Arizona Gold Corp. (“
Arizona”) (TSX: AZG, OTCQB:
AGAUF) and Golden Predator Mining Corp. (“
Golden
Predator”) are pleased to announce that they have entered
into a definitive arrangement agreement (the
“
Agreement”) pursuant to which Arizona and Golden
Predator have agreed to merge to create a new North American
focused near-term gold producer (the
“
Transaction”). The Transaction combines the fully
permitted past-producing Copperstone gold mine in Arizona and the
historic past-producing Brewery Creek gold mine in the Yukon.
Under the terms of the Agreement, all of the
issued and outstanding common shares of Golden Predator will be
exchanged for common shares of Arizona on the basis of 1.65 common
shares of Arizona per common share of Golden Predator (the
“Exchange Ratio”). Upon completion of the
Transaction, existing Arizona and Golden Predator shareholders will
own approximately 55% and 45% of the combined company common
shares, respectively, on an outstanding basis.
Transaction Highlights
- Creates a
diversified near-term gold producer in North America through
sequential development of the fully permitted Copperstone mine in
Arizona followed by the Brewery Creek mine in the Yukon;
- Combined
resource base1 of approximately 1.1 million oz gold in the Measured
& Indicated categories, plus an additional approximate 1.5
million oz gold in the Inferred category, paired with considerable
exploration upside at each project;
- Experienced
leadership team including Giulio Bonifacio as President & CEO
and William Sheriff as Non-Executive Chairman, to be supported by a
technical team with backgrounds in both mine-building and
operations;
- Improved capital
markets scale to enhance investor visibility and positioning
amongst peers, plus a broadened shareholder base; and
- Combined cash
and investments of $23M2, including shareholdings in Seabridge Gold
Inc., C2C Gold Corp. and Group 11 Technologies Inc.
_________________________________
1 For Copperstone, please reference the
independent technical report titled “National Instrument 43-101
Technical Report: Preliminary Feasibility Study for the Copperstone
Project, La Paz County, Arizona, USA” completed by Hard Rock
Consulting, LLC, effective date April 1, 2018. For Brewery Creek,
please reference the Independent technical report titled “NI 43-101
Technical Report on Resources – Brewery Creek Project, Yukon,
Canada” completed by Gustavson Associates LLC, effective date May
31, 2020.
2 Includes pro forma cash of $9.6M as at March
31, 2021 and pro forma equity investments calculated as at June 25,
2021, excluding transaction costs.
Giulio Bonifacio, CEO & Director of Arizona,
commented: “We view this as a great opportunity to bring together
the advanced-stage Copperstone Mine and the Brewery Creek Mine,
both former producing gold mines in superior jurisdictions, under
the same umbrella to leverage a shared technical team and corporate
infrastructure. The combined company will provide for stronger peer
positioning amongst gold producers as we advance Copperstone to
production in the very near term, and continue to advance Brewery
Creek towards a re-start decision.”
William Sheriff, Executive Chair of Golden
Predator, further added: “I have long been aware of and admired the
Copperstone project, from its days as an open pit mine to its
current incarnation as an underground operation. Golden Predator
shareholders shall benefit from this rational consolidation and
increased scale. Creating a more robust combined company, we
believe that stakeholders in the Brewery Creek project, including
the Tr’ondëk Hwëch’in First Nation, will benefit from the
Transaction.”
Transaction Details
Pursuant to the terms of the Agreement, all of
the issued and outstanding common shares of Golden Predator will be
exchanged for common shares of Arizona at the Exchange Ratio.
Outstanding and unexercised warrants and options to purchase common
shares of Golden Predator will be adjusted in accordance with their
terms based on the Exchange Ratio.
The Agreement includes standard deal protection
provisions, including non-solicitation, right-to-match, and
fiduciary out provisions, as well as certain representations,
covenants and conditions that are customary for a transaction of
this nature, along with a reciprocal termination fee of $1.5
million payable in certain circumstances.
The proposed business combination will be
effected by way of a plan of arrangement completed under the
Business Corporations Act (British Columbia). The Transaction will
require approval by (i) two-thirds of the votes cast by Golden
Predator shareholders at a special meeting of the shareholders of
Golden Predator to be called in connection with the Transaction;
(ii) a simple majority of the votes cast by Arizona shareholders at
a special meeting of the shareholders of Arizona to be called in
connection with the Transaction; and (iii) if required, a simple
majority of the votes cast by Arizona and Golden Predator
shareholders at their respective shareholder meetings, excluding
the votes held by certain persons as required my Multilateral
Instrument 61-101.
The shareholder meetings of Arizona and Golden
Predator are expected to be held in August 2021. An information
circular detailing the terms and conditions of the Transaction will
be mailed to the shareholders of both companies in connection with
the special shareholder meetings. All shareholders are urged to
read the information circular once available, as it will contain
important additional information concerning the Transaction.
Closing of the Transaction is subject to the
receipt of applicable regulatory approvals and the satisfactions of
certain other closing conditions customary in transactions of this
nature, including, without limitation, court and exchange approval.
Closing of the Transaction is anticipated to occur in September
2021.
Corporate Matters
The combined company will be managed by the
current Arizona executive team, led by Mr. Bonifacio as President
& CEO, John Galassini as COO, Dale Found as CFO and Michael
Maslowski as VP Technical Services & Exploration. Janet
Lee-Sheriff, current CEO of Golden Predator, will continue in an
advisory role with the combined company with a particular focus on
community engagement.
Each company will select three board of director
nominees, including Mr. Sheriff as Non-Executive Chair (Golden
Predator), Stefan Spears (Golden Predator), Tony Lesiak (Golden
Predator), Fahad Al Tamimi (Arizona Gold), Claudio Ciavarella
(Arizona Gold), and Mr. Bonifacio (Arizona Gold).
Upon closing of the Transaction, Arizona will
change its name to Sabre Gold Corp., subject to the receipt of all
necessary approvals.
Board Recommendations & Voting
Support
The Agreement has been unanimously approved by
the boards of directors of Arizona and Golden Predator, and each
board recommends that its respective shareholders vote in favour of
the Transaction.
All of the directors and officers of Golden
Predator have entered into customary voting support agreements
agreeing to vote in favour of the Transaction.
Similarly, all of the directors and officers of
Arizona have entered into customary voting support agreements
agreeing to vote in favour of the Transaction.
Certain shareholders have also indicated support
to vote in favour of the Transaction, including Eric Sprott who is
a shareholder of both Golden Predator and Arizona.
Advisors and Counsel
Haywood Securities Inc. acted as financial
advisor to Arizona. Peterson McVicar LLP acted as legal counsel to
Arizona.
Morton Law LLP acted as legal counsel to Golden
Predator.
Conference Call &
Webcast
Arizona and Golden Predator will be hosting a
joint online investor webinar on Tuesday, June 29, 2021 at 1:00 PM
EDT / 10:00 AM PDT to discuss the Transaction.
To register and attend the webinar please
visit:
https://attendee.gotowebinar.com/register/1749026547624844301?source=cl
Registration will also give you access to the on-demand
replay.
Qualified Persons
The technical information in this news release
has been prepared in accordance with the Canadian regulatory
requirements set out in NI 43-101 and reviewed and approved on
behalf of Arizona by Michael R. Smith, SME Registered Member
(Geology), and on behalf of Golden Predator by Mike Maslowski, CPG,
both of whom are each individually a “Qualified Person” as defined
by NI 43-101.
About Arizona
Arizona Gold is an emerging American gold
producer advancing the restart of production at its 100% owned,
fully permitted, past-producing Copperstone mine project, located
in mining-friendly Arizona. The Copperstone mine project
demonstrates significant upside exploration potential that has yet
to be drilled within a 50 km2 land package that includes past
production of over 500,000 oz gold by way of an open-pit
operation.
The company’s current focus is on maximizing
Copperstone’s potential by defining and expanding current resources
and further optimizing the mine’s economics for purposes of the
restart of gold production in the near-term as a result of the
recent project funding transaction with Star Royalties Ltd.
For further information please visit the Arizona
website at www.arizona-gold.com.
About Golden Predator
Golden Predator is advancing the past-producing
Brewery Creek mine towards a timely resumption of mining activities
in Canada’s Yukon. The project has established resources grading
over 1.0 g/t gold and both a technical report and Bankable
Feasibility Study underway to define the economics of a restart of
heap leach operations at the Brewery Creek mine. The 180 km2
brownfield property is located 55 km by road from Dawson City,
Yukon and operates under a Socio-Economic Accord with the Tr’ondëk
Hwëch’in First Nation. The Company also holds the Marg project,
with a NI 43-101 compliant resource, the Gold Dome project and the
Grew Creek project.
For additional information on Golden Predator
and the Brewery Creek mine, please visit the website at
www.goldenpredator.com.
Contact Information
Arizona Gold Corp.Giulio BonifacioCEO &
Director604-318-6760gtbonifacio@arizona-gold.com |
Golden Predator Mining Corp.William SheriffExecutive
Chair972-333-2214wms@goldenpredator.com |
Cautionary Statements
Certain information contained herein constitutes
forward-looking information or statements under applicable
securities legislation and rules. Such statements include, but are
not limited to, statements with respect to the anticipated
completion of the Transaction. Forward-looking statements are based
on the opinions and estimates of management as of the date such
statements are made and are subject to known and unknown risks,
uncertainties and other factors that may cause the actual results,
level of activity, performance or achievements of Arizona and/or
Golden Predator to be materially different from those expressed or
implied by such forward-looking statements, including, but not
limited to: (i) any inability of the parties to satisfy the
conditions to the completion of the Transaction on acceptable terms
or at all; and (ii) receipt of necessary stock exchange, court and
shareholder approvals. Although management of each of Arizona and
Golden Predator has attempted to identify important factors that
could cause actual results to differ materially from those
contained in forward-looking statements, there may be other factors
that cause results not to be as anticipated, estimated or intended.
There can be no assurance that such statements will prove to be
accurate. Accordingly, readers should not place undue reliance on
forward-looking statements. Neither party will update any
forward-looking statements or forward-looking information that are
incorporated by reference herein, except as required by applicable
securities laws. The parties caution readers not to place undue
reliance on these forward-looking statements and it does not
undertake any obligation to revise and disseminate forward-looking
statements to reflect events or circumstances after the date
hereof, or to reflect the occurrence of or non-occurrence of any
events.
This press release is not and is not to be
construed in any way as, an offer to buy or sell securities in the
United States. The distribution of the Arizona common shares in
connection with the transactions described herein will not be
registered under the United States Securities Act of 1933 (the
“U.S. Securities Act”) and the Arizona common shares may not be
offered or sold in the United States absent registration or an
applicable exemption from the registration requirements of the U.S.
Securities Act and applicable state securities laws. This press
release shall not constitute an offer to sell or the solicitation
of an offer to buy the Arizona common shares, nor shall there be
any offer or sale of the Arizona common shares in any jurisdiction
in which such offer, solicitation or sale would be unlawful.
Neither the TSX, the TSX Venture Exchange nor
its Regulation Services Provider (as that term is defined in the
policies of the TSX and TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release.
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