Share exchange transaction will result in Seabridge
shareholders gaining exposure to SnipGold’s significant resource at
its Iskut project while shareholders of SnipGold receive an
immediate 124% premium and exposure to Seabridge’s KSM project, one
of the largest undeveloped copper-gold projects in the world. Both
projects are located in the Golden Triangle area of B.C.,
Canada.
Seabridge Gold Inc. (TSX:SEA) (NYSE:SA)
("Seabridge") and
SnipGold Corp. (TSX-V:SGG)
("SnipGold") are pleased to announce that they have entered into a
definitive agreement dated April 18, 2016 (the "Arrangement
Agreement") pursuant to which Seabridge has agreed to acquire all
of the issued and outstanding common shares of SnipGold (the
"SnipGold Shares") by way of a statutory Plan of Arrangement under
the Business Corporations Act (British Columbia) (the
"Arrangement").
Rudi Fronk, Seabridge's CEO and Chairman, said:
"The board of directors of Seabridge believes the proposed
transaction will enhance our exploration potential in an area where
our technical team has built up significant expertise. This
proposal also meets our transaction test of immediately increasing
our gold resource ownership per share. Our KSM Project has
geological similarities to SnipGold’s Iskut Project and the two
properties are near enough to each other to offer synergies in
terms of personnel and infrastructure.
“This business combination offers SnipGold
shareholders the opportunity to maximize the potential value of
their Iskut property by accessing the technical and financial
resources needed to explore, engineer and permit their project.
SnipGold shareholders will also benefit from Seabridge’s more
senior exchange listings and greater liquidity. In our view, the
proposal offers shareholders of the combined company the potential
for enhanced capital appreciation with exposure to a larger asset
base in B.C.’s prolific Golden Triangle."
Patrick Soares Chairman of SnipGold said:
“SnipGold’s Board of Directors believes that our loyal shareholder
base will benefit from this combination of companies. We are
pleased by the premium that shareholders are receiving from
Seabridge, which we think is in recognition of not only the
exploration efforts of SnipGold management, but the underlying
value of SnipGold’s property. Seabridge has the ability to
fund the project going forward with minimal dilution to its
shareholder base.”
John Zbeetnoff, President and CEO of SnipGold
said: “I am pleased the SnipGold project will pass to a mid-tier
company that has the funding capacity to build upon our technical
efforts that advanced the understanding of the area. Our
project offers Seabridge excellent high grade gold and bulk tonnage
resource expansion and discovery potential at several drill ready
targets.
“I want to thank the employees and consultants
of SnipGold for the loyalty and sacrifice they have shown the
company during the last few difficult years. I also want to
thank our shareholders and Board of Directors, for their
support. As well, I thank the BC Ministry of Mines, the
Ministry of Environment and the Tahltan First Nation for working
collaboratively with SnipGold management through the years.
Without the patience and faith entrusted in management by
stakeholders, we would not have been able to advance the company to
this stage.”
Particulars of the
Transaction
Pursuant to the Arrangement Agreement, holders
of SnipGold Shares will be entitled to receive 1/63rd of a common
share of Seabridge in exchange for 1 SnipGold Share held (the
"Exchange Ratio"), representing an implied offer price of CDN$0.291
per SnipGold share, a premium of 124% based on yesterday’s closing
prices for both companies on the TSX/TSX.V and a premium of 115%
based on the trailing 30-day volume weighted average trading price
of SnipGold and Seabridge shares on the TSX/TSX.V, calculated from
the date of the Arrangement Agreement. Based on the foregoing, the
Arrangement represents total consideration to SnipGold shareholders
of CDN$9.9 million.
In connection with the Arrangement,
approximately 600,000 Seabridge shares are expected to be issued to
existing SnipGold shareholders (not including shares which might be
issued on exercise of convertible securities), which would result
in SnipGold shareholders owning approximately 1.14% of the combined
company (based on the Exchange Ratio and the number of issued and
outstanding SnipGold Shares and Seabridge shares as of the date of
the Arrangement Agreement).
To be effective, the Arrangement will require
approval by a majority of at least 66⅔% of the votes cast by
SnipGold Shareholders at a special meeting expected to take place
in June, 2016 (the "SnipGold Meeting"). The board of directors of
SnipGold has unanimously approved the Arrangement and recommends
that SnipGold shareholders vote in favour of the Arrangement. The
SnipGold board of directors acted in accordance with the
recommendation of its independent special committee (the "SnipGold
Special Committee") which received advice from Primary Capital Inc.
("Primary Capital"), its independent financial advisor.
All directors and officers of SnipGold, who hold
approximately 24% of the issued and outstanding SnipGold Shares,
have entered into voting and support agreements with Seabridge in
support of the Arrangement.
The Arrangement Agreement includes covenants
typical of transactions of this nature, including with respect to
non-solicitation, a right granted to Seabridge to match superior
proposals for SnipGold and a provision entitling SnipGold to a
fiduciary-out under certain conditions. In addition, SnipGold has
agreed to pay a termination fee to Seabridge upon the occurrence of
certain events.
In connection with the Arrangement, Seabridge
will provide SnipGold with interim debt financing of up to
$400,000, to be repaid 90 days following the termination of the
Arrangement Agreement, should termination occur.
Full details of the Arrangement will be included
in a management information circular of SnipGold describing the
matters to be considered at the SnipGold Meeting, which circular is
expected to be mailed to SnipGold shareholders May 2016 and made
available on SEDAR under the issuer profile of SnipGold at
www.sedar.com. It is anticipated that the transaction will close in
the second quarter of 2016.
About SnipGold Corp.
SnipGold Corp. (formerly Skyline Gold
Corporation) is a Canadian exploration company focused on
exploration in the Golden Triangle Area of northwestern B.C.
SnipGold's primary asset is a contiguous block of ground in excess
of 286 sq km in size which has been consolidated through a series
of transactions that began in 2005. The consolidated land package
has undergone intermittent exploration with the majority of the
work carried out in the late 1980s and early 1990s. This early work
was undertaken by over 30 independent operators and their efforts
have highlighted numerous targets which have seen little to no
follow up work in the past 20 years.
SnipGold completed a resource estimate for the
Bronson Slope Porphyry Deposit on its Iskut property in a
preliminary economic assessment completed in 2010 in accordance
with NI 43-101, summarized as follows:
|
Grade |
Contained Metal |
MineralCategory |
Tonnes(Millions) |
Au g/t |
Cu % |
Ag g/t |
Mag-netite % |
Au
Oz(Millions) |
Cu
lbs(Millions) |
Ag
Oz(Millions) |
MagTonnes(Millions) |
Measured |
84.15 |
0.42 |
0.151 |
2.22 |
5.9 |
1.14 |
280.1 |
6.01 |
4.96 |
Indicated |
102.74 |
0.31 |
0.098 |
2.17 |
4.8 |
1.02 |
222.0 |
7.16 |
4.93 |
*M + Ind |
186.89 |
0.36 |
0.122 |
2.19 |
5.3 |
2.16 |
502.7 |
13.17 |
9.91 |
Inferred |
4.94 |
0.32 |
0.074 |
2.19 |
3.7 |
0.05 |
8.1 |
0.35 |
0.18 |
|
*Burgoyne, Al, 2012. Technical Report on the
Iskut Property, p 109
SnipGold’s property contains two main target
types:
- High-grade precious metal mineralization, with drill ready
targets at McFadden, Snip-Bronson Trend, Johnny Flats and
Gorge. The property hosts numerous other attractive
exploration high grade targets.
- Bulk tonnage gold-copper porphyries, with resource expansion
potential at Bronson Slope deposit and resource definition at the
partially drill defined Snip North Iskut porphyry. Several
other porphyry targets exist on the property.
For additional information see:
www.snipgoldcorp.com
Qualified Persons
The technical information contained in this news
release has been reviewed and approved for Seabridge by William
Threlkeld, a Qualified Person as defined by NI 43-101 and for
SnipGold by John Zbeetnoff, P.Geo, the Chief Executive Officer of
SnipGold Corp and a Qualified Person under NI 43-101.
Advisors
Bennett Jones LLP has acted as legal counsel to
Seabridge and DuMoulin Black LLP has acted as legal counsel to
SnipGold. Canaccord Genuity Corp. has acted as the exclusive
financial advisor to Seabridge. In connection with this
transaction, the SnipGold board of directors formed a Special
Committee comprised of the independent, disinterested directors to
evaluate the transaction. Primary Capital has acted as the
exclusive financial advisor to the SnipGold Special Committee.
Primary Capital has provided an oral opinion to the SnipGold
Special Committee that, based upon and subject to the assumptions,
limitations and qualifications in the opinion, the consideration
being offered by Seabridge is fair, from a financial point of view,
to the shareholders of SnipGold. SnipGold expects to receive a
written opinion from Primary Capital prior to mailing the
management information circular to SnipGold Shareholders.
About Seabridge Gold Inc.
Seabridge's principal assets are the 100% owned
KSM property located near Stewart, British Columbia, Canada and the
100% owned Courageous Lake gold project located in Canada's
Northwest Territories. For a breakdown of Seabridge's mineral
resources by project and resource category please visit the
Company's website at www.seabridgegold.net
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.
Forward-Looking Information Disclaimer
This release contains certain “forward-looking
information” under applicable Canadian securities laws concerning
the events and transactions contemplated by the Arrangement
Agreement. Forward-looking information reflects Seabridge’s
and SnipGold’s current internal expectations or beliefs and are
based on information currently available to the two
companies. In some cases forward-looking information can be
identified by terminology such as “may”, “will”, “should”,
“expect”, “intend”, “plan”, “anticipate”, “believe”, “estimate”,
”projects”, “potential”, “scheduled”, “forecast”, “budget” or the
negative of those terms or other comparable terminology.
Assumptions upon which such forward-looking information is based
include, among others, that the conditions to closing of the
Arrangement will be satisfied, that the transactions contemplated
by the Arrangement Agreement will be completed on the terms set out
the Arrangement Agreement, that all required regulatory, security
holder, court and governmental approvals will be obtained on a
timely basis, and that the business prospects and opportunities of
each of the companies will proceed as anticipated. Many of
these assumptions are based on factors and events that are not
within the control of Seabridge and SnipGold, and there is no
assurance they will prove to be correct or accurate. Risk factors
that could cause actual results to differ materially from those
predicted herein include, without limitation: that the Arrangement
will not be completed at all or on the terms less favourable to one
party or the other, that required regulatory, security holder or
court approvals will not be obtained and that the business
prospects and opportunities of each of the companies will not
proceed as anticipated. In addition, there are risks and
hazards associated with the business of mineral exploration,
development and mining, including environmental hazards, industrial
accidents, unusual or unexpected formations, pressures, cave-ins
and flooding (and the risk of inadequate insurance or inability to
obtain insurance to cover these risks), as well as the risks
disclosed by Seabridge and SnipGold in their respective filings on
SEDAR at www.sedar.com. Forward-looking information is not a
guarantee of future performance and actual results and future
events could differ materially from those discussed in any such
forward-looking information. All of the forward-looking
information contained in this news release is qualified by these
cautionary statements. Readers cannot be assured that actual
results will be consistent with such statements. The
Arrangement may not be completed on the terms described above, or
at all. Accordingly, readers are cautioned against placing
undue reliance on any of the forward-looking information contained
herein. Seabridge and SnipGold each expressly disclaims any
intention or obligation to update or revise any forward-looking
information in this news release, whether as a result of new
information, events or otherwise, except as required by applicable
securities laws.
For further information please contact:
Rudi P. Fronk, Chairman and CEO
Seabridge Gold Inc.
Tel: (416) 367-9292 • Fax: (416) 367-2711
Email: info@seabridgegold.net
John Zbeetnoff, President and CEO
SnipGold Corp.
Tel: (604) 681-3989 • Fax: (604) 681-3557
Email: info@snipgoldcorp.com
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