Apogee Minerals Ltd. (“Apogee” or
the “Company”) (TSXV: APMI) is pleased to announce
that it has entered into a non-binding letter of intent dated
January 24th, 2022 (the “LOI”) with Alto Verde
Copper Inc. (“Alto Verde”), in respect of a
proposed business combination transaction (the “Proposed
Transaction”) expected to be completed by way of three
cornered amalgamation. Pursuant to the Proposed Transaction, a
newly created wholly-owned subsidiary of the Company will
amalgamate with Alto Verde, to create a new company
(“Newco”) with Newco becoming a wholly-owned
subsidiary of the Company at closing. The Proposed Transaction will
be an Arm’s Length Transaction (as that term is defined under TSX
Venture Exchange (“TSXV”) Policy 1.1) and is
expected to constitute a “reverse takeover” of the Company pursuant
to TSXV Policy 5.2. On closing of the Proposed Transaction, it is
anticipated that the Resulting Issuer (as defined below) will
change its name to “Alto Verde Copper Inc.” (the
“Name Change”).
Background on Alto
Verde:
Alto Verde Copper Inc. is a private mining
company focused on its portfolio of prospective exploration assets
located in the Central Volcanic Zone, within the prolific Chilean
Copper belt.
Alto Verde’s portfolio includes three copper
exploration projects: Pitbull in the Tarapaca Region and Tres
Marias and Zenaida in the Antofagasta Region. Alto Verde holds a
significant land package covering an area of 16,250 hectares with
the projects situated proximal to several of the world’s largest
mines.
Alto Verde’s leadership team is comprised of
senior mining industry executives who have a wealth of technical
and capital markets experience and a strong track record of
discovering, financing, developing, and operating mining projects
on a global scale. Alto Verde is committed to sustainable and
responsible business activities in line with industry best
practices, supportive of all stakeholders, including the local
communities in which it operates.
Alto Verde was incorporated on December 16, 2020
under the Business Corporations Act (Ontario).
Pitbull, Tres Marías, and
Zenaida Projects:
All three of the Alto Verde copper projects are
located in northern Chile within the Central Volcanic Zone, home to
a majority of the country’s production of copper, with much coming
from porphyry-style deposits that are rich in copper, molybdenum,
gold and silver by-products. Notable copper miners in the region
include Antofagasta Minerals, BHP Billiton, Glencore and
Freeport-McMoRan Inc., among others. With its well-developed
sector, Chile is also known as a favourable mining jurisdiction
within South America, with a long history of strong mining laws and
support for foreign direct investment.
Pitbull is an early-stage exploration group of
concessions comprising 1,400 ha and located about 25 km north of
Anglo American & Glencore’s Collahuasi mine, which in 2019
produced more than 565 kt of fine copper with revenues of US$ 3.1
billion. The group of concessions lies within the Upper
Eocene-Lower Oligocene (Mid-Tertiary) Metallogenic Belt, a similar
geological zone to that of Collahuasi. Initial plans at the Pitbull
property include a high resolution UAV magnetometry survey over 14
km2, an Induced Polarization and Resistivity GSDAS (3D) comprising
32 linear km and covering 14 km2, a photogrammetric survey,
Magnetovariational Profiling (MVP), and a 3D Resistivity Inversion
study. Data from these studies will determine the drill hole collar
locations for a follow-on drilling campaign. The Pitbull property
will serve as the “qualifying property” of the Resulting Issuer (as
described below) and as that term is defined under TSX Policy
1.1.
Tres Marías is a prospective mid-stage
exploration group of concessions covering an area of 13,050 ha and
is located within the Paleocene-Lower Eocene Central Metallogenic
Belt at a 1,600 m elevation with year-round access in the
Antofagasta Region. There is a visible hydrothermal alteration in
the outcrops that, based on geological mapping, corresponds to
continental clastic sedimentary rocks of the Jurassic Quehuita
Formation. Freeport-McMoRan Inc. (“Freeport”)
previously completed 2,800 m of drilling in 2015 and 2018,
performed in the eastern portion of the Tres Marías property,
including 6 diamond drill holes (DDH) and 1,000 m in 2 reverse
circulation (RC) holes completed, and there remains much to be
followed up on. Highlights from these historical drill holes
include TMD-15-02 with 2.4 m of 3.10% Cu and 19 ppm Ag, and
TMRC-18-01 with 4.0 m of 4.50% Cu and 121.5 ppm Ag. Drilling also
indicated anomalous polymetallic zinc, silver, lead and copper
potential.
The Tres Marías property is subject to a
purchase option by Freeport such that upon completing US$5 million
of qualifying exploration expenditures on the Tres Marías property
within 5 years of September 23rd, 2021, Freeport shall have the
right and option to (i) acquire a 51% interest in the Tres Marías
property for US$12.5 million, or (ii) acquire a 49% interest in the
Tres Marías property for US$250,000 (collectively with (i), the
“Purchase Option”), or (iii) not acquire any
interest in the Tres Marías property. If Freeport exercises the
Purchase Option to acquire a 51% interest in the Tres Marías
property, Alto Verde will be granted a 0.5% NSR royalty over the
Tres Marías property. If Freeport exercises the Purchase Option to
acquire a 49% interest in the Tres Marías property, Freeport will
be granted a 1.0% NSR royalty over the Tres Marías property.
Freeport may also elect not to participate in the property, in
which case it will be granted a 1.0% NSR royalty over the Tres
Marías property.
Zenaida is an early-stage exploration group of
concessions comprising 1,800 ha, and is also located on the Upper
Eocene-Lower Oligocene (Mid-Tertiary) Metallogenic Belt located in
the Antofagasta Region. Although Alto Verde has no current plans
for Zenaida, preliminary results indicate the potential for
mineralization and may warrant further analysis and follow-up by
Alto Verde in the future.
The information and data referred to above,
including the drilling results, are historical in nature. A
qualified person, as defined in National Instrument 43-101 –
Standards of Disclosure for Mineral Projects, has not completed
sufficient work to independently verify the historical information
and data disclosed and neither the Company nor Alto Verde is
treating the historical data as current.
Transaction
Structure:
The Proposed Transaction is expected to be
completed by way of a three-cornered amalgamation or such other
form of business combination determined by the legal and tax
advisors to each of Apogee and Alto Verde, acting reasonably, which
will result in Alto Verde combining its corporate existence with
NewCo or otherwise becoming a wholly-owned subsidiary of Apogee
(the “Resulting Issuer”). Upon completion of the
Proposed Transaction, it is expected that the Resulting Issuer will
be a Tier 2 mining issuer and carry on the business previously
carried on by Alto Verde.
In connection with the Proposed Transaction, the
Company is expected to complete a consolidation of its share
capital on a 4.25:1 basis (the “Consolidation”).
Pursuant to the Proposed Transaction, the Company will acquire 100%
of the issued and outstanding common shares of Alto Verde on a
share exchange ratio of one common share in the authorized share
structure the Company on a post-Consolidation basis for one common
share in the capital of Alto Verde. All outstanding restricted
share units, warrants, and options to purchase Alto Verde common
shares will be exchanged, on a 1:1 post-Consolidation basis, for
restricted share units, warrants, and options to purchase common
shares, as the case may be, of the Resulting Issuer.
In addition to securities of the Resulting
Issuer to be issued upon conversion of the Subscription Receipts
(as defined below), upon closing of the Proposed Transaction, it is
expected that the Resulting Issuer will issue approximately
16,957,328 common shares (on a post-Consolidation basis) to
shareholders of Alto Verde. Additionally, it is anticipated that
1,481,668 restricted share units, 6,000,000 common share purchase
warrants and 11,729 incentive stock options of Alto Verde will be
exchanged or replaced with equivalent securities of the Resulting
Issuer.
Non-Arm's Length Parties (as defined in TSXV
Policy 1.1) of the Company own approximately 2% of the issued and
outstanding shares of Alto Verde, which shares will be exchanged
for shares representing approximately 1% of the issued and
outstanding shares of the Resulting Issuer. No Non-Arm's Length
Parties of the Company are Insiders (as defined in TSXV Policy 1.1)
of Alto Verde.
Upon completion of the Proposed Transaction, the
directors and officers of Apogee will resign, and the nominees of
Alto Verde will be appointed as the directors and officers of the
Resulting Issuer.
Completion of the Proposed Transaction will be
subject to a number of conditions precedent set forth in the LOI,
including, but not limited to: (i) satisfactory completion of due
diligence investigations by each of the Company and Alto Verde;
(ii) the negotiation and execution of a definitive agreement (the
“Definitive Agreement”) on or before March 15,
2022; (iii) approval of the shareholders of Alto Verde and the
Company; (iv) completion of the Financing (as described below); (v)
completion of the Consolidation and the Name Change; (vi) the
Company having a minimum of $1,000,000 in cash immediately prior to
closing; and (vii) receipt of all requisite regulatory (including
the TSXV) and third party approvals. There can be no assurance that
the Proposed Transaction will be completed on the terms proposed in
the LOI or at all.
Upon execution of the Definitive Agreement, the
Company will issue a subsequent press release containing the
details of the Definitive Agreement and additional terms of the
Proposed Transaction.
The Proposed Transaction will require approval
of the Company’s shareholders in accordance with the policies of
the Exchange.
Proposed Private Placement
Financing:
Alto Verde anticipates completing a private
placement financing (the “Financing”) of
subscription receipts (the “Subscription
Receipts”) at a price of not less than C$0.65 per
Subscription Receipt for gross proceeds up to C$6.0 million, to
fund the operations of the Resulting Issuer. Upon closing of the
proposed Financing, each Subscription Receipt will automatically
convert into securities of the Resulting Issuer. The final size and
terms of the Financing will be determined in the context of the
market. The proposed Financing may be completed on a non-brokered
or brokered basis. In the event that the Financing is brokered, the
agent retained by the Company may be paid customary compensation
for such agency services. The Financing is subject to TSXV
approval.
Proposed Management and
Directors:
Subject to TSXV approval, on completion of the
Proposed Transaction, the board of the Resulting Issuer will be
comprised of five directors nominated for appointment by Alto
Verde. It is expected that at closing of the Transaction, the
following Alto Verde board members and officers will be appointed
as directors and officers of the Resulting Issuer:
Rick Gittleman, Director and Chairman of the
Board
Mr. Gittleman is a mining executive with over 40
years’ experience working on mining projects across the globe. He
started as a lawyer working on mining projects in central Africa.
During his 25-year career at Akin Gump Strauss Hauer & Feld, he
managed the energy and mining practice groups of the firm and
undertook M&A and Project Finance assignments on behalf of
energy and mining clients. In 2009 he joined Freeport McMoRan as a
Senior Vice President for Africa and was part of the leadership
team that brought the Tenke Fungurume mine in the Democratic
Republic of Congo into production. He also worked at Glencore in
its copper division. He is currently the Managing Partner of RMG
Minerals, a consulting company providing advice to the mining
community.
Chris Buncic, MBA, CFA, P.Eng, President, CEO
and Director
Chris Buncic is one of the founding partners in
the formation of Alto Verde Copper Inc. Most recently, Chris was
President and CEO of Ascendant Resources Inc. (TSX: ASND) where he
and the team acquired and restored profitability to the El Mochito
mine in Honduras and greatly advanced the exploration efforts of
the Lagoa Salgada project in Portugal. Chris has served in senior
management roles at several Canadian corporations in the technology
and resources sectors. His depth of experience also includes six
years in Institutional Equity Research at leading Canadian
independent full-service brokerage firms Cormark Securities Inc.
and Mackie Research Capital Corporation. Mr. Buncic is a CFA
Charterholder, has an MBA from Schulich School of Business and
B.A.Sc. from the University of Toronto. Mr. Buncic is a member of
the Professional Engineers of Ontario and the CFA Society.
Mike Ciricillo, Director
Mr. Ciricillo is a mining executive with almost
30 years of operational and project experience, having lived and
worked on 5 continents over the span of his career. Mike began his
career in 1991 at INCO Ltd in Canada and later joined Phelps Dodge
in 1995, which was later acquired by Freeport-McMoRan. There he
served in positions of increasing responsibility in the United
States, Chile, The Netherlands, and the Democratic Republic of
Congo (“DRC”). In the DRC, Mike served as President of Freeport
McMoRan Africa and spent 5 years at Tenke Fungurume from the
construction phase into the operations phase. Mike then joined
Glencore in 2014 as Head of Copper Operations in Peru, followed by
the role of Head of Copper Smelting Operations, and eventually, he
was placed in the role as Head of Glencore’s Worldwide Copper
Assets.
Dr. Mark Cruise, Ph.D, P.Geo, Director
Dr. Cruise is an exploration and mining
professional with over of 25 years’ global experience, having
discovered, developed and operated mines in Europe, South America,
Canada and Africa. Dr. Cruise currently serves as CEO of New
Pacific Metals Corp., having previously founded Trevali Mining
where he grew the Company from an initial discovery to a global
leading zinc producer. He has held a variety of professional and
executive positions with Anglo American plc and various publicly
listed exploration and development stage companies. Dr. Cruise
holds a Bachelor of Geology and a Doctorate of Geology from the
University of Dublin, Trinity College. He is a professional member
of the Institute of Geologists and the European Federation of
Geologists.
Rich Leveille, P.Geo, Director
Mr. Leveille has a lifetime’s worth of
experience in the mining sector, having grown up in major copper
camps in the western US where his father worked for Kennecott. He
has a B.S. Geology from the University of Utah and an M.S. in
geology at the University of Alaska, Fairbanks. He worked for a
progression of companies including AMAX, Kennecott, Rio Tinto,
Phelps Dodge and Freeport-McMoRan in the US and internationally,
where he was directly involved with and/or managed teams that made
several major discoveries. His last corporate position was Sr VP
Exploration for Freeport-McMoRan, based in Phoenix. Mr. Leveille
retired in September 2017 and has devoted his time since then to
hiking, backpacking, fishing, writing, advocacy for immigrants and
geological consulting.
Paul Robertson, Chief Financial Officer
Mr. Robertson is a Chartered Accountant with
extensive experience in the mining sector, including assisting
junior resource companies with their financial reporting and
regulatory requirements. He has over sixteen years of accounting,
auditing, and tax experience including working with Ernst &
Young from 1999 to 2005. Currently, he is the managing partner of
Quantum Advisory Partners LLP, a professional services firm
dedicated to assisting publicly listed companies with their
financial reporting, taxation and regulatory requirements. He was
previously the CFO of Grayd Resource Corporation that was acquired
by Agnico Eagle in 2011. Mr. Robertson holds a BA from the
University of Western Ontario (1993) and obtained his Chartered
Accountant designation from the British Columbian Institute of
Chartered Accountants in 1997.
David Garofalo, Special Advisor to the Board of
Directors
David Garofalo, currently a Director of Alto
Verde, will remain involved as Special Advisor to the Board of
Directors of Newco. Mr. Garofalo is an accomplished mining
executive with 30 years’ experience in the creation and growth of
multi-billion-dollar mining business across multiple continents.
Mr. Garofalo has served as Chairman, President and CEO of Gold
Royalty Corp. since August 2020. Formerly, he was the President and
CEO of Goldcorp Inc., a position he held from 2016 until its sale
to Newmont Corporation in 2019. Prior to Goldcorp, he was
President, CEO and Director of Hudbay Minerals Inc, (2010-2016),
Senior Vice President, Finance and CFO and Director of Agnico-Eagle
Mines Limited (1998-2010) and Treasurer of Inmet Mining Corporation
(1990-1998). Mr. Garofalo was recognized as the Mining Person of
the Year by the Northern Miner in 2012 and was named Canada’s CFO
of the Year by Financial Executives International Canada in 2009.
He holds a B. Comm with distinction from the University of Toronto,
is a fellow of Chartered Professional Accountants (FCPA, FCA) and a
Certified Director of the Institute of Corporate Directors (ICD.D).
He is also a Director of the great Vancouver Board of Trade and the
Vancouver Symphony Orchestra.
Filing Statement and Information
Circular:
In connection with the Proposed Transaction and
pursuant to the requirements of the TSXV, the Company will file a
filing statement or a management information circular on its issuer
profile on SEDAR at www.sedar.com, which will contain details
regarding the Proposed Transaction, the Consolidation, the Name
Change, the Financing and Alto Verde.
Sponsorship:
Sponsorship of the Proposed Transaction is
required by the TSXV unless an exemption from the sponsorship
requirement is available. The parties anticipate that an exemption
from the sponsorship requirement will be available under TSXV
Policy 2.2, however in the event that such an exemption is not
available, the parties will seek a waiver of any requirement for a
sponsor. In the event that an exemption is not available and a
waiver is not obtained, the parties will update the markets
accordingly.
Trading
Halt:
Trading in the common shares of the Company is
currently halted in compliance with the policies of the TSXV. The
Company anticipates that trading will remain halted pending the
review of the Proposed Transaction by the TSXV.
Finder’s
Fees:
Subject to approval of the TSXV, in connection
with closing of the Proposed Transaction, the Company will issue up
to 917,385 common shares (on a post-Consolidation basis) to certain
arm’s length parties as a finder’s fee in connection with the
Proposed Transaction. No other finder’s fee or commission is
payable in connection with the Proposed Transaction, other than
fees and commissions that may be payable in connection with the
Financing (the final terms of which will be set out in a subsequent
news release).
Qualified Person:
The scientific and technical information in this
press release has been reviewed and approved by Scott Jobin-Bevans,
Ph.D., PMP, P.Geo., Principal Geoscientist and Managing Director at
Caracle Creek International Consulting Inc., who is an independent
consultant and Qualified Person as defined in National Instrument
43-101.
About Apogee Minerals
Ltd.:
Apogee Minerals Ltd. is a mineral exploration
company. Our goal is to build shareholder value through mineral
project acquisitions and advancement, as well as new mineral
discoveries.
To find out more about Apogee Minerals Ltd.
(TSX-V: APMI) visit the Company’s website:
www.apogeemineralsltd.com
Apogee Minerals Ltd.
“Jim
Pettit”
James PettitCEO and Director
For further information, please contact:
Apogee Minerals Ltd. Riley Trimble,
DirectorEmail: rtrimble@sentinelmarket.com Tel: (604) 416-2978
Alto Verde Copper Inc. Chris Buncic,
PresidentEmail: investors@altoverdecopper.com
Completion of the Proposed Transaction is
subject to a number of conditions, including but not limited to,
TSXV acceptance and if applicable, disinterested shareholder
approval. Where applicable, the Proposed Transaction cannot close
until the required shareholder approval is obtained. There can be
no assurance that the transaction will be completed as proposed or
at all.
Investors are cautioned that, except as
disclosed in the management information circular or filing
statement to be prepared in connection with the Proposed
Transaction, any information released or received with respect to
the Proposed Transaction may not be accurate or complete and should
not be relied upon. Trading in the securities of Apogee Minerals
Ltd. should be considered highly speculative. The TSXV has in no
way passed upon the merits of the proposed transaction and has
neither approved nor disapproved the contents of this news
release.
The TSXV has in no way passed upon the merits of
the Proposed Transaction and has neither approved nor disapproved
the contents of this news release.
Neither the TSXV nor its Regulation
Services Provider (as that term is defined in the policies of the
TSXV) accepts responsibility for the adequacy or accuracy of this
news release.
Cautionary Statements Regarding
Forward-Looking Information
This news release contains forward-looking
information within the meaning of Canadian securities laws. Such
information includes, without limitation, information regarding the
structure of the Proposed Transaction, the terms and conditions of
the Proposed Transaction, the Consolidation, the Name Change, the
terms of the Financing. the composition of the board of directors
and officers of the Resulting Issuer upon completion of the
Proposed Transaction, the intention of the parties to seek a
sponsorship exemption or waiver, the issuance of subsequent news
releases, and Alto Verde’s future exploration plans. Although the
Company believes that such information is reasonable, it can give
no assurance that such expectations will prove to be correct.
Forward looking information is typically
identified by words such as: “believe”, “expect”, “anticipate”,
“intend”, “estimate”, “postulate” and similar expressions, or are
those, which, by their nature, refer to future events. The Company
cautions investors that any forward-looking information provided by
the Company is not a guarantee of future results or performance,
and that actual results may differ materially from those in forward
looking information as a result of various factors, including, but
not limited to: the Company’s ability to complete the Proposed
Transaction; the expected timing and terms of the Proposed
Transaction and the Financing; the state of the financial markets
for the Company’s securities; the state of the natural resources
sector in the event the Proposed Transaction is completed; recent
market volatility and potentially negative capital raising
conditions resulting from the continued COVID-19 pandemic and risks
relating to the extent and duration of such pandemic and its impact
on global markets; the Company’s ability to raise the necessary
capital or to be fully able to implement its business strategies;
and other risks and factors that the Company is unaware of at this
time.
The forward-looking statements contained in this
news release are made as of the date of this news release. The
Company disclaims any intention or obligation to update or revise
any forward-looking statements, whether as a result of new
information, future events or otherwise, except as required by
law.
The securities referred to in this news
release have not been, nor will they be, registered under the
United States Securities Act of 1933, as amended, and may not be
offered or sold within the United States or to, or for the account
or benefit of, U.S. persons absent U.S. registration or an
applicable exemption from the U.S. registration
requirements.
This news release does not constitute an
offer for sale of securities, nor a solicitation for offers to buy
any securities.
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