NOT FOR DISTRIBUTION TO UNITED
STATES NEWS WIRE SERVICES OR FOR DISSEMINATION IN
THE UNITED STATES
VANCOUVER, BC, Dec. 2, 2020 /CNW/ - Serengeti Resources Inc.
(TSXV: SIR) ("Serengeti") and Sun Metals Corp. (TSXV: SUNM)
("Sun Metals") are pleased to announce that they have
entered into an agreement with PI Financial Corp. and Haywood
Securities Inc. as co-lead underwriters, on behalf of a syndicate
of underwriters (collectively, the "Underwriters"), to
increase the size of the previously announced bought deal financing
to an aggregate of 72,000,000 subscription receipts (the
"Subscription Receipts") at a price of $0.125 per Subscription Receipt (the "Issue
Price") for gross proceeds of $9,000,000 (the "Offering"). The Offering
is being conducted in connection with the previously announced
merger transaction between Serengeti and Sun Metals to create a
premier Canadian multi-asset copper-gold developer (the
"Transaction") whereby Serengeti will acquire all of the
shares of Sun Metals on the basis of 0.43 common shares of
Serengeti (on a pre-consolidation basis) for each share of Sun
Metals held (the "Exchange Ratio").
In addition, Sun Metals has granted the Underwriters an option
to purchase up to an additional 10,800,000 Subscription Receipts at
the Issue Price, for additional gross proceeds of up to
$1,350,000, exercisable in whole or
in part at any time prior to the closing date of the Offering.
The Subscription Receipts will be issued pursuant to a
subscription receipt agreement (the "Subscription Receipt
Agreement") to be entered into by Sun Metals, the Underwriters,
and a licensed Canadian trust company as subscription receipt agent
to be agreed upon. Pursuant to the Subscription Receipt Agreement,
the gross proceeds of the Offering (less 50% of the Underwriters'
cash commission and all of the Underwriters' expenses) (the
"Escrowed Funds") will be held in escrow pending
satisfaction of certain conditions, including, amongst others, (a)
the satisfaction or waiver of each of the conditions precedent to
the Transaction; and (b) the receipt of all required shareholder
and regulatory approvals in connection with the Transaction and the
Offering, including the condition approval of the TSX Venture
Exchange (the "Escrow Release Conditions"). If the Escrow
Release Conditions have not been satisfied on or prior to
March 31, 2021, the holders of
Subscription Receipts will be returned a cash amount equal to the
Issue Price of the Subscription Receipts and any interest that has
been earned on the Escrowed Funds.
Upon the satisfaction of the Escrow Release Conditions, each
Subscription Receipt will automatically convert into one unit of
Sun Metals (each a "Unit") which shall be exchanged or
adjusted into securities of Serengeti at the Exchange Ratio upon
completion of the Transaction, (on a post-Serengeti share
consolidation basis as previously announced). Each Unit will
consist of one common share of Sun Metals (each a "Common
Share") and one-half of one common share purchase warrant (each
a "Warrant"). Each Warrant will be exercisable to acquire
one common share of Sun Metals (each a "Warrant Share") for
a period of 24 months from the closing of the Offering, at an
exercise price of $0.18, subject to
acceleration in the event that the volume weighted average trading
price of the common shares of Sun Metals on the TSX Venture
Exchange is equal to or greater than $0.30 for 20 consecutive trading days, all as to
be adjusted by the Exchange Ratio upon completion of the
Transaction.
Proceeds from the issue and sale of the Subscription Receipts
will be used by Sun Metals and Serengeti to advance their
collective portfolio of copper-gold exploration and development
assets in British Columbia, and
for general working capital purposes. The closing of the Offering
is expected to occur on or around December
17, 2020.
The Subscription Receipts to be issued under the Offering will
be offered by way of a private placement in all the provinces of
Canada and in the United States on a private placement basis
pursuant to exemptions from the registration requirements of the
United States Securities Act of 1933, as amended (the "U.S.
Securities Act"). The Subscription Receipts and the Common Shares,
Warrants and Warrant Shares underlying the Subscription Receipts,
will be subject to a statutory four-month hold period in accordance
with Canadian securities legislation, or until such securities are
exchange or adjusted pursuant to the Arrangement. The Offering is
subject to approval of the TSX Venture Exchange.
This press release does not constitute an offer to sell or a
solicitation of an offer to buy the Subscription Receipts in
the United States. The
Subscription Receipts and the Common Shares, Warrants and Warrant
Shares have not been and will not be registered under the U.S.
Securities Act, or any state securities laws and may not be offered
or sold within the United States
except pursuant to an available exemption from the registration
requirements of the U.S. Securities Act and applicable state
securities laws.
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
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 and the Offering, 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; the ability to complete the Offering; 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.
SOURCE Sun Metals