1246779 B.C. Ltd. and Western Alaska Copper & Gold Company Announce Letter of Intent for Reverse Takeover Transaction
Calgary, Alberta--(Newsfile Corp. - May 25, 2021) - 1246779 B.C. Ltd.("779" or the "Company") and Western Alaska Copper & Gold Company ("WAC&G") are pleased to announce that they have entered into an arm's length non-binding letter of intentdated April 12, 2021 (the "Letter of Intent") in respect of a proposed business combination (the "Proposed Transaction") that would result in the reverse takeover of 779 by WAC&G and the listing of the resulting entity (the "Resulting Issuer") on the TSX Venture Exchange (the "Exchange"). Following the completion of the Proposed Transaction, WAC&G will become a wholly-owned subsidiary of the Resulting Issuer, which will hold all of the assets and continue the business of WAC&G.
WAC&G was incorporated under the laws of the State of Alaska and currently has approximately 2,361share of common stock (the "WAC&G Shares") issued and outstanding and outstanding options to acquire an additional 222WAC&G Shares. It is anticipated that WAC&G will complete a non-brokered private placement prior to completion of the Proposed Private Placement (the "Pre-RTO Financing") in May, 2021 of approximately 606 WAC&G Shares, at a price of C$5,714.29 (US$4,500) per WAC&G Share, for aggregate gross proceeds of approximately C$3,462,857.14 (US$2,727,000), based upon a foreign exchange ratio of 0.7875 US dollars for every Canadian dollar. Following the completion of the Pre-RTO Financing, it is anticipated that WAC&G will have approximately 3,189 WAC&G Shares issued and outstanding on a fully diluted basis.
WAC&G owns the rights in and to the assets and claims in the Illinois Creek Project (the "Project") which is comprised of the Illinois Creek claim block, the Round Top claim block and the Honker claim block, totaling 222 State of Alaska mining claims and covering 35,520 acres (14,374 ha), or 55.5 square miles. The Project is 100% owned by WAC&G.
BD Resource Consulting, Inc. has prepared a technical report in respect of the Project dated effective January 15, 2021, which report is compliant with National Instrument 43-101 - Standards of Disclosure for Mineral Projects (the "NI 43-101 Report").
About the Project
The Illinois Creek claim block is one of three properties controlled by WAC&G in the Illinois Creek mining district located in western Alaska near the Yukon River. WAC&G is a private exploration company registered in Alaska and, since 2010, it has been exploring and advancing its interests in the district. Exploration of the properties began in the early 1980's by Anaconda Minerals Co., then by Echo Bay, USMS/Dakota Mining and NovaGold. The Illinois Creek Mine was permitted by USMX in 1996 and started production as a run-of-mine heap leach open pit mine in 1997. It closed soon after due to low gold prices and was reclaimed in 2002.
Illinois Creek is an advanced stage project with drilling, geophysical and geochemical surveys by several past operators. Extensive drilling, at total of 578 diamond and reverse circulation drill holes, at the Illinois Creek Property has targeted the oxidized gossans and, to a far lesser extent, the Waterpump Creek carbonate replacement deposit (CRD) and Last Hurrah CRD. Only minimal exploration has targeted the remainder of the Property, and the potential to find additional mineralized zones is considered by WAC&G to be very good.
Table 6.7 from the 43-101 Report summarizes the mineral resource delineation and exploration drill campaigns on the Property between 1980 and 2006 conducted by the previous operators of the Property.
Drill Campaigns 1980-2006 at Illinois Creek
The 43-101 Report indicates the following:
Mineral Resource Estimate for Combined
In-Situ and Leach Pad Mineral Resources
|Average Grade||Contained Metal|
In-Situ Mineral resources are stated as contained within a pit shell developed using a metal prices of US$1,600/oz Au and US$20/oz Ag, mining costs of US$2.50/t, processing costs of US$10/t, G&A cost of US$4.00/t, 92% metallurgical recovery Au, 65% metallurgical recovery Ag and an average pit slope of 45 degrees. The cut-off grade for resources considered amenable to open pit extraction methods is 0.35 g/t AuEq. It is assumed that the entire volume of the material on the leach pad will be processed and therefore, no selectivity is possible, and the Leach Pad Mineral Resources are presented at a zero-cut-off grade.
The technical information in this news release has been prepared and approved by Bruce Davis, BD Resource Consulting, Inc., Larkspur, Colorado and Robert Sim, SIM Geological Inc., Vancouver, B.C. and Jack DiMarchi, Core Geoscience and Deepak Mulhotra, Pro Solve LLC, Denver , Colorado., two of the authors of the NI 43-101 Technical Report prepared in respect of the Project by BD Resource Consulting, Inc. and dated effective January 15, 2021 (the "NI 43-101 Report"), and each a qualified person within the meaning of National Instrument 43-101 - Standards of Disclosure for Mineral Projects (the "QPs"). Such QPs have no beneficial interest in WAC&G or the Project and are not insiders, associates, or affiliates of WAC&G. The results of the Technical Report were not dependent on any prior agreements concerning the conclusions of the Technical Report, and there are no undisclosed understandings concerning future business dealings between WAC&G and the QPs. The authors of the Technical Report were paid a fee for their work in accordance with normal professional consulting practices. The Technical Report noted that Piek Exploration had conducted two 5% data verification checks of the assay and collar databases. In both instances, only two errors in the assay values were encountered and those appeared to be transcription errors. The QPs randomly selected the sample data from 15 drill holes, representing about 4% of the data using in the estimate of in-situ mineral resources. The grades in these holes were compared to those contained in the certified assay certificates provided by the laboratories. In this suite of 818 individual samples, there were four errors found in the gold data and three errors in the silver data. These results are similar to those achieved during previous database audits. The sample data from an additional four drill holes from the leach pad area were randomly selected, and the assay results were compared to the values contained in the assay certificates. There were no errors identified. The QPs believe the database meets industry standards for data quality and data integrity and that sample preparation, security, and analytical procedures are adequate to support a mineral resource estimation.
Summary of Proposed Transaction and Concurrent Financing
The Letter of Intent provides that 779 and WAC&G will negotiate and enter into a definitive agreement in respect of the Proposed Transaction (the "Definitive Agreement") as soon as possible. The Proposed Transaction is expected to be completed by way of a merger of WAC&G and a wholly-owned subsidiary of 779 ("SubCo"), pursuant to a Plan of Merger in accordance with the Alaska Corporations Code, or such other alternative structure to be determined, having regard to relevant tax, securities and other factors, which will result in WAC&G becoming a wholly owned subsidiary of 779.
In connection with the Proposed Transaction, 779 will amend and restate its Notice of Articles (the "Article Amendment") to create two classes of shares, common shares of 779 (the "779 Common Shares") and proportional voting shares of 779 ("779 Proportional Voting Shares"), which will convertible subject to certain conditions, into 779 Common Shares on the basis of approximately one hundred (100) 779 Common Shares for each 779 Proportional Voting Share (depending on their status as U.S. residents). The shareholders of WAC&G will receive either 779 Common Shares or 779 Proportional Voting Shares in exchange for their WAC&G Shares, resulting in a reverse takeover of 779 by WAC&G. Entering into of the Definitive Agreement is conditional upon 779 and WAC&G each being satisfied with the results of full financial, business, legal, environmental, labour and other due diligence investigations in respect of the other party.
For the purposes of the Proposed Transaction, each outstanding share of WAC&G held by a non-US resident shall be exchanged for approximately ten thousand (10,000) 779 Common Shares and each outstanding share of WAC&G held by a US resident shall be exchanged for approximately one hundred (100) 779 Proportional Voting Shares. In addition, all outstanding WAC&G options will be exchanged for options of 779 on the basis of approximately ten thousand (10,000) options of 779 for each WAC&G option.
Prior to the completion of the Proposed Transaction, 779 shall consolidate, as required, the 3,075,000 779 Shares which will be outstanding at that point in time (the "779 Consolidation") based upon a ratio to be determined immediately prior to the closing of the Proposed Transaction so that the current holders of 779 Shares shall hold, in the aggregate, such number of 779 Common Shares that, when multiplied by the offering price of the Concurrent Financing (as defined below), are equal to no less than C$1,132,500 (the "779 Share Value"). In the event that the offering price of the Concurrent Financing is greater than $0.75 per share, then the 779 Share Value shall be increased proportionately. In addition, in connection with the Proposed Transaction, 779 will change its name to "Western Alaska Copper & Gold Company" or such other name as may be determined by 779 and WAC&G.
Certain common shares of the Resulting Issuer to be issued pursuant to the Proposed Transaction are expected to be subject to restrictions on resale or escrow under the policies of the Exchange, including the securities to be issued to "Principals" (as defined under Exchange policies), which will subject to the escrow requirements of the Exchange.
The Proposed Transaction is subject to, among other things, the negotiation and execution of the Definitive Agreement, each of 779 and WAC&G being satisfied with the results of its due diligence review of the other party, completion of the Concurrent Financing for aggregate gross proceeds of not less than C$2,000,000 and that such Concurrent Financing meets the listing requirements of the Exchange, WAC&G owning all of the rights and interests in and to the Project, the Resulting Issuer meeting the requirements of the Exchange for a Tier 1 mining issuer and the Exchange issuing conditional acceptance, such only to customary conditions of closing, for the listing of the Resulting Issuer Shares, that the Resulting Issuer will be a "foreign private issuer" under US securities laws, and each of the parties obtaining all necessary board, shareholder and regulatory approvals, including the conditional approval of the Exchange, and other standard closing conditions. The Proposed Transaction will be subject to the approval of the 779 shareholders, which 779 anticipates it will obtain by way of unanimous written consent resolutions. The terms and conditions of the Proposed Transaction may change based on 779's due diligence (which will be limited as the 779 intends to rely upon the due diligence conducted by the Exchange and the agents involved with the Concurrent Financing) and the receipt of tax, corporate and securities law advice for both 779 and WAC&G.
On completion of the Proposed Transaction, the Resulting Issuer is expected to qualify as a Tier 1 mining issuer on the Exchange.
779 intends to complete a non-brokeredprivate placement offering (the "Concurrent Financing")of subscription receipt (the "Subscription Receipts") for aggregate gross proceeds of not less than C$2,000,000 at an offering price to be determined. In connection with the completion of the Proposed Transaction, each Subscription Receipt shall automatically convert, with no further action on behalf of the holder, into a Resulting Issuer Share. The net proceeds of the Private Placement will be placed into escrow and released to the Resulting Issuer, subject to the satisfaction of a number of conditions including that all conditions precedent to the closing of the Proposed Transaction shall be satisfied or waived.
WAC&G intends to use the net proceeds of the Concurrent Financing to fund the exploration of the Project, pay for expenses of the Concurrent Financing and Proposed Transaction, and for general working capital purposes.
The securities to be offered in the Proposed Transaction and Concurrent Financing have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act") or any U.S. state securities laws, and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. Persons (as defined in Rule 902(k) of Regulation S under the U.S. Securities Act) or persons in the United States, absent registration or applicable exemptions from the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws. This news release shall not constitute an offer to sell or the solicitation of an offer to buy securities in the United States, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.
Proposed Directors and Officers
It is anticipated that all of the current directors and officers of 779 will resign from their respective positions with 779 in connection with the closing of the Proposed Transaction. The board and management of the Resulting Issuer shall be comprised of five (5) WAC&G nominees, and is expected to include a board comprised of Christopher Marrs, Gregory Anderson, Nathan Brewer, Kevin Nishi and David Smallhouse. Management is expected to include Christopher Marrs as Chief Executive Officer, Alex Tong as Chief Financial Officer, Catalin KiloFliski as Corporate Development Officer and Joe Piekenbrock as Chief Exploration Officer. The following are brief descriptions of the currently proposed directors and officers of the Resulting Issuer:
Christopher Marrs, Proposed Chief Executive Officer and Director
Mr. Marrshas served as the Corporation's President since its inception in 2010 and has more than 40 years' experience as an Economic Geologist. Mr. Marrs was a project geologist for Anaconda, based in Anchorage, Alaska and managed the Illinois Creek and Round Top Projects in the 1980's along with numerous other projects throughout Alaska. Mr. Marrs was also previously a consulting geologist for Noranda Mining and LAC Minerals in Sonora Mexico. Mr. Marrs has a B.S. in Geology and a M.S. in Economic and Structural Geology from the University of Arizona and is a member of the Society of Economic Geologists, Alaska Miners Association and Arizona Geological Society. Mr. Marrs has also served on the University of Arizona Geoscience Department Advisory Board since 2005.
Nathan Brewer, Proposed Director
Mr. Brewerhas more than 40 years' experience as an exploration geologist. He has worked for several major mining companies in over 20 countries worldwide including Anaconda, Echo Bay, Lac Minerals, Barrick, Homestake and Gold Fields. His career started in Alaska (including 3 years as the Project Manager at Illinois Creek). Before retiring in 2018 from Gold Fields, he was Senior Vice President, Global Greenfields Exploration. During his career he lead two important South American projects from grass roots discovery through resource delineation, PEA, and Pre-Feasibility and Feasibility stages. Both of these deposits have since become profitable mines. Mr. Brewer holds a BA in Geology from UC Santa Barbara and is a Certified Professional Geologist. He is the current President of the Denver Regional Exploration Geologists' Society (DREGS).
David Smallhouse, Proposed Director
Mr. Smallhouseis a fifth generation Tucsonan, graduated from the University of California at Davis with a Bachelor of Science Degree in Agricultural Economics and holds a Master of Science Degree in Agricultural Economics from the University of Arizona. Mr. Smallhouse is currently Managing Partner of Miramar Ventures, LLC, a firm involved in agribusiness, real estate, private equity and venture capital investments. Miramar Ventures is also an active investor in angel and early stage ventures. Its portfolio includes bio-life sciences, drug development, software, clean tech, and medical device companies, many with close ties to the University of Arizona and/or the Desert Angels of Southern Arizona. Additionally, he is a partner in Arch Partners, LLC, an active seed venture investment company, a Tucson board member of BBVA Compass Bank, Playability Toys, Dependable Health Services. and I.Me.Mine Digital. Current Civic Activities include; Trustee of Salpointe Catholic High School, Director of the University of Arizona's Tech Launch Arizona, Board Member of the National Law Center for Inter American Trade, Executive Board Member of Sun Corridor, Inc., Board Member of Start Up Tucson, Board Member of the Arizona Sonora Desert Museum and a Member of the Eller College National Board of Advisors.
Gregory Anderson, Proposed Director
Mr. Andersonis an attorney whose practice focuses on business organization, strategy and commercial transactions. Mr. Anderson received his B.A. from the University of Wisconsin, his J.D. from the University of Arizona and has had his own law practice since 1984. Mr. Anderson is also manager of a family office which invests in real estate, startups and early-stage ventures.
Kevin Nishi, Proposed Director
Mr. Nishi is a Chartered Professional Accountant and holds a Bachelor of Business Administration degree from Simon Fraser University. He has held several director positions with exploration stage mining companies. Mr. Nishi is a partner with Smythe LLP working with several public companies listed on the TSX and TSX Venture exchanges in Canada and in the United States.
Alex Tong, Proposed Chief Financial Officer and Corporate Secretary
Mr. Tong is a Chartered Professional Accountant with extensive senior management experience in the mining industry, prior to serving as Chief Financial Officer of several publicly traded companies, he was Director of Finance at Lucara Diamond Corp. Mr. Tong also held senior finance roles at development resource public companies Energy Metals and NovaGold, where Mr Tong was responsible for achieving operational performance, leading mergers and acquisitions and being involved with various financing initiatives.
Alex is currently co-founder of Calibre Capital Corp., a full-service merchant bank providing financial services, leading stock exchange listings and managing all aspects of businesses for its clients to achieve commercial success.
Catalin Kilofliski, Proposed Corporate Development Officer
Mr. Kilofliski is Former CEO of Canarc Resources, Director of Business Development with Aurcana Corp., Director Business Development for Selwyn Resources and Director Corporate Development for Tudor Gold with over 25 years of senior leadership roles, including business development, capital raising, company building, marketing, communications, corporate governance and sustainability in Canada, US, Mexico, Europe and Asia. He has extensive expertise in mining and capital markets. Most recently he was instrumental in growing TSX.V listed Tudor Gold Corp from $30 million to over $500 million in market cap. with over 25 years of senior company management
Joe Piekenbrock, Proposed Chief Exploration Officer
Mr. Piekenbrockbrings over 35 years of experience to the mining exploration and development industry where he has managed all aspects of exploration from grassroots discovery through feasibility. From 2003 to 2011, he served as Vice President, Exploration, for NovaGold Resources and more recently served as Senior Vice President of Exploration for NovaCopper. He had extensive experience throughout Latin America while working for Placer Dome and was one of the founding members of Brett Resources. Earlier in his career, he was a member of the Cominco Alaska exploration team responsible for the discovery of the Whistler Cu deposit, the Sleitat Sn deposit, the Shotgun Au deposit and the giant Pebble Cu/Au deposit. After joining the Nova group of companies in 2003, he was instrumental in leading a series of major discoveries including the Donlin Creek Au deposit, the Bornite Cu and the Galore Creek Cu/Au porphyry deposit in Alaska and British Columbia. He was awarded the Thayer Lindsley medal for International Discovery in 2009 for his role in the discovery of the Donlin Creek deposit and the Colin Spence award for International Discovery in 2015 for his contributions to the discovery of South Reef deposit at Bornite. Mr. Piekenbrock holds a Bachelor of Arts degree in geology from the University of Colorado, and a Master of Science degree in economic geology from the University of Arizona.
Principals or Insiders of the Resulting Issuer
In addition to the forgoing proposed directors and officers, the following are the person that are expected to qualify as Principals and Insiders (as those terms are defined in the Exchange policy) of the Resulting Issuer:
|Joan Marrs||Anticipated to hold in excess of 10% of the Resulting Issuer Shares|
Selected Financial Information
The following table sets out selected financial information with respect to WAC&G as at the dates noted. The selected financial information is derived from WAC&G's audited consolidated financial statements for the periods described and denominated in US dollars.
December 31, 2018
December 31, 2019
|As at December 31, 2020|
|Net Profits / Losses||(87,276)||(158,063)||(165,131)|
Further financial information will be included in the listing application to be prepared in connection with the Proposed Transaction.
Exchange Matters and Sponsorship
As at the date hereof, neither the 779 Shares nor the WAC&G Shares are listed on any stock exchange. A condition to completion of the Proposed Transaction is the conditional approval for the listing of the Resulting Issuer Shares on the Exchange. A listing application in respect of the Resulting Issuer Shares, which will include further details of the Proposed Transaction, will be filed on 779's issuer profile on SEDAR at www.sedar.com provided the Exchange's conditional approval of the listing of the Resulting Issuer Shares has been obtained. There can be no assurance that the Exchange will grant such conditional approval or that the Proposed Transaction will be completed as proposed or at all. The Proposed Transaction is not a "Non-Arm's Length Qualifying Transactions" (within the meaning of Exchange policies).
768 intends to apply to the TSXV for an exemption from the sponsorship requirements for the Transactions based upon the Private Placement and/or other exemptions available in TSXV policies.
Sponsorship of a reverse take-over transaction is required by the Exchange unless exempt in accordance with Exchange policies. WAC&G intends to apply for an exemption from the sponsorship requirements based upon the Pre-RTO Private Placement and the Concurrent Financing and/or other exemptions available in the Exchange policies. There is no assurance that WAC&G will ultimately obtain an exemption from sponsorship.
Additional information concerning the Proposed Transaction, 779, WAC&G and the Resulting Issuer will be provided in subsequent news releases and in 779's listing application to be filed in connection with the Proposed Transaction, which will be available under 779's SEDAR profile at www.sedar.com.
None of the securities to be issued pursuant to the Proposed Transaction have been or will be registered under the United States Securities Act of 1933, as amended, or any state securities laws, and any securities issued pursuant to the Proposed Transaction are anticipated to be issued in reliance upon available exemptions from such registration requirements. This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities.
779 is a company formed pursuant to the laws of British Columbia and is a reporting issuer in the Provinces of Alberta and British Columbia. 779 currently has issued and outstanding 3,000,000 779 Shares and 75,000 incentive stock options to acquire 75,000 779 Shares at a price of $0.10 per share which options shall be exercised prior to completion of the Proposed Transaction.
For further information:
1246779 B.C. Ltd.
James Ward, Director
Phone: (416) 897-2359
Western Alaska Copper & Gold Company
Kit Marrs, President
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Exchange) accepts responsibility for the adequacy or accuracy of this release.
Completion of the Proposed Transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and obtaining all required shareholder approvals. There can be no assurance that the Proposed Transaction will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the listing application 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.
The Exchange has in no way passed upon the merits of the Proposed Transaction and has neither approved nor disapproved the contents of this press release.
All information contained in this news release with respect to 779, WAC&G, and the Resulting Issuer was supplied by the parties, respectively, for inclusion herein, and 779 and its directors and officers have relied on WAC&G for any information concerning such party.
This news release contains "forward-looking information" and "forward-looking statements" (collectively, "forward-looking statements") within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as "expects", or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "budget", "scheduled", "forecasts", "estimates", "believes" or "intends" or variations of such words and phrases or stating that certain actions, events or results "may" or "could", "would" , "might " or "will" be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements. In this news release, forward-looking statements relate, among other things, to: the terms and conditions of the Proposed Transaction, the Pre-RTO Private Placement, the Concurrent Financing, the 779 Consolidation, the exchange ratios for the WAC&G Shares in connection with the Proposed Transaction, the anticipated term of the 779 Proportional Voting Shares, the business and operations of 779, WAC&G and the Resulting Issuer, go-forward directors and management of the Resulting Issuer, the use of proceeds from the Concurrent Financing, the trading of the Resulting Issuer Shares, and the receipt of director, shareholder and regulatory approvals. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: general business, economic, competitive, political and social uncertainties; and the delay or failure to receive board, shareholder, court or regulatory approvals. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this news release. Except as required by law, 779 and WAC&G assume no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change, except as required by law. The terms and conditions of the Proposed Transaction may change based on 779's due diligence (which will be limited as the 779 intends to rely upon the due diligence conducted by the agents in connection with the Concurrent Financing) and the receipt of tax, corporate and securities law advice for both 779 and WAC&G. The statements in this press release are made as of the date of this release.
Not for distribution to U.S. Newswire Services or for dissemination in the United States. Any failure to comply with this restriction may constitute a violation of U.S. Securities laws.
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/85178
News Provided by Newsfile Corp.