VANCOUVER, July 26, 2017 /CNW/ - Canasil Resources Inc.
(TSX-V: CLZ, DB Frankfurt: 3CC, "Canasil" or the "Company")
announces that its Board of Directors has unanimously approved a
proposal to undertake a spin-out transaction to segregate its
British Columbia properties into a
separate company, Canmine Minerals Inc. ("Canmine").
Shareholders of Canasil will receive shares of Canmine in
proportion to their shareholdings of Canasil, and Canasil will
continue to hold its Mexican assets. It is proposed that the
transaction will be carried out as a Plan of Arrangement under the
Business Corporations Act (British
Columbia).
The transaction is intended to unlock value for Canasil
shareholders by allowing the market to independently value the
British Columbia properties, and
by providing greater flexibility to further advance the properties,
including exploration programs with the proceeds of "flow-through"
share financings. Complete details of the proposed transaction will
be set out in the information circular to be sent to shareholders
of Canasil prior to the Special Meeting to be convened to approve
the transaction.
Bahman Yamini, President and CEO
of Canasil, commented: "The spin-out of the British Columbia properties to create a new
publicly listed Company is intended to be beneficial for our
shareholders by recognizing unrealized value in our BC projects. We
believe there is significant potential value in the Company's large
BC land holdings which are located in strategic locations with
excellent access and infrastructure. Two of the projects are close
to past producing mines and major deposits, and exploration work to
date indicates they are particularly prospective for hosting
Copper-Gold porphyry mineralization with multiple targets. We
anticipate that this transaction will also allow greater access to
funding for more active exploration to advance these projects
without diluting the Company's interests in its Mexican project
portfolio."
The British Columbia Properties
Under the terms
of the proposed transaction, Canasil will transfer to Canmine a
100% interest in each of the following properties (the "BC
Properties"):
- Brenda Copper-Gold project,
comprising 4,450 hectares in the Kemess-Toodoggone gold-copper
district;
- Vega Copper-Gold project, comprising 9,100 hectares in the
Omineca Mining Division;
- Lil Silver prospect, comprising
820 hectares in the Omineca Mining Division, and;
- Granite Gold prospect, comprising 1,270 hectares in the Omineca
Mining Division.
Further information on the BC Properties is available on
Canasil's website, and will also be set out in the information
circular to be prepared for the Canasil shareholder meeting.
The consideration for the transfer of the BC Properties is
proposed to be 50,948,686 common shares (the "Consideration
Shares") of Canmine, which will be distributed to Canasil
shareholders as a return of capital following approval of the
transaction and other required procedures. Canasil may retain part
(anticipated to be less than 10%) of the Consideration Shares, as
will be further set out in the information circular. Over the
past 23 years of continuous ownership by Canasil, an aggregate of
over $7.4 million in expenditures is
attributed to the BC Properties, including $3.2 million in direct exploration expenditures
by Canasil, $875,000 expenditures by
third parties under option agreements, and $3.3 million of indirect expenditures.
Details of the Proposed Transaction
Canasil's
current shareholders will receive shares of Canmine by way of a
return of capital transaction through issuance of one share of
Canmine for each two shares of Canasil held. Warrantholders and
Optionholders of Canasil will receive warrants or options of
Canmine which are proportionate to, and commensurate with the terms
of, their existing Canasil warrants or options.
Canasil shareholders will be asked to vote on the plan of
arrangement proposal at a Special Meeting of its shareholders,
expected to be convened in October 2017. The Canmine shares
will be distributed pro-rata to persons who are Canasil
shareholders on the "Share Distribution Record Date", which will be
the day that is four business days after the date of the Special
Meeting of Canasil's shareholders (or such other day as agreed to
by Canasil and Canmine).
Management of Canmine
It is proposed that the Board of Directors of Canmine will comprise
certain members of the current Canasil Board and additional
independent Directors who can assist in advancing the BC
Properties. The current Board and management of Canasil will
remain unchanged.
Conditions Precedent
Conditions precedent to the completion of the proposed transaction
include:
- Approval by the shareholders of Canasil by special
resolution;
- Acceptance of the transaction by the TSX Venture Exchange;
- The issuance of interim and final Orders by the Supreme Court
of British Columbia; and
- The conditional listing of the shares of Canmine on the TSX
Venture Exchange.
About Canasil:
Canasil is a Canadian mineral exploration company with a strong
portfolio of 100% owned silver-gold-copper-lead-zinc projects in
Durango and Zacatecas States, Mexico, and in British Columbia, Canada. The Company's
directors and management include industry professionals with a
track record of identifying and advancing successful mineral
exploration projects through to discovery and further development.
The Company is actively engaged in the exploration of its mineral
properties, and maintains an operating subsidiary in Durango, Mexico, with full time geological and
support staff for its operations in Mexico.
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 news release.
This release includes certain statements that may be deemed
to be "forward-looking statements". All statements in this release,
other than statements of historical facts are forward looking
statements, including statements that address future
mineral production, reserve potential, exploration drilling,
exploitation activities and events or developments. 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. Although the Company 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. Factors
that could cause actual results to differ materially from those in
forward-looking statements include, but are not limited to, changes
in commodities prices, exploration successes, continued
availability of capital and financing, and general economic, market
or business conditions. The reader is referred to the
Company's filings with the Canadian securities regulators for
disclosure regarding these and other risk factors. There is no
certainty that any forward-looking statement will come to pass and
investors should not place undue reliance upon forward-looking
statements.
SOURCE Canasil Resources Inc.
