TSXV:OIII | OTCQX:OIIIF - O3 Mining
TORONTO, Jan. 14, 2021 /PRNewswire/ - O3 Mining
Inc. (TSX.V: OIII) (OTCQX: OIIIF) ("O3 Mining" or the
"Corporation") is pleased to announce that it has entered into a
definitive share purchase agreement with Moneta Porcupine Mines
Inc. (TSX: ME) (OTC: MPUCF) ("Moneta"), pursuant to which it
has agreed to sell its wholly-owned subsidiary, Northern Gold
Mining Inc. ("Northern Gold"), in exchange for 149,507,273
common shares of Moneta ("Moneta Shares"), representing
30.1% of the outstanding Moneta Shares (the "Transaction").
Northern Gold owns 100% of the Golden Bear assets, including the
Garrison gold project ("Garrison Project"), in the
Kirkland Lake district of the
Timmins gold mining camp in
Ontario, Canada. Garrison is
located adjacent to the Golden Highway Project where Moneta
recently declared a mineral resource estimate of 2,144,200 ounces
(oz) of indicated mineral resources and 3,335,300 oz of inferred
mineral resources.
The strategic consolidation of the Garrison and Golden Highway
Projects under Moneta will create a leading gold development
company in the prolific Timmins
gold mining camp, allowing for their more systematic exploration
and combined development in partnership with O3 Mining. This
divestiture is part of O3 Mining's broader corporate strategy to
unlock value for its shareholders and maintain exposure to the
development potential of the Garrison Project while allowing the
Corporation to focus its resources on advancing its core assets.
Its core assets are the Marban and Alpha gold properties situated
in Québec, Canada, where it is
currently working to expand its gold mineralization through an
extensive 150,000-metre drilling campaign with 12 drilling
rigs.
José Vizquerra, President and CEO of O3 Mining,
commented: "O3 Mining is pleased to unlock value for our
shareholders through our investment in, and ongoing support of, our
new partner, Moneta. This transaction will allow O3 Mining to
partner in the future development of a large and long-life gold
project situated in one of the world's most famous gold producing
districts through the consolidation of these two projects and their
respective land positions. We look forward to partnering with
Moneta's management team, through our board representation and in
our role as Moneta's largest shareholder, and being part of its
growth story. O3 Mining aims to be a supportive partner to Moneta
as it advances the Garrison and Golden Highway Projects through the
formation of a joint technical committee, board representation, and
its ability to participate in future financings to maintain its
pro-rata ownership position."
Gary O'Connor, CEO of
Moneta, commented: "The partnership with O3 Mining through
the acquisition of the Golden Bear assets will transform Moneta
into one of the largest gold development companies in North America with a significant resource and
landholding in Canada's most
prolific gold mining camp. The Golden Bear assets, including the
Garrison Gold deposits, are adjacent to our flagship Golden Highway
project and provide significant synergies and multiple options for
the development of our gold deposits. Moneta will hold
approximately 4.0 million ounces of indicated gold resources and
4.4 million ounces of inferred gold resources including both
high-grade bulk tonnage underground deposits and near-surface open
pit resources, and access to the technical capabilities of O3
Mining team. With the completion of a proposed concurrent equity
financing, Moneta will be well funded to test the expansion
potential of the integrated project. We are excited about this
transaction; it provides excellent value for the shareholders of
both companies."
Transaction Highlights
- Creation of a leading gold development company with 4.0 million
ounces of gold (Au) in the indicated mineral resource category and
4.4 million ounces of Au in the inferred mineral resource category
and mineral inventory expansion opportunities on the combined
landholdings of over 20,000 hectares in the prolific Timmins gold mining camp in Ontario, Canada
- Partnership between O3 Mining and Moneta under an investor
rights agreement and including the formation of a joint technical
committee, the right of O3 to nominate two directors for election
to the board of directors of Moneta, and the right to participate
in future financings to maintain its pro-rata ownership
position
- Unlocking substantial developmental and operating synergies by
consolidating the Garrison and Golden Highway projects
-
- Potential starter pit at Garrison with outcropping gold
resources at higher grades and a lower strip ratio
- The overall footprint of the facilities can be reduced as
common buildings, process plant area, and tailings storage areas
are combined
- Enhanced capital markets profile and value proposition platform
for further district consolidation opportunities
- Creation of a district-scale mining company under Moneta with
enhanced critical mass which can command greater financial support
from institutions to facilitate the execution of its business
plan.
Transaction Terms
The Transaction is subject to the approval of Moneta's
shareholders at a special meeting expected to be held in
April 2021. In addition, the
Transaction is subject to the receipt of certain regulatory and
stock exchange approvals and other customary closing conditions for
a transaction of this nature. The Agreement includes, among other
things, customary mutual non-solicitation provisions, a "fiduciary
out" provision of Moneta, a right to match superior proposals by O3
Mining and a C$1.42 million
termination fee payable by Moneta to O3 Mining under certain
circumstances.
Concurrent with closing of the Transaction, O3 Mining and Moneta
will enter into an investor rights agreement (the "Investor
Rights Agreement") pursuant to which the board of directors of
Moneta will be reconstituted to consist of eight individuals, with
O3 Mining entitled to nominate two directors and one newly
appointed independent director to be agreed upon by the parties.
Additionally, for a period of two years, O3 Mining shall have the
right to nominate two nominees for election as directors of Moneta
and, thereafter, for so long as O3 Mining holds greater than * 25%
of the issued and outstanding Moneta Shares, O3 Mining shall have
the right to nominate two nominees for election as directors of
Moneta, and (y) 10% of the issued and outstanding Moneta Shares, O3
Mining shall have the right to nominate one nominee for election as
a director of Moneta. The Investor Rights Agreement includes, among
other things, pre-emptive and top-up rights in favour of O3 Mining,
a 24-month standstill provision in favour of Moneta, and certain
other restrictions in respect of O3 Mining's dealings in Moneta
Shares (including a prohibition from selling the Moneta Shares held
by O3 Mining until December 31,
2022).
The directors of Moneta, collectively holding approximately
16.5% of the outstanding Moneta Shares, have entered into voting
support agreements and have agreed to vote in favour of the
Transaction, subject to certain exceptions. Moneta also intends to
consolidate its share capital on a 6:1 basis, subject to the
receipt of all necessary approvals, on closing of the
Transaction.
Moneta Financing
In connection with the Transaction, Moneta will raise
approxiamately C$20 million in
equity, including the C$17 million
Bought Deal Offering, as further described below.
Moneta entered into an agreement with Paradigm Capital Inc.
("Paradigm") and Dundee Goodman Merchant Partners
("Dundee"), on behalf of a
syndicate of underwriters (collectively, with Paradigm and
Dundee, the
"Underwriters"), in connection with a "bought deal" private
placement offering (the "Bought Deal Offering") for
aggregate gross proceeds of approximately C$17 million. The Bought Deal Offering will
consist of 30,435,000 common shares of Moneta that will qualify as
"flow-through shares" (within the meaning of subsection 66(15) of
the Income Tax Act (Canada)) (the "Flow-Through Shares") at
a price of C$0.46 per Flow-Through
Share and 9,375,000 common shares of Moneta ("Hard Dollar
Shares") at a price of C$0.32 per
Hard Dollar Share.
In addition, Moneta has granted the Underwriters an option,
exercisable in whole or in part up to 48 hours prior to the closing
of the Bought Deal Offering, to purchase that number of additional
Flow-Through Shares and/or Hard Dollar Shares on the same terms
described above for additional aggregate gross proceeds of up to
approximately C$2.55
million.
Concurrent with the Bought Deal Offering, Moneta will also
undertake a non-brokered private placement (together with the
Bought Deal Offering, the "Offerings") of subscription
receipts of Moneta (the "Subscription Receipts"), at a price
of C$0.32 per Subscription Receipt,
for gross proceeds of up to C$3
million. In conjunction with the closing of the Transaction,
each Subscription Receipt will be exchanged for one Moneta Share.
Moneta will use an amount equal to the gross proceeds from the
sale of the Flow-Through Shares, pursuant to the provisions in the
Income Tax Act (Canada), to
incur or be deemed to incur eligible "Canadian exploration
expenses" that qualify as "flow-through mining expenditures" as
both terms are defined in the Income Tax Act (Canada) (the "Qualifying Expenditures")
on future and current properties of Moneta or a subsidiary thereof
on or before December 31, 2022, and
to renounce all the Qualifying Expenditures in favour of the
subscribers of the Flow-Through Shares effective on or before
December 31, 2021. The proceeds
from the sale of the Hard Dollar Shares and Subscription Receipts
will be used for exploration and development activities on future
and current properties of Moneta or a subsidiary thereof and for
general corporate purposes.
Completion of the Transaction is not contingent on completion of
the Offerings and completion of the Bought Deal Offering is not
contingent on completion of the Transaction.
The Offerings are subject to the satisfaction of certain
conditions, including receipt of all applicable regulatory
approvals including the approval of the Toronto Stock Exchange. The
securities to be issued under the Offerings will have a hold period
of four months and one day from the applicable closing date in
accordance with applicable securities laws.
This news release does not constitute an offer to sell or a
solicitation of an offer to buy nor shall there be any sale of any
of the securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful, including any of the
securities in the United States of
America. The securities have not been and will not be
registered under the United States Securities Act of 1933, as
amended (the "1933 Act") or any state securities laws and may not
be offered or sold within the United
States or to, or for account or benefit of, U.S. Persons (as
defined in Regulation S under the 1933 Act) unless registered under
the 1933 Act and applicable state securities laws, or an exemption
from such registration requirements is available.
Advisors
O3 Mining has engaged Sprott Capital Partners LP as its
financial advisor and Bennett Jones LLP as its legal counsel.
Moneta has engaged Maxit Capital LP as its financial advisor and
Stikeman Elliott LLP as its legal counsel.
Conference call
Moneta's management will host a conference call to discuss the
Garrison transaction on Thursday January 14,
2021 at 11:00 a.m. (Eastern
time). O3 Mining's President and CEO, José Vizquerra,
and Moneta's CEO, Gary O'Connor,
will participate in this conference call.
Conference call number
Toll Free Dial-In Number: (833) 772-0367
International Dial-In Number: (343) 761-2596
Webcast Link
https://onlinexperiences.com/Launch/QReg/ShowUUID=9233F573-2D68-4C1A-9191-A13B5FABEFEF
About O3 Mining Inc.
O3 Mining, which forms part of the Osisko Group of companies, is
a mine development and emerging consolidator of exploration
properties in prospective gold camps in Canada - focused on projects in Québec and
Ontario – with a goal of becoming
a multi-million ounce, high-growth company.
O3 Mining is well-capitalized and holds a 100% interest in
properties in Québec (133,557 hectares). The Corporation controls
66,064 hectares in Val-d'Or and
over 50 kilometres of strike length of the Cadillac-Larder Lake
Fault. O3 Mining also has a portfolio of assets in the Chibougamau region of Québec.
About Moneta
Moneta's land package in the Timmins Gold Camp covers 12,742
hectares (ha) including six gold projects plus a joint venture with
Kirkland Lake Gold Corporation (TSX: KL) covering 4,334 ha.
Moneta's flagship project, Golden Highway Gold Project is located
100 km east of Timmins and hosts a
total indicated resource of 2,145,000 ounces gold contained within
55.3 Mt @ 1.21 g/t Au and a total of 3,337,000 ounces gold
contained within 49.7 Mt @ 2.09 g/t Au in the inferred category at
a 2.60 g/t Au at South West, 3.00 g/t Au cut-off for the other
underground deposits and 0.30 g/t Au for the open pit deposits. The
project includes a total of 1,512,000 ounces of open pit indicated
resources contained within 50.5 Mt @ 0.93 g/t Au and 1,207,000
ounces of open pit inferred resources contained within 34.0 Mt @
1.10 g/t Au. The project also includes 632,000 ounces of indicated
underground resources contained within 4.9 Mt @ 4.05 g/t Au and
2,128,000 ounces of inferred underground resources within 15.7 Mt @
4.21 g/t Au. The open-pit resources and new underground discoveries
have not yet been subjected to a preliminary economic assessment
study at Golden Highway. The Garrison Project hosts a total
indicated resource of 1,822,000 ounces gold contained within
66.3 Mt @ 0.86 g/t Au and a total of 1,062,000 ounces gold
contained within 45.3 Mt @ 0.73 g/t Au in the inferred
category.
Qualified Person
The scientific and technical content in this news release has
been reviewed and approved by Mr. Louis
Gariepy. (OIQ #107538), VP Exploration, who is a "qualified
person" as defined by National Instrument 43-101 – Standards of
Disclosure for Mineral Projects.
Cautionary Note Regarding Forward-Looking Information
This news release contains "forward-looking information" within
the meaning of the applicable Canadian securities legislation that
is based on expectations, estimates, projections, and
interpretations as at the date of this news release. The
information in this news release about the transaction; and any
other information herein that is not a historical fact may be
"forward-looking information". Any statement that involves
discussions with respect to predictions, expectations,
interpretations, beliefs, plans, projections, objectives,
assumptions, future events or performance (often but not always
using phrases such as "expects", or "does not expect", "is
expected", "interpreted", "management's view", "anticipates" or
"does not anticipate", "plans", "budget", "scheduled", "forecasts",
"estimates", "believes" or "intends" or variations of such words
and phrases or stating that certain actions, events or results
"may" or "could", "would", "might" or "will" be taken to occur or
be achieved) are not statements of historical fact and may be
forward-looking information and are intended to identify
forward-looking information. This forward-looking information is
based on reasonable assumptions and estimates of management of the
Corporation, at the time it was made, involves known and unknown
risks, uncertainties and other factors which may cause the actual
results, performance or achievements of the companies to be
materially different from any future results, performance or
achievements expressed or implied by such forward-looking
information. Such factors include, among others, risks relating to
the restart of operations; further steps that might be taken to
mitigate the spread of COVID-19; the impact of COVID-19 related
disruptions in relation to the Corporation's business operations
including upon its employees, suppliers, facilities and other
stakeholders; uncertainties and risk that have arisen and may arise
in relation to travel, and other financial market and social
impacts from COVID-19 and responses to COVID 19. Although the
forward-looking information contained in this news release is based
upon what management believes, or believed at the time, to be
reasonable assumptions, the parties cannot assure shareholders and
prospective purchasers of securities that actual results will be
consistent with such forward-looking information, as there may be
other factors that cause results not to be as anticipated,
estimated or intended, and neither the Corporation nor any other
person assumes responsibility for the accuracy and completeness of
any such forward-looking information. The Corporation does not
undertake, and assumes no obligation, to update or revise any such
forward-looking statements or forward-looking information contained
herein to reflect new events or circumstances, except as may be
required by law.
Neither the 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. No stock exchange, securities
commission or other regulatory authority has approved or
disapproved the information contained herein.
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SOURCE O3 Mining Inc.