Tawsho Mining Inc. and Rockcliff Resources Inc. Enter Into Letter
of Intent Regarding Proposed Merger, Rockcliff Amends Terms of
Financing
TORONTO, ONTARIO--(Marketwired - Dec 9, 2013) - Rockcliff
Resources Inc. ("Rockcliff") (TSX-VENTURE:RCR) and Tawsho Mining
Inc. (TSX-VENTURE:TAW) ("Tawsho") are pleased to announce that they
have entered into a letter of intent (the "LOI") which sets out the
principal terms upon which it is proposed that the two corporations
will complete a business combination (the "Merger"). The Merger
will be effected on a share for share basis such that each nine (9)
issued and outstanding securities of Rockcliff will be exchanged
for five (5) securities of Tawsho. At the conclusion of the Merger,
the existing Tawsho shareholders will hold approximately 69.72% of
the outstanding shares of the combined entity ("MergeCo") and the
existing shareholders of Rockcliff will hold approximately 30.28%
of the outstanding shares of MergeCo. It is anticipated that
MergeCo will continue to be named "Tawsho Mining Inc." and will
continue to be listed on the TSX Venture Exchange ("TSXV").
Currently Rockcliff has 22,868,903 common shares issued and
outstanding and Tawsho has 29,251,849 common shares issued and
outstanding. MergeCo will have 41,956,795 common shares issued and
outstanding before giving effect to the Rockcliff Financing
referred to below. As part of the Merger, Zoran Arandjelovic,
Chairman of Tawsho, (as to $300,000) and Steve Balch, President
& C.E.O. of Tawsho, (as to $60,000) have agreed to subscribe
for a total of $360,000 of the Rockcliff Financing on the terms set
out below.
Reasons for the Merger
Rockcliff President and C.E.O., Ken Lapierre stated "The Board
and Management of Rockcliff unanimously support the planned merger
between our two Companies. The MergeCo will have an outstanding
technical and financial team in place which will perfectly augment
an excellent property portfolio centered on its high grade copper
deposits in Manitoba and gold deposits in Quebec. MergeCo will now
have the financial capability to systematically advance these
deposits so that their true mine potential can be realized.
Obviously, the market has not been kind to juniors over the last
number of years and MergeCo will be vigilant of its finances while
advancing its priority properties moving forward. We strongly
recommend to our shareholders to support this Merger as it will
provide long term survival and growth of the properties we have
worked so hard at advancing." The share exchange ratio represents a
25% premium to the closing price of Rockcliff common shares on
December 5, 2013.
Steve Balch, President and C.E.O. of Tawsho stated "Tawsho is
enthusiastic about expanding its resource focus, currently
comprised of its gold resource in Quebec and its graphite property
in Newfoundland, to include the high grade copper deposits of
Rockcliff. Tawsho shareholders will benefit from the significant
enhancements made by Rockcliff management to the Rockcliff copper
properties in Manitoba. Presently, two copper deposits host
approximately 150,000,000 pounds of high grade copper in the
indicated resource category and over 55,000,000 pounds in the
inferred resource category with significant credits in gold, zinc
and silver. Both deposits are open in all directions and
significant high grade tonnage could be added to the present
resources with additional drilling. MergeCo will have a solid base
of precious and base metal resources and access to capital that
will ensure its continued viability."
Rockcliff Financing
Rockcliff wishes to announce that it will be undertaking a
non-brokered flow-through unit private placement and a non-brokered
working capital unit private placement to raise aggregate proceeds
of up to $650,000 (the "Rockcliff Financing") to provide it with
additional operating and exploration capital. The offering
announced on November 11, 2013 has been amended to provide for up
to 2,500,000 flow-through units of Rockcliff at a price of $0.06
per flow-through unit, for gross proceeds of up to $150,000, and up
to 10,000,000 working capital units of Rockcliff at a price of
$0.05 per working capital unit, for gross proceeds of up to
$650,000.
Each flow-through unit (a "FT Unit") consists of one
flow-through common share of Rockcliff priced at $0.06 and one (1)
non flow-through share purchase warrant (a "Warrant"). Each Warrant
entitles the holder to acquire an additional common share at a
price of $0.075 until twenty-four (24) months from the closing of
the Rockcliff Financing.
Each working capital unit (a "WC Unit") consists of one common
share of Rockcliff priced at $0.05 and one (1) share purchase
warrant (a "WC Warrant"). Each WC Warrant entitles the holder to
acquire an additional common share at a price of $0.075 until
twenty-four (24) months from the closing of the Rockcliff
Financing.
Rockcliff will pay finder's fees of 10% cash and issue
Compensation Options equal to 10% of the number of WC Units or FT
Units placed by any eligible finders. Each Compensation Option will
entitle the finder to acquire one common share for twenty-four (24)
months from the closing of the Rockcliff Financing at $0.05 per
common share.
If the Rockcliff Financing is fully subscribed, the existing
Tawsho shareholders will hold approximately 59.82% of the
outstanding shares of MergeCo and the existing shareholders of
Rockcliff, including in the investors in the Rockcliff Financing,
will hold approximately 40.18% of the outstanding shares of
MergeCo. MergeCo will then have 48,901,240 common shares issued and
outstanding.
If the Rockcliff Financing is fully subscribed, Zoran
Arandjelovic will hold 16.96% of Rockcliff on an undiluted basis
and Steve Balch will hold 3.39% of Rockcliff on an undiluted basis.
The WC Warrants to be issued to Mr. Arandjelovic will be restricted
such that Mr. Arandjelovic will not be able to exercise the WC
Warrants if such exercise could result in Mr. Arandjelovic holding
20% or more of the issued and outstanding capital of Rockcliff
without obtaining approval of the shareholders of Rockcliff to the
change of control. If the Merger is completed, the restriction will
be removed.
Structure of the Merger
It is anticipated that the Merger will be effected by way of a
three-cornered amalgamation under the Business Corporations Act
(Ontario) (the "OBCA"), pursuant to which Rockcliff (a corporation
formed under the OBCA) will amalgamate with a newly-incorporated,
wholly owned OBCA formed subsidiary of Tawsho, to be become a
wholly-owned subsidiary of Tawsho.
Under the terms of the Merger:
- all of the common shares of Rockcliff (the "Rockcliff Shares")
outstanding will be exchanged for common shares of Tawsho (the
"Tawsho Shares") at the ratio of nine (9) Rockclifff Shares for
five (5) Tawsho Shares (the "Exchange Ratio");
- the warrants and options of Rockcliff issued and outstanding at
the date of the Merger will be converted into warrants and options
of Tawsho at the Exchange Ratio and the exercise prices of the
warrants and options will be adjusted by a factor of 9/5;
- Tawsho shall continue with its listing on the TSXV.
- Tawsho shall appoint four (4) directors to MergeCo and
Rockcliff shall appoint two (2) directors to MergeCo.
- The President and C.E.O. of Tawsho, Steven Balch, will become
the President and Chief Executive Officer of MergeCo and the
President and C.E.O. of Rockcliff, Ken Lapierre, will become the
Chief Operating Officer of MergeCo. Zoran Arandjelovic, Chairman of
the Board of Tawsho, will become the Chairman of the Board of
MergeCo.
Rockcliff and Tawsho shall cooperate in structuring the Merger,
which may vary from the foregoing structure on the basis of tax,
securities, corporate law and other advice in order to ensure the
most efficient and cost effective structure for each of the parties
and their respective security holders.
Completion of the Merger is subject to a number of conditions,
including, but not limited to, confirmatory due diligence, the
negotiation and execution of a definitive agreement, the receipt of
all required regulatory approvals, including the approval of the
TSXV, and approval of the shareholders of Rockcliff and Tawsho.
The Merger will be submitted to the shareholders of Rockcliff
(the "Rockcliff Shareholders") for consideration and approval by
special resolution at a special meeting to be convened by Rockcliff
(the "Rockcliff Meeting"). The Merger will be submitted to the
shareholders of Tawsho (the "Tawsho Shareholders") for
consideration and approval by an ordinary resolution of the
majority of the minority shareholders of Tawsho at a special
meeting to be convened by Tawsho (the "Tawsho Meeting"). The
Rockcliff Meeting and the Tawsho Meeting shall be held as soon as
possible following the completion, to the satisfaction of Rockcliff
and Tawsho, of all due diligence investigations and execution of
definitive documentation.
Each party will pay its own costs and expenses (including all
legal, accounting and financial advisory fees and expenses) in
connection with the Merger, including expenses related to the
preparation, execution and delivery of the LOI, a definitive
agreement and such other required documents.
In addition, the parties have agreed that either party may
terminate the Merger as a result of such party completing an
alternative transaction, including but not limited to a merger,
amalgamation, share exchange, business combination, take-over bid,
sale or other disposition of material assets, recapitalization,
reorganization, liquidation, sale or issuance of a material number
of treasury securities (except upon the due exercise of convertible
securities outstanding on the date of this news release) or rights
or interests therein or thereto or rights or options to acquire any
material number of treasury securities or any type of similar
transaction involving it or any of its subsidiaries other than with
the other party to the LOI, such party enters into a letter of
intent or definitive written agreement with respect to a Superior
Proposal, or if such party is subject to a take-over bid initiated
by a third party.
Rockcliff Resources Inc.
Rockcliff Resources Inc. is a Canadian resource exploration
company focused on discovery and advancement of its high-quality
mineral properties at its Snow Lake Project. Rockcliff presently
controls the Snow Lake Project in Manitoba, totalling in excess of
400 km2. The project includes two VMS high grade copper rich
National Instrument 43-101 ("NI 43-101") Resources (Rail and T-1
Copper Deposits), one historic VMS copper deposit (Lon), the T-2
Copper Zone (Tower), numerous untested geophysical anomalies and
several additional properties with VMS potential. Rockcliff also
owns a zinc-silver rich NI 43-101 Resource (Shihan) in Ontario.
Rockcliff's two principle assets are the high grade T-1 Copper
Deposit mineral resource at the Tower Property and the Rail Deposit
at the Rail Property.
Tower
Property
Mineral Resource Statement, T-1 Copper Deposit, Manitoba, by
Caracle Creek International Consulting Inc., dated December 2,
2012:
Resource
Category |
Tonnes |
Cu (%) |
Zn (%) |
Ag (g/t) |
Au (g/t) |
Contained Pounds-Cu |
|
|
|
|
|
|
|
Indicated |
1,084,186 |
3.73 |
1.05 |
17.28 |
0.55 |
88,968,303 |
Inferred |
1,253,522 |
2.00 |
1.02 |
9.78 |
0.27 |
55,154,968 |
|
|
|
|
|
|
|
Notes:
- CIM definitions were followed for the estimation of mineral
resources.
- Mineral resources are estimated at a Cu cut-off of 0.5%.
- Cut-off grade was based on a copper price of US$3.63 per
pound.
- Given the tonnage, grade and orientation of the deposit,
Caracle Creek considers the T-1 Copper Deposit to be reasonably
amenable to extraction using underground mining methods.
- Specific Gravity measurements were taken on a portion of the
samples and where actual measurements were not available an average
of 3.00 was used.
- Mineral resources are not mineral reserves and do not have
demonstrated economic viability.
- The report entitled "Independent Technical Report, Tower
Property, Grand Rapids, Manitoba" dated January 20, 2013 was
prepared by Zsuzsanna Magyarosi, Julie Selway, Jason Baker and
Julie Palich, independent qualified persons under NI 43-101, for
Caracle Creek International Consulting Inc. (Caracle Creek) and is
available at www.sedar.com.
Pursuant to an exploration and option agreement with Pure Nickel
Inc., to earn a 70% interest in the property, Rockcliff must pay
$150,000 in incremental payments and is required to incur aggregate
exploration expenditures totalling $4,000,000.
Rockcliff has recently exercised the option to earn its 50%
interest by spending $2,000,000 on exploration expenditures and
paying $90,000 to Pure Nickel Inc. A 50/50 Joint venture has now
been formed. Rockcliff can now earn an additional 20% in the
property by spending an additional $2,000,000 (approximately
$1,900,000 of which has been spent to date) in exploration
expenditures and paying a total of $60,000 to Pure Nickel ($30,000
has been paid to date) by March of 2014. Once completed, Rockcliff
will control a 70% interest in the property. An underlying 2% NSR
on the property is held by Xstrata Nickel, of which half can be
purchased for $1,000,000.
Rail Deposit
The report entitled "Mineral Resource Evaluation, Rail
Polymetallic Sulphide Deposit, Snow Lake, Manitoba", dated December
19, 2010 (the "Rail Deposit Report"), was prepared by Sébastien
Bernier, M. Sc., P.Geo, and Dominic Chartier, P.Geo., qualified
persons under NI 43-101, on behalf of SRK Consulting (Canada) Inc.
and is available at ww.sedar.com.
The Mineral Resource Statement prepared by SRK for the Rail
Deposit is detailed below.
The Mineral Resource Statement for the Rail Deposit is reported
at a cut-off grade of 2.0 percent copper. The statement includes
metal grade for copper, zinc, gold and silver but not lead because
this metal is present at near detection limits. The Mineral
Resource Statement for the Rail Deposit is summarized in Table
i.
Table i: Mineral Resource Statement*, Rail Polymetallic
Sulphide Deposit, Manitoba |
SRK Consulting, November 4, 2010 |
|
Resource Category |
|
Grade |
|
Quantity (tonnes) |
Cu (%) |
Zn (%) |
Au (g/t) |
Ag (g/t) |
Contained Cu (pounds) |
Indicated |
822,000 |
3.04 |
0.90 |
0.66 |
9.25 |
55,090,000 |
Inferred |
- |
- |
- |
- |
- |
- |
* Reported at a cut-off grade of 2.0 percent copper. Cut-off
grade is based on copper price of US$3.00 per pound and a
metallurgical recovery of eighty percent, without considering
revenues from other metals. All figures rounded to reflect the
relative accuracy of the estimates. Mineral resources are not
mineral reserves and do not have demonstrated economic
viability. |
The mineral resources are reported at a cut-off grade of 2.0 per
cent copper to reflect "the reasonable prospects" for economic
extraction. SRK considers the Rail Deposit to be amenable to
extraction using underground mining methods. The Mineral Resources
Statement for the Rail Deposit presented in Table i are not mineral
reserves and do not have demonstrated economic viability. There is
no certainty that all or any part of the mineral resources will be
converted into mineral reserves. The Indicated Mineral Resource for
the Rail Deposit was classified according to the CIM Definition
Standards for Mineral Resources and Mineral Reserves (December
2005) by Sebastien Bernier, P.Geo (APGO#1847), an appropriate
independent person for the purpose of NI 43-101. Mr. Bernier has
reviewed the technical content of this news release. Reference is
made to the press release dated November 4, 2010.
Rockcliff has a 100% interest in the Rail Property from Hudson
Bay Exploration and Development Company Limited (HBED), a wholly
owned subsidiary of HudBay Minerals Inc. (HBM: TSX). HBED will
receive a 2% Net Smelter Return Royalty. HBED has the right to
acquire back up to a 65% interest in the Rail Property until March
2015. Please refer to the News Release dated March 23, 2007 for
further details.
Ken Lapierre, P.Geo., President & CEO of Rockcliff Resources
Inc., is a Qualified Person under the definition of NI 43-101. Mr.
Lapierre has reviewed and approved the information in this press
release relating to Rockcliff.
Tawsho Mining Inc.
Tawsho is a mining exploration company focused on the
acquisition, exploration and development of advanced stage
exploration projects containing gold, base metals and industrial
minerals. Tawsho is presently developing its Cabot Graphite
Property (comprised of 102 claims covering an area of 2,550Ha of
25.5 sq.km) located on the Baie Verte Peninsula, Newfoundland and
its Chevrier Property (comprised of 557 claims, covering an area of
9,542Ha or 95.4 sq.km) located in the Chibougamau region of
Quebec.
Chevrier Gold
Deposits
Tawsho's principle asset is the open pit potential of its
Chevrier Gold Project located near Chibougamau, Quebec. Met-Chem
Canada Inc. ("Met-Chem") completed a report dated April 2010
entitled "NI 43-101 Technical Report on the Mineral Resource of the
Chevrier Gold Project, Chibougamau, Quebec-Canada" which is
available on www.sedar.com.
The Chevrier Property comprises two main zones, the Chevrier
Deposit and the Chevrier South Deposit.
The Chevrier Deposit is estimated by Met-Chem to contain the
following Inferred Resource, between surface and a depth of 250m,
using a cut-off grade of 1.0g/t gold and a minimum width of
1.5m:
Resource |
Tonnage |
Average Grade |
Gold (oz) |
Inferred |
4,600,000 |
1.99g/t gold |
295,000 |
Met-Chem cautioned that mineral resources have no demonstrated
economic viability. In addition, there is no certainty that all or
part of the Mineral Resources will be converted into reserves.
The Chevrier South Deposit has been tested by only 19 drill
holes and as such Met-Chem determined that insufficient reliable
information was present to estimate a mineral resource. However,
Met-Chem did provide a 3D conceptual model outlining an estimate of
tonnage and grade of the "mineralized material" potentially present
at the Chevrier South Deposit as follows:
Tonnage |
Average Grade |
8.5-9.0 million tonnes |
1.8-2.2g/t gold |
Stephen Balch, P.Geo., President & CEO of Tawsho Mining
Inc., is a Qualified Person under the definition of NI 43-101 and
has reviewed and approved the technical content in this press
release relating to Tawsho Mining Inc.
Forward Looking Statement:
Some of the statements contained herein may be forward-looking
statements which involve known and unknown risks and uncertainties.
Without limitation, statements regarding potential mineralization
and resources, exploration results, and future plans and objectives
of the Companies are forward looking statements that involve
various risks. The following are important factors that could cause
the Companies' actual results to differ materially from those
expressed or implied by such forward looking statements: changes in
the world wide price of mineral commodities, general market
conditions, risks inherent in mineral exploration, risks associated
with development, construction and mining operations, the
uncertainty of future profitability and the uncertainty of access
to additional capital. There can be no assurance that
forward-looking statements will prove to be accurate as actual
results and future events may differ materially from those
anticipated in such statements. Rockcliff undertakes no obligation
to update such forward-looking statements if circumstances or
management's estimates or opinions should change. The reader is
cautioned not to place undue reliance on such forward-looking
statements.
Neither 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.
Rockcliff Resources Inc. Ken Lapierre P.Geo.President &
CEO(416) 863-9800 or (647)
678-3879klapierre@rockcliffresources.comTawsho Mining Inc.Stephen
Balch, P.Geo.President & CEO(905)
407-9586sbalch@tawshomining.com
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