SGI Superior Gold Inc

TORONTO, Feb. 23, 2023 /CNW/ - Superior Gold Inc. ("Superior" or the "Company") (TSXV: SGI) (OTCQX: SUPGF) announces that it has entered into a definitive agreement (the "Agreement") pursuant to which Catalyst Metals Limited ("Catalyst") (ASX: CYL) will acquire all of the issued and outstanding common shares of Superior pursuant to a court-approved plan of arrangement (the "Transaction").

The Transaction will result in Catalyst acquiring 100% of Superior's Plutonic Gold Operations, located in central Western Australia. The Plutonic Gold Operations include the Plutonic underground gold mine and central mill, numerous open-pit projects, and an interest in the Bryah Basin joint venture.

Under the terms of the Transaction, common shareholders of Superior will receive 0.3571 of one ordinary share of Catalyst (each whole share, a "Catalyst Share") for each Superior common share ("Superior Share") held (the "Exchange Ratio"). The Exchange Ratio represents the equivalent of C$0.44 per Superior Share and a total equity value for Superior of approximately C$54 million on a fully-diluted basis based on the closing price of Catalyst on the Australian Securities Exchange ("ASX") as of February 22, 2023. The consideration implies a premium of 62% to the closing price of Superior on the TSX Venture Exchange ("TSXV") as of February 22, 2023 and a premium of 52% to the 20-day volume weighted average prices ("VWAP") of each of Catalyst and Superior on the ASX and TSXV respectively, as of February 22, 2023.

Upon completion of the proposed Transaction, existing Catalyst shareholders and former Superior shareholders will own approximately 78% and 22% of the combined company, respectively, including the impact of the previously-announced acquisition of Vango Mining Limited by Catalyst but excluding the impact of the planned Catalyst financing, as further described below.

Chris Jordaan, President and Chief Executive Officer of Superior said: "We are very pleased to offer shareholders the opportunity we have always proposed, the consolidation of the Plutonic-Marymia gold belt, with a meaningful immediate premium, diversification of assets and cash flow and logically, a listing on the ASX. We believe the Transaction will create a strong platform from which to advance the development of the Plutonic underground mine and surrounding open pit projects. Shareholders will also benefit from Catalyst's strong Australian shareholder register, financial strength and portfolio of exploration projects. We would like to thank our indigenous partners, the Jidi Jidi Aboriginal Corporation and the Marputu Aboriginal Corporation, for all of their support. I am confident that, when completed, this Transaction will mean an even stronger future for Plutonic. Catalyst will bring to Plutonic a team with international mining experience, a proven track record of exploration success and the financial resources to develop the district."

• Immediate upfront premium of 62% to the closing price of Superior on the TSXV as of February 22, 2023 and a premium of 52% to the 20-day VWAP of each of Catalyst and Superior on the ASX and TSXV, respectively, as of February 22, 2023;
• Ownership in a well-funded, diversified, ASX-listed producer with proven operating and exploration capabilities, significantly improving the scale and access to capital compared to a single asset company;
• Ongoing exposure to future value-creating growth projects at Plutonic plus exploration upside across the Plutonic-Marymia gold belt;
• Provides access to a strong balance sheet and diversified cash flow generation to fund and optimize Plutonic project development;
• Established Australian institutional investors and improved trading liquidity.

The Transaction will be implemented by way of a court-approved plan of arrangement under the Business Corporations Act (Ontario) and will require the approval of at least 66 2/3% of the votes cast by the shareholders of Superior at special meeting of Superior expected to be held in the second quarter of 2023.

Under the terms of the Transaction, Catalyst will acquire all the issued and outstanding Superior Shares and Superior shareholders will receive 0.3571 of a Catalyst Share for each Superior Share.

Each of the directors and senior officers of Superior have entered into voting and support agreements with Catalyst pursuant to which they have agreed to vote all Superior Shares they own or control in favour of the proposed Transaction. 

In addition to Superior shareholder approval, the Transaction is also subject to the receipt of applicable court approval and the satisfaction of certain other closing conditions, including Catalyst's completion of a financing of at least A$20 million and up to A$50 million, Superior receiving a fairness opinion as well as other customary closing conditions. Under ASX listing rules, Catalyst will file a prospectus in connection with the issuance of the Catalyst Shares pursuant to the Transaction or obtain a waiver or relief granted by the Australian Securities and Investment Commission, or otherwise seek shareholder approval to the extent required under the ASX. Subject to the satisfaction of these conditions, Catalyst and Superior expect that the Transaction will be completed in the second quarter of 2023.

Catalyst and Superior have provided representations and warranties customary for a transaction of this nature as well as customary interim period covenants regarding the operation of their respective businesses in the ordinary course. The Agreement also provides for customary deal protection measures, including non-solicitation covenants on the part of Superior and a right to match in favour of Catalyst. Superior may, under certain circumstances, terminate the Agreement in favour of an unsolicited superior proposal, subject to a termination payment of C$2 million by Superior to Catalyst.

None of the securities to be issued pursuant to the Agreement have been or will be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or any state securities laws, and any securities issued in the Transaction are anticipated to be issued in reliance upon available exemptions from such registration requirements pursuant to Section 3(a)(10) of the U.S. Securities Act and applicable exemptions under state securities laws. This news release does not constitute an offer to sell or the solicitation of an offer to buy any securities.

Further information regarding the Transaction will be contained in an information circular that Superior will prepare, file and mail in due course to its shareholders. Details regarding these and other terms of the Transaction are set out in the Agreement, which will be available under Superior's profile on SEDAR at www.sedar.com.

A special committee comprised entirely of independent directors of Superior (the "Special Committee") unanimously recommended the Transaction to the Board of Directors of Superior (the "Board"). The Board has evaluated the Agreement with the Company's management and legal and financial advisors, and following the receipt and review of a unanimous recommendation from the Special Committee, the Board has unanimously determined that the Transaction is in the best interests of the Company and recommends that shareholders of Superior vote in favour of the Transaction.

Superior's financial advisor is National Bank Financial Inc., its Canadian legal counsel is Bennett Jones LLP, and its Australian counsel is Grondal Bruining Pty Ltd. National Bank Financial Inc. has also been retained to provide a fairness opinion to the Board that the consideration offered under the Transaction is fair, from a financial point of view, to the shareholders of Superior.

Catalyst's financial advisor is Argonaut Securities Pty Ltd, its Canadian legal counsel is Cassels Brock & Blackwell LLP, its Australian legal counsel is Gilbert + Tobin, its tax advisor is PwC (in both Canada and Australia), and Entech is a technical consultant to Catalyst.

Superior and Catalyst executives will host a joint conference call to discuss the Transaction on February 23, 2023, at 10:00 am ET. Participants may dial in using the numbers below.

• Rapid Connect Link: https://emportal.ink/41idcnB
• Toll-free in U.S. and Canada: 1 888 664 6392
• All other callers: +1 416 764 8659

The conference call will be available for playback for two weeks by dialing toll-free in U.S. and Canada:
1 888 390 0541, replay code 473533 #. All other callers: +1 416 764 8677, replay code 473533 #.

The scientific and technical information in this press release has been reviewed and approved by Ettienne Du Plessis, who is a "qualified person" as defined by National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101"). Mr. Du Plessis is not independent of the Company within the meaning of NI 43-101.

Superior is a Canadian-based gold producer that owns 100% of the Plutonic Gold Operations located in Western Australia. The Plutonic Gold Operations include the Plutonic underground gold mine and central mill, numerous open-pit projects, and an interest in the Bryah Basin joint venture.

This news release contains "forward-looking information" within the meaning of applicable Canadian securities laws that are intended to be covered by the safe harbours created by those laws. "Forward-looking information" includes statements that use forward-looking terminology such as "may", "would", "could", "should", "will", "intend", "plan", "anticipate", "allow", "believe", "estimate", "expect", "predict", "can", "might", "potential", "predict", "is designed to", "likely" or the negative thereof or other variations thereof or comparable terminology.  In addition, any statements in this press release that refer to expectations, projections or other characterizations of future events or circumstances contain forward-looking information and include, among others, statements with respect to: (i) the expected outcomes of the Transaction, including the strength, characteristics and potential of the combined company; (ii) the ability of Superior and Catalyst to complete the Transaction on the terms described herein in a timely manner, or at all, including, receipt of required approvals and satisfaction of other closing conditions; (iii) the impact of the Transaction on stakeholders, including the expected benefits to Superior shareholders; (iv) Catalyst's ability to complete a financing; and (v) discussion of future plans, projects and objectives.

Forward-looking information is not a guarantee of future performance and is based upon a number of estimates and assumptions of management at the date the statements are made, including but not limited to, assumptions about the Company's future business objectives, goals, and capabilities, the regulatory framework applicable to the Company and its operations, and the Company's financial resources. Furthermore, such forward-looking information involves a variety of known and unknown risks and uncertainties, including, but not limited to, risks and uncertainties related to (i) the available funds of the Company and the anticipated use of such funds, (ii) the availability of financing opportunities, (iii) legal and regulatory risks, (iv) risks associated with economic conditions, (v) risks related to the Company's underground mining operations, (vi) risk of litigation, (vii) risks related to the ongoing COVID-19 pandemic, and its impact on the Company's operations, (viii) reliance on the expertise and judgment of senior management, and ability to retain such senior management, (ix) risks relating to the management of growth and other factors which may cause the actual plans, intentions, activities, results, performance, or achievements of the Company to be materially different from any future plans, intentions, activities, results, performance or achievements expressed or implied by such forward-looking information. Readers are encouraged to refer to the annual information form and other public filings of the Company for a discussion of other risks which could have a material adverse effect on the Company. The Company cautions that there can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, investors should not place undue reliance on forward-looking information as no assurance can be given that any of the events anticipated by the forward-looking information will transpire or occur, and if any of them do so, what benefits the Company will derive therefrom. Except as required by law, the Company does not assume any obligation to release publicly any revisions to forward-looking information contained in this news release to reflect events or circumstances after the date hereof.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Exchange) accept responsibility for the adequacy or accuracy of this release.

SOURCE Superior Gold Inc.