/NOT FOR DISTRIBUTION TO UNITED STATES NEWS WIRE SERVICES OR FOR
DISSEMINATION IN THE UNITED
STATES/
VANCOUVER, BC, Dec. 17, 2020 /CNW/ - Serengeti Resources
Inc. (TSXV: SIR) ("Serengeti") and Sun Metals Corp. (TSXV:
SUNM) ("Sun Metals") are pleased to announce, further to
their joint news releases dated November 30,
2020 and December 2, 2020, the
closing of the previously announced upsized bought deal financing
of 82,800,000 subscription receipts (the "Subscription
Receipts") of Sun Metals, at a price of $0.125 per Subscription Receipt (the "Issue
Price") for gross proceeds of $10,350,000 (the "Offering"). The
Offering included a full exercise of the underwriters'
over-allotment option, and was co-led by PI Financial Corp.
and Haywood Securities Inc. (the "Co-Lead Underwriters"), and
included Agentis Capital Markets Canada Limited Partnership, Clarus
Securities Inc. and Cormark Securities Inc. (collectively, with the
Co-Lead Underwriters, the "Underwriters").
The Offering is being conducted in connection with the
previously announced merger 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 (as defined below)
basis) for each share of Sun Metals held (the "Exchange
Ratio"), to create a premier Canadian multi-asset copper-gold
developer (the "Transaction"). Proceeds from the issue and
sale of the Subscription Receipts will be used to advance the
collective portfolio of copper-gold exploration and development
assets in British Columbia, and
for general working capital purposes.
The Subscription Receipts were issued pursuant to a subscription
receipt agreement (the "Subscription Receipt Agreement")
entered into by Sun Metals, Serengeti, the Co-Lead Underwriters,
and Computershare Trust Company of Canada as subscription receipt agent. 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 conditional
approval of the TSX Venture Exchange (the "TSX-V")
(collectively, 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 prior to
March 31, 2021, each Subscription
Receipt will automatically convert into one Unit (each, a
"Unit") of Sun Metals which shall be exchanged, adjusted, or
converted into securities of Serengeti at the Exchange Ratio, on a
post-Consolidation basis, upon completion of the Transaction. The
number of units of Serengeti to be exchanged or adjusted will
reflect the previously announced consolidation (the
"Consolidation"), whereby immediately prior to the closing
of the Transaction, Serengeti will consolidate its common shares on
a two for one basis, subject to the receipt of all necessary
approvals.
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 full 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. Each Warrant is 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 prices to be adjusted by the Exchange
Ratio upon completion of the Transaction. It is expected that
an aggregate of 17,802,000 post-Consolidation shares of Serengeti
will be issued and the warrants will be adjusted to entitle the
holders to acquire an additional 8,901,000 post-Consolidation
shares of Serengeti at an approximate effective price of
$0.84 per share, on or before
December 17, 2022, subject to agreed
acceleration provisions, on conversion of the Subscription Receipts
and following completion of the Transaction.
The Subscription Receipts were 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 Transaction.
Certain insiders of Sun Metals acquired Subscription
Receipts pursuant to the Offering and as such the Offering is
considered a related party transaction with the meaning of TSX
Venture Policy 5.9 and Multilateral Instrument 61-101 Protection of
Minority Security Holders in Special Transactions ("MI
61-101"). Neither Sun Metals, nor to the knowledge of Sun
Metals after reasonable inquiry, a related party, has knowledge of
any material information concerning Sun Metals or its securities
that has not been generally disclosed. Sun Metals has relied on
exemptions from the formal valuation and minority approval
requirements of sections 5.5(a) and 5.7(1)(a) of MI 61-101 in
respect of such insider participation, based on a determination
that the fair market value of the participation in the Offering by
insiders will not exceed 25% of the market capitalization of the
Sun Metals, as determined in accordance with MI 61-101. Sun
Metals did not file a material change report more than 21 days
before the expected closing of the Offering because the details of
the participation therein by related parties of Sun Metals were not
settled until shortly prior to closing of the Offering and the
parties wished to close on an expedited basis for business
reasons.
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
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 use of proceeds from 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 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
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 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 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' 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.
SOURCE Sun Metals
