Concurrent $10,000,000 Financing
VANCOUVER, Feb. 1, 2017 /CNW/ - Zinc One Resources Inc.
(TSX-V: Z) ("Zinc One") and Forrester Metals Inc.
(TSX-V: VEM.H) ("Forrester") are pleased to announce that
they have entered into a binding agreement (the "Agreement")
whereby Zinc One has agreed to acquire all of the issued and
outstanding common shares of Forrester (the "Transaction")
and complete a private placement financing of $10,000,000 (the "Private Placement
Financing"). Zinc One's proposed acquisition of Forrester is
based on a positive outlook for the zinc price and the
attractiveness of the zinc assets contained in the Forrester
portfolio.
Jim Walchuck, CEO of Zinc One,
stated "We believe that this transaction is a tremendous step in
moving Zinc One towards becoming a zinc producer. Although
there are other quality assets in Forrester, it is the high-grade
zinc Bongara and Charlotte Bongara properties which will become the
flagship project of Zinc One. This is an exciting opportunity for
Zinc One and all its shareholders."
Martin Walter, President of
Forrester, commented, "Combining Forrester's projects with Zinc
One's strong corporate finance team along with the proposed
financing ensures further development at the Bongara Zinc Project
and also offers Forrester shareholders a nice premium to the
current share price."
Details of the Arrangement
The Transaction will be effected by way of a court approved plan
of arrangement under the Business Corporations Act
(Ontario). Under the terms of
the Agreement, each shareholder of Forrester will receive 1 common
share of Zinc One ("Zinc One
Share") for every 5.5 common shares of Forrester
("Forrester Shares"). Assuming completion, exercise of
all convertible securities of Forrester and completion of the Debt
Settlement (as defined below), Zinc One will issue a total of
30,855,273 Zinc One Shares to the shareholders of Forrester.
Based on a price of $0.75 per Zinc
One Share, being a volume weighted average price for the last seven
trading days, the 5.5 to 1 conversion ratio represents an offer
price of $0.14 per Forrester Share, being a premium of 119% of
Forrester's volume weighted average price for the period comprising
the 30 trading days ended on January 30,
2017.
Following the completion of the Transaction and the Debt
Settlement, Zinc One will have issued and outstanding shares of up
to 87,630,513 Zinc One Shares.
All outstanding options, warrants and convertible debentures of
Forrester will remain outstanding (if not exercised prior to
closing of the Transaction) and will be adjusted to give effect to
the Transaction in accordance with their respective terms or
pursuant to the Agreement. Prior to closing of the
Transaction, Forrester will be permitted to issue up to 27,040,000
Forrester Shares at a deemed price of $0.125 per share to settle outstanding
indebtedness of approximately $3,380,000 (the "Debt Settlement").
Each company's Board of Directors unanimously approved the terms
of the Transaction and recommends that their shareholders (if
applicable) vote in favour of the Transaction.
The Transaction will require the approval by at least 66 2/3% of
the votes cast on the special resolution by Forrester shareholders
and, if required, Zinc One shareholders present in person or
represented by proxy at the shareholder meetings.
The Transaction is subject to due diligence by each party,
completion of the Private Placement Financing, shareholder
approval, applicable regulatory and TSX Venture Exchange approvals
and satisfaction of customary provisions. The Transaction is
expected to close in the second quarter of 2017.
The Agreement includes customary deal protection provisions,
including a break fee of $1,000,000
payable by a breaching party, and a right to match and
non-solicitation provision in favour of Zinc One.
Management Team and Board of Directors
The parties anticipate that the management team and board of
directors for Zinc One will remain unchanged. The management team
will continue to be James Walchuck
(CEO and President) and Natasha Tsai
(Chief Financial Officer), and the board of directors will be
James Walchuck, Greg Crowe, W. Barry
Girling, Gunther Roehlig and
a mutually agreed representative of the current Forrester board of
directors.
Private Placement Financing
In connection with the proposed Transaction, Zinc One plans to
complete a non-brokered private placement financing of 16,666,667
units (each a "Unit") at a price of $0.60 per Unit for gross proceeds of $10,000,000 (the "Private Placement
Financing"). Each Unit will consist of one Zinc One Share
and one-half of one share purchase warrant (each a
"Warrant"), with each whole Warrant entitling the holder to
purchase one additional Zinc One Share at a price of $0.90 per share for a period of 24 months from
the date of issue.
Zinc One will also have an overallotment option, for a period of
30 days from closing of the Private Placement Financing, to offer
an additional 15% of the number of Units at $0.60 per Unit, solely to cover over-allotments,
if any.
The proceeds from the private placement will be used for
exploration on the high-grade zinc Bongara and Charlotte Bongara
properties and for general working capital purposes.
About Bongara Zinc Mine and Charlotte Bongara Zinc
Project
The Bongara Zinc Mine zinc-oxide mineralization was discovered
in 1974 and since then various companies have completed exploration
programs across the area. The mineralization is concentrated
along and proximal to a NW-trending anticlinal axis over
approximately 2.5 kilometres. From the southeast edge of the
project, the Mina Grande, Mina Chica
and Bongarita mine areas were subject to sampling from pits and
trenches as well as shallow drilling over a distance of
approximately 1.2 kilometres. This zinc-oxide mineralization
appears to continue to the northwest into an additional exploration
area known as Campo Cielo, where
pits and trenches have also exposed additional high grade,
zinc-oxide mineralization in historical pits and trenches.
The adjacent Charlotte Bongara Zinc Project was explored by
Solitario Resources in 1994. Cominco Ltd. later completed
five drill holes for 592 metres within the property, two of which
encountered near-surface, high grade zinc oxide
mineralization. Between 2007 and 2011, Rio Cristal Zinc
optioned the project and eventually drilled 95 drill holes for a
total of 7,722 metres on the Cristal and Charlita prospects.
Rio Cristal drill results included
29.5% Zn across 15.5 metres, 26.1% Zinc across 12.5 metres, 29.7%
Zinc across 11.5 metres (the cited intervals are drill-intercept
widths and true widths are unknown).
Neither Qualifying Persons nor each company has verified the
data herein with samples.
About Zinc One Resources Inc.
Zinc One is a Vancouver based
company focused on the acquisition, exploration and development of
prospective and advanced zinc projects. Zinc One believes in
the current and future fundamentals of the zinc supply and demand
scenario and the continued growing demand for zinc in global
industrial uses.
About Forrester Metals Inc.
Forrester Metals is a Canadian mining company focused on the
exploration and development of Peru's mineral potential. Forrester has six
projects including two zinc properties, Azulcocha West and the
recently acquired Bongará Zinc Mine and the Charlotte Bongará Zinc
Project.
The technical content of this news release has been reviewed and
approved by James Walchuck, CEO and
director of Zinc One, and Bill
Williams, Director of Forrester, each a qualified person as
defined by National Instrument 43-101.
Forward-Looking Statements
Information set forth in
this news release contains forward-looking statements that are
based on assumptions as of the date of this news release. These
statements reflect management's current estimates, beliefs,
intentions and expectations. They are not guarantees of future
performance. Each of Zinc One and Forrester cautions that all
forward looking statements are inherently uncertain and that actual
performance may be affected by a number of material factors, many
of which are beyond their respective control. Such factors include,
among other things: risks and uncertainties relating to each of
Zinc One and Forrester's limited operating history, ability to
complete the proposed Transaction (including obtaining all
necessary shareholder and regulatory approvals), ability to close
the Private Placement Financing and the need to comply with
environmental and governmental regulations. Accordingly,
actual and future events, conditions and results may differ
materially from the estimates, beliefs, intentions and expectations
expressed or implied in the forward looking information. Except as
required under applicable securities legislation, neither Zinc One
nor Forrester undertakes no obligation to publicly update or revise
forward-looking information.
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.
SOURCE Zinc One Resources Inc.
