Bonterra Resources (TSXV:BTR; OTCQX:BONXF, FWB:9BR1) and Metanor Resources Inc. (“Metanor”) (TSXV: MTO) are pleased to announce that, further to their news release dated June 18, 2018, they have entered into a definitive arrangement agreement dated July 20, 2018 (the “Arrangement Agreement”) 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 (the “Purchase Price”) for each Metanor share by way of plan of arrangement under the Canada Business Corporations Act (the “CBCA”). The Purchase Price represents a 40% premium to the 30-day VWAP of Metanor’s common shares on the TSXV on June 15, 2018 (the last unaffected trading price prior to the announcement of the Transaction) and 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 combined company, respectively.
Immediately prior to the completion of the Metanor acquisition, Bonterra will spin out its Larder Lake assets and liabilities in Ontario, Canada and $7 million in cash (the “Spin-Out”) in order to create a new exploration company (“Spinco”), by way of plan of arrangement under the Business Corporations Act (British Columbia) (the “BCBCA”).
Metanor has called a special meeting of its shareholders and optionholders (the “Metanor Meeting”) to approve the Transaction on September 18th, 2018. Bonterra has called a special meeting of its shareholders and optionholders (the “Bonterra Meeting”) on the same date to approve the Spin-Out. Further information regarding the Transaction and the Spin-Out will be contained in the management information circulars to be sent to securityholders in connection with the Metanor Meeting and Bonterra Meeting.
The board of directors of Metanor, following consultation with its legal advisors and receipt of a favourable fairness opinion by Red Cloud Klondike Strike Inc., has approved the Transaction. The directors of Metanor will recommend that Metanor securityholders vote in favour of the Transaction in the information circular to be mailed to Metanor securityholders in respect of the Metanor Meeting.
The board of directors of Bonterra, following consultation with its financial and legal advisors and receipt of a favourable fairness opinion by PI Financial Corp., has approved the Transaction and the Spin-Out. The directors of Bonterra will recommend that Bonterra securityholders vote in favour of the Spin-Out in the information circular to be mailed to Bonterra securityholders in respect of the Bonterra Meeting.
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 combined 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 Spinco, a well-capitalized exploration company, to unlock the value of Bonterra’s Larder Lake gold asset, and allow for a focused exploration effort and advancement of these assets.
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 executed option agreement 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 (the last unaffected trading day prior to announcement of the Transaction).
- 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.
- Increased exposure to institutional, corporate and retail investors.
Transaction Summary and Timing
Pursuant to the Arrangement Agreement, the Transaction will take place by way of a plan of arrangement under the CBCA whereby Bonterra will acquire all of the issued and outstanding common shares of Metanor. Optionholders of Metanor will receive replacement Bonterra options, entitling them to receive on exercise common shares of Bonterra, subject to an adjustment to reflect the Transaction. Holders of outstanding warrants of Metanor will have their warrants adjusted to reflect the Transaction and will not be receiving replacement warrants. The Transaction is subject to the approval of 662/3% of Metanor shareholders and optionholders in attendance and voting at the Metanor Meeting. Shareholders and optionholders of Metanor will be voting on the approval of the Transaction only and will not be voting on the Spin-Out.
Pursuant to the Arrangement Agreement, the Spin-Out will take place by way of a plan of arrangement under the BCBCA whereby Bonterra will assign its Larder …read more
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