March 2,
2012: Prophecy Platinum Corp. ("Prophecy" or the "Company")
(TSX-V: NKL, OTC-QX: PNIKF, Frankfurt: P94P)
and Ursa Major Minerals Incorporated
("Ursa") (TSX: UMJ) (the "Companies") are pleased to
announce that they have entered into a binding letter of agreement
(the
"Agreement") for a business combination through a proposed all
share
transaction (the "Transaction"). Prophecy and Ursa act at arm's
length and the Transaction has been negotiated at arm's length.
Financial Terms
of the Transaction
Pursuant to the Agreement, Prophecy will issue 1 common share in
exchange for
every 25 outstanding common shares of Ursa. Ursa options and
warrants will be
exchanged for options and warrants of Prophecy as discussed under
the "Further
Detail" Section.
The offer represents approximately $0.15 per each common share of
Ursa based on
Prophecy's share price of $3.70 as at March 1, 2012, representing a
premium of
130% to Ursa's closing price as at March 1, 2012 of $0.065.
Prophecy is to subscribe for $1 million common shares of Ursa by
way of private
placement financing at $0.06 per share, subject to regulatory
approval. Upon
placement completion, John Lee and Greg Hall, current Prophecy
directors, will
be appointed to Ursa's board.
Highlights of the
Transaction
The new Prophecy will become a mid-tier resource company with a
robust and
diversified pipeline of platinum nickel projects,
including
-
Fully permitted open-pit
Shakespeare* PGM-Ni-Cu mine close to Sudbury infrastructure with
near term
production capabilities.
-
Flagship Wellgreen** (Yukon)
PGM-Ni-Cu project with over 10 million oz of Pt-Pd-Au inferred
resource.
Active drilling is ongoing with pending preliminary economic
assessment
study.
-
Manitoba's Lynn Lake***
Ni-Cu project with over 262 million lbs Ni, and 138 million lbs
Cu
Measured and Indicated.
The
transaction provides Ursa shareholders with liquidity, sustaining
capital and
opportunity to participate in the significant exploration and
development upside
of Wellgreen and Lynn Lake.
The
principal focus of Prophecy in 2012 and beyond is Wellgreen. Upon
completion of
the Transaction, Prophecy plans to publish a new Shakespeare
feasibility and
thoroughly examine project economics and metal prices before making
a
production decision. At the appropriate time, joint venture
partners may be
sought to develop Wellgreen, Lynn Lake, and Shakespeare.
John Lee, Chairman of Prophecy, comments, "We believe with this
production
ready mine, Prophecy would raise its profile, broaden investment
appeal, and
gain further trading liquidity. Ursa's board recognize the synergy
and that
this deal is potentially accretive to both Ursa and Prophecy
shareholders"
Richard Sutcliffe, President and CEO of Ursa, comments "We are
very
pleased to have reached this agreement with Prophecy which provides
an
excellent opportunity to advance the Shakespeare Mine. Our
shareholders will to
participate in a combined company with an outstanding portfolio of
assets and
substantially improved market capitalization and liquidity."
Further Detail
Regarding the Transaction
It is contemplated that the Transaction will be completed by way of
a Plan of
Arrangement, structured in such a way that will result in the
financial terms
of the Transaction being met. The parties have agreed to complete
the
Transaction by June 15, 2012.
Richard Sutcliffe, President and CEO of Ursa, will be appointed to
the board of
directors of Prophecy upon completion of the Transaction.
As a result of the Transaction, all existing warrants, options and
other rights
to acquire common shares of Ursa will be exchanged for options and
warrants of
Prophecy such that each former Ursa option and warrant will be
exchanged for a
Prophecy option or warrant, respectively, exercisable for that
number of
Prophecy shares that is equal to the number of Ursa Shares that
would otherwise
have been issuable thereunder divided by 25 with the exercise price
of such
Prophecy option or warrant being adjusted to equal the exercise
price of the applicable
Ursa option or warrant multiplied by 25.
Based on 79.7 million Ursa common shares outstanding, Prophecy is
expected to
issue 3.19 million shares as part of the Transaction.
The final structure and ratios of the Transaction will be subject
to the receipt
of final tax, corporate and securities law advice.
Completion of the Transaction is conditional upon:
-
Completion of environmental
and title due diligence of Ursa by Prophecy;
-
Ursa securing support
agreements in favour of the Transaction from the holders of a
minimum of
20% of its outstanding shares;
-
Ursa and Prophecy, if
required, shareholders having approved the Transaction;
-
Prophecy shareholders or
Ursa shareholders not having exercised rights to dissent over more
than
10% of the shares of Prophecy or 10% of the shares of Ursa,
respectively,
-
receipt of all necessary
regulatory approvals, including the approval of the TSX Venture
Exchange
(the "Exchange") and the TSX ("TSX");
-
receipt of approval of the
British Columbia Supreme Court, if applicable;
-
execution of a definitive
Transaction agreement;
-
Ursa terminating certain
third party agreements; and
-
certain other customary
conditions.
The
Agreement includes non-solicitation clauses. A break fee of
$1,500,000 is
payable to Prophecy should Ursa accept a superior un-solicited
offer.
Ursa, and Prophecy, if required, will call a special meeting of
shareholders to
be held in late May 2012 to approve the Transaction. Ursa expects
to mail an
information circular providing full details of the Transaction in
late April
2012.
Prophecy's Key
Assets
**The Wellgreen PGM Ni-Cu
Project
The Wellgreen PGM Ni-Cu property covers an area of approximately 22
square
miles in the Yukon Territory, Canada. The property has easy road
access,
located approximately 35 kilometres northwest of Burwash Landing,
Yukon, 15 km
from the paved 2 lane Alaska Highway and 402 km from Alaska's
Haines deep sea
port. Wellgreen is part of Kluane Ultramafic Nickel belt, which is
second
largest behind the Thompson Belt in Canada and remains vastly
unexplored.
Management is focused on advancing the project, with most recent
efforts
centering around an underground drilling program initiated in
February 2012
that is intended to further define the Wellgreen resource. A more
comprehensive
surface drilling operation will commence later in the spring. In
addition, a
scoping study (PEA) by Wardrop Engineering is expected to be
completed by Q1
2012. Prophecy intends to utilize the results of the 2012 drill
program to
update the current resource estimate. Wellgreen contains an
indicated mineral
resource of 14 million tonnes at 0.69% nickel, 0.62% copper and
2.25 g/t PGM+Au
and 289 million tonnes of inferred resources at 0.28% nickel, 0.35%
copper and
1.18 g/t PGM+Au, all estimated at 0.4% NiEq cut-off (Wardrop
Technical
Report July 2011).
|
Tonnes
(t)
|
PGM+Au
(g/t)
|
Ni (%)
|
Cu (%)
|
Indicated
|
14
Million
|
2.25
|
0.69
|
0.62
|
Inferred
|
289
Million
|
1.18
|
0.38
|
0.35
|
Based on resource estimated at
0.4% NiEq cut-off
|
Metal
|
Indicated
|
Inferred
|
Nickel
(Ni)
|
0.22
Billion lbs.
|
2.42
Billion lbs.
|
Copper
(Cu)
|
0.20
Billion lbs.
|
2.23
Billion lbs.
|
Cobalt
(Co)
|
15.77
Million lbs.
|
191.30
Million lbs.
|
Platinum
(Pt)
|
0.46
Million oz.
|
4.93
Million oz.
|
Palladium
(Pd)
|
0.34
Million oz.
|
3.91
Million oz.
|
Gold
(Au)
|
0.24
Million oz.
|
2.14
Million oz.
|
PGM+Gold
|
1.04
Million oz.
|
10.97
Million oz.
|
Based on resource estimated at 0.4% NiEq cut-off and 100% metals
recoveries.
|
***The Lynn Lake Nickel Project
In October 2009, Prophecy entered into an agreement to acquire a
100% interest
in The Lynn Lake Nickel Project from Victory Nickel Inc. (TSX:
NI). The
deposit is in Manitoba, Canada, which is mining friendly and also
adjacent to a
power line, rail line, and airport. Lynn Lake contains Measured and
indicated
mineral resources of 22.9 million tons of grading, of 0.57% nickel
and 0.30%
copper and 8.1 million tonnes of Inferred Resource at 0.51% Nickel
& 0.28%
Copper (Wardrop Technical Report April 2011). Prophecy
recently
completed bulk tonnage metallurgical testing at Lynn Lake in
preparation for a
feasibility study.
|
Tonnes
(t)
|
Ni (%)
|
Cu (%)
|
Measured
|
1.02
Million
|
0.76
|
0.36
|
Indicated
|
21.88
Million
|
0.56
|
0.30
|
Inferred
|
8.07
Million
|
0.51
|
0.28
|
Based on resource estimated at
0.4% NiEq cut-off
|
Metal
|
Measured
(lbs.)
|
Indicated
(lbs.)
|
Inferred
(lbs.)
|
Nickel
(Ni)
|
16
Million
|
247
Million
|
82
Million
|
Copper
(Cu)
|
7
Million
|
130
Million
|
46
Million
|
Based on resource estimated at 0.4% NiEq cut-off and 100% metals
recoveries.
|
The
information concerning the current mineral properties controlled by
Prophecy,
as described in this news release, has been reviewed and approved
by Danniel
Oosterman, P.Geo., a Prophecy Geologist and a Qualified Person
under National
Instrument 43-101.
Ursa's Key
Assets
*The Shakespeare
Mine
The Shakespeare PGM-Ni-Cu Mine is located 70 km west of Sudbury,
Ontario. In
2010 and 2011, through contract mining, the Company trucked and
delivered a
total of over 360,000 tonnes of ore to the Sudbury's Strathcona
Mill for
processing. Total revenue generated was over $20,000,000. Ursa
believes there
is potential to increase throughput and realize cost savings by
constructing a
mill on site.
The feasibility study by Micon International Limited in January
2006 and
subsequently updated in 2008, defined a Probable Reserve of
11,828,000 tonnes
grading 0.33% nickel, 0.35% copper, 0.02% cobalt, 0.33 g/t
platinum, 0.36 g/t
palladium and 0.18 g/t gold. The mineral reserve is to a maximum
depth of 250
metres below surface.
|
Tonnes
(t)
|
PGM+Au
(g/t)
|
Ni (%)
|
Cu (%)
|
Probable
|
11.8
Million
|
0.87
|
0.33
|
0.35
|
With a 4,500 tpd Mill on site, the study projects an after tax
internal rate of
return ("IRR") of 22.6% (29.1% pre-tax IRR) on an initial total
capital cost of C$148,193,000.The undiscounted total annual cash
flow
("NPV") is C$169,581,000 and the NPV discounted at 8% is
C$73,297,000. The project has a 7.2 year mine production life. The
economic
analysis makes the assumption of the following long term metal
prices over the
life of the project, expressed in 2007 dollars, nickel US$9.37/lb,
copper
US$2.11/lb, cobalt US$27.57/lb, platinum US$995.52/ounce,
palladium
US$342.49/ounce, gold US$563.27/ounce.
Mr. T. Hennessey, P.Geo, of Micon and Mr. E. Puritch P.Eng. of
P&E Mining
Consultants Inc. were the qualified persons for the Shakespeare
reserve
estimates and Mr. Ian Ward, P.Eng. of Micon was the qualified
person for the
Shakespeare feasibility study.
About Prophecy
Platinum
Prophecy Platinum Corp. is a Canadian based Nickel PGM exploration
company with
projects in Canada, Argentina and Uruguay. Prophecy Platinum's
flagship
Wellgreen PGM-Cu-Ni project is in Yukon Territory, Canada and the
Lynn Lake
project is located in Manitoba, Canada. Further information can be
found at www.prophecyplat.com.
About URSA Major
Minerals
Ursa is a Canadian mining company with a nickel mine and two nickel
sulphide
projects containing significant NI 43-101 compliant nickel and
copper reserves
and resources. Ursa is focused on expanding operations at the
Shakespeare
Nickel Mine and growing its nickel, copper and platinum group metal
(PGM)
deposits through exploration and development, primarily in Ontario,
Canada.
ON BEHALF
OF THE BOARD OF DIRECTORS of
Prophecy
Platinum Corp. "John Lee"
John Lee
Chairman
For
further information:
David Brook
Manager, Investor Relations
1-800-358-5865
dbrook@prophecyplat.com
www.prophecyplat.com
ON BEHALF
OF THE BOARD OF DIRECTORS of
Ursa
Major Minerals Incorporated"RICHARD SUTCLIFFE"
Richard Sutcliffe
President and CEO
For further information:
Alison Tullis
Manager, Investor Relations
Telephone 416.864.0615
Email: atullis@ursamajorminerals.com
www.ursamajorminerals.com
Mineral resources that are not mineral reserves do not have
demonstrated
economic viability. 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 Statements: This news release includes certain statements
that may be
deemed "forward-looking statements". All statements in this
release,
other than statements of historical facts, including, without
limitation,
statements potential mineralization, the estimation of mineral
resources, the
realization of mineral resource estimates, interpretation of prior
exploration
and potential exploration results, the timing and success of
exploration
activities generally, the timing and results of future resource
estimates,
permitting time lines, metal prices and currency exchange rates,
availability
of capital, government regulation of exploration operations,
environmental
risks, reclamation, title, and future plans and objectives of the
company are
forward-looking statements that involve various risks and
uncertainties. .
Although Prophecy believes the expectations expressed in such
forward-looking
statements are based on reasonable assumptions, such statements are
not
guarantees of future performance and actual results or developments
may differ
materially from those in the forward-looking statements.
Forward-looking
statements are based on a number of material factors and
assumptions. Factors that could cause actual results to differ
materially
from those in forward-looking statements include failure to obtain
necessary
approvals in respect of the Transaction, unsuccessful exploration
results,
changes in project parameters as plans continue to be refined,
results of
future resource estimates, future metal prices, availability of
capital and
financing on acceptable terms, general economic, market or business
conditions,
risks associated with operating in foreign jurisdictions, uninsured
risks,
regulatory changes, defects in title, availability of personnel,
materials and
equipment on a timely basis, accidents or equipment breakdowns,
delays in
receiving government approvals, unanticipated environmental impacts
on
operations and costs to remedy same, and other exploration or other
risks
detailed herein and from time to time in the filings made by the
companies with
securities regulators. Readers are cautioned that mineral resources
that are
not mineral reserves do not have demonstrated economic viability.
Mineral
exploration and development of mines is an inherently risky
business. Accordingly
the actual events may differ materially from those projected in
the
forward-looking statements. For more information on Prophecy and
the risks and
challenges of their businesses, investors should review their
annual filings
that are available at www.sedar.com.
"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."
This press release does not constitute an offer to sell or a
solicitation to
buy any of the securities in the United States. The
securities have not
been and will not be registered under the United States Securities
Act of 1933,
as amended ("the U.S. Securities Act") or any state securities
law
and may not be offered or sold in the United States or to U.S.
Persons unless
registered under the U.S. Securities Act and applicable state
securities laws
or an exemption from such registration is available.
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