TORONTO, July 31, 2015 /CNW/ - Temex Resources Corp.
(TSX-V: TME, FWB: TQ1) ("Temex" or "the Company")
announces that it has terminated the arrangement agreement with
Oban Mining Corporation (TSX-V: OBM) ("Oban"), and
subsequently entered into a binding arrangement agreement with Lake
Shore Gold Corp. (TSX and NYSE: LSG) ("Lake Shore"), on the
terms proposed by Lake Shore on July 16,
2015 (the "Lake Shore Proposal"), as disclosed in the
Company's press release of the same date and as described in
further detail below.
In accordance with the provisions of the arrangement agreement
dated June 29, 2015 between Temex and
Oban (the "Oban Arrangement Agreement"), the Company has (i)
terminated the Oban Arrangement Agreement; (ii) paid Oban the
agreed termination payment of $691,856 (the "Oban Termination
Payment") under the Oban Arrangement Agreement; and (iii)
subsequently entered into a binding arrangement agreement (the
"Lake Shore Arrangement Agreement") with Lake Shore pursuant
to which Lake Shore will acquire all of the outstanding common
shares of Temex (each, a "Temex Share") by way of a
court-approved plan of arrangement (the "Lake Shore
Arrangement").
Under the Lake Shore Arrangement, each shareholder of Temex (a
"Temex Shareholder") would receive, in exchange for each
Temex Share held, 0.105 of a common share in the capital of Lake
Shore (a "Lake Shore Share"), having a value of $0.13 based on the closing price of the Lake
Shore Shares on the Toronto Stock Exchange (the "TSX") on
July 15, 2015. In response to the
Lake Shore Proposal, the board of directors of Temex determined,
after receiving a recommendation to such effect from its special
committee and the advice of the financial and legal advisors to the
Company, that the Lake Shore Proposal was a "Superior Proposal" as
defined in Oban Arrangement Agreement.
The Lake Shore Arrangement is subject to the approval of Temex
Shareholders. The Lake Shore Arrangement Agreement contemplates the
meeting of Temex Shareholders to consider the Lake Shore
Arrangement (the "Meeting") being held on or before
September 30, 2015. To be effective,
the Lake Shore Arrangement must be approved by a resolution passed
at the Meeting by (i) at least 66 2/3% of the votes cast by Temex
Shareholders, voting as a single class, present in person or by
proxy at the Meeting; and (ii) a simple majority of the votes cast
by Temex Shareholders, voting as a single class, present in person
or by proxy at the Meeting (excluding Temex Shares held by certain
"interested parties" and "related parties" of any interested
parties (as such terms are defined in Multilateral Instrument
61-101 ("MI 61-101")) in accordance with the requirements of
MI 61-101). The Lake Shore Arrangement is not subject to the
approval of the shareholders of Lake Shore.
The completion of Lake Shore Arrangement is also subject to,
among other things: (i) receipt of certain regulatory approvals,
including the TSX; (ii) receipt of required court approvals; and
(iii) other customary conditions for similar transactions of this
nature. The deadline for the completion of the Lake Shore
Arrangement is December 31, 2015.
The terms of the Lake Shore Arrangement Agreement also include:
(i) the payment of approximately $1,000,000 as a termination fee payable to the
Lake Shore if the Lake Shore Arrangement does not proceed in
certain circumstances; (ii) an advance from Lake Shore to Temex of
a loan to pay the Oban Termination Payment; (iii) an advance from
Lake Shore to Temex of an interim loan in the amount of
$500,000 to be used by Temex for
working capital purposes; (iv) customary standstill undertakings by
the Company not to solicit alternative acquisition proposals; and
(v) right to match covenants in favor of Lake Shore. The Lake Shore
Arrangement Agreement permits the Company to consider unsolicited
alternative acquisition proposals that are likely to result in a
superior proposal in accordance with the terms of the Lake Shore
Arrangement Agreement.
All loans contemplated and advanced by Lake Shore to Temex
pursuant to the Lake Shore Arrangement Agreement will be unsecured
and bear interest at a rate of 12% per annum. If the Lake Shore
Arrangement Agreement is terminated prior to the effective date of
the Lake Shore Arrangement, all principal amounts outstanding and
any interest payable thereon will become payable upon ninety days'
written notice by Lake Shore to Temex. In certain circumstances,
Temex will have the option of satisfying the outstanding principal
and interest by the issuance of Temex Shares (at a deemed
conversion price equal to the greater of $0.086 per Temex Share and the maximum
"Discounted Market Price" permitted under the rules and policies of
the TSX Venture Exchange (the "TSXV")) or a combination of
Temex Shares and cash. Any issuance of Temex Shares will be subject
to the prior approval of the TSXV.
Advisors to Temex
GMP Securities L.P. is acting as
financial advisor to Temex and Norton Rose Fulbright Canada LLP is
acting as legal advisor.
Ian Campbell, P.Geo., President
and CEO and Karen Rees, P.Geo., Vice
President, Exploration and Corporate Secretary of Temex Resources
Corp., are the designated qualified persons responsible for the
preparation of this news release.
About Lake Shore Gold
Lake Shore Gold is a
Canadian-based gold producer with operations based in the Timmins
Gold Camp of Northern Ontario.
Lake Shore Gold produces gold from two mines, Timmins West and Bell
Creek, with material being delivered for processing to the
Bell Creek Mill. In addition to current mining and milling
operations, Lake Shore Gold also has a number of highly prospective
projects and exploration targets, all located in and around the
Timmins Camp. Lake Shore Gold's common shares trade on the TSX and
NYSE MKT under the symbol LSG.
About Temex Resources Corp.
Temex is a Canadian based
exploration company focusing on its portfolio of precious metals
properties in the world class mining district of northeastern
Ontario. Temex is advancing the Timmins Whitney Gold Project,
in partnership with Goldcorp Canada Ltd., and exploring its 100%
owned Juby Gold Project.
The Whitney Property has NI 43-101 mineral resources on the
Upper Whitney of 0.97 million tonnes at a grade of 7.02 g/t gold
for 218,100 ounces of gold in the Measured category plus 2.3
million tonnes at a grade of 6.77 g/t gold for 490,500 ounces of
gold in the Indicated category and 1.0 million tonnes at a grade of
5.34 g/t gold for 170,700 ounces of gold in the Inferred category
at a cut-off grade of 3.0 g/t gold (Note 1).
The Juby Gold Project has NI 43-101 mineral resources of 26.6
million tonnes at a grade of 1.28 g/t gold for 1,090,400 ounces of
gold in the Indicated category and 96.2 million tonnes at a grade
of 0.94 g/t gold for 2,908,800 ounces of gold in the Inferred
category, both at a cut-off grade of 0.40 g/t gold (Note
2).
Temex also has a NI 43-101 mineral resource for tailings
material on its Gowganda Silver Project. The tailings piles
contain a NI 43-101 mineral resource of 1.94 million tonnes grading
47.5 g/t silver for a contained resource of 2.96 million ounces of
silver in the Indicated category (Note 3).
Notes:
- Information regarding the mineral resource estimate on the
Upper Whitney is in the Company's news release dated January 14, 2014 and the technical report filed
on SEDAR on February 27, 2014.
The Mineral Resource Statement was prepared for Temex by P&E
Mining Consultants Inc. of Brampton,
Ontario in accordance with NI 43-101 by Richard Sutcliffe, PhD, P.Geo., Eugene Puritch, P.Eng., David Burga, P.Geo., Yungang Wu, P.Geo.,
Tracy Armstrong, P.Geo., and
Antoine Yassa, P.Geo., "independent
qualified persons" as defined by NI 43-101.
- Information regarding the mineral resource estimate on the Juby
Gold Project is in the Company's news releases dated April 29, 2013 and January
15, 2014 and the technical report filed on SEDAR
February 26, 2014. The Mineral
Resource Statement was prepared for Temex by GeoVector Management
Inc., Ottawa, Ontario in
accordance with NI 43-101 by Joe Campbell,
BSc, P.Geo., Alan Sexton,
MSc, P.Geo., and Duncan Studd, MSc,
P.Geo., "independent qualified persons" as defined by NI
43-101.
- Information regarding the mineral resource estimate in the
tailings piles located on the Gowganda Silver Project is in the
Company's news release dated June 8,
2011 and the technical report filed on SEDAR July 21, 2011. The Mineral Resource
Statement was prepared for Temex by GeoVector Management Inc.,
Ottawa, Ontario in accordance with
NI 43-101 by Allan Armitage, PhD,
P.Geol., Alan Sexton, MSc, P.Geo.,
and Joe Campbell, BSc, P.Geo.,
"independent qualified persons" as defined by NI 43-101.
Cautionary Note Regarding Forward-Looking
Information
This press release contains forward-looking information which
is not comprised of historical facts. Forward-looking information
involves risks, uncertainties and other factors that could cause
actual events, results, performance and opportunities to differ
materially from those expressed or implied by such forward-looking
information. Forward-looking information contained or referred to
in this press release includes, but may not be limited to,
the completion and expected timing of the Lake Shore
Arrangement, the timing of the Meeting and the receipt by the
Company of certain loans pursuant to the terms of the Lake Shore
Arrangement Agreement.
Factors that could cause actual results to differ materially
from those described in such forward-looking information include,
but are not limited to, risks related to the Company's or
Lake Shore's inability to satisfy a condition precedent to the
completion of the Lake Shore Arrangement (including obtaining the
requisite shareholder approval at the Meeting and the necessary
regulatory approvals), other risks related to the completion of the
Lake Shore Arrangement and risks related to the inability of each
of the Company and Lake Shore to perform its respective
obligations under the Lake Shore Arrangement Agreement as well
as certain other risks set out in the Company's public documents,
including its management's discussion and analysis dated
May 31, 2015,
filed under the Company's profile on SEDAR at
www.sedar.com.
The forward-looking information in this press release
reflects the current expectations, assumptions and/or beliefs of
the Company based on information currently available to the
Company. In connection with the forward-looking information
contained in this press release, the Company has made assumptions
about: the Company's business, the economy and the Company's
industry in general as well as Lake Shore's ability to complete the
Lake Shore Arrangement and to perform its obligations under the
Lake Shore Arrangement Agreement. The Company has also assumed that
no significant events occur outside of the Company's normal course
of business. Although the Company believes that the assumptions
inherent in the forward-looking information are reasonable,
forward-looking information is not a guarantee of future
performance and accordingly undue reliance should not be put on
such information due to the inherent uncertainty therein.
Any forward-looking information speaks only as of the date on
which it is made and, except as may be required by applicable
securities laws, the Company disclaims any intent or obligation to
update any forward-looking information, whether as a result of new
information, future events or results or otherwise.
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.
SOURCE Temex Resources Corp.