Crown Minerals Inc. ("Crown") (TSX VENTURE: CWM) and Gold Summit
Corporation ("Gold Summit") (TSX VENTURE: GSM) are pleased to
announce that they have reached an agreement in principle to
combine the two companies on the basis that one (1) Gold Summit
share will be exchanged for one and sixty-five hundredths (1.65)
Crown shares. Based on the share exchange ratio, the Crown and Gold
Summit shareholders will own approximately 58% and 42%,
respectively, of the combined common shares outstanding.
GSM currently explores primarily in Nevada for high grade gold
and gold/silver deposits that would support underground, low cash
cost operations. GSM has recently filed new NI 43-101 compliant
technical reports announced resources at the Monte Cristo and
Sugarloaf Peak (Tip Top) properties and holds part of four more
Tertiary epithermal vein districts, all with drill ready targets
defined by surface work. All GSM properties have potentially
economic gold and or silver grades in outcrops or discovery drill
holes. The inventory of Gold Summit's properties includes four
other gold prospects in Nevada and two in the Kenora mining
district of Ontario. All GSM properties have potentially economic
gold and or silver grades in outcrops or discovery drill holes.
Crown has recently optioned five different gold exploration
properties in Ontario including its Mackenzie Island prospect in
Red Lake, its Whitney prospect in Timmins and the old Stairs mine
near Matachewan. Crown has also recently purchased a property
beside Trelawney's property in Chester Township near Timmins,
Ontario. In addition, Crown owns two nickel/copper prospects near
Timmins and a gold prospect near Silver Peak, Nevada.
"We are very excited about the synergies between these two
companies. They both have properties in Nevada and in Ontario - two
famous gold-mining areas. The combination of Crown and Gold Summit
will create a larger, stronger company with mutually complementary
assets and management teams. The new company will be better
positioned to develop and expand the tremendous upside potential of
the Monte Cristo gold project, which is the primary asset of Gold
Summit," said Dr. Anthony P. Taylor, Gold Summits' CEO. "We see
this combination as a logical development in our strategy for
growth. With the technical and management resources of both
companies, the combined company will have increased flexibility in
how it proceeds with the continued exploration and development of
the larger portfolio of assets of the combined company."
Stephen Dunn, President & CEO of Crown said: "This merger
delivers value to the shareholders of both companies. The
"all-share" transaction gives Gold Summit shareholders an immediate
premium with continued participation in their current resource base
while offering them participation in the exploration upside of a
larger portfolio of quality exploration assets in Ontario and
Nevada. It allows Crown shareholders to more quickly transition
from an exploration company to a company with a near-term
production scenario and still participate in the exploration upside
of the combined assets of the two companies. Crown will also
benefit from the highly experienced and successful mining team that
Gold Summit will bring to the table. The combined companies' land
positions in two of the top gold producing regions in the world
should also create a higher profile company within the financial
community."
The Board of Directors of both companies are recommending that
their respective shareholders vote in favour of the transaction and
the creation of a new aggressive gold focused company.
Currently, Crown has approximately 33.6 million common shares
issued and outstanding while Gold Summit has approximately 14.8
million common shares issued and outstanding. Under the terms of
the proposed business combination, Crown and Gold Summit
shareholders, respectively, would own approximately 58% and 42% of
the shares outstanding on completion of the transaction.
The board of directors of the company resulting from the
business combination will consist of six directors with three
nominees from Crown and three nominees from Gold Summit. Dr.
Anthony P. Taylor, currently Chief Executive Officer of Gold
Summit, will become Chairman of the combined company and Stephen
Dunn, currently President & CEO of Crown, will retain the same
role of the combined company.
Crown and Gold Summit have entered into a letter agreement in
respect of the business combination transaction. Completion of the
transaction is subject to usual terms and conditions for such a
transaction, including completion of due diligence, completion and
execution of definitive business combination documentation, receipt
of all required regulatory and security holder approvals and no
material adverse changes occurring in the financial condition of
either company.
Crown and Gold Summit have agreed to the following: prior to the
completion of the business combination neither company will issue
any further securities or amend the terms of any issued and
outstanding securities without the consent of the other, and both
companies have agreed to conduct business only in the ordinary
course. They also agreed to exclusivity and non-solicitation
provisions subject to an exception for superior proposals. The
definitive transaction documentation will provide that in certain
circumstances where one party decides not to complete the business
combination, it will pay the other party an expense reimbursement
payment equal to the greater of $100,000 or the other party's
professional costs incurred in connection with the transaction. In
the event that the proposed transaction is terminated and Gold
Summit completes an alternative business combination, Gold Summit
will pay Crown a fee in accordance with TSXV policies. The
structure of the business combination will be determined by the two
companies in consultation with their professional advisors.
Forward-looking Statements
This news release contains certain forward-looking information
as defined in applicable securities laws (referred to herein as
"forward-looking statements"). Often, but not always,
forward-looking statements can be identified by the use of words
such as "plans", "expects", "is expected", "budget", "scheduled",
"estimates", "continues", "forecasts", "projects", "predicts",
"intends", "anticipates" or "believes", or variations of, or the
negatives of, such words and phrases, or statements that certain
actions, events or results "may", "could", "would", "should",
"might" or "will" be taken, occur or be achieved. Specifically,
this press release includes forward-looking statements regarding
the intended business combination of Gold Summit and Crown. These
forward-looking statements reflect the current internal
projections, expectations or beliefs of Gold Summit and Crown,
based on information currently available to them. Forward-looking
statements are subject to a number of risks and uncertainties,
including those detailed from time to time in filings made by Gold
Summit and Crown with securities regulatory authorities, that may
cause actual outcomes to differ materially from those discussed in
the forward-looking statements. The completion of the proposed
business combination is subject to a number of risks, including,
without limitation, the shareholders of Gold Summit and Crown not
approving the transaction or required regulatory or court approvals
not being obtained. Even if the business combination does complete,
which cannot be guaranteed, anticipated synergies and efficiencies
or other intended benefits of the transaction may not be realized,
and the prospects of the combined entity will remain subject to all
the general risks associated with mineral exploration and public
securities markets.
This news release includes certain "forward looking statements"
within the meaning of the United States Private Securities
Litigation Reform Act of 1995. Without limitation, statements
regarding potential mineralization and resources and reserves,
exploration results, and future plans and objectives of the Company
are forward looking statements that involve various degrees of
risk. The following are important factors that could cause the
Company's actual results to differ materially from those expressed
or implied by such forward looking statements: changes in the world
wide price of mineral commodities, general market conditions, risks
inherent in mineral exploration, risks associated with development,
construction and mining operations, the uncertainty of future
profitability and the uncertainty of access to additional
capital.
Neither 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 release.
Contacts: Crown Minerals Inc. Stephen Dunn President and CEO
416-822-3343 416-364-5400 (FAX) sd@crownmin.com www.crownmin.com
Gold Summit Corporation Dr. Anthony P. Taylor CEO 775-284-7200
775-284-7202 (FAX) ttaylor@goldsummitcorp.com
www.goldsummitcorp.com
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