Serengeti Resources Inc. (TSX-V: SIR)
(“
Serengeti”) and Sun Metals Corp. (TSX-V: SUNM)
(“
Sun Metals”) are pleased to announce that Sun
Metals has obtained an interim order from the Supreme Court of
British Columbia with respect to the previously announced proposed
plan of arrangement, pursuant to which Serengeti will acquire all
of the issued and outstanding shares of Sun Metals, on the basis of
0.215 of a post-Consolidation (as defined below) Serengeti share
for each Sun Metals share, which is 0.43 of a pre-Consolidation
Serengeti share for each Sun Metals share on a pre-Consolidation
basis (the “
Transaction”). Each company will mail
out a joint management information circular in connection with the
holding of special meetings of the securityholders of Sun Metals,
which will be held in accordance with the interim order, and
shareholders of Serengeti to approve the Transaction and related
matters. The meetings are scheduled to be held concurrently on
February 26, 2021, with the record date for Serengeti shareholders
and Sun Metals securityholders to receive notice of and vote at
each of the Serengeti meeting and Sun Metals meeting having been
set at January 15, 2021. Subject to receipt of all requisite
approvals and waiver or satisfaction of all relevant conditions,
closing of the Transaction is expected to be on or about March 4,
2021.
The Transaction will consolidate the contiguous
copper-gold exploration and development assets of Kwanika and
Stardust, both of which will benefit from operational synergies as
the projects advance with a combined development strategy, along
with the robust portfolio of British Columbia copper-gold assets
held by the companies. The combined company will be well positioned
and capitalized as a result of the recently completed $10,350,000
upsized subscription receipt financing of Sun Metals (the
“Financing”) to take advantage of a strengthening
copper market.
Upon completion of the Transaction, it is
expected that Mark O’Dea will assume the role of Executive Chairman
of Serengeti and the Serengeti board of directors will comprise
Mark O’Dea, David Moore, Lewis Lawrick, Teodora Dechev, Sean
Tetzlaff and Richard Bailes. David Moore will continue as Interim
President and Chief Executive Officer until such time as a full
time CEO is appointed, and Lauren McDougall will assume the role of
Chief Financial Officer and Ian Neill the role of Vice President
Exploration. Following the Transaction, current Sun Metals
shareholders, not including holders of Sun Metals shares issued on
conversion of the subscription receipts issued from the Financing,
will hold approximately 40% of the combined company.
Serengeti Meeting
At the Serengeti special meeting of
shareholders, shareholders will be asked to approve the
Transaction. The Transaction resolution must be approved by an
affirmative vote of a simple majority of the votes cast by
Serengeti shareholders present in person or represented by proxy at
the meeting.
In addition to approving the Transaction,
Serengeti shareholders will be asked to approve resolutions to
consolidate its common shares on a two for one basis (the
“Consolidation”) and amend and restate its stock
option plan (the “Amended Option Plan”) to, among
other things, become a rolling 10% plan. Approval by Serengeti
shareholders of these resolutions is a condition to closing the
Transaction. Disinterested Serengeti shareholders will also be
asked to approve resolutions adopting a deferred share unit plan
(the “DSU Plan”) and a restricted share unit Plan
(the “RSU Plan”). The Amended Option Plan, the DSU
Plan and the RSU Plan are all subject to approval by the TSX
Venture Exchange.
The Consolidation is anticipated to be completed
immediately prior to closing of the Transaction. In addition to
shareholder approval, the Consolidation is also subject to approval
by the TSX Venture Exchange. Following the Consolidation, the
111,003,368 outstanding shares of Serengeti will be consolidated
such that there will be approximately 55,501,684 outstanding
shares, not including any Serengeti shares to be issued pursuant to
the Transaction. Serengeti also intends to proceed with a name
change in connection with the Transaction and Consolidation, which
name change will be subject to TSX Venture Exchange approval.
Further details with respect to the name change will be provided
when available.
Further details with respect to the Transaction,
the Consolidation, and the Amended Option Plan as well as the DSU
Plan and RSU Plan will be outlined in a joint management
information circular to be circulated to Serengeti shareholders in
due course. The joint management information circular will also
include instructions on how to vote and participate at the
Serengeti meeting scheduled to be held on February 26, 2021.
Sun Metals Meeting
At the Sun Metals special meeting of
securityholders, securityholders will be asked to approve the
Transaction. The Transaction resolution must be approved by an
affirmative vote of: (i) 66⅔% of the votes cast on the resolution
by Sun Metals shareholders present in person or by proxy at the
meeting; (ii) 66⅔% of the votes cast on the resolution by Sun
Metals securityholders (voting as a single class) present in person
or by proxy at the Sun Metals meeting; and (iii) a majority of the
votes cast by Sun Metals shareholders present in person or by proxy
at the meeting excluding for this purpose votes attached to Sun
Metals shares held by certain persons as required under
Multilateral Instrument 61-101 – Protection of Minority Security
Holders in Special Transactions.
Further details with respect to the Transaction
will be outlined in a joint management information circular to be
circulated to Sun Metals securityholders in due course. The joint
management information circular will also include instructions on
how to vote and participate at the Sun Metals meeting scheduled to
be held on February 26, 2021.
Board Recommendations and Voting
Support
The Transaction has been unanimously approved by
the board of directors of both Serengeti and Sun Metals. Both
boards of directors recommend that their respective shareholders
and securityholders vote in favour of the Transaction. The
Serengeti board of directors also recommends that Serengeti
shareholders vote in favour of the Consolidation, the amendment to
the Serengeti stock option plan as well as the DSU Plan and RSU
Plan.
All of the directors and officers of Sun Metals,
holding in aggregate 14.03% of the issued and outstanding shares of
Sun Metals and 15.38% of the outstanding shares, options and
warrants of Sun Metals, have entered into customary voting support
agreements agreeing to vote in favour of the Transaction. All of
the directors and officers and several large shareholders of
Serengeti, holding in aggregate 27.32% of the issued and
outstanding shares of Serengeti, have similarly entered into
customary voting support agreements agreeing to vote in favour of
the Transaction.
This announcement is for informational purposes
only and does not constitute an offer to purchase, a solicitation
of an offer to sell any shares or a solicitation of a proxy.
About Serengeti
Serengeti is a mineral exploration company
managed by an experienced team of professionals with a solid track
record of exploration success. The Company is currently advancing
its majority-owned, advanced Kwanika copper-gold project and
exploring its extensive portfolio of properties in north-central
British Columbia. Additional information can be found on the
Company’s website at www.serengetiresources.com.
About Sun Metals
Sun Metals is advancing its 100% owned flagship,
high-grade Stardust Project located in north-central British
Columbia, Canada. Stardust is a high-grade polymetallic Carbonate
Replacement Deposit with a rich history. Sun Metals also owns the
Lorraine copper-gold project, and the OK copper-molybdenum
project.
On Behalf of the Board of Directors of
Serengeti Resources Inc.
“David W. Moore”
President, CEO & Director
On Behalf of the Board of Directors of
Sun Metals Corp.
“Steve Robertson”
President, CEO & Director
For further information, please
contact:
Serengeti Resources Inc.Tel: 604-605-1300Email:
info@serengetiresources.com |
Sun Metals Corp.Tel: 604-683-7790Email: info@sunmetals.ca |
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.
Cautionary Statement Regarding Forward
Looking Information
All statements, trend analysis and other
information contained in this press release about anticipated
future events or results constitute forward-looking statements.
Forward-looking statements are often, but not always, identified by
the use of words such as “seek”, “anticipate”, “believe”, “plan”,
“estimate”, “expect” and “intend” and statements that an event or
result “may”, “will”, “should”, “could” or “might” occur or be
achieved and other similar expressions. All statements, other than
statements of historical fact, included herein, including, without
limitation, statements regarding anticipated benefits of the
Transaction, the closing of the Transaction, the Financing, the
Consolidation, the Kwanika and Stardust (the
“Projects”), including anticipated operational
synergies between the properties, holding of a shareholder meeting
of Serengeti and securityholder meeting of Sun Metals are
forward-looking statements. Although Serengeti and Sun Metals (the
"Companies") believe that the expectations
reflected in such forward-looking statements and/or information are
reasonable, undue reliance should not be placed on forward-looking
statements since the Companies can give no assurance that such
expectations will prove to be correct. These statements involve
known and unknown risks, uncertainties and other factors that may
cause actual results or events to differ materially from those
anticipated in such forward-looking statements, including the
risks, uncertainties and other factors identified in the Companies'
periodic filings with Canadian securities regulators, and
assumptions made with regard to: the Companies' ability to complete
the proposed Transaction; the Companies' ability to secure the
necessary shareholder, securityholder, legal and regulatory
approvals required to complete the Transaction and meeting the
other conditions to the closing of the Transaction; the estimated
costs associated with the advancement of the Projects; and the
Companies' ability to achieve the synergies expected as a result of
the Transaction. Forward-looking statements are subject to business
and economic risks and uncertainties and other factors that could
cause actual results of operations to differ materially from those
contained in the forward-looking statements. Important factors that
could cause actual results to differ materially from the Companies’
expectations include risks associated with the business of
Serengeti and Sun Metals; risks related to the satisfaction or
waiver of certain conditions to the closing of the Transaction;
non-completion of the Transaction; risks related to reliance on
technical information provided by Serengeti and Sun Metals; risks
related to exploration and potential development of the Projects;
business and economic conditions in the mining industry generally;
fluctuations in commodity prices and currency exchange rates;
uncertainties relating to interpretation of drill results and the
geology, continuity and grade of mineral deposits; the need for
cooperation of government agencies and native groups in the
exploration and development of properties and the issuance of
required permits; the need to obtain additional financing to
develop properties and uncertainty as to the availability and terms
of future financing; the possibility of delay in exploration or
development programs and uncertainty of meeting anticipated program
milestones; uncertainty as to timely availability of permits and
other governmental approvals; and other risk factors as detailed
from time to time and additional risks identified in Serengeti and
Sun Metals’s filings with Canadian securities regulators on SEDAR
in Canada (available at www.sedar.com). Forward-looking statements
are based on estimates and opinions of management at the date the
statements are made. Neither Serengeti nor Sun Metals undertakes
any obligation to update forward-looking statements except as
required by applicable securities laws. Investors should not place
undue reliance on forward-looking statements.
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