Kerr Mines and Bear Lake Enter Into Arrangement Agreement
TORONTO, ONTARIO and LONGUEUIL, QUEBEC--(Marketwired - Feb 26,
2014) - Further to their January 24, 2014 news release, Kerr Mines
Inc. ("Kerr Mines") (TSX:KER) and Bear Lake Gold Ltd. ("Bear Lake")
(TSX-VENTURE:BLG) are pleased to announce that they have entered
into an arrangement agreement dated as of February 25, 2014 (the
"Arrangement Agreement").
Under the terms of the Arrangement Agreement, Kerr Mines will
issue 1.4 units (each, a "Unit") of Kerr Mines in exchange for
every one (1) common share of Bear Lake pursuant to a plan of
arrangement under the Business Corporations Act (Ontario)
(the "Arrangement"). Each Unit will consist of one Kerr Mines share
and one-half of one Kerr Mines warrant. Each whole Kerr Mines
warrant will entitle the holder thereof to purchase one Kerr Mines
share at an exercise price of $0.16 per Kerr Mines share for a
period of two (2) years from the closing date of the Arrangement.
Currently, Kerr Mines has 432,267,608 shares issued and outstanding
while Bear Lake has 136,381,545 shares issued and outstanding. Each
holder of the stock options of Bear Lake outstanding as of the date
of completion of the Arrangement will receive such number of
replacement stock options of Kerr Mines adjusted in accordance with
the exchange ratio of 1.4 to 1. The board of directors of each of
Kerr Mines and Bear Lake have approved the Arrangement.
The Arrangement must be approved by two-thirds of the votes cast
by shareholders present and voting at the special meeting of Bear
Lake shareholders called to consider the Arrangement. The board of
directors of Bear Lake has unanimously resolved to recommend that
its shareholders vote their securities in favour of the
Arrangement.
The Arrangement is subject to the approval of the Ontario
Superior Court of Justice, the TSX Venture Exchange, the TSX and
all applicable regulatory authorities. Completion of the
Arrangement is further subject to Kerr Mines shareholder approval
and additional conditions set out in the Arrangement Agreement.
Kerr Mines and Bear Lake expect to close the transaction on or
before May 30, 2014.
It is anticipated that the closing of the Arrangement will occur
prior to the proposed acquisition of American Bonanza Mining Corp.
by Kerr Mines, announced on January 23, 2014 (the "American Bonanza
Transaction").
As previously announced, the objective of the combination of
Kerr Mines and Bear Lake is to consolidate a greater than 20-km
strike length of highly prolific land on the Cadillac-Larder Lake
break by creating a larger, stronger company that will be better
positioned to exploit the tremendous upside potential of their
projects, as well as create a higher profile company within the
financial community.
Subject to the requisite shareholder approvals of each of Kerr
Mines and Bear Lake, the board of directors of the company
resulting from the combination of Kerr Mines and Bear Lake will
consist of six nominees from Kerr Mines and one nominee from Bear
Lake. As approved by the shareholders of Kerr Mines at the annual
and special meeting of the shareholders of Kerr Mines held on
December 19, 2013, the Kerr Mines shares will, following completion
of the Arrangement and the American Bonanza Transaction, be
consolidated on a 1 for 15 basis.
Primary Capital Inc. is acting as financial advisor to Bear
Lake.
A copy of the Arrangement Agreement will be filed on SEDAR and
will be available for viewing under the profiles of Kerr Mines and
Bear Lake at www.sedar.com.
Forward-looking Statements
This news release contains certain forward-looking information
as defined in applicable securities laws (referred to herein as
"forward-looking statements"). Often, but not always,
forward-looking statements can be identified by the use of words
such as "plans", "expects", "is expected", "budget", "scheduled",
"estimates", "continues", "forecasts", "projects", "predicts",
"intends", "anticipates" or "believes", or variations of, or the
negatives of, such words and phrases, or statements that certain
actions, events or results "may", "could", "would", "should",
"might" or "will" be taken, occur or be achieved. Specifically,
this press release includes forward-looking statements regarding
the intended business combination of Kerr Mines and Bear Lake.
These forward-looking statements reflect the current internal
projections, expectations or beliefs of Kerr Mines and Bear Lake,
based on information currently available to them. Forward-looking
statements are subject to a number of risks and uncertainties,
including those detailed from time to time in filings made by Kerr
Mines and Bear Lake with securities regulatory authorities that may
cause actual outcomes to differ materially from those discussed in
the forward-looking statements. The completion of the proposed
business combination is subject to a number of risks, including,
without limitation, the shareholders of Kerr Mines and Bear Lake
not approving the transaction or required regulatory or court
approvals not being obtained. Even if the business combination is
completed, which cannot be guaranteed, anticipated synergies and
efficiencies or other intended benefits of the transaction may not
be realized, and the prospects of the combined entity will remain
subject to all the general risks associated with mineral
exploration and public securities markets.
About Kerr Mines Inc.
Kerr Mines, a Canadian-based exploration and development
company, is the owner of the McGarry gold mine in Ontario's
Kirkland Lake area. Including the McGarry Mine property, Kerr Mines
has established a sizeable footprint of contiguous gold properties
in Virginiatown on the prolific Larder Lake-Cadillac Break that
extends 200 km east-west straddling the Ontario and Quebec border
and that have produced 95 million ounces of gold in past
operations. The McGarry Mine consists of 33 contiguous patented
mining claims, including three licenses of occupation, totaling 484
hectares. The McGarry Mine is fully permitted and all equipment and
systems at the site have been brought up to standards.
In addition, in December 2010, Kerr Mines signed a definitive
five-year option agreement for the purchase of up to 100 percent of
the mineral rights on the Kerr-Addison property, which is adjacent
to the McGarry Mine. The Kerr-Addison Gold Mine was one of Canada's
largest gold producers, producing more than 11 million ounces of
gold during a 58-year operating life from 1938 to 1996. In December
2012, Kerr Mines completed the purchase of the mineral rights on 18
mining claims totaling 627 acres (the Barber-Larder Property)
located on the western boundary of the McGarry Mine.
About Bear Lake Gold Ltd.
Bear Lake's Larder Lake gold project located on the
Cadillac-Larder Lake Break in north-eastern Ontario is being
explored under an option and joint venture agreement with Gold
Fields Abitibi Exploration Corporation (a subsidiary of Gold Fields
Limited) entitling Gold Fields to acquire up to 60% of the Larder
Lake gold project by spending up to $40 million over 5 years. Gold
Fields has spent over $5 million in exploration on the Larder Lake
Project, therefore satisfying the $5 million minimum spending
requirement under the agreement.
Neither the TSXV, the TSX nor its Regulation Services
Provider (as that term is defined in the policies of the TSXV)
accepts responsibility for the adequacy or accuracy of this release
and has in no way passed upon the merits of the Arrangement and has
neither approved nor disapproved of the contents of this press
release.
Completion of the Arrangement is subject to a number of
conditions including but not limited to TSX and TSXV acceptance, as
applicable, and if applicable, receipt of approval by Bear Lake and
Kerr Mines shareholders to the Arrangement. Where applicable, the
Arrangement cannot close until the required shareholder approval is
obtained. There can be no assurance that the Arrangement will be
completed as proposed or at all.
Investors are cautioned that, except as disclosed in the
management information circular or filing statement to be prepared
in connection with the Arrangement, any information released or
received with respect to the Arrangement may not be accurate or
complete and should not be relied upon. Trading in the securities
of Bear Lake or Kerr Mines should be considered highly
speculative.
Kerr Mines Inc.Greg GibsonPresident and
CEOggibson@kerrmines.comBear Lake Gold Ltd.David FennellChairman of
the Board and Interim CEO450-677-1009Info@bearlakegold.com
Bear Lake Gold Ltd. (TSXV:BLG)
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