Victory Metals Announces Concurrent Minimum
$8 Million Equity Financing
Backstopped by Palisades Goldcorp Ltd.
VANCOUVER, BC, Nov. 20, 2020 /CNW/ - Victory Metals Inc. (TSXV:
VMX) ("Victory") and Nevada
King Mining Ltd. ("Nevada
King"), a private B.C. company, announce that they
have entered into a binding letter agreement (the
"Agreement") dated November 16,
2020, whereby Victory will acquire all the issued and
outstanding shares of Nevada King ("Nevada King Shares").
The business combination (the "Transaction") will be
completed pursuant to a statutory plan of arrangement whereby all
of the outstanding Nevada King
Shares will be exchanged for common shares of Victory (the
"Victory Shares"). The shareholders of Nevada King will hold 50% of the issued and
outstanding Victory Shares following completion of the Transaction
(the "Exchange Ratio").
Additionally, a key condition to the completion of the
Transaction is to complete a minimum $8
million non-brokered private placement (the "Private
Placement"). The Private Placement will be conducted on a
post-Transaction basis and, as such, the common shares of the
resulting issuer (the "Company") to be issued to subscribers
of the Private Placement will not be considered in the calculation
of the Exchange Ratio. Victory and Nevada King are pleased to announce that
Palisades Goldcorp Ltd. ("Palisades"), a major shareholder
of both Nevada King and Victory,
has committed to subscribe for any portion of the Private Placement
that is not taken up by other investors.
Highlights of Transaction:
- The business combination will form a leading Nevada explorer and developer, focused
exclusively on the Battle Mountain Trend, one of the world's most
endowed and prolific gold trends.
- Nevada King is the fastest
growing mineral claim holder in the
United States and now ranks as Nevada's fourth largest active claim holder
with 5,985 claims totaling 115,471 acres (467 km2), with
an additional 1,082 claims currently in the process of being filed.
Nevada King continues to pursue
its program of strategic land acquisition on the Battle Mountain
Trend.
- The transaction brings together two 100%-owned development
stage assets:
-
- Atlanta Gold Mine, Nevada – a past producing gold mine with
recorded production of 110,000 ounces of gold and 800,000 ounces of
silver (1975-1985). A recently completed National Instrument 43-101
("NI 43-101") compliant technical report dated October 29, 2020, by Gustavson Associates of
Lakewood, Colorado, calculated a
pit constrained, Measured and Indicated resource of 11 million
tonnes grading 1.3 g/t Au and 11.9 g/t Ag using a 0.35 g/t Au only
cut off, containing 460,000 oz Au and 4,220,000 oz Ag; and an
Inferred mineral resource of 5.31 million tonnes grading 0.83 g/t
Au and 7.3 g/t Ag, containing 142,000 oz Au and 1,240,000 oz Ag
(see Table 1-1).
- Iron Point Vanadium/Gold Project, Nevada – North
America's largest mineralized vanadium footprint in a
shallow, open-pittable configuration, currently moving towards a
maiden NI 43-101 resource and Preliminary Economic Assessment, as
well as a deep Carlin-style gold target currently being explored by
joint venture partner Ethos Gold Corp.
- These core assets are combined with a portfolio of
district-scale exploration projects in the heart of the Battle
Mountain Trend including Golconda Gold, Horse Mountain-Mill Creek,
Lewis, Hilltop South, Buffalo Valley,
Cedars-Carico Lake, Kobeh Valley, and Evana (see Figure 1). These
projects have seen significant historic exploration by numerous
major mining companies and in many cases, are nearby or adjacent to
large gold resources or operating mines.
Figure 1: The combined Nevada King and Victory Metals mineral claim
portfolio along the Battle Mountain Trend, Nevada.
- Importantly, advancement of this exploration and development
portfolio will be managed by a highly experienced and successful
team of mining entrepreneurs led by Executive Chairman Paul Matysek and Chief Executive Officer
Collin Kettell. Mr. Matysek has sold
his last five companies for a cumulative transaction value in
excess of $2.6-billion. Mr. Kettell
is the Founder and Executive Chairman of Palisades, a
resource-focused merchant bank with $420-million of net assets and is Executive
Chairman of New Found Gold Corp. with a current market
capitalization of $600-million.
- Dr. Quinton Hennigh and
Susan Lavertu will join the board of
the Company. Dr. Hennigh is a world-renowned geologist and the
Founder & Chairman of Novo Resources Corp., a TSX-V focused
gold explorer and developer. Ms. Lavertu has held the position as
CEO of Nevada King since its
inception; she is a resource investor who acts as advisor to
several publicly listed resource companies.
- Cal Herron, P.Geo., COO, will
lead the Company's technical team. Mr. Herron has over 40 years in
the evaluation, design, and management of gold exploration
projects, and has spent a significant portion of his career in
Nevada. Dr. Quinton Hennigh and Doug
Forster, P.Geo., bring significant geological and other
expertise at the board level.
- Following the completion of the Private Placement, the Company
will be well financed with a minimum of $11
million in working capital.
- On completion of the Transaction and the Private Placement,
Management, Directors, and Insiders of the Company will own up to
57% of the issued and outstanding shares of the Company.
Paul Matysek, Executive Chairman
of Victory, stated: "We are thrilled to transform Victory into a
new Nevada-focused gold company
with a diverse portfolio of development and exploration assets.
Nevada King was an early mover and
has been very successful in accumulating large strategic district
scale gold projects in one of the best addresses globally for the
discovery of large gold deposits. We are particularly impressed
with their property acquisition strategy which is based on decades
of on the ground experience and scientific rigor in understanding
the controls of gold mineralization in the Battle Mountain Trend.
The addition of Dr. Quinton Henning
to the Board of the Company will be instrumental in guiding our
exploration and development activities going forward. After the
completion of the Transaction, our initial work will focus on 3 key
areas: 1) further drilling at Altanta Mine to re-categorize
resources and expand the existing gold resource: 2) at Iron Point,
completing the maiden vanadium resource estimate while continuing
to work with Ethos Gold to refine targeting for a deep Carlin-type deposit and 3) developing and
prioritizing drilling on some of the most compelling target areas
with significant gold mineralization historically identified on
these project areas."
Collin Kettell, Executive
Chairman of Nevada King, stated:
"We are very excited to be able to bring Nevada King's project portfolio public through
this transaction with Victory. Our team has spent five years
staking and consolidating one of the largest land packages in
Nevada's Battle Mountain Trend,
North America's most endowed gold
belt. We kicked off this strategy before the recent resurgence in
interest in gold and were able to successfully acquire highly
strategic project areas prior to the recent influx of competitors.
We are particularly excited to have assembled an outstanding
technical and corporate team for the advancement of this project
portfolio that will now be led by Paul
Matysek. With $11 million in
working capital following the completion of the Transaction we will
be well funded and are looking forward to kicking off multiple
exploration and development initiatives."
Atlanta Mine, Nevada
Nevada King owns 100% of the
Atlanta Mine, located 100km southeast of Ely, Nevada, which is a historical gold-silver
producer that currently hosts a NI 43-101 compliant mineral
resource estimate constrained by a conceptual pit containing 11
million tonnes of measured and indicated resources grading 1.3g/t
Au and containing 460,000 Au oz (Table 1-1). Inferred mineral
resources are 5.31 million tonnes grading 0.83 g/t Au containing
142,000 Au oz. Past open pit production is reported to have been
110,000 oz Au and 800,000 oz. Ag (1975 - 1985). Exploration
activities are currently covered by a BLM-approved Plan of
Operations. Existing infrastructure includes electricity to the
mine, phone/internet communications, access via a graded county
road, and abundant water supply. The resource area remains open for
expansion through further drilling.
- 2020 Updated Mineral Resource Estimate
Mineral Resources are not Mineral Reserves and do not have
demonstrated economic viability. There is no certainty that
the Mineral Resources will be converted to Mineral Reserves. The
quantity and grade are estimates and are rounded to reflect the
fact that it is an approximation. Quantities may not sum due to
rounding.
Kevin Francis, SME RM, of Gustavson Associates is the Qualified
Person with responsibility for the mineral resource estimate.
Mineral Resources do not have modifying factors or dilution
applied. Mineral Resources are presented at a 0.35 ppm gold only
cutoff grade and constrained by a pit optimization shell developed
at US $1500/ oz Au.
In the previous report, written in 2013, no economic pit
analysis was applied to constrain the mineral resource estimate.
Gustavson believes that this most recent presentation better
represents a 'reasonable prospects for economic extraction'. There
is additional mineralized material indicated by the exploration and
estimation process that exists outside the pit optimization shell.
However, this material is not considered a Mineral Resource with
current economic parameters in this report.
The 2021 exploration plan anticipates a US $2.5M expenditure designed to complete a
Preliminary Economic Assessment (PEA) that includes metallurgical
testing, 9000m of RC and core
drilling, and an ambitious geophysical program. Most of the
drilling is dedicated to expanding the existing Inferred
mineralization eastward and northward of the pit constrained
resource zone and at the same time converting Inferred to
Measured-Indicated. The wide-ranging geophysical studies and soil
sampling program seek to identify new gold targets elsewhere in the
Atlanta District, which is in
large part covered by alluvium and post-mineral
volcanics.
Iron Point, Nevada
The Iron Point Project encompasses 12,822 acres and is located
22 miles east of Winnemucca,
Nevada. The project area adjoins Interstate 80, is bisected
by high voltage electric power lines, and is traversed by the Union
Pacific railroad line across the northern property boundary. The
primary gold target is Carlin-type
gold mineralization hosted in Lower Plate carbonate stratigraphy
below the Roberts Mountain thrust fault. Some of the world's
largest and highest-grade gold deposits are found in this Lower
Plate Assemblage. The linear target zone coincides with a
north-south striking range front fault that hosts strong
Carlin-type gold pathfinder
geochemistry along a 5km strike length. Based on previous drilling,
significant gold mineralization in Upper Plate rocks typically
starts at depths exceeding 100m.
Ethos Gold's 2019 drilling program penetrated the Roberts Mountain
Thrust and encountered gold mineralization in Lower Plate
carbonates in core hole VM-8C, bottoming at 710m depth in 5.8m
grading 0.165ppm Au accompanied by elevated As, Sb, and Hg (true
mineralized thickness unknown). On the heels of a
district-scale geophysical program completed in late 2020, Ethos
seeks to expand upon this deep gold intercept in its planned 2021
drilling program.
Board of Directors and Management:
Following completion of the Transaction, the Company's board of
directors will consist of Victory's current board of directors
(Paul Matysek (Executive Chairman),
Collin Kettell, Douglas Forster, P.Geo. and Craig Roberts, P.Eng.) supplemented by
Susan Lavertu, current CEO of
Nevada King, and Dr. Quinton Hennigh, presently an advisor to
Nevada King. Management of the
Company will continue to be led by Victory's current senior
management team with the addition of Susan
Lavertu as President of the Company.
Paul Matysek, M.Sc., Executive
Chairman –
Mr. Matysek is a geologist/geochemist by training, a successful
alpha entrepreneur and creator of shareholder value with over 40
years of experience in the mining industry. Since 2004 as either
CEO or Executive Chairman, Mr. Matysek has sold five publicly
listed exploration and development companies, in aggregate worth
over $2 billion. Most recently, he
was Executive Chairman of Lithium X Energy Corp., which was sold to
Nextview New Energy Lion Hong Kong Limited for $265 million in cash. Mr. Matysek was President
and CEO of Goldrock Mines Corp., which sold to Fortuna Silver Mines
in July 2016. He was previously CEO
of Lithium One, which merged with Galaxy Resources of Australia to create a multi-billion-dollar
integrated lithium company. He served as CEO of Potash One, which
was acquired by K+S Ag for $434-million cash in a friendly takeover in 2011.
Mr. Matysek was also the co-founder and CEO of Energy Metals Corp.,
a uranium company that grew from a market capitalization of
$10 million in 2004 to approximately
$1.8 billion when sold in 2007.
Collin Kettell, Chief
Executive Officer & Director –
Mr. Kettell is Founder & Executive Chairman of Palisades,
Canada's resource focused merchant
bank, with current AUM of $420M.
Collin comes from a family with deep ties to mining, including
co-founding AuEx Ventures, the company responsible for discovering
the Long Canyon deposit, a project ultimately acquired by Newmont
for $2.3B. Mr. Kettell is also the
Founder & Executive Chairman of New Found Gold Corp., which is
currently exploring its flagship Queensway Project in Newfoundland; Co-Founder of Goldspot
Discoveries (TSXV: SPOT).
Susan Lavertu, President &
Director –
Ms. Lavertu is the President & CEO of Nevada King since its inception, where she has
been instrumental in organizing financing, advancing operations,
and directing the overall strategy of the company. Ms. Lavertu is a
private resource focused investor. She acts in the capacity as
advisor to several TSX-V listed mining companies. Prior to working
in the resource sector, Ms. Lavertu worked in marketing and online
marketing in North America and
Europe.
Bassam Moubarak, CPA, Chief
Financial Officer –
Mr. Moubarak is a seasoned senior executive with over 10 years
of experience in the mining industry. Most recently, Mr. Moubarak
was chief financial officer of Lithium X Energy Corp., where he
played a key role in its sale to NextView New Energy Lion Hong Kong
Ltd. for $265-million. Prior to this,
Mr. Moubarak was chief financial officer of Goldrock Mines Corp.,
where he played a key role in its sale to Fortuna Silver Mines Inc.
for $180-million. He was chief
financial officer of Petaquilla Minerals Ltd., where he was
instrumental in raising in excess of $120-million to develop and bring into production
the Molejon gold mine. He also played a key role in the sale of
Petaquilla Copper Ltd. to Inmet Mining Corp. for $400-million and negotiated the sale of Golden
Arrow Resources Corp.'s 1-per-cent net smelter return royalty on
the Gualcamayo gold mine to Premier Royalty Inc. for $17.75-million. Mr. Moubarak is a chartered
professional accountant and was previously a senior manager with
the international accounting firm Deloitte LLP, where he led audits
of public companies and oversaw SOX 404 implementations, with
specific emphasis on the mining industry.
Cal Herron, P.Geo., Chief
Operating Officer –
Mr. Herron acts as Chief Operating Officer for Nevada King since its inception. Mr. Herron is
President of Quest Geological Consultants, a geo-consultancy group
focused on minerals exploration in North
America. Cal has over 40 years' experience in the
evaluation, design, and management of base and precious metals
exploration projects in the United
States and Asia. M.A. in
Geology from California State
University (1981); Professional Geoscientist (P. Geo.)
registered in Ontario, Canada with
APGO.
Doug Forster, M.Sc., P.Geo.,
Director –
Mr. Forster has been involved in the mining industry and capital
markets for over 35 years having acted as geologist, company
founder, director, senior executive, and financier. Mr. Forster was
a founder, President and CEO of Newmarket Gold which was acquired
by Kirkland Lake Gold in a
$1 billion transaction in 2016. Doug
has a proven track record in mergers and acquisitions, mine
operations, resource project development and equity and debt
financing. For over three decades Mr. Forster has been creating
wealth for North American and International investors through
natural resource discovery, exploration, and operations. Mr.
Forster obtained his B.Sc. and M.Sc. in geological sciences from
the University of British Columbia and
he is a registered member of the Association of Professional
Engineers and Geoscientists of British Columbia.
Craig Roberts, B.A.Sc.,
M.Phil., P.Eng., Director –
Mr. Roberts is a mining engineer with 35 years of operations,
consulting, and investment banking experience. For the last 20
years Mr. Roberts has worked as a mining investment banker with
First Marathon Securities, National Bank Financial, PI Financial,
and Axemen Resource Capital, focused on institutional equity
financing and merger and acquisition advisory mandates in the
mining sector. Previous to this Mr. Roberts worked seven years with
Wright Engineers/Fluor Corporation, focused on feasibility studies
of various mining projects worldwide. Prior to this Mr. Roberts
worked for five years in underground mining operations. Mr. Roberts
holds a B.A.Sc. degree in Mining Engineering from UBC, an M.Phil.
in Management Studies from Oxford
University, and is registered as a Professional Engineer
(Mining) in British Columbia. Mr.
Roberts has taught mining engineering courses at UBC and is former
Chair of the Mineral Economics Society of the Canadian Institute of
Mining, Metallurgy, and Petroleum. He is currently CEO of New
Found Gold Corp. and Ethos Gold Corp.
Dr. Quinton Hennigh, Director
–
Dr. Hennigh is an economic geologist with 25 years of
exploration experience, mainly gold related. Early in his
career, he explored for major mining firms including Homestake
Mining Company, Newcrest Mining Ltd and Newmont Mining
Corporation. Dr. Hennigh joined the junior mining sector in
2007 and has been involved with a number of Canadian listed gold
companies including Gold Canyon Resources where he led exploration
at the Springpole alkaline gold project near Red Lake Ontario, a 5 million ounce gold asset
that was recently sold. In 2010, Dr. Hennigh helped start
Novo Resources and began assembling its Australian exploration
portfolio. Dr. Hennigh obtained a Ph.D. in Geology/Geochemistry
from the Colorado School of Mines.
Further Transaction Details:
The boards of directors of Victory and Nevada King have unanimously approved the
Agreement and the terms of the Transaction. Given the related party
nature of the transaction, certain directors of Victory and
Nevada King abstained from voting
on the Transaction. The parties intend to enter into a definitive
arrangement agreement (the "Arrangement Agreement") in the
near future, which will set out the detailed terms of the
Transaction.
The key conditions to the completion of the Transaction are
approval of the plan of arrangement by the shareholders of
Nevada King, approval of the
issuance of the Victory Shares to the Nevada King shareholders and certain other
matters by the shareholders of Victory, court approval, approval of
the TSX Venture Exchange, completion of the Private Placement and
other conditions customary for a transaction of this nature. No
finder's fee is payable in connection with the Transaction.
The transaction is a "business combination" subject to
Multilateral Instrument 61-101 Protection of Minority Security
Holders in Special Transactions (" MI-61-101").
MI-61-101 provides that, in certain circumstances, where a "related
party" (as defined in MI-61-101) of an issuer is acquiring
the issuer, such transaction may be considered a "business
combination" for the purposes of MI-61-101 and may be subject
to minority shareholder approval, formal valuation and other
requirements. Palisades is both a major shareholder of Victory and
Nevada King, holding approximately
50% of the Victory Shares and 46% of the Nevada King Shares. Consequently,
minority shareholder approval of the Victory shareholders will be
required for the Transaction. It is expected that the
Transaction will be exempt form the formal valuation requirement
of MI-61-101 as Victory is not listed on a specified market
set out in section 4.4(1)(a) of MI-61-101.
The Company will be seeking TSX Venture Exchange approval as
soon as practicable and expects the transaction to be a
"fundamental acquisition" and subject to TSX Venture Exchange
policy 5.3.
Full details of the Transaction, including the Company's
assumption of any liabilities of Nevada King, will be included in the
Arrangement Agreement and materials to be mailed to the
shareholders of Victory and Nevada
King for the shareholder meetings required in connection with the
Transaction.
Fort Capital Partners acted as financial advisor to the Special
Committee and board of directors of Victory and provided an oral
report, subject to certain assumptions, that the Transaction is
fair to the shareholders of Victory.
Further Private Placement Details
The Company intends to satisfy the Private Placement condition
by raising a minimum of $8 million by
way of non-brokered private placement financing priced at
$0.55 per share of the Company. The
Private Placement will be closed in conjunction with the completion
of the Transaction with the investors funds being released to the
Company at that time. Use of funds will include advancement of the
Company's development and exploration stage assets. Palisades, a
resource focused merchant bank, has committed to subscribe for any
portion of the Private Placement that is not taken up by other
investors.
Qualified Person
The scientific and technical information in this news release
has been reviewed and approved by Calvin R.
Herron, P.Geo., who is a Qualified Person as defined by NI
43-101.
The technical information surrounding the recently released NI
43-101 compliant mineral resource for the Atlanta Mine has been
reviewed and approved by Kevin
Francis, SME RM, who is a
Qualified Person as defined by NI 43-101.
About Victory
Victory owns a 100% interest in the Iron Point Vanadium Project,
located 22 miles east of Winnemucca,
Nevada. The project is located within a few miles of
Interstate 80, has high voltage electric power lines running
through the project area and a railroad line passing across the
northern property boundary. The Company is well financed to advance
the project through resource estimation and initial feasibility
study work. Victory has a proven capital markets and mining team
led by Executive Chairman Paul
Matysek. Major shareholders include Palisades
([50]%), and management, directors and founders (27%).
Approximately 28% of the Company's issued and outstanding shares
are subject to an escrow release over the next two
years.
Please see the Company's website at www.victorymetals.ca.
About Nevada King
Nevada King is the fourth
largest mineral claim holder in the State
of Nevada, and the fastest growing mineral claim holder in
the United States. Nevada King owns 100% of the Atlanta Mine,
located 100km southeast of Ely,
Nevada, which is a historical gold-silver producer that
currently hosts a NI43-101 compliant mineral resource estimate
constrained by a conceptual pit containing 11 million tonnes of
measured and indicated resources grading 1.3g/t Au and containing
460,000 Au oz (Table 1-1). Inferred mineral resources are 5.31
million tonnes grading 0.83 g/t Au containing 142,000 Au oz. Past
open pit production is reported to have been 110,000 oz Au and
800,000 oz. Ag (1975 - 1985). Exploration activities are currently
covered by a BLM-approved Plan of Operations. Existing
infrastructure includes electricity to the mine, phone/internet
communications, access via a graded county road, and abundant water
supply. The resource area remains open for expansion through
further drilling.
Please see the Company's website at www.nevadaking.ca
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.
Cautionary Statements Regarding Forward Looking
Information
This news release contains certain "forward-looking information"
and "forward-looking statements" (collectively "forward-looking
statements") within the meaning of applicable securities
legislation. All statements, other than statements of historical
fact, included herein, without limitation, statements relating the
future operations and activities of the Company, are
forward-looking statements. Forward-looking statements are
frequently, but not always, identified by words such as "expects",
"anticipates", "believes", "intends", "estimates", "potential",
"possible", and similar expressions, or statements that events,
conditions, or results "will", "may", "could", or" should" occur or
be achieved. Forward-looking statements in this news release relate
to, among other things, statements relating the terms of the
Transaction; the terms of the Private Placement, managements
expectations regarding the Transaction, the terms of the
Arrangement Agreement, the Company's future outlook and anticipated
events or results; and the completion of the Transaction. Actual
future results may differ materially. There can be no assurance
that such statements will prove to be accurate, and actual results
and future events could differ materially from those anticipated in
such statements. Forward-looking statements reflect the beliefs,
opinions and projections on the date the statements are made and
are based upon a number of assumptions and estimates that, while
considered reasonable by the Victory, are inherently subject to
significant business, economic, competitive, political and social
uncertainties and contingencies. Many factors, both known and
unknown, could cause actual results, performance or achievements to
be materially different from the results, performance or
achievements that are or may be expressed or implied by such
forward-looking statements and the parties have made assumptions
and estimates based on or related to many of these factors. Such
factors include, without limitation, the Victory's failure to
complete the Transaction, the failure or Victory shareholders or
Nevada King shareholders to
approve the transaction, the failure of the TSX Venture Exchange to
approve the Transaction and the Private Placement and management's
discretion to reallocate the use of proceeds. Readers should not
place undue reliance on the forward-looking statements and
information contained in this news release concerning these items.
Victory does not assume any obligation to update the
forward-looking statements of beliefs, opinions, projections, or
other factors, should they change, except as required by applicable
securities laws.
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