a high-grade polymetallic Carbonate
Replacement Deposit with a rich history. Sun Metals also owns
the Lorraine copper-gold project, and the OK copper-molybdenum
project.
On Behalf of the Board of Directors of
Serengeti Resources Inc.
“David W. Moore”
President, CEO & Director
On Behalf of the Board of Directors of
Sun Metals Corp.
“Steve Robertson”
President, CEO & Director
For further information, please
contact:
Serengeti Resources Inc.Tel: 604-605-1300Email:
info@serengetiresources.com |
Sun Metals Corp.Tel: 604-683-7790Email: info@sunmetals.ca |
Neither 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.
Cautionary Statement Regarding Forward
Looking Information
All statements, trend analysis and other
information contained in this press release about anticipated
future events or results constitute forward-looking statements.
Forward-looking statements are often, but not always, identified by
the use of words such as “seek”, “anticipate”, “believe”, “plan”,
“estimate”, “expect” and “intend” and statements that an event or
result “may”, “will”, “should”, “could” or “might” occur or be
achieved and other similar expressions. All statements, other than
statements of historical fact, included herein, including, without
limitation, statements regarding anticipated benefits of the
Transaction, the closing of the Transaction and the Offering, are
forward-looking statements. Although Serengeti and Sun Metals (the
"Companies") believe that the expectations reflected in such
forward-looking statements and/or information are reasonable, undue
reliance should not be placed on forward-looking statements since
the Companies can give no assurance that such expectations will
prove to be correct. These statements involve known and unknown
risks, uncertainties and other factors that may cause actual
results or events to differ materially from those anticipated in
such forward-looking statements, including the risks, uncertainties
and other factors identified in the Companies' periodic filings
with Canadian securities regulators, and assumptions made with
regard to: the Companies' ability to complete the proposed
Transaction; the Companies' ability to secure the necessary
shareholder, securityholder, legal and regulatory approvals
required to complete the Transaction; the ability to complete the
Offering; the estimated costs associated with the advancement of
the Projects; and the Companies' ability to achieve the synergies
expected as a result of the Transaction. Forward-looking statements
are subject to business and economic risks and uncertainties and
other factors that could cause actual results of operations to
differ materially from those contained in the forward-looking
statements. Important factors that could cause actual results to
differ materially from the Companies’ expectations include risks
associated with the business of Serengeti and Sun Metals; risks
related to the satisfaction or waiver of certain conditions to the
closing of the Transaction; non-completion of the Transaction;
risks related to reliance on technical information provided by
Serengeti and Sun Metals; risks related to exploration and
potential development of the Projects; business and economic
conditions in the mining industry generally; fluctuations in
commodity prices and currency exchange rates; uncertainties
relating to interpretation of drill results and the geology,
continuity and grade of mineral deposits; the need for cooperation
of government agencies and native groups in the exploration and
development of properties and the issuance of required permits; the
need to obtain additional financing to develop properties and
uncertainty as to the availability and terms of future financing;
the possibility of delay in exploration or development programs and
uncertainty of meeting anticipated program milestones; uncertainty
as to timely availability of permits and other governmental
approvals; and other risk factors as detailed from time to time and
additional risks identified in Serengeti and Sun Metals’s filings
with Canadian securities regulators on SEDAR in Canada (available
at www.sedar.com). Forward-looking statements are based on
estimates and opinions of management at the date the statements are
made. Neither Serengeti nor Sun Metals undertakes any obligation to
update forward-looking statements except as required by applicable
securities laws. Investors should not place undue reliance on
forward-looking statements.
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