Bonterra Resources Inc. (“Bonterra” or the “Company”) (TSXV:BTR, US:BONXF, FSE:9BR1) and Metanor Resources Inc. (“Metanor”) (TSXV:MTO) are pleased to announce that they have entered into a binding letter of intent dated June 17, 2018 (the “LOI”) to combine Bonterra and Metanor (the “Transaction”) to create an exciting new advanced Canadian gold exploration and development company focused on becoming the leader in the building out and future mining development of the Urban Barry Quebec Gold Camp.
The Transaction contemplates that Bonterra will acquire all of the issued and outstanding common shares of Metanor for C$0.73 in equity consideration, at an exchange ratio of 1.6039 Bonterra shares, for each Metanor share. Immediately prior to the completion of the Metanor acquisition, Bonterra will spin out its Larder Lake assets in Ontario, Canada, and a specified amount of cash (the “Spin-Out”), in order to create a well-capitalized and exciting new exploration opportunity for its shareholders.
Highlights of the Transaction:
- Creation of an exciting precious metals growth exploration, development and production company located in one of the best mining jurisdictions in the world.
- The proforma entity will have one of the largest contiguous land packages located in the highly prospective Urban Barry gold camp.
- Control of three advanced high grade gold deposits (Gladiator, Bachelor, Barry) and significant regional priority targets with resource upside potential.
- 100% control and operator of the only permitted gold mill in the region, that provides an expandable centralized production facility, surrounded by greater than 15 known gold deposits within a 100km radius.
- De-risking of the Gladiator project: Bonterra’s delivery of its updated National Instrument 43-101 resource for the Gladiator Gold Deposit remains on schedule for 2H/2018. Metanor’s mill infrastructure provides Bonterra the opportunity to significantly reduce the capital requirements and compress the timelines to advance the Gladiator project to potential production.
- Maintains strong balance sheet: The pro forma company will have approximately C$32 million in cash on hand, after the Spin-Out, to further advance the Gladiator project to production, and increase production at Bachelor and Barry.
- The creation of a well-capitalized spin out exploration company (“Spinco”), to unlock the value of Bonterra’s Larder Lake gold asset, and allowing for a focused exploration effort and advancement of these assets.
Nav Dhaliwal, President and CEO of Bonterra, said, “Bonterra has been an extremely successful exploration company and must continue to evolve and participate in growth opportunities. We have quickly and efficiently discovered and developed the Gladiator deposit over the past two years, and now look to put our exploration skills and experience to work on the larger combined land package. We believe we will be able to develop a much larger and more significant resource profile within the Urban Barry Camp. The availability and ownership of a permitted and expandable processing facility certainly places Bonterra in an excellent position to rapidly and cost effectively become a significant Quebec based gold producer.”
Greg Gibson, Chairman and Interim CEO of Metanor, commented, “Putting together two, arguably, undervalued companies like Metanor and Bonterra is extremely beneficial and logical in a number of ways. Resource growth, exploration synergies and de-risking the path to production are all considerations, as well as potential to access different and larger markets and shareholders. I look forward to working with the Bonterra team, as the combined effort provides the opportunity to create significant shareholder value.”
Benefits to Bonterra
- Provides Bonterra with a clear and cost-effective pathway to bring its Gladiator deposit into production.
- Addition of the Bachelor Mine and the Barry Deposit and associated exploration potential to its existing resource portfolio.
- Consolidates the entire southern portion of the Urban Barry Camp, when combined with the recently announced transaction with Beaufield Resources, and places Bonterra as one of the largest landholders in the region.
- Access to and control of an expandable mill/processing facility, centrally located in the Urban Barry Camp, further de-risking the Gladiator Gold Deposit.
- Adds tremendous exploration potential to Bonterra’s portfolio with several high priority regional targets to explore.
- Addition of strong technical team and increased knowledge base of this rich camp.
Benefits to Metanor
- Immediate and significant premium of approximately 40% based on the 30-day volume weighted average price (“VWAP”) on the TSX Venture Exchange (“TSXV”) on June 15, 2018.
- Superior financial strength and flexibility to simultaneously increase production and exploration programs while leveraging and enhancing existing infrastructures.
- Exposure to potential long-life asset to supplement current production.
- Increased trading liquidity, enhanced value proposition and capital markets profile.
- Addition of key strategic institutional, corporate and retail shareholders to broaden existing base.
Under the terms of the LOI, Bonterra will acquire all of the issued and outstanding common shares of Metanor (the “Transaction”) for C$0.73 in equity consideration per share (the “Purchase Price”), at an exchange ratio of 1.6039 Bonterra shares for each Metanor share (the “Exchange Ratio”), representing an aggregate transaction value of C$78 million on a fully diluted in-the-money basis.
The Purchase Price represents a 40% premium to the VWAP of Metanor’s common shares on the TSXV on June 15, 2018and a premium of 30% to the closing price as of such date.
Upon completion of the Transaction, existing Bonterra and Metanor shareholders will own approximately 58% and 42% of the pro forma company, respectively.
Immediately prior to the completion of the proposed Transaction, Bonterra will complete the Spin-Out of its Larder Lake, Ontario project to current shareholders of Bonterra in order to create a new exploration company Spinco focused on the growth of this multi-deposit high grade project. Spinco will be well capitalized with C$7 million of cash. Further details of the Spin-Out will be included as part of an information circular to be distributed prior to a Bonterra shareholder meeting to approve the Transaction and the Spin-Out.
Wexford Capital LP, Kirkland Lake Gold Ltd., Eric Sprott, Van Eck Associates Corp. and other shareholders controlling greater than 50% of Metanor’s voting securities as of June 18, 2018, have provided their support for the proposed Transaction.
Transaction Summary and Timing
Metanor and Bonterra expect the Transaction will take place by way of a plan of arrangement whereby Bonterra, and/or a wholly owned subsidiary, will enter into an arrangement agreement with Metanor …read more
From:: Investing News Network