TORONTO, March 16, 2020 /CNW/ - Excellon Resources
Inc. (TSX: EXN, EXN.WT, OTC: EXLLF and FRA: E4X1) ("Excellon" or
the "Company") and Otis Gold Corp. (TSX-V: OOO, OTC: OGLDF, FRA:
4OG) ("Otis") are pleased to announce the receipt of an interim
order from the Supreme Court of British
Columbia on March 13, 2020
(the "Interim Order"), in connection with Excellon's
previously announced acquisition of all of the issued and
outstanding shares of Otis (the "Otis Shares") pursuant to a
plan of arrangement under the Business Corporations Act
(British Columbia) (the
"Arrangement"). The Interim Order provides for, among other
things, a meeting of Otis shareholders to consider and vote upon
the Arrangement.
Arrangement
On February 24, Excellon entered
into a definitive arrangement agreement (the "Arrangement
Agreement") with Otis, whereby, subject to the terms and
conditions of the Arrangement Agreement, Excellon will acquire all
of the Otis Shares on the basis of 0.23 of an Excellon common
share (an "Excellon Share") for each Otis Share (the "Exchange Ratio").
Benefits of the Arrangement
Excellon and all of its subsidiaries immediately following the
completion of the Arrangement (the "Combined Company") will
be a well-financed precious metals producer with established silver
production in Mexico and an
attractive gold development project in the United States. The Arrangement is an
initial step in Excellon becoming a larger multi-asset precious
metals company with the following foundation for further
growth:
- Enhanced portfolio of projects: The Arrangement combines
Platosa's high-grade silver production with the high return and low
risk Kilgore development project,
creating a pipeline for growth. Furthermore, it adds two
significantly undervalued gold assets, Kilgore and Oakley, to Excellon's portfolio and amplifies
the Combined Company's exposure to precious metals in the early
stages of an anticipated bull market.
- Significant exploration upside: Active exploration on
four key mineral trends including the CRD and Fresnillo epithermal silver trends in
Mexico, the re-emerging
Idaho gold region, and the
historic Freiberg district in Saxony, all known for multi-million
ounce precious metal discoveries.
- Geographic diversification: Diverse, well-established
mining jurisdictions across two continents, reducing single asset
risk and positioning the Combined Company for further growth in
North America.
- Enhanced capital market profile: The Combined Company
will be well financed with US$10
million in cash and available funds, with a pro forma
combined market capitalization of approximately C$122 million (based on the basic outstanding
shares of the Combined Company after giving effect to the Exchange
Ratio and the price of the Excellon Shares immediately prior to the
announcement of the Arrangement) and will be listed on the TSX. The
Combined Company also intends to apply for a listing on the NYSE
American LLC stock exchange ("NYSE American") in
the United States which may
increase its capital markets presence, trading liquidity and
shareholder base.
- Re-rating potential: Expanded resource base and
production growth profile of the Combined Company is expected to
demand a more attractive valuation and provide re-rating potential
in line with larger precious metals peers.
- Proven board and management: Board and management that
can discover, permit, finance, develop and operate mining assets to
industry leading standards, with proven experience in North America.
The shareholders' meetings to approve the Arrangement for each
of Excellon and Otis will be held on April 17, 2020 with the
record date set on March 13, 2020.
Additional information about the Meetings will be included in a
joint management information circular of Excellon and Otis (the
"Circular"), which is expected to be filed on or about
March 19, 2020 with materials to be
mailed to shareholders of Excellon and Otis shortly thereafter. The
Circular, letter of transmittal and related proxy materials will,
in due course, be available on each of Otis' and Excellon's
websites and SEDAR profiles. The Arrangement is expected to be
completed in late April 2020.
Shareholder Questions
If you have any questions regarding the Arrangement please
contact Laurel Hill Advisory Group, the proxy solicitation agent
for Excellon and Otis, by telephone at: 1-877-452-7184 (North
American Toll Free) or 416-304-0211 (Outside North America); or by
email at: assistance@laurelhill.com
Closing of Sprott
Bridge-Loan
Excellon is also pleased to announce the closing of the
previously announced US$6-million
bridge-loan credit facility (the "Facility") with Sprott
Private Resource Lending II (Collector), LP ("Sprott
Lending"). The Facility bears interest at 10% per annum,
compounded and payable monthly, and due and payable in full on or
before September 14, 2020. In
consideration for the Facility, Excellon has issued 536,454
Excellon Shares (the "Subscribed Shares") to Sprott Lending,
representing 3% of the principal amount of the Facility based on a
10% discount to the 5-day volume weighted average trading price of
Excellon Shares as of March 12, 2020.
The Subscribed Shares will be subject to a hold period of four
months and one day from the date of issuance under applicable
securities laws.
About Excellon
Excellon's 100%-owned Platosa Mine has been Mexico's highest-grade silver mine since
production commenced in 2005. The Company is focused on optimizing
Platosa's cost and production profile, discovering further
high-grade silver and carbonate replacement deposit mineralization
on the 14,000-hectare Platosa Project and epithermal silver
mineralization on the 100%-owned 45,000-hectare Evolución Property,
and capitalizing on current market conditions by acquiring
undervalued projects. The Company also holds an option on the 164
km2 Silver City Project in Saxony, Germany, a high-grade epithermal silver
district with 750 years of mining history and no modern
exploration.
Additional details on Excellon's properties are available at
www.excellonresources.com.
About Otis Gold
Otis Gold is a resource company
focused on the acquisition, exploration, and development of
precious metal deposits in Idaho,
USA. Otis is currently developing its flagship property, the
Kilgore Project, located in Clark County,
Idaho and the Oakley Project, located in Cassia County, Idaho.
Additional details on Otis Gold's
properties are available at www.otisgold.com.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of Canadian securities laws. Such statements in this
press release include, without limitation, statements regarding the
timing of the completion of the Transaction, synergies of the
Transaction; the anticipated benefits of the Transaction to
shareholders of Excellon and Otis
Gold; the third-party approvals required to complete the
Transaction; the conditions required to be satisfied to complete
the Transaction; the ability of the companies to complete the
Transaction on terms announced; the future results of operations of
the Combined Company following the completion of the Transaction,
the timing of the companies to hold their respective shareholders'
meetings; the expected timing to finalize, file and mail the joint
management information circular; the proposed listing on the NYSE
American; the intentions, plans and future actions of the companies
participating in the transactions described herein; the board and
management of the Combined Company; timing to list the common
shares of Excellon on the NYSE American, performance and
achievements of the Combined Company, including potential property
acquisitions, the timing, content, cost and results of proposed
work programs, the discovery and delineation of mineral
deposits/resources/reserves, geological interpretations, proposed
production rates, potential mineral recovery processes and rates,
business and financing plans, business and market trends and future
operating revenues. Although the companies believe that such
statements are reasonable, it can give no assurance that such
expectations will prove to be correct. Forward-looking statements
are typically identified by words such as: believe, expect,
anticipate, intend, estimate, postulate and similar expressions, or
are those, which, by their nature, refer to future events. The
companies caution investors that any forward-looking statements are
not guarantees of future results or performance, and that actual
results may differ materially from those in forward looking
statements as a result of various factors, including, but not
limited to, the inability to satisfy the conditions required to
complete the Transaction; the companies not being able to obtain
third-party approvals; the Arrangement being terminated; variations
in the nature, quality and quantity of any mineral deposits that
may be located, significant downward variations in the market price
of any minerals produced, the inability to obtain any necessary
permits, consents or authorizations required for its activities, to
produce minerals from its properties successfully or profitably, to
continue its projected growth, to raise the necessary capital or to
be fully able to implement its business strategies. The companies
do 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.
The public disclosure filings of Excellon and Otis Gold may be accessed via www.sedar.com and
readers are urged to review these materials, including the
technical reports filed with respect to the mineral properties of
the Combined Company, and particularly the September 7, 2018 NI 43-101 technical report
prepared by SRK Consulting (Canada) Inc. with respect to the Platosa
Property.
This press release is not and is not to be construed in any
way as, an offer to buy or sell securities in the United States. The distribution of the
Excellon Shares in connection with the transactions described
herein will not be registered under the United States Securities
Act of 1933 (the "U.S. Securities Act") and the Excellon Shares may
not be offered or sold in the United
States absent registration or an applicable exemption from
the registration requirements of the U.S. Securities Act and
applicable state securities laws. This press release shall not
constitute an offer to sell or the solicitation of an offer to buy
the Excellon Shares, nor shall there be any offer or sale of the
Excellon Shares in any jurisdiction in which such offer,
solicitation or sale would be unlawful.
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 press release.
SOURCE Excellon Resources Inc.