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THE UNITED STATES/
Summary:
- Exploration driven value creation at the Moss Mine and Hercules
Project.
- Solid foundation of production and growing cash flow.
- Strong pro-forma balance sheet with a cash position of
~C$29 million.
- Optimization ongoing at the Moss Mine to enhance cash
flows.
- Combination of two highly capable leadership, operations and
exploration teams.
VANCOUVER, BC, Dec. 7, 2020 /CNW/ - Northern Vertex
Mining Corp. ("Northern Vertex") (TSXV: NEE) (NASDAQ Intl:
NHVCF) and Eclipse Gold Mining Corp. ("Eclipse") (TSXV:
EGLD) (OTC: EGLPF) are pleased to announce that they have
entered into a definitive arrangement agreement (the
"Arrangement Agreement") to combine in an at-market merger
(the "Transaction"), creating a new gold growth resource
business focused on the Western United
States. Northern Vertex will be the resulting company with
offices in the US and Canada.
Transaction Highlights
- Concurrent "best efforts" private placement of subscription
receipts by Eclipse for minimum gross proceeds of C$20 million to be led by Stifel GMP on behalf of
a syndicate of agents including Canaccord Genuity Corp., Raymond
James Ltd., Beacon Securities Limited, and PI Financial Corp.
- Exchange ratio for existing common shares of Eclipse of 1.09
shares of Northern Vertex for every one share of Eclipse,
determined based on the 20-day VWAP of each company on December 4th, 2020.
- Combined company will be comprised of 71% Northern Vertex
shareholders, 18% Eclipse shareholders and 11% new
shareholders.
- Joining the Board of Directors of Northern Vertex from Eclipse
will be Douglas J. Hurst and
Marcel de Groot. Mr. Hurst will
serve as Chairman of Northern Vertex and lead the integrated Board
and management team.
- Accelerated corporate growth will be supported by the Moss
Mine's production and cash flow, and a bolstered balance
sheet.
- Shareholders of the combined company gain leverage to resource
growth at greater scale with accelerated drilling at both the Moss
Mine and Hercules Gold project.
Northern Vertex President, CEO and Director Mr. Kenneth Berry stated, "The result of this
transaction will be a combined company with a greatly strengthened
balance sheet, and an enhanced team with extensive experience
growing multi-asset gold companies. This represents a significant
step toward our unwavering vision of building a top of the class
mid-tier gold producer. We plan to use this new platform to
accelerate organic growth opportunities by targeting significant
resource expansion at the Moss Mine and execute an aggressive
roll-up strategy focused on the Western
United States."
Eclipse President, CEO and Director Michael G. Allen stated, "This combination
gives Eclipse shareholders exposure to creating value on a larger
scale, supported by positive cash-flow. Shareholders of the new
combined company will now own a platform including two Walker Lane gold projects with
multi-million-ounce potential, a producing mine with untapped
production and cash-flow growth opportunities, and an executive
team with demonstrated success building multi-asset companies
organically and through M&A. This combination aligns all the
key elements required toward building America's next mid-tier gold
growth story."
Greenstone Resources LLP Senior Partner Michael Haworth stated,
"As a 22% shareholder of this new, integrated gold company, we
are excited about the opportunity we see ahead with a stronger
balance sheet, enhanced capital markets presence, and accelerated
fulfilment of operational and exploration
potential. With our original investment in 2017,
we had a vision for developing a consolidated, Western US precious
metals producer and support this transaction as the next step in
that direction."
Board and Management Team
The combined company will feature a new integrated Board of
Directors comprised of Douglas J.
Hurst (Eclipse) acting as Chairman, Geoff Burns (Maverix Metals/Northern Vertex),
Michael Haworth (Greenstone
Resources/Northern Vertex), Marcel de
Groot (Eclipse), David
Farrell (Northern Vertex), Kenneth
Berry (Northern Vertex), and James
M. McDonald (Northern Vertex).
The management team will be comprised of President and CEO
Kenneth Barry, CFO David Splett, EVP Corporate Development Michael
G. Allen, and Dr. Warwick Board as
Vice President of Exploration.
Transaction Details
Eclipse and Northern Vertex, who are arms length to each other,
have entered into an Arrangement Agreement dated December 4th, 2020 pursuant to which
shareholders of Eclipse will receive 1.09 shares in Northern Vertex
for each Eclipse share by way of a plan of arrangement under the
Business Corporations Act (British
Columbia).
All outstanding stock options and warrants of Eclipse will be
exchanged for stock options or warrants of Northern Vertex on the
same basis as the share exchange ratio for the common shares.
The Transaction will be carried out by way of a court-approved
plan of arrangement under the Business Corporations Act
(British Columbia) and is subject
to a number of conditions being satisfied or waived by one or both
of Eclipse and Northern Vertex at or prior to closing of the
Transaction, including approval of Eclipse's shareholders and
receipt of all necessary regulatory and court approvals and the
satisfaction of certain other closing conditions customary for a
transaction of this nature, including completion of the Offering
(as hereinafter defined).
It is expected that the special meeting of Eclipse shareholders
to approve the proposed Transaction will be held in February 2021 with closing shortly
thereafter.
The Arrangement Agreement includes customary provisions,
including mutual 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. A
termination fee of C$2.0 million will
be payable by either party in the case of certain terminating
events. The termination fee payable by Northern Vertex will
increase to C$2.6 million in the
event that Northern Vertex terminates the Arrangement Agreement to
accept a superior proposal at any time following the closing of the
Offering, as defined below.
Further information regarding the Transaction will be contained
in a management information circular to be prepared by Eclipse and
mailed to Eclipse shareholders in connection with a special meeting
of shareholders to consider the Transaction. All shareholders of
Eclipse are urged to read the information circular once available,
as it will contain important additional information concerning the
Transaction.
Board Recommendations and Voting Support
The Transaction has been unanimously approved by the board of
directors of both Northern Vertex and Eclipse. The board of
directors of Eclipse has unanimously recommended that the Eclipse
shareholders vote in favour of the Transaction.
All the directors and officers of Eclipse, holding in aggregate
approximately 17.3% of the issued and outstanding common shares of
Eclipse have entered into customary voting support agreements
agreeing to vote in favour of the Transaction.
Stifel GMP has provided a fairness opinion to the board of
directors of Eclipse that, as of the date hereof, and based upon
and subject to the assumptions, limitations and qualifications
stated therein, the consideration being received by the
shareholders of Eclipse under the Transaction is fair, from a
financial point of view, to the shareholders of Eclipse.
Concurrent Financing
Concurrent with signing the Arrangement Agreement, Eclipse has
entered into an agreement with a syndicate of agents led by Stifel
GMP and including Canaccord Genuity Corp., Raymond James Ltd.,
Beacon Securities Limited, and PI Financial Corp. (collectively,
the "Agents") in connection with a "best efforts" private
placement financing (the "Offering") of subscription
receipts (the "Subscription Receipts") to be sold at
C$0.50 per Subscription Receipt for
minimum gross proceeds of C$20
million.
The Subscription Receipts will each be automatically converted
into one divided by 1.09 of an Eclipse share (the "Eclipse
Shares") (for no further consideration and without any further
action by the holders thereof) upon the satisfaction of certain
escrow release conditions, all of which must occur before
February 28, 2021. The Eclipse Shares
acquired upon conversion of the Subscription Receipts will be
exchanged for Northern Vertex shares in accordance with the Plan of
Arrangement resulting in purchasers of Subscription Receipts
receiving one common share in Northern Vertex for each Subscription
Receipt purchased in the Offering.
The Northern Vertex shares issued in connection with the closing
of both the offering and the Transaction will not be subject to any
statutory hold period in Canada.
Maverix Metals Inc. ("Maverix") has agreed to exercise,
on or before December 12, 2020,
approximately 19.5 million share purchase warrants (the
"Warrants") exercisable into 19.5 million Northern Vertex
common shares (the "Warrant Shares") at C$0.40 per Warrant Share for gross proceeds to
Northern Vertex of approximately C$7.8
million. As part of the Transaction, Maverix will sell
the Warrant Shares to Eclipse for C$0.50 per Warrant Share for a total purchase
price of C$9.8 million.
Immediately following the closing of the Transaction the Warrant
Shares will be returned to Northern Vertex for cancellation.
The proceeds of the Offering will partly be used to fund the
purchase of the Warrant Shares from Maverix (C$9.8 million) with the remaining funds
(C$10.2 million), prior to commission
and expenses, together with the C$7.8
warrant exercise proceeds plus cash on hand, will be used to fund
ongoing exploration and development at Northern Vertex's Moss Mine,
the Hercules Gold project, and general corporate purposes.
Advisors and Counsel
Stifel GMP is acting as financial advisor to Eclipse and
DuMoulin Black LLP is acting as legal counsel to Eclipse.
Raymond James Ltd. is acting as financial advisor and Maxis Law
Corporation is acting as legal counsel to Northern Vertex.
Qualified Persons
The foregoing technical information contained in this news
release has been reviewed and verified by Mr. Joseph Bardswich, P.Eng., a director of Northern
Vertex and a Qualified Person ("QP") for the purpose of National
Instrument 43-101 (Disclosure Standards for Mineral Projects), as
well as Dr. Warwick Board, P.Geo.,
Vice President of Exploration for Eclipse Gold Mining Corporation,
and a QP.
About Northern Vertex
Northern Vertex Mining Corp. owns and operates the Moss Mine,
currently the largest pure gold and silver mine in Arizona. Focused on low cost gold and silver
production, the Company has experience across all areas of
operations, mine development, exploration, acquisitions, and
financing of mining projects. With operations at the flagship Moss
Mine achieving commercial production the Company intends to
consolidate additional producing or near-term production gold
assets within the Western US. Through mergers and acquisitions
Northern Vertex's corporate goal is to become a mid-tier gold
producer.
About Eclipse Gold Mining
Eclipse Gold Mining is exploring the district-scale Hercules
gold property within Nevada's
Walker Lane trend. The Hercules
property is located only a one-hour drive from Reno and appears to have all the
characteristics of a large, low-sulphidation epithermal gold
system. The company brings together a team with a track record of
extensive M&A and nine successful buyouts totaling $4.6 billion.
ON BEHALF OF THE BOARD OF DIRECTORS OF NORTHERN VERTEX
MINING
Kenneth Berry
President, CEO and Director
ON BEHALF OF THE BOARD OF DIRECTORS OF ECLIPSE GOLD
MINING
Michael G. Allen
President, CEO and Director
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TSXV: NEE | Nasdaq Intl: NHVCF | Frankfurt: 54N | ISIN: CA6660061012 | WKN:
A1JUA0
TSXV: EGLD | OTC:EGLPF | Frankfurt:43J | ISIN: CA27888R1001 |
WKN: A2PYV4
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 Eclipse and Northern Vertex (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 Companies'
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 Eclipse and Northern Vertex; 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
Eclipse and Northern Vertex; risks related to exploration and
potential development of the Companies' 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 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 Eclipse and Northern Vertex'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 Eclipse nor
Northern Vertex 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.
SOURCE Eclipse Gold Mining Corporation
