TSX-V:
GBR
VANCOUVER, Jan. 31, 2020 /CNW/ - Great Bear Resources Ltd.
(TSX-V: GBR) (the "Company" or "Great Bear") today announces that
is has entered into a 2.0% net smelter return royalty agreement
(the "NSR Royalty") with a newly incorporated wholly-owned
subsidiary named Great Bear Royalties Corp. ("Great Bear
Royalties"). Great Bear plans to transfer the NSR Royalty,
approximately $1 million in
marketable securities currently owned by the Company, and
$0.5 million in cash into Great Bear
Royalties, which together will be the initial assets for a new
royalty company. Great Bear will continue to focus on
advancing the 100% owned Dixie Project, while Great Bear Royalties
will allow shareholders to capture additional long-term value
through the royalty interest.
Great Bear Royalties will not initially be listed on a public
stock exchange but will operate as a reporting issuer. Great Bear
Royalties will evaluate all strategic opportunities available to
the company to enhance value.
Terms of the Arrangement Agreement
Great Bear has executed an arrangement agreement with Great Bear
Royalties, whereby the business of Great Bear will be reorganized
into two companies by way of a plan of arrangement (the
"Arrangement") under the Business Corporations Act (British Columbia). Great Bear shareholders
will vote on the Arrangement at a special meeting of shareholders
("Meeting") to be held on a date to be announced. To be effective,
the Arrangement must be approved by a special resolution passed by
at least 66⅔% of the votes cast by Great Bear shareholders present
in person or represented by proxy at the Meeting, which
shareholders are entitled to one vote for each Great Bear share
held.
The Arrangement involves, among other things, the distribution
of 100% of the common shares of Great Bear Royalties (the "Great
Bear Royalties Shares") to Great Bear shareholders such that each
shareholder as of a particular date, immediately prior to closing
of the transaction (the "Record Date") will receive one share
of Great Bear Royalties for each four common shares of Great
Bear held as of the Record Date. It is anticipated that the
closing date will occur in April
2020. Great Bear warrants and options will also be adjusted
pursuant to the Arrangement as described in more detail in the
information circular ("Circular") that will be mailed to
shareholders prior to the Meeting.
After careful consideration, the Board of Directors has
unanimously determined that the Arrangement is fair to shareholders
and is in the best interests of the Company. A description of the
various factors considered by the Board of Directors in arriving at
this determination will be provided in the Circular.
After closing of the Arrangement, Great Bear shares will
continue trading on the TSX Venture Exchange in Canada under the symbol GBR, and on the OTCQX
Market in the United States under
the symbol GTBDF. Great Bear Royalties Shares will not be listed on
any stock exchange after closing of the Arrangement, but the
company will be a reporting issuer and will comply with its
continuous disclosure obligations including press releases and
financial reporting.
Grant of Stock Options
The Company also reports it has granted an aggregate of 710,000
stock options to employees, directors, consultants and advisors of
the Company, exercisable at $8.67 per
share for a period of five years. The options are subject to a
four month hold period.
About Great Bear
Great Bear Resources Ltd. is a well-financed gold
exploration company managed by a team with a track record of
success in mineral exploration. Great Bear is focused
in the prolific Red Lake gold
district in northwest Ontario,
where the company controls over 300 km2 of highly
prospective tenure across 4 projects: the flagship Dixie
Project (100% owned), and the Pakwash Property (earning a
100% interest), the Dedee Property (earning a 100% interest), and
the Sobel Property (earning a 100% interest), all of which are
accessible year-round through existing roads.
ON BEHALF OF THE BOARD
"Chris
Taylor"
Chris Taylor, President and
CEO
Cautionary note regarding forward-looking statements
This release contains certain "forward looking statements" and
certain "forward-looking information" as defined under applicable
Canadian and U.S. securities laws. Forward-looking statements and
information can generally be identified by the use of
forward-looking terminology such as "may", "will", "should",
"expect", "intend", "estimate", "anticipate", "believe",
"continue", "plans" or similar terminology. The forward-looking
information contained herein is provided for the purpose of
assisting readers in understanding management's current
expectations and plans relating to the future. Readers are
cautioned that such information may not be appropriate for other
purposes.
Forward-looking statements and information include, but are not
limited to, statements with respect to timing, structure and
completion of the Arrangement, the transfer of assets from Great
Bear to Great Bear Royalties, future growth potential for Great
Bear and Great Bear Royalties, future mine development plans at the
Dixie Project, anticipated benefits of the Arrangement, the timing
and receipt of required shareholder, court, stock exchange and
regulatory approvals for the Arrangement, the Company's financial
guidance and outlook.
Forward-looking information is subject to known and unknown
risks, uncertainties and other factors that may cause the actual
actions, events or results to be materially different from those
expressed or implied by such forward-looking information, including
but not limited to: the requirement for regulatory approvals; the
impact of general business and economic conditions; the absence of
control over mining operations from which Great Bear will purchase
gold and other metals or from which it will receive royalty
payments and risks related to those mining operations, including
risks related to any international operations, government and
environmental regulation, delays in mine construction and
operations, actual results of mining and current exploration
activities, conclusions of economic evaluations and changes in
project parameters as plans continue to be refined; accidents,
equipment breakdowns, title matters, labor disputes or other
unanticipated difficulties or interruptions in operations; problems
inherent to the marketability of gold and other metals; the
inherent uncertainty of production and cost estimates and the
potential for unexpected costs and expenses; industry conditions,
including fluctuations in the price of the primary commodities
mined at such operations, fluctuations in foreign exchange rates
and fluctuations in interest rates; government entities
interpreting existing tax legislation or enacting new tax
legislation in a way which adversely affects Great Bear or Great
Bear Royalties; stock market volatility; regulatory restrictions;
liability, competition, loss of key employees and other related
risks and uncertainties.
Forward-looking information are based on management of the
parties' reasonable assumptions, estimates, expectations, analyses
and opinions, which are based on such management's experience and
perception of trends, current conditions and expected developments,
and other factors that management believes are relevant and
reasonable in the circumstances, but which may prove to be
incorrect.
Great Bear undertakes no obligation to update forward-looking
information except as required by applicable law. Such
forward-looking information represents management's best judgment
based on information currently available. No forward-looking
statement can be guaranteed and actual future results may vary
materially. Accordingly, readers are advised not to place undue
reliance on forward-looking statements or information.
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SOURCE Great Bear Resources Ltd.