VANCOUVER, Dec. 3, 2014 /CNW/ - Montan Capital Corp. (TSXv:
MO.P) ("Montan") and Strait Minerals Inc. (TSXv: SRD)
("Strait") are pleased to announce that they have entered
into a binding letter agreement (the "Letter Agreement")
dated effective December 2, 2014 to
merge the two companies and form a strong Peru-focused mine development company (the
"Transaction").
The resulting company ("MergeCo") will combine Montan's
technical team, with a track record of successful project and mine
development in Peru and other
jurisdictions, and its financial and capital markets team, with
expertise in Peru and a local
shareholder support base, with Strait's portfolio of projects.
MergeCo will have a strong platform to build from and to seek
further opportunities in the Peruvian mining sector presented by
the current mining and resource market.
The Transaction
Montan is a "Capital Pool Company" under the policies of the TSX
Venture Exchange (the "Exchange") and the transaction will
constitute its "Qualifying Transaction" in accordance with Exchange
Policy 2.4 Capital Pool Companies (the "Policy").
Upon completion of the Transaction, Montan expects to be listed as
a Tier 2 mining issuer on the Exchange and will be engaged in the
exploration and development of mineral properties. Strait is an
Exchange-listed mining issuer and is active solely in Peru. Strait has one principal mineral
project, Alicia, and three other non-core mineral projects (the
"Properties").
On closing of the Transaction, it is anticipated that current
shareholders of Montan will hold 8,000,000 common shares of
MergeCo, and current shareholders of Strait will hold 6,203,258
common shares, after an intended 10-for-one share consolidation of
Strait's outstanding share capital. In addition, any securities
issued pursuant to a Concurrent Financing (as defined below) will
be outstanding on closing, as well as options and warrants
currently outstanding in MergeCo or issued pursuant to the
Concurrent Financing.
Strait's Peru Properties
Strait's focus is on copper, gold, silver and molybdenum at four
active projects in Peru. Strait
holds a 100% interest in the 26-sq-km Alicia Property located in
the Andahuaylas-Yauri metallogenic belt of southeastern
Peru, a Tertiary-aged belt of
porphyry and skarn deposits extending for over 300 km in a
northwest-southeast direction. The belt contains more than 30
porphyry and skarn deposits and prospects, several of which are
being mined or are under development including Tintaya (Xstrata),
Las Bambas (Minmetal), Antapaccay (Glencore), Haquira (First
Quantum) and Constancia (Hudbay), and has emerged as one of the
most active copper exploration and development regions of
Peru, and on a global basis.
Alicia is Strait's principal property.
The Alicia property consists of a multi-phase porphyry intrusion
surrounded by copper-bearing skarns. The property is relatively
advanced having seen over $1.5
million in exploration by Strait and over $3 million from recent joint-venture partner Teck
Resources. Teck financed a 10-hole, 4,000-metre drill program in
December, 2013.
While much of the recent effort has focused on porphyry-style
mineralization, at least nine copper-bearing skarn zones
surrounding the intrusion have also been identified. Exploration on
some of the skarns, consisting of surface trenching (28 trenches
totalling 1466m.), identified high-grade (0.5% to 4.9% Cu) copper
zones. These have attracted the Montan technical team, and will be
the immediate focus of exploration and, if warranted, development
moving forward.
Strait's Letra Rumi South base
metals property and Culebrilla precious metals property, both 100%
owned, subject to a 3% net smelter return royalty, are about 250 km
north of Lima. Strait also holds
an option to earn a 100% interest in the Caribe copper-molybdenum
property approximately 80 km west of Alicia.
An updated, independent geological report of the Alicia Property
prepared in accordance with National Instrument 43-101 –
Standards of Disclosure for Mineral Projects ("NI
43-101") will be completed in conjunction with the Transaction.
Upon its receipt, Montan intends to issue a press release
announcing the results of the geological report.
Proposed Directors and Officers
The first board of the merged Montan and Strait upon closing of
the Transaction will comprise five (5) directors, as determined by
Montan with input from Strait. Strait shall have the right to
nominate one (1) director to the board of directors. The names of
such directors as well as the management of the combined entity
will be provided by Montan prior to finalization of each party's
Information Circular.
The current board of Montan is:
Mr. Ian Graham, B.Sc.
(Hons), Geology
Mr. Graham is an accomplished mining professional with over 20
years of experience in the development and exploration of mineral
deposits, mostly gained with the major mining companies Rio Tinto
and Anglo American. Formerly Chief
Geologist with the Project Generation Group at Rio Tinto located in
Vancouver, Mr. Graham has been
involved with evaluation and pre-development work on several
projects in Canada and abroad
including the Diavik Diamond Mine (Northwest Territories, Canada), Resolution
Copper (Arizona, USA), Eagle
Nickel (Michigan, USA),
Lakeview Nickel (Minnesota, USA) and Bunder Diamonds
(India). Prior to his work with
Rio Tinto, Ian held exploration geologist roles with Anglo American. Ian graduated from the
University of Natal (now Kwa-Zulu Natal) in Durban, South Africa with a B.Sc. in Geology
and Applied Geology (1984) and B.Sc. (Hons) in Geology (1985).
Mr. Luis F. Zapata
Mr. Zapata was previously Partner and Head of Capital Markets at
Seminario SAB, Peru's largest
independent brokerage firm. Prior to that, he was Head of Latin
America Institutional Equity Sales at Canaccord Genuity. Mr. Zapata
has structured, financed or participated in over $500M of equity raises for natural resources
companies with a focus on connecting Latin American assets with
Canadian and global public market financing and listing vehicles.
Mr. Zapata is a frequent media commentator on the resource sector
in Peru and a dual
Canadian/Peruvian citizen fluent in English and Spanish.
Mr. Michel Robert, B.A.,
B.A.Sc. (Hons), M.A.Sc. (Hons)
Mr. Michel Robert has over 40
years of professional experience in the mining industry. He
previously served for nine years at Teck Corporation as corporate
metallurgist, lead engineer and start-up manager. Mr. Robert was
also a director of SNC, one of three founders of Simons Mining
Group (now Amec) and Senior Vice President for Pan American Silver
Corp. (TSX: PAA) from 1995 to 2001, where he was responsible for
the management of operation in Latin
America and the expansion of the company in Peru, Mexico,
and Bolivia.
More recently, Mr. Robert was Vice President of Quinto Mining
Corp. which was acquired by Consolidated Thompson Iron Mines for
C$150 million in 2008 for the Peppler
Lake and Lamelee iron deposits. The resources on these two
contiguous grass root projects were advanced to a level of slightly
more than a billion tonnes in the span of two seasons for less than
$5M, by Mr. Robert's team.
Mr. Ryan Fletcher, B.A.
(Econ)
Mr. Ryan Fletcher is an
entrepreneur and financier with a focus on the mining and mineral
exploration space. Mr. Fletcher co-founded Montan Capital Corp. in
2009 with the goal and mandate to identify a strong Qualifying
Transaction in the resource and mining space, with a focus on
Peru. Most recently, Mr. Fletcher
was a Director of Zimtu Capital Corp., a resource investment issuer
listed on the Exchange. Mr. Fletcher brings extensive knowledge and
experience in public company management, corporate compliance and
governance, financing, marketing, and communications and
shareholder relations, as well as an energetic and entrepreneurial
spirit and passion for the industry. He is a graduate of the
University of British Columbia Okanagan
with a Bachelor of Arts degree in Economics.
Concurrent Financing
Montan and Strait agree that if required, Canaccord Genuity
Corp. ("Canaccord") or another brokerage firm as agreed will
be engaged to act as agent for a financing and/or in connection
with any sponsorship requirements of the Exchange. The
parties intend to raise up to $1,500,000 (the "Concurrent Financing")
for advancement and exploration of Strait's mineral properties, but
such funds will not be a requirement of closing. The parties may
pay finder's fees as negotiated with finders respecting the
Concurrent Financing.
All securities issued in the Concurrent Financing will be
subject to a statutory hold period expiring four months and one day
after closing.
Sponsorship
Montan intends to make an application to the Exchange to have
the requirement for sponsorship of the Qualifying Transaction
waived. There can be no assurance that the waiver will be
granted. In any event, an agreement to sponsor should not be
construed as any assurance with respect to the merits of the
Transaction or the likelihood of its completion.
Trading Halt
In accordance with Exchange policies, the common shares of
Montan are currently halted for trading. The Montan common shares
may remain halted until completion of the Qualifying Transaction.
The Transaction is scheduled to be completed no later than
March 31, 2015, unless otherwise
agreed by the parties.
Other Matters Concerning the Transaction
The Transaction is arm's length as Montan and Strait deal at
arm's length with one another. However, under section 15.4(e)
of the Policy, Montan will be required to obtain minority
shareholder approval because it is completing its Qualifying
Transaction with an existing public company.
An Information Circular in respect of the Transaction will be
prepared and filed in accordance with the Policy 2.4 on SEDAR at
www.sedar.com no less than ten (10) business days prior to the
closing of the proposed Transaction. A press release will be issued
once the Information Circular has been filed as required pursuant
to Exchange policies.
The completion of the Transaction is subject to the approval of
the Exchange and all other necessary regulatory approval. The
completion of the Transaction is also subject to additional
conditions, including completion of a definitive agreement setting
forth the terms and conditions set out in the Letter Agreement,
satisfactory completion of a due diligence review by both
companies, board of directors approval of both companies and
certain other usual conditions.
If and when a definitive agreement is executed, in accordance
with the policies of the Exchange, Montan and Strait will issue a
subsequent joint press release containing the details of the
definitive agreement and additional terms of the Transaction, and
to the extent not contained in this joint press release, additional
information required by Exchange policies.
The Transaction will be submitted to the shareholders of Montan
for consideration and approval by a simple majority resolution of
the minority shareholders of Montan at a special meeting to be
convened by Montan. The Transaction will be submitted to the
shareholders of Strait for consideration and approval by a special
resolution of shareholders of Strait at a special meeting to be
convened by Strait.
Each party will pay its own costs and expenses (including all
legal, accounting and financial advisory fees and expenses) in
connection with the Transaction, including expenses related to the
preparation, execution and delivery of the Letter Agreement, the
definitive agreement and such other required documents.
In addition, the parties have agreed that Strait will pay Montan
a break fee of up to CDN$250,000 if,
among other things, Strait terminates the Letter Agreement as a
result of Strait completing an alternative transaction, including
but not limited to a merger, amalgamation, share exchange, business
combination, take-over bid, sale or other disposition of material
assets, recapitalization, reorganization, liquidation, sale or
issuance of a material number of treasury securities (except upon
the due exercise of convertible securities outstanding on the date
of this press release) or rights or interests therein or thereto or
rights or options to acquire any material number of treasury
securities or any type of similar transaction involving Strait
which is a Superior Proposal (as defined in the Letter
Agreement).
All of Strait's exploration programs are prepared by, or
prepared under the supervision of, Dr. Roger Moss, P.Geo., who serves as the Qualified
Person as defined by NI 43-101 and is a director of Strait.
Dr. Moss has reviewed and approved the technical content of
this press release.
Completion of the Transaction is subject to a number of
conditions, including, but not limited to, Exchange acceptance.
Montan requires an extension from the Exchange to the required date
under CPC policies to complete a Qualifying Transaction. There can
be no assurance that the Transaction will be completed as proposed
or at all, or that the extension will be granted.
Investors are cautioned that, except as disclosed in the
management information circular or filing statement to be prepared
in connection with the Transaction, any information released or
received with respect to the Transaction may not be accurate or
complete and should not be relied upon. Trading in the
securities of a capital pool company should be considered highly
speculative.
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.
Cautionary Note Regarding Forward-Looking Statements
Certain statements herein may contain forward-looking statements
and forward-looking information within the meaning of applicable
securities laws. Forward-looking statements or information appear
in a number of places and can be identified by the use of words
such as "plans", "expects", "budget", "scheduled", "estimates",
"forecasts", "intends", "anticipates" or "believes" or variations
of such words and phrases or statements that certain actions,
events or results "may", "could", "would", "might" or "will" be
taken, occur or be achieved. Forward-looking statements and
information include statements regarding the Transaction, the
Concurrent Financings, the timing of exploration programs and
filing of technical reports and the Company's exploration plans and
exploration results with respect to the Properties. With respect to
forward looking statements and information contained herein, we
have made numerous assumptions, including assumptions about mineral
prices, cut-off grades, metallurgical recoveries, operating and
other costs and technical assumptions used in the estimate. Such
forward-looking statements and information are subject to risks,
uncertainties and other factors which may cause the Company's
actual results, performance or achievements, or industry results,
to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statement
or information. Such risks include discrepancies between actual and
estimated mineral resources, subjectivity of estimating mineral
resources and the reliance on available data and assumptions and
judgments used in the interpretation of such data, speculative and
uncertain nature of gold exploration, exploration costs, capital
requirements and the ability to obtain financing, volatility of
global and local economic climate, share price volatility, estimate
uranium price volatility, changes in equity markets, increases in
costs, exchange rate fluctuations and other risks involved in the
mineral exploration industry. There can be no assurance that a
forward-looking statement or information referenced herein will
prove to be accurate, as actual results and future events could
differ materially from those anticipated in such statements or
information. Also, many of the factors are beyond the control of
the Company. Accordingly, readers should not place undue reliance
on forward-looking statements or information. We undertake no
obligation to reissue or update any forward-looking statements or
information except as required by law. All forward-looking
statements and information herein are qualified by this cautionary
statement.
SOURCE Montan Capital Corp.