NEW YORK and DENVER, June 1,
2020 /PRNewswire/ -- Mudrick Capital Acquisition
Corporation (NASDAQ: MUDS, MUDSU and MUDSW) ("MUDS"), a publicly
traded blank check company, and Hycroft Mining Corporation
("Hycroft"), a US-based, gold and silver producer in Nevada, are pleased to announce the
consummation of the purchase of Hycroft by MUDS. The
shareholders of each of MUDS and Hycroft approved the transaction,
which closed on May 29, 2020,
creating a new world-class mining company named Hycroft Mining
Holding Corporation ("HYMC" or the "Company") that will trade
publicly on the NASDAQ Capital Market under the ticker symbol
HYMC. Hycroft has sold all of the equity interests of
Hycroft's subsidiaries and substantially all of its other assets to
MUDS, and MUDS has discharged and paid or assumed all or
substantially all of Hycroft's liabilities. HYMC has 50.2
million common shares outstanding, as of the consummation of the
transaction.
"This is a critical transaction that paves the way for the
development of Hycroft into one of the world's premier gold and
silver producers with a long life and in a desirable mining
jurisdiction," noted Randy
Buffington, President & CEO. "We now have the
pieces we need to build a profitable future for the mine, its
employees and the surrounding areas."
HYMC has in excess of $50.0
million of unrestricted cash on hand post transaction. Cash
sources for the transaction included (a) a $110.0 million multi-tranche senior secured
credit facility ("Senior Credit Facility") by Sprott Private
Resource Lending II (Collector), LP, of which $70.0 million was drawn at closing, (b) a
$30.0 million 1.5% net smelter
royalty agreement arranged by Sprott Private Resource Lending II
(CO) Inc., (c) a $25.0 million forward purchase of HYMC's units and
shares by Mudrick Capital Acquisition Holdings LLC, (d) a $75.96
million purchase of HYMC shares by certain stockholders of Hycroft
and (e) the net cash of $12.4 million remaining in HYMC's trust
account following stockholder redemptions. HYMC's post-transaction
indebtedness will include amounts drawn from the Senior Credit
Facility plus newly issued subordinated notes totaling $80.0
million. All other indebtedness of Hycroft was retired, exchanged
for MUDS shares or converted into Hycroft shares. The Hycroft
stockholders were distributed shares of HYMC upon the dissolution
of Hycroft.
HYMC operates its wholly owned Hycroft Mine, a world-class gold
and silver producing operation located 55 miles west of
Winnemucca in the prolific
Northern Nevada mining
jurisdiction. In July 2019,
Hycroft completed the Hycroft Technical Report, a third-party
feasibility study1 supporting its multi-year developed
proprietary2 sulfide oxidation and leach process along
with M3 Engineering and incorporating resources modeled by SRK
Consulting (Reno, NV).
Results of the feasibility study were robust indicating a projected
life-of-mine ("LOM") net present value ("NPV") of $2.1 billion (at a 5% discount rate), a LOM
after-tax internal rate of return ("IRR") of 147.5%, and a payback
period of 2.6 years. The Hycroft Mine was restarted in 2019
to demonstrate this proprietary process on a commercial scale and,
to date, has proven successful. Based on the success of initial
operations and the robust feasibility study, Hycroft began
implementing the long-term mine plan with the start of construction
in April 2020 of the first phase of a
large leach pad capable of processing the resource base with more
than 30 years of mine life. The funds received from this
transaction allow HYMC to construct the new leach pad, expand its
existing mining fleet (via rental contracts) and increase
production rates.
Neal, Gerber & Eisenberg LLP is acting as legal advisor to
Hycroft and will act as legal counsel to HYMC. Weil, Gotshal &
Manges LLP is acting as legal advisor to MUDS.
This news release does not constitute an offer to sell or the
solicitation of an offer to buy any securities.
About Hycroft Mining Holding Corporation
The Company is a US-based, gold and silver producer operating
the Hycroft mine located in the world-class mining region of
Northern Nevada. The Hycroft mine
features one of the largest gold/silver deposits in the world with
a low-capital, low-cost process and a 34-year mine life.
Cautionary Note Regarding Forward-Looking Statements
This news release contains "forward-looking statements" within
the meaning of Section 27A of the United States Securities Act of
1933, as amended, Section 21E of the Unites States Securities
Exchange Act of 1934, as amended, or the United States Private
Securities Litigation Reform Act of 1995. All statements,
other than statements of historical fact, included herein or
incorporated by reference herein that address activities, events or
developments that we expect or anticipate will or may occur in the
future, are forward-looking statements. Generally, these
forward-looking statements can be identified by the use of
forward-looking terminology such as "estimate", "plan",
"anticipate", "expect", "intend", "believe", "project", "target",
"budget", "may", "can", "will", "would", "could", "should",
"seeks", or "scheduled to", or other similar words, or negatives of
these terms or other variations of these terms or comparable
language or any discussion of strategy or intentions.
Forward-looking statements address activities, events or
developments that the Company expects or anticipates will or may
occur in the future and are based on current expectations and
assumptions. These statements involve known and unknown risks,
uncertainties, assumptions and other factors which may cause our
actual results, performance or achievements to be materially
different from any results, performance or achievements expressed
or implied by such forward-looking statements, and include, but are
not limited to the time and cost of construction and operation of
existing and new leach pads; the feasibility and efficacy of
processing sulfide ores using a pre-oxidation and heap leach
process; the effectiveness and control of the oxidation process;
the processing and production of gold and silver from the heap
leach pads; the availability of personnel and equipment to operate
the mine; the future price of gold and silver; the timing and
amount of estimated future production, costs of production, capital
expenditures and requirements for additional capital; cash flow
provided by operating activities before changes in working capital;
government regulation of mining operations; environmental risks;
unanticipated reclamation expenses; title disputes or claims and
limitations on insurance coverage; total cash cost per ounce, total
cash cost net of by-product per ounce, all-in sustaining cost per
ounce, capital expenditures, corporate general and administration
expenses; sustaining and project capital expenditures; the expected
working capital requirements; the sufficiency of capital resources
and the availability of additional funding as and when required to
meet operational and strategic needs; the expected depreciation and
depletion rates; changes in mining laws and regulations; the
uncertainty in the estimation of mineral resource and mineral
reserve estimates; the cost and timing of sustaining capital
projects; the uncertainty in geologic, hydrological, metallurgical
and geotechnical studies and opinions; infrastructure risks,
including access to water and power; the expectation of meeting
production targets; the expected timeline for achieving mining
rates, oxidation rates and percentage recoveries included in the
Hycroft Technical Report; projected net present values and internal
rates of return under the Hycroft Technical Report; risks
associated with competition; contractor, labor and employment
risks; the adverse effects of COVID-19 on our business and
dependence on key management personnel and executives . Although
the Company has attempted to identify important factors that could
cause actual results, performance or achievements to differ
materially from those described in forward-looking statements,
there may be other factors that cause results, performance or
achievements not to be as anticipated, estimated or intended. There
can be no assurance that such statements will prove to be accurate,
as actual results, performance and achievements and future events
could differ materially from those anticipated in such statements.
Accordingly, readers should not place undue reliance on
forward-looking statements. Further, the financial and other
projections are preliminary and subject to change. The Company
undertakes no obligation to update or revise these forward–looking
statements to reflect events or circumstances that arise after the
date made or to reflect the occurrence of unanticipated events,
unless required by applicable law. Projections are inherently
subject to substantial and numerous uncertainties and to a wide
variety of significant business, economic and competitive risks,
and the assumptions underlying the projections may be inaccurate.
Therefore, the actual results achieved may vary significantly from
the forecasts, and the variations may be material.
Cautionary Note to U.S. Investors Regarding Reserves and
Resources
The Mineral Resource and Mineral Reserve estimates included
herein or incorporated by reference herein have been prepared in
accordance with the requirements of the Modernization of Property
Disclosures for Mining Registrants (the "New Mining Rules") set
forth in subpart 1300 of Regulation S-K, as promulgated by the
United States Securities and Exchange Commission ("SEC").
These disclosures differ in material respects from the requirements
set forth in Industry Guide 7, which remains applicable to U.S.
companies subject to the reporting and disclosure requirements of
the SEC that have not early adopted the New Mining Rules. These
standards differ significantly from the disclosure requirements of
Industry Guide 7 in that mineral resource information contained
herein may not be comparable to similar information disclosed by
U.S. companies that have not early adopted the New Mining Rules
promulgated by the SEC.
Under SEC standards, mineralization, such are mineral resources,
may not be classified as a "reserve" unless the determination has
been made that the mineralization could be economically and legally
produce or extracted at the time of the reserve
determination. The term "economically," as used in the SEC's
Industry Guide 7 definition of reserves, means that profitable
extraction or production has been established or analytically
demonstrated in a feasibility study to be viable and justifiable
under reasonable investment and market assumptions. The term
"legally" as used in the SEC's Industry Guide 7 definition of
reserves, does not imply that all permits needed for mining and
processing have been obtained or that other legal issues have been
completely resolved. However, for a reserve to exist, we must have
a justifiable expectation, based on applicable laws and
regulations, that issuance of permits or resolution of legal issues
necessary for mining and processing at a particular deposit will be
accomplished in the ordinary course and in a timeframe consistent
with our current mine plans. As used in this joint proxy
statement/prospectus, the terms "mineral resource", "measured
mineral resource", "indicated mineral resource" and "inferred
mineral resource" are defined and used in accordance with the New
Mining Rules set forth in subpart 1300 of Regulation S-K, even
though such terms are not recognized under Industry Guide 7 which
the New Mining Rules will replace beginning January 1, 2021 for companies that do not early
adopt the New Mining Rules. You are specifically cautioned not to
assume that any part or all of the mineral deposits in these
categories will ever be converted into mineral reserves, as defined
by the SEC.
You are cautioned that, except for that portion of mineral
resources classified as mineral reserves, mineral resources do not
have demonstrated economic value. Inferred mineral resources have a
high degree of uncertainty as to their existence as to whether they
can be economically or legally mined. Under the New Mining Rules,
estimates of inferred mineral resources may not form the basis of
an economic analysis. It cannot be assumed that all or any part of
an inferred mineral resource will ever be upgraded to a higher
category. A significant amount of exploration must be completed in
order to determine whether an inferred mineral resource may be
upgraded to a higher category. Therefore, you are cautioned not to
assume that all or any part of an inferred mineral resource exists,
that it can be economically or legally mined, or that it will ever
be upgraded to a higher category. Likewise, you are cautioned not
to assume that all or any part of measured or indicated mineral
resources will ever be upgraded to mineral reserves.
1 A
Summary Technical Report showing the results of the Feasibility
Study can be found at www.hycroftmining.com.
2 The proprietary sulfide oxidation and heap leach
process is the subject of a patent application.
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SOURCE Hycroft Mining Holding Corporation