TSX-V: GBR
VANCOUVER, BC, Jan. 20, 2022
/CNW/ - Great Bear Resources Ltd. (the "Company" or
"Great Bear", (TSXV: GBR) (OTCQX: GTBAF) announced today
that it has mailed and filed a management information circular and
related materials (the "Meeting Materials") for its special
meeting (the "Meeting") of shareholders, optionholders,
restricted share unit ("RSU") holders, and deferred share
unit ("DSU") holders of Great Bear (collectively,
"Securityholders") to be held on February 14, 2022, in connection with the
proposed acquisition of Great Bear by Kinross Gold Corporation
("Kinross"), (TSX: K)
(NYSE: KGC) announced on December 8,
2021 (the "Transaction").
Information about the Meeting and Receipt of Interim Court
Order
Due to the ongoing public health concerns related to the
COVID-19 pandemic, and in order to ensure the health and well-being
of our Securityholders, employees, communities and other
stakeholders, the Meeting will be conducted virtually via live
audio webcast, using the Summit meeting platform at
https://meetnow.global/MCZJJLW. Registered Securityholders and duly
appointed proxyholders will be able to vote in real time and ask
questions at the Meeting by following the instructions set out in
the Circular. Beneficial Securityholders who have not duly
appointed themselves as proxyholders may attend the Meeting as
guests. Guests may listen but cannot vote at the Meeting or ask
questions. Securityholders should closely review the Meeting
Materials to ensure that they are able to cast their vote at and
participate in the Meeting.
On January 13, 2022, Great Bear
obtained an interim order (the "Interim Order") from the
Supreme Court of British Columbia
(the "Court") authorizing the holding of the Meeting and
matters relating to the conduct of the Meeting. At the Meeting,
Securityholders will be asked to consider and, if deemed advisable,
pass a special resolution (the "Arrangement Resolution") to
approve an arrangement (the "Arrangement"), in accordance
with the terms of an arrangement agreement (the "Arrangement
Agreement") entered into by the Company and Kinross on December 8,
2021, pursuant to which Kinross agreed to acquire all of the issued
and outstanding Great Bear common shares ("Great Bear
Shares") that it does not already own by way of a statutory
plan of arrangement (the "Plan of Arrangement") under
section 288 of the Business Corporations Act (British Columbia).
The Meeting Materials contain important information regarding
the Transaction, how Securityholders can participate and vote at
the Meeting, the background that led to the Transaction and the
reasons for the unanimous determinations of the special committee
of independent directors of the Company (the "Special
Committee") as well as the board of directors of the Company
(the "Board") that the Transaction is in the best interests
of the Company and is fair to Shareholders. Securityholders should
carefully review all of the Meeting Materials as they contain
important information concerning the Transaction and the rights and
entitlements of Securityholders thereunder. The Meeting Materials
have been filed by the Company on SEDAR and are available under the
Company's profile at www.sedar.com.
Transaction Details
Under the terms of the Transaction, Great Bear shareholders will
receive upfront consideration of approximately C$1.8 billion, representing C$29.00 per Great Bear Share on a fully diluted
basis ("Consideration"). Great Bear shareholders will be
able to elect to receive the upfront consideration as either (i)
C$29.00 in cash or (ii) 3.8564
Kinross shares per Great Bear
share, both subject to proration. The upfront consideration will be
subject to maximum aggregate cash consideration of approximately
C$1.4 billion and a maximum of
approximately 80.8 million Kinross
shares issuable. Great Bear shareholders who do not elect cash or
Kinross shares will be deemed to
have elected to receive cash, subject to pro-ration.
In order to make a valid election, registered Securityholders
must duly complete, execute and return the letter of transmittal
and election form enclosed with the Meeting Materials in accordance
with the instructions contained therein by 4:30 p.m. (Vancouver time) on February 9, 2022, or, if the Meeting is adjourned
or postponed, no later than 72 hours (excluding Saturdays, Sundays
and statutory holidays in British
Columbia) before the adjourned Meeting is reconvened or the
postponed Meeting is convened. Beneficial Great Bear shareholders
should follow the instructions provided by your intermediary to
make your election.
Great Bear shareholders will also receive contingent
consideration in the form of contingent value rights
("CVRs") providing for further potential consideration equal
to 0.1330 of a Kinross share per
Great Bear Share. The contingent consideration will be payable in
connection with Kinross' public
announcement of commercial production at the Dixie project,
provided that at least 8.5 million gold ounces of measured and
indicated mineral resources have been disclosed.
The Consideration represents a premium of 31% and 40% to the
closing price and the volume weighted average price
("VWAP"), respectively, of Great Bear's shares on the TSX-V
for the 20-day period ending December 7,
2021.
The Arrangement Agreement provides for customary deal-protection
provisions, including a non-solicitation covenant on the part of
Great Bear and a right for Kinross
to match any Superior Proposal (as defined in the Arrangement
Agreement). The Arrangement Agreement includes a termination fee of
C$85 million, payable by Great Bear
to Kinross, under certain
circumstances (including if the Arrangement Agreement is terminated
in connection with Great Bear pursuing a Superior Proposal).
Directors, officers, and certain shareholders of Great Bear, owning
in aggregate approximately 20% of Great Bear's voting securities
have agreed to vote all the securities they own or control in
favour of the Transaction.
Reasons for the Arrangement
In evaluating and unanimously approving the Arrangement, the
Special Committee and the Board gave careful consideration to the
current position and condition and the expected and potential
future position and condition of the business of the Company, and
all terms of the Arrangement Agreement, including the conditions
precedent, representations and warranties and deal protection
provisions. The Special Committee and the Board considered a number
of factors including, among others, the following:
- Significant Premium to Great Bear Shareholders
– The Consideration represents a premium of 31% and
40% to the closing price and the 20-day VWAP, respectively, of
Great Bear's shares on the TSXV as at December 7, 2021. The total equity value of the
Consideration pursuant to the Arrangement are approximately
$1.8 billion on a fully diluted basis
and $58.2 million on a partially
diluted basis, respectively (based on the closing price of Kinross
Shares on the TSX on December 8,
2021).
- Optionality for Great Bear Shareholders – The Great Bear
shareholders have the option to receive either (a) $29.00 in cash for each Great Bear share held or
(b) 3.8564 Kinross shares for each
Great Bear share held, subject to pro-ration.
- Ability to Participate in Future Potential Growth of
Combined Entity – By having the ability to elect to receive
Kinross Shares under the Arrangement, and the issuance of CVRs
under the Arrangement, Great Bear shareholders will have an
opportunity to retain exposure to the Dixie Project, while gaining
exposure to Kinross's diversified
portfolio of high-quality operating mines, sector-leading
production growth and free cash flow generation in a robust gold
price environment. Kinross has the
technical, development, operating and financial capabilities to
advance the Dixie Project, as a top growth priority, from
exploration to development, building on and further enhancing its
top tier potential.
- Benefits to Local Stakeholders – Kinross' history of strong Indigenous
community relationships and industry recognition as a leader in
sustainability and environmental stewardship, along with its
Canadian identity and headquarters in Ontario will facilitate close ties between the
Combined Company and the Dixie Project's local communities,
including the Wabauskang and Lac Seul First Nations, which will
help to maximize lasting sustainable socio-economic benefits to
their local communities and the local area.
- Business and Industry Risks – The business, operations,
assets, financial condition, operating results and prospects of
Great Bear are subject to significant uncertainty, including (but
not limited to) risks associated with Great Bear's dependency on
the Dixie Project, its only material property, for its future
operating revenue, permitting and regulatory approvals, exploration
and development risks and commodity price and inflation risks. The
Board concluded that the Consideration under the Arrangement is
more favourable to Great Bear Shareholders than continuing with
Great Bear's current business plan, including the inherent risks
associated with ownership of a single-asset mining company, after
taking into account the potential for such business plan to
generate value for Great Bear shareholders through the continued
exploration and potential development of Great Bear's Dixie Project
and Great Bear's other exploration assets.
Board Recommendation
The Board unanimously recommends that the Securityholders
vote FOR the Arrangement Resolution.
Pursuant to the Interim Order, the record date for the Meeting
is January 5, 2022 (the "Record
Date") for determining Securityholders who are entitled to
receive notice of and to vote at the Meeting. Only registered
Securityholders as of January 5,
2022, are entitled to receive the notice of the Meeting
("Notice of Meeting") and to attend and vote at the
Meeting.
In order to become effective, the Arrangement must be approved
by at least (i) 66⅔% of the votes cast by Great Bear shareholders
present or represented by proxy at the Meeting; (ii) 66⅔% of the
votes cast by Securityholders, voting together as a single class,
present or represented by proxy at the Meeting; and (iii) a
majority of the votes cast by Great Bear shareholders other than
votes attached to Great Bear shares required to be excluded under
Multilateral Instrument 61-101.
Subject to obtaining approval of the Transaction at the Meeting,
and the satisfaction of the other customary conditions to
completion of the Transaction contained in the Arrangement
Agreement, including final approval of the Court and certain
regulatory approvals, all as more particular described in the
Meeting Materials, the Transaction is expected to close in the
first quarter of 2022.
On January 5, 2022, the
Commissioner of Competition issued an Advance Ruling Certificate in
respect of the Transaction, thereby satisfying the requirement to
obtained Competition Act approval. The Toronto Stock
Exchange has conditionally approved the listing of the additional
Kinross common shares issuable in
connection with the Transaction, subject to the delivery of
customary closing documentation and the TSX Venture Exchange has
confirmed acceptance of the notice of the Transaction by Great
Bear.
Securityholder Questions
Securityholders who have questions or need assistance with
voting their Great Bear shares, Great Bear options, Great Bear RSUs
or Great Bear DSUs should contact Laurel Hill Advisory
Group by telephone at:
Laurel Hill Advisory Group
North American Toll-Free
Number: 1-877-452-7184
Outside of North America Collect Calls Number: 416-304-0211
Email: assistance@laurelhill.com
Advisors and Counsel
GenCap Mining Advisory Ltd. and CIBC World Markets Inc. are
acting as co-advisors to Great Bear, and Blake, Cassels &
Graydon LLP is acting as Great Bear's legal counsel. BMO Capital
Markets is acting as financial advisor to the Special
Committee. Cormark Securities Inc. provided capital markets
advice to Great Bear.
About Great Bear
Great Bear Resources Ltd. is a Vancouver-based gold exploration company
focused on advancing its 100% owned Dixie project in Northwestern Ontario, Canada. A
significant exploration drill program is currently underway to
define the mineralization within a large-scale, high-grade
disseminated gold discovery made in 2019, the LP Fault.
Additional exploration drilling is also in progress to expand and
infill nearby high-grade gold zones, as well as to test new
regional targets.
Great Bear is a committed partner to all stakeholders, with a
long-term vision of sustainable exploration to advance the Dixie
project in a manner that demonstrates good stewardship of land,
operational excellence and accountability.
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 relate to future events or future
performance and reflect our expectations or beliefs regarding
future events and the impacts of the ongoing and evolving COVID-19
pandemic. Forward-looking statements include, but are not limited
to statements with respect to the consummation and timing of the
Transaction; approval by Great Bear's shareholders; the
satisfaction of the conditions precedent to the Transaction; the
strengths, characteristics and potential of the Transaction; growth
potential and expectations regarding the ability to advance the
project, timing, receipt and anticipated effects of court,
regulatory and other consents and approvals; the impact of the
Transaction on local stakeholders and other anticipated benefits of
the Transaction. By their very nature, forward-looking
statements involve known and unknown risks, uncertainties and other
factors that may cause our actual results, performance or
achievements to be materially different from any future results,
performance or achievements expressed or implied by the
forward-looking statements. Such factors include, amongst others,
risks related to failure to receive approval by Great Bear
shareholders, the required court, regulatory and other consents and
approvals to effect the Transaction, the potential of a third party
making a superior proposal to the Transaction, the possibility that
the Arrangement Agreement could be terminated under certain
circumstances.
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. Such factors, among other things, include: impacts
arising from the global disruption caused by the Covid-19
coronavirus outbreak, business integration risks; fluctuations in
general macroeconomic conditions; fluctuations in securities
markets; fluctuations in spot and forward prices of gold or certain
other commodities; change in national and local government,
legislation, taxation, controls, regulations and political or
economic developments; risks and hazards associated with the
business of mineral exploration, development and mining (including
environmental hazards, industrial accidents, unusual or unexpected
formations pressures, cave-ins and flooding); discrepancies between
actual and estimated metallurgical recoveries; inability to obtain
adequate insurance to cover risks and hazards; the presence of laws
and regulations that may impose restrictions on mining; employee
relations; relationships with and claims by local communities and
indigenous populations; availability of increasing costs associated
with mining inputs and labour; the speculative nature of mineral
exploration and development (including the risks of obtaining
necessary licenses, permits and approvals from government
authorities); and title to properties.
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.
