Silver Predator Corp. ("Silver Predator") (TSX:SPD) and Nevgold
Resource Corp. ("Nevgold") (TSX VENTURE:NDG) are pleased to
announce that they have entered into a letter of intent (the "LOI")
whereby Silver Predator will acquire all of the outstanding
securities of Nevgold (the "Proposed Transaction"). Nathan Tewalt,
Chief Executive Officer of Nevgold, will be assuming the position
of Chief Executive Officer of Silver Predator upon completion of
the Proposed Transaction.
"I am pleased to announce this transaction," said William M.
Sheriff, Chairman of Silver Predator. "The addition of Nevgold's
silver assets to the Silver Predator portfolio, and the benefit of
the substantial experience of Nevgold's senior management, are
anticipated to propel our company forward as we continue to develop
our properties in two of the world's preeminent silver
jurisdictions."
Nathan Tewalt, Chief Executive Officer of Nevgold, stated: "By
combining Nevgold's assets with Silver Predator, we are forming a
well-capitalized Company with significant resources and upside
potential; our whole team looks forward to combining forces to
create a leading silver explorer."
About Nevgold Resource Corp.
Nevgold's exploration portfolio includes the Cornucopia
Property, located within the Cornucopia silver mining district in
Elko County, Nevada, the Copper King Property located two miles
north of the Lucky Friday silver mine in the Coeur d' Alene
District of Idaho, and the Cordero Property, located seven miles
southwest of the town of McDermitt in Humboldt County,
north-central Nevada.
Cornucopia Property
The Cornucopia Property occurs in Elko County's Cornucopia
mining district, where historic underground high grade precious
metal production started in 1873 from veins averaging approximately
24.6 oz per ton (opt) silver and 0.43 opt gold (Smith, 1976). The
property is situated approximately 15 miles (24 km) north-northwest
of Tuscarora, Nevada. Nevgold's consolidated land position covering
the Cornucopia district is comprised of a contiguous block of one
patented and 48 unpatented lode mining claims totaling
approximately 950 acres (384 ha). The property's epithermal silver
mineralization is hosted by Tertiary volcanic rocks, and has
similarities to the Midas mine (Newmont Mining Corporation) and the
Ivanhoe property (currently under development by Great Basin Gold)
located 32 miles (51 km) to the southwest. The mineralization is
associated with quartz veining, silicification and argillic
alteration. High-grade silver veins of the Leopard underground mine
occur with ruby silver, tetrahedrite, stephanite and electrum, and
display crustiform to colliform banding, and evidence of multiple
periods of vein and wall rock brecciation.
Copper King Property
The Copper King Property consists of 50 unpatented lode mining
claims covering approximately 560 acres (226.6 ha) in northern
Idaho's famous Coeur d'Alene Silver District. Nevgold's target at
Copper King is a sediment-hosted, stratabound, copper-silver system
similar to those found 100 miles (160 km) to the north in
northwestern Montana (Troy Mine type). These deposits are also
similar to the better-known examples from the copper belt of
Central Africa. The Copper King claims are situated two miles north
of Hecla's Lucky Friday Mine, one of the Coeur d'Alene District's
largest silver producers, with production of over 144 million
ounces of silver since 1942. Copper-silver mineralization occurs on
the claim block, both as veins and larger stratabound disseminated
bodies. The property has never been drilled despite productive
mining of high grade stratabound mineralization immediately to the
southeast at the Snowstorm and National Mines.
Cordero Property
The Property includes the historic Cordero underground mercury
mine adjacent to the more recently mined McDermitt open pit mercury
mine, where each mines annual production was large enough to rank
them as the largest producers of mercury in the western hemisphere
during their respective years of operation (1933-1991). The gold
and silver-gold targets identified to date in limited reverse
circulation and core drilling, include lower grade, flat-lying,
potentially bulk mineable gold mineralization starting
approximately 100 feet (30 meters) below the surface and higher
grade vein style mineralization indicated by a 5.4 foot (1.65 m)
core intercept assaying 0.15 opt gold (see Nevgold news release
dated March 8, 2010). Alteration and mineralization occurs in
Miocene-aged volcanics of bi-modal composition ranging from
rhyolites to andesites and basalts, although past mercury
production and currently identified precious metal mineralization
is typically hosted in the more felsic rhyolites. Antimony is an
important pathfinder to precious metal mineralization and local
concentrations are high enough that an antimony recovery circuit
was considered by earlier operators. Silica alteration is high
level "opalite" silica, a microcrystalline to chalcedonic/opaline
silica that occupies fault zones with considerable vertical extent,
but can also cover substantial areas as a relatively flat-lying
"cap rock". At deeper levels, quartz is locally present in some of
the fault zones. Clay/zeolite alteration includes variable
kaolinite-smectite-alunite and clinoptilolite-mordenite. Potassic
alteration, composed of quartz and adularia, is present locally.
Petrographic (SEM/EDS) work has identified pyrite, marcasite,
galena, sphalerite, tetrahedrite, arsenopyrite and small grains of
gold.
Technical information in this news release pertaining to Nevgold
has been reviewed and approved by Thomas Chadwick, PGeo, President
of Nevgold and a Qualified Person as defined by National Instrument
43-101.
About Silver Predator Corp.
Silver Predator's corporate mandate is to explore and develop
commercially viable silver resources in the leading silver
districts of Yukon, Canada and Nevada, USA. Working within stable
geopolitical jurisdictions, Silver Predator is focused on
silver-dominant bulk tonnage and/or high grade opportunities.
Proven management plus access to unparalleled geological talent in
the Yukon and extensive experience in Nevada provide the ability to
maximize shareholder value from the quality asset base. Silver
Predator owns or has interests in over 25 properties in Nevada and
Yukon, the most significant of which are the Taylor and Plata
Projects.
Taylor Project
The Taylor silver deposit is an epithermal, high-silica,
low-sulfide replacement deposit hosted by folded and faulted
Devonian carbonate rocks of the Pilot Shale, Guilamette, and Joana
formations intruded by Tertiary rhyolite dikes and sills. The
Taylor property includes a National Instrument 43-101 compliant
resource consisting of 1,123,000 tonnes of 85.71 g/t silver
measured mineral resource, and 4,712,000 tonnes of 77.83 g/t silver
indicated mineral resource totalling 14.9 million ounces contained
silver; along with an additional 1.9 million ounces silver from an
inferred mineral resource of 687,000 tonnes grading 87.1 g/t silver
using a 41.1 g/t silver cutoff grade: (Hester, 2010).
The Taylor Project includes rights to a 1,320 ton per day mill
with flotation and cyanide leach plants, water rights and
approximately 3,900 acres (1,576 ha) of mining claims located near
Ely, Nevada.
Plata Project
The Plata Project lies within the Tintina Gold Belt and displays
similar features to Canada's second-largest historical silver
producer, the Keno Hill Silver Camp, which is situated about 165 km
west of the property. From 1976 to 1984, high-grade mineralized
veins were intermittently mined from a number of shallow open pits
on the Plata property, resulting in approximately 9,020 kg (290,000
oz) of silver being extracted from approximately 2,041 tonnes of
hand-sorted mineralized rock. Silver Predator's 2011 drill program
is planned to target existing major structures in the form of
thrust faults that appear to control silver-gold-lead-zinc
mineralization on the property, and high grade silver-lead lenses
within extensional fault zones. The program will focus on exploring
a new area located between two known high-grade silver mineralized
zones (the Aho Zone), exploring the extension of known high-grade
silver mineralized veins in the Ladue Zone, and defining the
potential of lower grade, bulk tonnage mineralization at the Etzel
Zone.
The Plata property is located 190 km east of Mayo and 165 km
north of Ross River. Both communities are accessible by the Yukon
Highway system and have maintained gravel airstrips. There is also
a 110 km winter road connecting the property to the North Canol
road. The Plata property itself is located 11 km north of a gravel
airstrip and has a network of unimproved roads connecting the major
zones.
Technical information in this news release pertaining to Silver
Predator has been reviewed by Gilles Dessureau, MSc, PGeo, Senior
Geologist and a Qualified Person as defined by National Instrument
43-101.
Terms of the Proposed Transaction
Pursuant to the LOI, Silver Predator and Nevgold have agreed to
use reasonable commercial efforts to prepare a definitive
acquisition agreement (the "Pre-Arrangement Agreement") with the
following principal terms:
(a) Silver Predator will issue 0.5 of a common share of Silver Predator (a
"SPD Share") for each outstanding common share of Nevgold (the "Exchange
Ratio"), resulting in the issuance of approximately 7,059,000 SPD Shares;
and
(b) outstanding options and warrants to acquire common shares of Nevgold
(the "NDG Shares") will entitle the holders thereof on exercise to receive
SPD Shares, adjusted for the Exchange Ratio with a corresponding adjustment
to the exercise price. Notwithstanding the foregoing, holders of not less
than 585,000 presently outstanding options of Nevgold must agree to cancel
such options effective on or before the completion of the Proposed
Transaction. Nevgold presently has 710,000 stock options and 1,005,000
warrants outstanding.
Completion of the Proposed Transaction will be subject to normal
conditions for transactions of this nature, including without
limitation the following:
(a) receipt by the board of directors or special committee of Nevgold of a
fairness opinion which concludes that the Proposed Transaction is fair to
the minority shareholders of Nevgold from a financial point of view, which
opinion is acceptable to the applicable stock exchange and court for the
purposes of obtaining stock exchange and court approval to the Proposed
Transaction;
(b) the board of directors of the other party will have approved the
Proposed Transaction and the entering into of the Pre-Arrangement Agreement,
and neither of such approvals will have been withdrawn or modified;
(c) the approval of the Arrangement (as defined below) to implement the
Proposed Transaction by the security holders of Nevgold and the Supreme
Court of British Columbia;
(d) approval of the Proposed Transaction by the applicable stock exchanges
or other regulatory authorities;
(e) execution and delivery by certain shareholders of Nevgold of lock-up and
support agreements in favour of Silver Predator within 10 calendar days of
the execution of the LOI, pursuant to which such shareholders agree to vote
any shares, options or warrants of Nevgold over which they have control or
direction in favour of the Proposed Transaction; and
(f) completion of due diligence, and execution and delivery of the Pre-
Arrangement Agreement, by both Nevgold and Silver Predator no later than
November 30, 2011.
Each of Nevgold's directors and officers have entered into a
lock-up agreement with Silver Predator under which they will vote
the Nevgold shares held by them in favour of the Proposed
Transaction.
The LOI provides that the Pre-Arrangement Agreement will contain
provisions for a Break Fee (as defined below). In the event the
Proposed Transaction is not completed following the execution of
the Pre-Arrangement Agreement, other than as a result of:
(a) the termination of the Pre-Arrangement Agreement by Silver Predator;
(b) the termination of the Pre-Arrangement Agreement by Nevgold in the event
of a breach by Silver Predator of a covenant or obligation contained in the
Pre-Arrangement Agreement or in the event the parties have not completed the
Proposed Transaction on or before February 28, 2012 (provided, in each case,
that Nevgold is not in material default of any of its obligations under the
Pre-Arrangement Agreement);
(c) the inability of Nevgold to obtain the court, regulatory or security
holder approvals required for the completion of the Proposed Transaction,
provided that Nevgold has acted in good faith to obtain such approvals and
the failure to obtain such approvals is not as a result of any gross
negligence or willful misconduct of Nevgold or a result of a withdrawal or
change in Nevgold's board approval of the Proposed Transaction; and
(d) the occurrence of an event which prevents or prohibits the completion of
the Proposed Transaction on the same economic or structural terms, due to
causes beyond the control of either party, provided that such event has not
occurred as a result of any gross negligence or willful misconduct on the
part of Nevgold, then a break fee of $100,000 (the "Break Fee") will be
payable by Nevgold to Silver Predator. Nevgold may elect, subject to
regulatory approval, to pay the Break Fee in units of Nevgold ("Units") at a
price of $0.20 per Unit, each Unit consisting of one NDG Share and one-half
of one share purchase warrant, each full warrant entitling Silver Predator
to purchase a NDG Share for a period of two years from the date of issue at
a price of $0.25.
It is anticipated that the Proposed Transaction will be effected
by way of a plan of arrangement among Nevgold, the security holders
of Nevgold and Silver Predator under the Canada Business
Corporations Act (the "Arrangement"). If there are tax, securities
or corporate law considerations which favour the inclusion of an
amalgamation in the Arrangement, Silver Predator intends to use a
new formed, wholly-owned subsidiary to amalgamate with Nevgold for
the purposes of completing the Proposed Transaction. Shareholders
of Nevgold will be required to vote to approve the Proposed
Transaction and will have rights of dissent. The outstanding
options and/or warrants of Nevgold will not be included in the
Arrangement and will not be entitled to vote on the approval of the
Arrangement, unless required by the court, in which case in
addition to a separate vote of Nevgold shareholders, Nevgold will
seek to have any such options or warrants vote with the
shareholders as one class.
The terms of the Proposed Transaction will be described in
detail in the management information circular of Nevgold to be
filed with the regulatory authorities and mailed to the Nevgold
shareholders in accordance with applicable securities laws. Copies
of the Pre-Arrangement Agreement between Silver Predator and
Nevgold and certain related documents will be filed with Canadian
securities regulators and will be available on the SEDAR website at
www.sedar.com. The management information circular will also be
available on the SEDAR website at www.sedar.com.
Upon the completion of the Proposed Transaction, directors,
management and employees of Nevgold will resign, and Silver
Predator will appoint Nathan Tewalt as Chief Executive Officer and
Thomas Chadwick as VP, Exploration of Silver Predator. Silver
Predator will also nominate one representative of Nevgold,
acceptable to SPD, acting reasonably, to its board of directors
upon closing of the Proposed Transaction. Any arrangement with such
individuals will be separate from the Pre-Arrangement
Agreement.
The Proposed Transaction may be considered a "business
combination" under Multilateral Instrument 61-101. The terms
contemplate that Nathan Tewalt, the Chief Executive Officer and a
director of Nevgold, will be appointed the Chief Executive Officer
and a director of Silver Predator on closing and will have an
outstanding US$70,000 loan to Nevgold repaid by Silver Predator on
or shortly following the closing. In addition, Thomas Chadwick, the
President and a director of Nevgold, will be appointed as VP
Exploration of Silver Predator on closing. The terms and amounts of
any compensation to be paid to Nathan Tewalt and Thomas Chadwick as
officers of Silver Predator have yet to be finalized. As a result
of these arrangements, Nathan Tewalt and Thomas Chadwick may be
considered to be receiving a "collateral benefit" as defined in
Multilateral Instrument 61-101. As a result, the votes attaching to
the NGD Shares beneficially owned, or over which control or
direction is exercised, by Nathan Tewalt (2,191,500 NGD Shares) and
Thomas Chadwick (780,000 NGD Shares) in the aggregate amount of
2,971,500 NGD Shares, will be excluded in determining whether
minority approval of the shareholder resolution approving the
Proposed Transaction has been obtained.
It is anticipated that the Proposed Transaction will be
completed by January 30, 2012, but if the Proposed Transaction is
not completed on or before February 28, 2012, either party may
terminate the LOI, provided that the party seeking to terminate the
LOI is not in material default of any of its obligations
thereunder. While the LOI is in force, and subject to the right of
Nevgold, or its board of directors, to take such actions as may be
required by their obligations under applicable corporate laws,
Nevgold has agreed to not, directly or indirectly, solicit,
discuss, encourage or accept any offer for the purchase (including
by merger) of Nevgold, or any of its business or assets, or for the
issuance of any additional securities of Nevgold. Notwithstanding
the foregoing, the board of directors of Nevgold may respond to, in
accordance with applicable law or in discharge of its fiduciary
duties, any unsolicited offer or proposal received from a third
party, which the board of directors of Nevgold determines in good
faith (after consultation with its financial advisors, if any, and
with its outside legal counsel) would, if consummated in accordance
with its terms, result in a transaction that is more favourable to
the shareholders of Nevgold from a financial point of view than the
Proposed Transaction contemplated by the LOI (a "Superior
Proposal"). Nevgold shall immediately advise Silver Predator of the
existence and terms of any such offer or proposal and provide
copies thereof immediately upon receipt thereof by Nevgold. If,
within three business days of receipt of copies of such offer or
proposal, Silver Predator agrees to amend the terms of the LOI such
that the Proposed Transaction is no less favourable to the
shareholders of Nevgold from a financial point of view than the
Superior Proposal, in the opinion of the board of directors of
Nevgold, acting in good faith, then Nevgold shall not enter into
any agreement regarding the Superior Proposal.
Bridge Loan
Pursuant to the LOI, Silver Predator has agreed to advance to
Nevgold a convertible bridge loan, for the purposes of paying
Nevgold's day-to-day expenses and Nevgold's expenses related to the
Proposed Transaction, in the maximum amount of $225,000, as
follows:
(a) $50,000 upon acceptance of the LOI by Nevgold;
(b) $100,000 upon execution and delivery of the Pre-Arrangement Agreement by
both parties; and
(c) $75,000 upon the mailing to shareholders of Nevgold the information
circular describing the Proposed Transaction.
In the event the Proposed Transaction does not close as and when
provided for in the LOI or in the Pre-Arrangement Agreement, the
amount of the bridge loan will be fully repaid on demand by Silver
Predator or, at the option of Nevgold and subject to regulatory
approval, converted into Units on the same terms as described
above.
None of the securities anticipated to be issued under 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 such securities are anticipated to be issued
in the United States pursuant to exemptions from such registration
requirements. This press release shall not constitute an offer to
sell or solicitation of an offer to buy any securities in any
jurisdiction where such an offer or sale would be unlawful.
Information Concerning Mineralization and Resources
Unless otherwise indicated, all resource estimates contained in
this news release have been prepared in accordance with National
Instrument 43-101 in compliance with Canadian securities laws,
which differ from the requirements of United States securities
laws. Without limiting the foregoing, this news release uses the
terms "measured resources", "indicated resources" and "inferred
resources". United States investors are advised that, while such
terms are recognized and required by Canadian securities laws, the
United States Securities and Exchange Commission ("SEC") does not
recognize them. Under United States standards, mineralization may
not be classified as a "reserve" unless the determination has been
made that the mineralization could be economically and legally
produced or extracted at the time the reserve determination is
made. United States investors are cautioned not to assume that all
or any part of measured or indicated resources will ever be
converted into reserves. Further, inferred resources have a great
amount of uncertainty as to their existence and as to whether they
can be mined legally or economically. It cannot be assumed that all
or any part of the inferred resources will ever be upgraded to a
higher category. Therefore, United States investors are also
cautioned not to assume that all or any part of the inferred
resources exist, or that they can be mined legally or economically.
Disclosure of contained ounces is permitted disclosure under
Canadian regulations; however, the SEC normally only permits
issuers to report resources as in place tonnage and grade without
reference to unit measures. Accordingly, information concerning
descriptions of mineralization and resources contained in this news
release may not be comparable to information made public by United
States companies subject to the reporting and disclosure
requirements of the SEC.
Forward-Looking Statements
This news release contains certain forward-looking information
and statements with the meaning of applicable Canadian and United
States securities laws. The use of any of the words "expect",
"anticipate", "continue", "estimate", "objective", "confident",
"might", "proposed" and similar expressions are intended to
identify forward-looking information or statements. In particular,
but without limiting the foregoing, this news release contains
forward-looking information and statements pertaining to the
Proposed Transaction and the proposed terms and timing thereof,
exploration, development and production of properties, including
the proposed timing and success thereof, and expected
mineralization and mineral resources.
The forward-looking information and statements included in this
news release are not guarantees of future performance and should
not be unduly relied upon. Forward-looking statements are based on
current expectations, estimates and projections that involve a
number of risks and uncertainties, which could cause actual results
to differ materially from those anticipated and described in the
forward-looking statements. Such information and 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 information or statements.
These include, but are not limited to, risks associated with
fluctuations in the market price of the Silver Predator or
Nevgold's common shares, commodity price and exchange rate
fluctuations and uncertainties and risks relating to the outcome of
the Proposed Transaction on the market price, marketability and
liquidity of Silver Predator or Nevgold's common shares risks
associated with exploration, development and production and other
risks and uncertainties described herein and in the disclosure
documents of Silver Predator and Nevgold filed on the SEDAR website
at www.sedar.com. All forward-looking statements are based on
various assumptions including, without limitation, the presence of
and continuity of minerals and metals at a project at modeled
grades, the availability of equipment, exchange rates and the
continued availability of financing. Although management considers
these assumptions to be reasonable based on information currently
available to it, they may prove to be incorrect.
The forgoing list of assumptions, risks and uncertainties is not
exhaustive. The forward-looking information and statements
contained in this news release speak only as of the date of this
news release, and Silver Predator and Nevgold assume no obligation
to update publicly or revise any forward-looking information or
statements, whether as a result of new information, future events
or otherwise, unless so required by applicable securities laws.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture) accepts responsibility for the adequacy or accuracy of
this release.
Contacts: Nevgold Resource Corp. Nathan A. Tewalt Chief
Executive Officer (604)
899-1551ntewalt1@charter.netwww.nevgoldcorp.com Contacts: Silver
Predator Corp. William M. Sheriff Chairman & CEO (604)
648-4653info@silverpredator.comwww.silverpredator.com
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