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- Creates new growth-focused silver producer in Peru
- Multi-asset company led by team with proven track
record
- Concurrent minimum C$14,000,000 financing to fund 30,000 m exploration and development drilling
campaign at Nueva Recuperada project
VANCOUVER, BC, Feb. 11, 2021 /CNW/ - ORO X MINING CORP. (TSX-V: OROX) (OTC
Pink: WRPSF) ("Oro X" or the "Company")
and Mines and Metals Trading (Peru) PLC ("MMTP", also commercially
known as "Latitude Silver") are pleased to announce the
signing of a business combination agreement (the "Business
Combination Agreement"). Pursuant to the Business Combination
Agreement, Oro X will acquire 100% of the issued and outstanding
shares of MMTP (the "Transaction").
With a team led by CEO Jose
Garcia, Executive Chairman Luis
Zapata, and Lead Advisor Paul
Matysek, Silver X will be Latin
America's next low-cost silver producer. The combination of
Oro X's and MMTP's teams, assets and operational experience creates
a growth-focused platform primed to consolidate the fragmented
Peruvian silver landscape.
Upgrading and expanding MMTP's Nueva Recuperada inferred
resource pursuant to a NI 43-101 Technical Report for Recuperada
Project, Peru with an effective
date of October 15, 2020 (the
"Recuperada Technical Report"), from 7.3 million
tonnes (Mt) at 130.38 g/t Ag and increasing processing capacity
beyond 600 tpd at the operating plant has the potential to create
significant near-term positive cashflow. The inferred resources
estimated are 7,324,400 T at grades of 130.38 gm/T Ag, 3.17% Pb/T,
2.04% Zn/T.
Additionally, the anticipated minimum C$14,000,000 Financing (as defined herein) will
provide the resources to develop the now-consolidated,
approximately 15,000 Ha Nueva Recuperada district and to create
shareholder value in a multi-asset portfolio.
SILVER X HIGHLIGHTS
- Consolidated silver district – Approximately 15,000 Ha
of total concessions at the Nueva Recuperada project hosts 90 known
productive veins in Peru's premier
silver belt.
- Significant current silver resource – The
Recuperada Technical Report includes an inferred resource of 7.3
million tonnes (Mt) at 130.38 g/t Ag, 3.17% Pb and 2.04% Zn.
- High impact drill campaigns – Planned 30,000 meters
of exploration and development drilling in 2021 includes targets at
Esperanza and Maria Luz along with continued exploration of the
Coriorcco gold project.
- Strong financial platform – Well funded pro forma
treasury with synergies to reduce corporate G&A and a strategy
to monetize select non-core assets.
- Experienced team – Executive team, directors and
advisors with proven mining pedigree have created over CAD
$3.2 billion in shareholder value
over the past 13 years.
José García, CEO of Latitude said: "Through this Transaction,
Latitude Silver takes one step further in the fast-track
development that the company has embarked upon since its inception.
This outstanding team is committed to developing one of the most
agile mining companies in the sector, combining operations with
high-quality exploration and resource development. This is great
news for all of our stakeholders and strategic partners, and we
look forward to continue working with all of them. Also, we
appreciate Oro X's and Latitude Silver's investors support to the
Transaction, and we remain committed to delivering great results
over the next few years."
Luis Zapata, CEO of Oro X said:
"From founding Oro X barely thirteen months ago to now having
completed three increasingly significant transactions, I could not
be happier for our shareholders as we become a high-growth silver
producer. I look forward to working with José Garcia as the
incoming CEO of Silver X. I will continue to ensure that the new
company has the proper capital markets exposure and following to
complement our operational excellence."
Paul Matysek, Lead Advisor to Oro
X said: "The combination of Oro X and Latitude to form Silver X
creates a dynamic platform primed to consolidate a myriad of
high-quality silver-centric projects that require financing,
improved structure, and local knowledge. Silver X will be led by a
team with a proven track record of operating assets and creating
shareholder value. I look forward to seeing the Silver X team build
a high-growth silver producer that will take advantage of the
exciting M&A opportunities throughout the region."
About MMTP
MMTP is a private mining company with a mission to realize the
full value of underdeveloped silver projects across Latin America. MMTP's only asset is the Nueva
Recuperada silver-lead-zinc project, located in Huancavelica,
Peru. It consists of 218
concessions covering approximately 15,000 hectares, that host a
network of 90 known mineral-bearing veins, advanced infrastructure
from historical underground mining operations, and a fully
permitted and operational 600 tonnes per day and (210,000 tonnes
per year) ore processing plant.
MMTP acquired the Nueva Recuperada project from Compañía de
Minas Buenaventura SAA (NYSE: BVN) in 2017 and rapidly restarted
commercial operations. MMTP has also increased its mineral
concession package from the original 6,000 Ha to approximately
15,000 Ha via strategic acquisitions from companies including Pan
American Silver (TSX: PAAS).
The Nueva Recuperada Project hosts an inferred resource estimate
pursuant to a NI 43-101 Technical Report for Recuperada Project,
Peru with an effective date of
October 15, 2020 (the
"Recuperada Technical Report"), of 7,324,400 T at
grades of 130.38 gm/T Ag, 3.17% Pb/T, 2.04% Zn/T. The key
assumptions, parameters, and methods used to estimate MMTP's
mineral resources includes the verifiable portion of the historic
(Buenaventura, Panamerican Silver) data by site visits, core
examination and database confirmation and physical verification of
the current Gemin and MMTP exploration data.
The Recuperada property is fully permitted and is operating per
Peruvian law. MMTP has the approved, required operations notices
and the required closure/rehabilitation plan. The Recuperada
Technical Report states "Potential risks for starting mine
operations and permitting are considered to be minimal. In
Peru, the social risk is the
potentially largest risk for mining projects. The local communities
are long-time mining communities and have large portions of their
populations as miners. The communities also are welcoming to the
mining industry. Environmental and cultural risks are relatively
minor. Risks in the permitting with the government is also of
minor, almost unlikely levels."
Current MMTP development and exploration targets at Nueva
Recuperada include:
- Tangana – 7M tonnes of 43-101 inferred silver
resources currently being processed at the Recuperada Plant
- María Luz – High grade silver vein system
For a complete overview of all Silver X assets please refer to
the Investor Presentation now hosted at www.oroxmining.com.
Transaction Summary
The Transaction, if completed, is anticipated to be a
Fundamental Acquisition for Oro X, as defined under the policies of
the TSX Venture Exchange (the "Exchange"). The
Transaction is an arm's length transaction and Oro X anticipates
that shareholder approval from Oro X's shareholders will not be
required. Pursuant to Exchange policy, Oro X's common shares
have been halted and will remain halted until all required
documentation has been filed and accepted by the Exchange, and
permission to resume trading has been granted.
Pursuant to the terms of the Business Combination Agreement, Oro
X will acquire all of the MMTP common shares (the "MMTP
Shares") as part of a merger of equals. Each MMTP Share
will be exchanged for 28.828 (the "Exchange Ratio") common
shares of Oro X (an "Oro X Share"), resulting in an
aggregate of approximately 42,969,000
Oro X Shares to be issued to the MMTP shareholders pursuant
to the Transaction.
The transactions contemplated by the Business Combination
Agreement are subject to, among other things: (i) the completion of
a financing for minimum gross proceeds of C$14,000,000, as described below; (ii) the
approval of MMTP shareholders; (iii) the receipt of all necessary
consents, approvals, authorizations (including Exchange approval)
for the Transaction; (iv) certain changes to the board of directors
and management of Oro X, as described below; and (v) other
conditions which are customary for a transaction of this type.
A termination fee of C$2,500,000
is payable by Oro X or MMTP, as applicable, if the Business
Combination Agreement terminates under certain circumstances.
The Company also anticipates paying a finder's fee consisting of
1,250,000 Shares in connection with the Transaction to an arm's
length third party.
The Transaction remains subject to TSX Venture Exchange (the
"Exchange") acceptance.
Management and Board Appointments and Significant
Shareholders
On closing of the Transaction, Oro X anticipates that two
members of its current board of directors will resign and that José
Maria García Jimenez and Sebastian
Wahl will be appointed in their place to hold office until
the next annual meeting of Oro X shareholders. The parties have
also agreed to appoint a third director to be determined but is
expected to be agreed upon as Mr. Mike
Hoffman, the former Chairman of Trevali Mining.
Luis Zapata is expected to resign
as Chief Executive Officer of Oro X and to be appointed as the
Company's Executive Chairman. Mr. García Jimenez will become Oro
X's Chief Executive Officer and Mr. Wahl will become the Vice
President of Corporate Development.
Pursuant to the Transaction, José Maria García Jimenez and
Sebastian Wahl, the two largest
shareholders of MMTP, are expected to receive 13,385,128 and
12,866,244 Oro X Shares,
respectively, in exchange for their MMTP Shares, equal to 15.6% and
15% of the outstanding Oro X Shares upon closing of the
Transaction, assuming gross proceeds of C$14,000,000 raised pursuant to the
Financing.
Below is a brief description of the backgrounds of each of José
Maria García Jimenez and Sebastian
Wahl.
José Maria García Jimenez
Mr. García is a Mining Engineer with 17 years of experience
across Peru, Chile, Australia, Spain and Switzerland; having worked for Anglo American, Inmet Mining and BHPB among
others. Mr. García holds a MSc in Mining Engineering from Madrid
Polytechnic University, a Master of Philosophy in Mineral Economics
from the University of Queensland,
Australia and is a Global Leadership Fellow from the World Economic
Forum. Mr. García is also a Professional Engineer (Spain). He is currently a Director and Chief
Executive Officer of MMTP and its operating subsidiary, Mines &
Metals Trading (Peru) SAC (2016 -
present). Previously, he was a co-founder of and consultant at
Mining Sense Global SL (2013 - 2016), a mining consulting firm
focused on mining project evaluation, economics, and strategy, an
Associate Director of Mining and Metals at the World Economic Forum
(2011 - 2014) and worked in various mining engineering roles with
mining and professional mining services firms.
Sebastian Wahl
Mr. Wahl is an executive with over a decade of experience in the
investment industry, mining and commodities trading. Mr. Wahl holds
a BBA from the Graduate School of Business Administration Zurich.
He is currently a director of Mines & Metals Trading
(Peru) SAC (2016 to present).
Previously, he was a project development and assessment consultant
and member of the Strategic Advisory Committee of Affinity Gold
Corp. (2014 - 2015).
Financing
Oro X and MMTP expect to engage a syndicate of agents co-led by
Echelon Wealth Partners Inc. ("Echelon") and Red Cloud
Securities Inc. (collectively, the "Agents") in connection
with a "best efforts" private placement financing (the
"Financing") of subscription receipts (the "Subscription
Receipts").
Pursuant to the terms of the Business Combination Agreement, and
concurrent with the closing of the Transaction, the parties will
complete the Financing of Subscription Receipts of a company to be
incorporated ("MMTP Finco"), as a wholly-owned British Columbia incorporated subsidiary of
MMTP, for gross proceeds of a minimum of C$14,000,000. Oro X and MMTP intend to use the
proceeds of the Financing, subject to the satisfaction of the
Escrow Release Conditions (as defined below), to develop the Nueva
Recuperada project, complete a planned 30,000 m drill campaign and to provide general
working capital.
The gross proceeds from the issuance of Subscription Receipts
will be deposited with a subscription receipt agent (the
"Subscription Receipt Agent") in escrow (the "Escrowed
Proceeds") pursuant to a subscription receipt agreement (the
"Subscription Receipt Agreement"). It is anticipated that
the Escrowed Proceeds will be released by the Subscription Receipt
Agent to MMTP Finco upon receipt of a notice (the "Release
Notice") to the Subscription Receipt Agent from Oro X, MMTP and
MMTP Finco indicating (a) all conditions to the completion of the
Transaction pursuant to the Business Combination Agreement have
been satisfied or waived to the satisfaction of the Agents, acting
reasonably, (b) the receipt of all court, regulatory, shareholder
and third-party approvals, if any, required in connection with the
Transaction, (c) the distribution of: (i) the securities underlying
the Subscription Receipts; and (ii) the Oro X Shares to be issued
in exchange for MMTP Shares pursuant to the Transaction being
exempt from applicable prospectus and registration requirements of
applicable securities laws, and (d) Oro X and MMTP not having
committed any breach of the agency agreement for the Financing that
has not been cured within five (5) days of the receipt of written
notice from Agents (collectively, the "Escrow Release
Conditions").
Upon and subject to the receipt by the Subscription Receipt
Agent of the Release Notice the Escrowed Proceeds shall be released
to MMTP Finco and the holders of Subscription Receipts will be
issued securities of MMTP Finco, which are to be then exchanged for
Oro X securities on a one-for-one basis upon completion of a
three-cornered amalgamation between MMTP Finco, a wholly owned
subsidiary of Oro X and Oro X as part of the Transaction.
Change of Name
On the closing of the Transaction, subject to Exchange
acceptance, the Company anticipates changing its name to Silver X
Mining Corp.
Advisors and Counsel
Echelon is acting as financial advisor and McMillan LLP and
Dentons is acting as legal counsel to Oro X. Gowling WLG
(Canada) LLP is acting as legal
counsel to MMTP.
About Oro X Mining
Oro X Mining is a Canadian exploration company currently
targeting high grade gold exploration in Peru. The Company's flagship asset is the
Coriorcco Gold Project in Ayacucho, Peru. Founders and management have a
successful track record of increasing shareholder value. For more
information visit our website at
www.oroxmining.com.
Qualified Person
Mr. John E. Bolaños, who is a qualified person under NI 43-101,
has reviewed and approved the technical content of this news
release for Oro X. Mr. Bolaños is a M.Sc. Mining Geologist from
Camborne School of Mines (U.K.) and a Professional Geologist Eng.
from The Central University of Ecuador (honours degree). He is a registered
member (ID 4172671) of the Society for Mining, Metallurgy &
Exploration (SME) of the United
States; Director of the Ecuadorian College of Engineers in
Geology, Mines, Oil and Environment; and a member of the Mining
Chamber of Ecuador. He has 27
years of experience in the exploration and mining industry
throughout the Americas.
Mr. A. David Heyl who is a
qualified person under NI 43-101, has reviewed and approved the
technical content of this news release for MMTP. Mr. Heyl, B.Sc.,
C.P.G., QP is a Certified Professional Geologist and Qualified
Person under NI 43-101. With over 25 years of field and upper
management experience, Mr. Heyl has a solid geological background
in generating and conducting exploration and mining programs for
gold, rare earth metals, and base metals, resulting in several
discoveries. David has 20 years of experience in Peru. He worked for Barrick Gold, was the exploration manager for
Southern Peru Copper, and spent over ten years working in and
supervising underground and open pit mining operations in
Peru
This news release does not constitute an offer to sell or a
solicitation of an offer to buy any of the securities described in
this news release in the United
States. Such 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 laws,
and, accordingly, may not be offered or sold within the United States, or to or for the account or
benefit of persons in the United
States or "U.S. Persons", as such term is defined in
Regulation S promulgated under the U.S. Securities Act, unless
registered under the U.S. Securities Act and applicable state
securities laws or pursuant to an exemption from such registration
requirements.
ON BEHALF OF THE BOARD
Luis Zapata
CEO & Director
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release.
Cautionary Statement Regarding "Forward-Looking"
Information
Some of the statements contained in this news release are
forward-looking statements and information within the meaning of
applicable securities laws. Forward-looking statements and
information can be identified by the use of words such as
"expects", "intends", "is expected", "potential", "suggests" or
variations of such words or phrases, or statements that certain
actions, events or results "may", "could", "should", "would",
"might" or "will" be taken, occur or be achieved. Forward-looking
statements in this news release include statements in respect of
the completion of the Transaction, the Company's exploration plans
for the Company's properties, the terms of the Financing, the use
of proceeds from the Financing and the completion of the
Transaction. Forward-looking statements and information are not
historical facts and are subject to a number of risks and
uncertainties beyond the Company's control. Actual results and
developments are likely to differ, and may differ materially, from
those expressed or implied by the forward-looking statements
contained in this news release. Accordingly, readers should not
place undue reliance on forward-looking statements. the Company
undertakes no obligation to update publicly or otherwise revise any
forward-looking statements, except as may be required by law.
SOURCE Oro X Mining Corp.