Trillium Gold Mines Inc. (TSXV: TGM, FRA: 0702) (“Trillium”) and
Pacton Gold Inc. (TSXV: PAC, OTC: PACXF, FSE: 2NKM) (“Pacton”) are
pleased to announce that they have entered into an arrangement
agreement dated March 15, 2023 (the “Agreement”) to combine the two
companies to create the leading gold explorer and dominant
strategic land holder, over 15 projects covering over 1,260 km2 in
the prolific Red Lake Mining District of Northern Ontario (the
“Transaction”).
Under the terms of the Agreement, Trillium and
Pacton will merge on an at-market basis, with each common
shareholder of Pacton (each, a “Pacton Shareholder”) entitled to
receive 1.275 common shares of Trillium (each whole such common
share, a “Trillium Share”) in exchange for each Pacton common share
held (each, a “Pacton Share”). Upon completion of the Transaction,
existing Trillium and Pacton shareholders will own 53% and 47%,
respectively, of the combined company.
Transaction Highlights
-
Establishes dominant and strategic land position in the
prolific Red Lake Mining District: With over 1,260 km2 of
properties extending across the Red Lake Mining District, the
combined company’s property holdings will be larger than major gold
producers in the district such as Evolution Mining Limited
(“Evolution”) and Kinross Gold Corporation (“Kinross”).
-
Substantial synergies: The companies expect
material cost savings and synergies from the consolidation of
corporate overheads and exploration programs across this prolific
mineral district. Pacton’s Red Lake Gold Project is located within
20 km of Trillium’s Newman Todd Complex and the western portion of
its Confederation Belt properties. In addition, Trillium’s Leo and
Pakwash properties are located immediately south of Pacton’s Dixie
and Pakwash properties.
-
Enhanced capital markets profile: The proposed
Transaction will result in a greater combined market capitalization
and an expanded institutional investor base. Shareholders are also
expected to benefit from enhanced trading liquidity and a more
robust treasury following completion of the Transaction.
-
Proven leadership and technical team with expanded
board: The combined company’s forward leadership and
technical team represents over 150 years of exploration and
corporate development experience, with several senior geologists
each having decades of exploration expertise in the Red Lake Mining
District. The proposed Transaction will also add two experienced
directors from Pacton to Trillium’s existing board, increasing
board depth and providing continuity for Pacton Shareholders.
Russell Starr, President, CEO and
Director of Trillium, commented, “This combination
literally changes the map of the prolific Red Lake Mining District.
With the addition of Pacton’s neighbouring projects, Trillium will
become the leading strategic landholder in the region. With over
1,260 km2 of prospective ground, we will effectively increase and
diversify our opportunities, while realizing financial and
operating synergies. Being the most dominant and
strategic land holder in the jurisdiction for gold, we will also
seek to leverage the lithium and critical element opportunities
that exist throughout the combined land package.”
Nav Dhaliwal, President, CEO and
Director of Pacton, further commented, “The combination of
Trillium and Pacton represents an all too rare outcome in our
sector - real synergy. Our projects are proximal, our corporate
philosophies are consistent and cost efficiencies will be realized.
The new company shall be properly diversified and well positioned
to achieve exploration success, while putting under one roof an
extensive land position that we expect will present strategic value
to other players in the industry.”
Benefits to Trillium
Shareholders
- Increases
Trillium’s land holdings in the Red Lake Mining District by over
36,000 hectares (40% growth).
- Addition
of Pacton’s Red Lake Gold Project, which is a 28,000 hectare land
package located in the heart of the Red Lake gold camp between
Kinross’ Great Bear gold project (acquired in February 2022 from
Great Bear Resources for US$1.4 billion) and Evolution’s Red Lake
Operations.
- Leverages
the significant work completed by Pacton at the Red Lake Gold
Project, including 79 drill holes totaling 26,719 m and 1,011
surface samples. In 2022, a 15-hole drill program totaling 5,698 m
intersected multiple high-grade gold targets, including 0.5 m of
17.2 g/t Au, of which high-grade surface samples included 126.5 g/t
Au and 23.3 g/t Au. Pacton also identified a 2 km long gold-bearing
trend at the Claremont Target, which has widespread, anomalous gold
with exposed zones that are up to 60 m long and 50 m wide.
- Addition
of Pacton’s 46.7% interest in the Sidace Project pursuant to its
joint venture with Evolution. Sidace is an 8,600 hectare property
located at the northern extent of the Red Lake Greenstone Belt.
Over 80,000 m of past and recent drilling have defined three zones
of high-grade and widespread gold mineralization. In 2021, 17 of
the 18 holes drilled at Sidace intercepted gold, including 9.0 g/t
Au over 2.3 m, 1.3 g/t Au over 75.2 m, 1.5 g/t Au over 61.2 m and
20.6 g/t Au over 1.0 m.
- Pacton
has a strong existing balance sheet of cash and cash
equivalents.
Benefits to Pacton
Shareholders
- Ownership
in a larger, more diversified gold exploration company with
substantial exposure to over 89,600 hectares of prospective
properties in the Red Lake Mining District.
-
Trillium’s extensive Confederation Belt property holdings spans
over 115 km along favourable structures, which is several times
larger than Kinross’ LP Fault Zone. In addition to gold targets,
these properties have substantial potential to host significant
critical metals including copper, nickel, cobalt, lithium, zinc,
molybdenum, indium and gallium.
-
Trillium’s greater Newman Todd project hosts over 20 high-grade
zones and has a sizable historic NI 43-101 resource estimate. More
than 31,000 m of drilling over 2020 to 2022 has been completed by
Trillium, targeting high-grade veins with comparable widths to
historical drilling (>55,000 m up to 2013), on the Newman Todd
and Rivard projects, located 26 km from Evolution’s Red Lake
Operations.
- Enhanced
market capitalization in combination with research coverage, a
strong institutional and retail investor base, and greater trading
liquidity.
Transaction Procedures
The proposed merger will be completed by way of
plan of arrangement (the “Arrangement”) under the Business
Corporations Act (British Columbia) resulting in Pacton becoming a
wholly owned subsidiary of Trillium. The Transaction will require
approval of at least 66 2/3 percent of the votes cast by
shareholders of Pacton at a special meeting of shareholders
expected to be held in the second quarter of 2023 (the “Pacton
Meeting”). All of the directors and senior officers of Pacton have
entered into voting and support agreements with Trillium in support
of the Transaction.
The Arrangement will also provide for the
issuance of Trillium stock options to Pacton optionholders in
exchange for their existing Pacton options. Pacton optionholders
who do not exercise their Pacton options prior to the effective
time of the Arrangement will receive Trillium stock options to
purchase Trillium common shares, in number and at exercise prices
adjusted by the exchange ratio. Under the Arrangement, all existing
warrants of Pacton will become exercisable to acquire Trillium
common shares, in number and at exercise prices adjusted by the
exchange ratio.
The Agreement includes customary provisions
including non-solicitation provisions, a right for Trillium to
match any superior proposal, and a termination fee payable in
certain circumstances. Currently there are 79,586,665 Trillium
shares issued and outstanding. Upon closing of the Transaction
Trillium is expected to have 149,070,735 shares issued and
outstanding. Full details of the Transaction will be included in
the management information circular of Pacton describing the
matters to be considered at the Pacton Meeting, which is expected
to be mailed to the Pacton Shareholders in the second quarter 2023,
and made available on SEDAR under Pacton’s issuer profile at
www.sedar.com.
The Transaction is a result of arm’s length
negotiations between the parties and there is no finder's fee
associated with the Transaction. Financial advisors to Pacton are
expected to receive advisory fees customary of transactions of this
nature which will be described in more detail in Pacton’s
management information circular in respect of the Transaction.
Board of Directors’
Recommendations
The Board of Directors of Pacton has unanimously
approved the proposed Transaction and unanimously recommends that
Pacton Shareholders vote in favour of the proposed Transaction.
Haywood Securities Inc. has provided a fairness opinion to the
Board of Directors of Pacton stating that, as of the date hereof,
and based upon and subject to the assumptions, limitations, and
qualifications set forth therein, the consideration to be received
by Pacton Shareholders pursuant to the proposed Transaction is
fair, from a financial point of view, to the Pacton
Shareholders.
Additionally, the Board of Directors of Trillium
has unanimously approved the proposed Transaction.
Board and Management
It is intended that, upon the closing of the
Transaction, the Board of Directors of the combined company will
consist of six members, of which two members shall be selected by
Pacton and four members shall be selected by Trillium.
Qualified Persons
William Paterson, P.Geo., VP Exploration of
Trillium, is a Qualified Person as defined under National
Instrument 43-101 – Standards of Disclosure for Mineral Projects
(“NI 43-101”). Mr. Paterson has reviewed and approved the
scientific and technical information in this press release relating
solely to Trillium.
Dale Ginn, P.Geo., Executive Chairman of Pacton,
is a Qualified Person as defined under NI 43-101. Mr. Ginn has
reviewed and approved the scientific and technical information in
this press release relating solely to Pacton.
Advisors and Legal Counsel
Red Cloud Securities Inc. is acting as financial
advisor to Trillium and its Board of Directors. Fasken Martineau
DuMoulin LLP is acting as legal counsel to Trillium.
Haywood Securities Inc. is acting as financial
advisor to Pacton and its Board of Directors. Cozen O’Connor LLP is
acting as legal counsel to Pacton.
Webcast
Trillium and Pacton will host a joint webcast
tomorrow, March 17, 2023 at 1:00 p.m. Eastern Time / 10:00
a.m. Pacific Time to discuss the Transaction.
Login to the webcast:
https://redcloudfs.com/rcwebinar-tgm-3
About Trillium Gold Mines
Inc.
Trillium Gold Mines Inc. is a growth focused
company engaged in the business of acquisition, exploration and
development of mineral properties located in the Red Lake Mining
District of Northern Ontario. As part of its regional-scale
consolidation strategy, the Company has assembled one of the
largest prospective land packages in and around the Red Lake mining
district in proximity to major mines and deposits, as well as along
the Confederation Lake and Birch-Uchi greenstone belts. The Company
recently closed acquisitions effectively extending its contiguous
land position over more than 100 km of favourable structures on
trend with Kinross Gold’s Great Bear Project and Evolution Mining’s
Red Lake Operation. In addition, the Company has interests in
highly prospective properties in Larder Lake and Shining Tree,
Ontario.
Visit Trillium’s website
at www.trilliumgold.com.
About Pacton Gold Inc.
Pacton Gold is a Canadian exploration company
with key strategic partners focused on the exploration and
development of high-grade mineral resource properties in Ontario,
Canada. The Company also owns a strategic portfolio of prospective
projects in Western Australia.
Visit Pacton’s website at
www.pactongold.com.
For further information, please contact:
Trillium Gold Inc.Russell StarrPresident, CEO and
DirectorDonna YoshimatsuVP Corporate Development and Investor
RelationsTel: (416) 722-2456Email: dyoshimatsu@trilliumgold.com or
info@trilliumgold.com Website: www.trilliumgold.com |
Pacton Gold Inc.Nav DhaliwalPresident, CEO and
DirectorTel: 1-(855)-584-0258Email: info@pactongold.com Website:
www.pactongold.com |
Neither the 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 note regarding
forward-looking statements
This news release contains forward-looking
information, which involves known and unknown risks, uncertainties
and other factors that may cause actual events to differ materially
from current expectations. This news release contains
forward-looking information, which involves known and unknown
risks, uncertainties and other factors that may cause actual events
to differ materially from current expectations. Forward-looking
information includes but is not limited to, completion of the
proposed Transaction, receipt of all shareholder and court
approvals, the completion of other regulatory approvals, the
mailing of the management information circular, the completion of a
concurrent private placement and, anticipated cash balance and
anticipated cost savings following completion of the Transaction
among other things. These statements are based on each of the
management of Trillium and Pacton, respectively, reasonable
assumptions, estimates, expectations, analyses and opinions, which
are based on each 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 others, 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); 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.
Readers are cautioned not to place undue
reliance on these forward-looking statements, which speak only as
of the date of this press release. The companies disclaim any
intention or obligation, except to the extent required by law, to
update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise.
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