TSX-V: SMP
Frankfurt: 5RE
VANCOUVER, BC, Aug. 19, 2020 /CNW/ - Southern Empire
Resources Corp. (Southern Empire) (TSXV: SMP)
(Frankfurt: 5RE) and MAS Gold
Corp. (MAS Gold) (TSXV: MAS) are pleased to announce that further
to their news release dated July 13,
2020, they have now entered into a definitive arrangement
agreement dated August 18, 2020 (the
"Agreement") whereby Southern Empire has agreed to acquire
all of the issued and outstanding common shares of MAS Gold (the
"Transaction").
Highlights of the Transaction
MAS Gold has two advanced stage gold deposits with NI 43-101
mineral resources located in the La Ronge Gold Belt of Saskatchewan, Canada:
- the North Lake Gold Deposit containing 417,000 ounces
gold (oz Au) is comprised of an Inferred Mineral Resource of
14,110,00 tonnes (t) grading 0.92 grams gold per tonne (g
Au/t)
- the Greywacke North Gold Deposit containing 95,600 oz Au
is comprised of an Indicated Mineral Resource of 255,500 t at 9.92
g Au/t, plus an Inferred Mineral Resource of 59,130 t at 7.42 g
Au/t, at a cut-off grade of 5 g Au/t
- Significant potential for resource expansion exists at both
Greywacke North and North
Lake
- Excellent exploration potential also exists for MAS Gold's
Preview-North Property (which hosts the Point gold deposit),
Henry Lake and Elizabeth Lake properties.
The combined entity will have a strong balance sheet, with no
debt and a cash position of approximately $4.5 million, which will be used to target
expansion of the current NI 43-101 resources as well as exploration
and development on all of Southern Empire's projects.
Chief Executive Officer of Southern Empire, Dale Wallster, stated: "We are pleased that
the due diligence process has completed in a timely manner to the
satisfaction of both parties. Management is now, more than ever,
confident in its decision to pursue the acquisition of MAS Gold and
looks forward to advancing the La Ronge Gold Belt
projects. Together with our gold projects in the
southwestern U.S.A., Southern
Empire will emerge as a multi-asset, advanced stage gold
exploration and development company with holdings in some of the
best mining jurisdictions in the
world."
Details of the Arrangement
The Transaction will be effected by way of a court approved plan
of arrangement under the Business Corporations Act
(British Columbia). Under
the terms of the Agreement, each shareholder of MAS Gold will
receive 1 common share of Southern Empire ("Southern Empire
Share") for every 8.5 common shares of MAS Gold. Assuming
completion, and none of the options or share purchase warrants of
MAS Gold being exercised prior to closing of the Transaction,
Southern Empire will issue a total of 5,828,090 Southern Empire
Shares to the shareholders of MAS Gold.
Following the completion of the Transaction, Southern Empire
will have 56,734,890 issued and outstanding shares, of which the
former shareholders of MAS Gold will hold approximately 10.3%.
All outstanding options and warrants of MAS Gold will remain
outstanding (if not exercised prior to closing of the Transaction)
and will be adjusted to give effect to the Transaction in
accordance with their respective terms or pursuant to the
Agreement.
After taking into consideration, among other things, the terms
of the Transaction, the recommendation of the special committee of
independent MAS Gold directors established to review the
Transaction and discussions with its advisors, MAS Gold's board of
directors has concluded that the Transaction is in the best
interests of MAS Gold and has approved the Agreement. MAS Gold's
board of directors intends to recommend in the management
information circular to be mailed in connection with the MAS Gold
shareholder meeting that the MAS Gold shareholders vote in favour
of the Transaction.
Similarly, after taking into consideration, among other things,
the terms of the Transaction, the Southern Empire board of
directors has concluded that the Transaction is in the best
interests of Southern Empire and has approved the Agreement.
The Transaction is subject to MAS Gold shareholder approval,
applicable regulatory and TSX Venture Exchange approvals and
satisfaction of customary provisions. The Transaction is
expected to close in the second half of 2020.
The Transaction will require the approval by at least 66 2/3% of
the votes cast on the special resolution by MAS Gold shareholders
and, if required, Southern Empire shareholders present in person or
represented by proxy at the shareholder meetings. The Transaction
may also require the approval of a majority of the votes cast by
minority shareholders of MAS Gold for the purposes of Multilateral
Instrument 61-101.
Mr. Ronald Netolitzky is Chairman
and director of Southern Empire and Chief Executive Officer,
President and a director of MAS Gold and Andrew Davidson is Chief Financial Officer of
each of Southern Empire and MAS Gold.
The Agreement includes customary deal protection provisions,
including a break fee of $250,000
payable by a breaching party, and a right to match and a
non-solicitation provision in favour of Southern Empire.
Details of the Transaction, including a summary of the terms and
conditions of the Agreement, will be disclosed in the management
information circular of MAS Gold which will be mailed to the
securityholders of MAS Gold and will also be available on SEDAR at
www.sedar.com.
None of the securities to be issued have been or will be
registered under the United States Securities Act of 1933, as
amended (the "U.S. Securities Act"), or any state securities
laws, and any securities issued in the Transaction are anticipated
to be issued in reliance upon available exemptions from such
registration requirements pursuant to Section 3(a)(10) of the U.S.
Securities Act and applicable exemptions under state securities
laws. This press release does not constitute an offer to sell or
the solicitation of an offer to buy any securities.
Management Team and Board of Directors
The parties anticipate that the management team and board of
directors for Southern Empire will remain unchanged. The management
team will continue to be Dale
Wallster (CEO and President) and Andrew Davidson (Chief Financial Officer), and
the board of directors will be Ron
Netolitzky (Chairman), Dale
Wallster, Bryan Slusarchuk,
James Currie and a mutually agreed
representative of the current MAS Gold board of directors.
James Hutton will remain as an
advisor to the company.
Qualified Person (QP)
The scientific and technical information contained in this news
release has been prepared, reviewed, verified and approved by
David Tupper, P.Geo. (British Columbia), Southern Empire's VP
Exploration and a Qualified Person within the context of Canadian
Securities Administrators' National Instrument 43-101; Standards
of Disclosure for Mineral Projects.
About Southern Empire Resources Corp.
Southern Empire is focused on the acquisition, exploration and
development of gold deposits in North
America, currently having two projects in the American
southwest.
In the Cargo Muchacho mountains of Imperial County, southeast California, Southern Empire holds options to
acquire a 100% interest in the 2,160 hectares (5,338 acre) Oro Cruz
Property located approximately 22.5 kilometres (km; 14 miles)
southeast of the Mesquite gold mine of Equinox Gold Corp.
With a history that includes extensive drilling and large-scale
open pit and underground mining that was suspended during the gold
market downturn in 1996, the Oro Cruz Gold Project hosts numerous
exploration targets in addition to a high-grade oxide gold zone
that, based on the historical mine operation records, is amenable
to conventional heap leach extractive methods.
Southern Empire also owns an 85% interest in the 817 hectares
(2,020 acre) Eastgate Gold Project, located 81 kilometres (50
miles) southeast of the city of Fallon in Churchill
County, Nevada. Southern Empire has just completed six
HQ-size core drill holes at Eastgate, in a drill program targeting
previously reverse circulation drilled, high-grade gold/silver
epithermal vein systems. Selective core samples have been submitted
to ALS USA Inc.'s laboratories in
Reno, Nevada and assay results
will be released after they become available. Permitting for the
next phase of drilling has been initiated.
About MAS Gold Corp.
MAS Gold Corp. is a Canadian mineral exploration company focused
on road-accessible exploration projects located in the La Ronge
Gold Belt of Saskatchewan. MAS
Gold's Greywacke Lake and Preview-North Gold Projects are located
within 10 km of Highway 102, approximately 60 km west of the
producing Santoy gold mine of SSR Mining Inc.'s Seabee gold
operations.
The Greywacke North gold deposit for which a Mineral Resource of
255,500 t at 9.92 g Au/t has been estimated in the Indicated
category, plus an Inferred Mineral Resource of 59,130 t at 7.42 g
Au/t, at a cut-off grade of 5 g Au/t (see MAS Gold's NI 43-101
Technical Report of June 1, 2016) is
one of several known stratabound, high-grade gold-bearing zones on
the Greywacke Lake Property.
The North Lake gold deposit,
located on the Preview North property, has an Inferred Mineral
Resource estimated at 417,000 ounces of gold contained in
14,110,000 t grading 0.92 g Au/t; see MAS Gold's News Release dated
March 25, 2020 and the NI 43-101
Technical Report dated April 10,
2020.
On behalf of the Board of Directors of Southern
Empire,
Dale Wallster, CEO and
Director
Cautionary Notice on Forward-Looking
Information
Information set forth in this news release contains
forward-looking statements that are based on assumptions as of the
date of this news release. These statements reflect management's
current estimates, beliefs, intentions and expectations. They are
not guarantees of future performance. Each of Southern Empire and
MAS Gold cautions that all forward looking statements are
inherently uncertain and that actual performance may be affected by
a number of material factors, many of which are beyond their
respective control. Such factors include, among other things: risks
and uncertainties relating to each of Southern Empire and MAS
Gold's limited operating history, ability to complete the proposed
Transaction (including obtaining all necessary shareholder and
regulatory approvals), the need to comply with environmental and
governmental regulations, results of exploration programs on their
projects and those risks and uncertainties identified in each of
their annual and interim financial statements and management
discussion and analysis. Accordingly, actual and future
events, conditions and results may differ materially from the
estimates, beliefs, intentions and expectations expressed or
implied in the forward-looking information. Except as required
under applicable securities legislation, neither Southern Empire
nor MAS Gold undertakes no obligation to publicly update or revise
forward-looking information.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the Exchange)
accepts responsibility for the adequacy or accuracy of this
release.
SOURCE Southern Empire Resources Corp.