Apogee Minerals Ltd. Announces Proposed Transaction with Alto Verde Copper Inc.
/NOT FOR DISTRIBUTION TO UNITED STATES NEWS SERVICES OR DISSEMINATION IN THE UNITED STATES/
JANUARY 25th, 2022, VANCOUVER, British Columbia – Apogee Minerals Ltd. (“Apogee” or the “Company”) (TSXV: APMI) is pleased to announce that it has entered into a non-binding letter of intent dated January 24th, 2022 (the “LOI”) with Alto Verde Copper Inc. (“Alto Verde”), in respect of a proposed business combination transaction (the “Proposed Transaction”) expected to be completed by way of three cornered amalgamation. Pursuant to the Proposed Transaction, a newly created wholly-owned subsidiary of the Company will amalgamate with Alto Verde, to create a new company (“Newco”) with Newco becoming a wholly-owned subsidiary of the Company at closing. The Proposed Transaction will be an Arm’s Length Transaction (as that term is defined under TSX Venture Exchange (“TSXV”) Policy 1.1) and is expected to constitute a “reverse takeover” of the Company pursuant to TSXV Policy 5.2. On closing of the Proposed Transaction, it is anticipated that the Resulting Issuer (as defined below) will change its name to “Alto Verde Copper Inc.” (the “Name Change”).
Background on Alto Verde:
Alto Verde Copper Inc. is a private mining company focused on its portfolio of prospective exploration assets located in the Central Volcanic Zone, within the prolific Chilean Copper belt.
Alto Verde’s portfolio includes three copper exploration projects: Pitbull in the Tarapaca Region and Tres Marias and Zenaida in the Antofagasta Region. Alto Verde holds a significant land package covering an area of 16,250 hectares with the projects situated proximal to several of the world’s largest mines.
Alto Verde’s leadership team is comprised of senior mining industry executives who have a wealth of technical and capital markets experience and a strong track record of discovering, financing, developing, and operating mining projects on a global scale. Alto Verde is committed to sustainable and responsible business activities in line with industry best practices, supportive of all stakeholders, including the local communities in which it operates.
Alto Verde was incorporated on December 16, 2020 under the Business Corporations Act (Ontario).
Pitbull, Tres Marías, and Zenaida Projects:
All three of the Alto Verde copper projects are located in northern Chile within the Central Volcanic Zone, home to a majority of the country’s production of copper, with much coming from porphyry-style deposits that are rich in copper, molybdenum, gold and silver by-products. Notable copper miners in the region include Antofagasta Minerals, BHP Billiton, Glencore and Freeport-McMoRan Inc., among others. With its well-developed sector, Chile is also known as a favourable mining jurisdiction within South America, with a long history of strong mining laws and support for foreign direct investment.
Pitbull is an early-stage exploration group of concessions comprising 1,400 ha and located about 25 km north of Anglo American & Glencore’s Collahuasi mine, which in 2019 produced more than 565 kt of fine copper with revenues of US$ 3.1 billion. The group of concessions lies within the Upper Eocene-Lower Oligocene (Mid-Tertiary) Metallogenic Belt, a similar geological zone to that of Collahuasi. Initial plans at the Pitbull property include a high resolution UAV magnetometry survey over 14 km2, an Induced Polarization and Resistivity GSDAS (3D) comprising 32 linear km and covering 14 km2, a photogrammetric survey, Magnetovariational Profiling (MVP), and a 3D Resistivity Inversion study. Data from these studies will determine the drill hole collar locations for a follow-on drilling campaign. The Pitbull property will serve as the “qualifying property” of the Resulting Issuer (as described below) and as that term is defined under TSX Policy 1.1.
Tres Marías is a prospective mid-stage exploration group of concessions covering an area of 13,050 ha and is located within the Paleocene-Lower Eocene Central Metallogenic Belt at a 1,600 m elevation with year-round access in the Antofagasta Region. There is a visible hydrothermal alteration in the outcrops that, based on geological mapping, corresponds to continental clastic sedimentary rocks of the Jurassic Quehuita Formation. Freeport-McMoRan Inc. (“Freeport”) previously completed 2,800 m of drilling in 2015 and 2018, performed in the eastern portion of the Tres Marías property, including 6 diamond drill holes (DDH) and 1,000 m in 2 reverse circulation (RC) holes completed, and there remains much to be followed up on. Highlights from these historical drill holes include TMD-15-02 with 2.4 m of 3.10% Cu and 19 ppm Ag, and TMRC-18-01 with 4.0 m of 4.50% Cu and 121.5 ppm Ag. Drilling also indicated anomalous polymetallic zinc, silver, lead and copper potential.
The Tres Marías property is subject to a purchase option by Freeport such that upon completing US$5 million of qualifying exploration expenditures on the Tres Marías property within 5 years of September 23rd, 2021, Freeport shall have the right and option to (i) acquire a 51% interest in the Tres Marías property for US$12.5 million, or (ii) acquire a 49% interest in the Tres Marías property for US$250,000 (collectively with (i), the “Purchase Option”), or (iii) not acquire any interest in the Tres Marías property. If Freeport exercises the Purchase Option to acquire a 51% interest in the Tres Marías property, Alto Verde will be granted a 0.5% NSR royalty over the Tres Marías property. If Freeport exercises the Purchase Option to acquire a 49% interest in the Tres Marías property, Freeport will be granted a 1.0% NSR royalty over the Tres Marías property. Freeport may also elect not to participate in the property, in which case it will be granted a 1.0% NSR royalty over the Tres Marías property.
Zenaida is an early-stage exploration group of concessions comprising 1,800 ha, and is also located on the Upper Eocene-Lower Oligocene (Mid-Tertiary) Metallogenic Belt located in the Antofagasta Region. Although Alto Verde has no current plans for Zenaida, preliminary results indicate the potential for mineralization and may warrant further analysis and follow-up by Alto Verde in the future.
The information and data referred to above, including the drilling results, are historical in nature. A qualified person, as defined in National Instrument 43-101 – Standards of Disclosure for Mineral Projects, has not completed sufficient work to independently verify the historical information and data disclosed and neither the Company nor Alto Verde is treating the historical data as current.
The Proposed Transaction is expected to be completed by way of a three-cornered amalgamation or such other form of business combination determined by the legal and tax advisors to each of Apogee and Alto Verde, acting reasonably, which will result in Alto Verde combining its corporate existence with NewCo or otherwise becoming a wholly-owned subsidiary of Apogee (the “Resulting Issuer”). Upon completion of the Proposed Transaction, it is expected that the Resulting Issuer will be a Tier 2 mining issuer and carry on the business previously carried on by Alto Verde.
In connection with the Proposed Transaction, the Company is expected to complete a consolidation of its share capital on a 4.25:1 basis (the “Consolidation”). Pursuant to the Proposed Transaction, the Company will acquire 100% of the issued and outstanding common shares of Alto Verde on a share exchange ratio of one common share in the authorized share structure the Company on a post-Consolidation basis for one common share in the capital of Alto Verde. All outstanding restricted share units, warrants, and options to purchase Alto Verde common shares will be exchanged, on a 1:1 post-Consolidation basis, for restricted share units, warrants, and options to purchase common shares, as the case may be, of the Resulting Issuer.
In addition to securities of the Resulting Issuer to be issued upon conversion of the Subscription Receipts (as defined below), upon closing of the Proposed Transaction, it is expected that the Resulting Issuer will issue approximately 16,957,328 common shares (on a post-Consolidation basis) to shareholders of Alto Verde. Additionally, it is anticipated that 1,481,668 restricted share units, 6,000,000 common share purchase warrants and 11,729 incentive stock options of Alto Verde will be exchanged or replaced with equivalent securities of the Resulting Issuer.
Non-Arm's Length Parties (as defined in TSXV Policy 1.1) of the Company own approximately 2% of the issued and outstanding shares of Alto Verde, which shares will be exchanged for shares representing approximately 1% of the issued and outstanding shares of the Resulting Issuer. No Non-Arm's Length Parties of the Company are Insiders (as defined in TSXV Policy 1.1) of Alto Verde.
Upon completion of the Proposed Transaction, the directors and officers of Apogee will resign, and the nominees of Alto Verde will be appointed as the directors and officers of the Resulting Issuer.
Completion of the Proposed Transaction will be subject to a number of conditions precedent set forth in the LOI, including, but not limited to: (i) satisfactory completion of due diligence investigations by each of the Company and Alto Verde; (ii) the negotiation and execution of a definitive agreement (the “Definitive Agreement”) on or before March 15, 2022; (iii) approval of the shareholders of Alto Verde and the Company; (iv) completion of the Financing (as described below); (v) completion of the Consolidation and the Name Change; (vi) the Company having a minimum of $1,000,000 in cash immediately prior to closing; and (vii) receipt of all requisite regulatory (including the TSXV) and third party approvals. There can be no assurance that the Proposed Transaction will be completed on the terms proposed in the LOI or at all.
Upon execution of the Definitive Agreement, the Company will issue a subsequent press release containing the details of the Definitive Agreement and additional terms of the Proposed Transaction.
The Proposed Transaction will require approval of the Company’s shareholders in accordance with the policies of the Exchange.
Proposed Private Placement Financing:
Alto Verde anticipates completing a private placement financing (the “Financing”) of subscription receipts (the “Subscription Receipts”) at a price of not less than C$0.65 per Subscription Receipt for gross proceeds up to C$6.0 million, to fund the operations of the Resulting Issuer. Upon closing of the proposed Financing, each Subscription Receipt will automatically convert into securities of the Resulting Issuer. The final size and terms of the Financing will be determined in the context of the market. The proposed Financing may be completed on a non-brokered or brokered basis. In the event that the Financing is brokered, the agent retained by the Company may be paid customary compensation for such agency services. The Financing is subject to TSXV approval.
Proposed Management and Directors:
Subject to TSXV approval, on completion of the Proposed Transaction, the board of the Resulting Issuer will be comprised of five directors nominated for appointment by Alto Verde. It is expected that at closing of the Transaction, the following Alto Verde board members and officers will be appointed as directors and officers of the Resulting Issuer:
Rick Gittleman, Director and Chairman of the Board
Mr. Gittleman is a mining executive with over 40 years’ experience working on mining projects across the globe. He started as a lawyer working on mining projects in central Africa. During his 25-year career at Akin Gump Strauss Hauer & Feld, he managed the energy and mining practice groups of the firm and undertook M&A and Project Finance assignments on behalf of energy and mining clients. In 2009 he joined Freeport McMoRan as a Senior Vice President for Africa and was part of the leadership team that brought the Tenke Fungurume mine in the Democratic Republic of Congo into production. He also worked at Glencore in its copper division. He is currently the Managing Partner of RMG Minerals, a consulting company providing advice to the mining community.
Chris Buncic, MBA, CFA, P.Eng, President, CEO and Director
Chris Buncic is one of the founding partners in the formation of Alto Verde Copper Inc. Most recently, Chris was President and CEO of Ascendant Resources Inc. (TSX: ASND) where he and the team acquired and restored profitability to the El Mochito mine in Honduras and greatly advanced the exploration efforts of the Lagoa Salgada project in Portugal. Chris has served in senior management roles at several Canadian corporations in the technology and resources sectors. His depth of experience also includes six years in Institutional Equity Research at leading Canadian independent full-service brokerage firms Cormark Securities Inc. and Mackie Research Capital Corporation. Mr. Buncic is a CFA Charterholder, has an MBA from Schulich School of Business and B.A.Sc. from the University of Toronto. Mr. Buncic is a member of the Professional Engineers of Ontario and the CFA Society.
Mike Ciricillo, Director
Mr. Ciricillo is a mining executive with almost 30 years of operational and project experience, having lived and worked on 5 continents over the span of his career. Mike began his career in 1991 at INCO Ltd in Canada and later joined Phelps Dodge in 1995, which was later acquired by Freeport-McMoRan. There he served in positions of increasing responsibility in the United States, Chile, The Netherlands, and the Democratic Republic of Congo (“DRC”). In the DRC, Mike served as President of Freeport McMoRan Africa and spent 5 years at Tenke Fungurume from the construction phase into the operations phase. Mike then joined Glencore in 2014 as Head of Copper Operations in Peru, followed by the role of Head of Copper Smelting Operations, and eventually, he was placed in the role as Head of Glencore’s Worldwide Copper Assets.
Dr. Mark Cruise, Ph.D, P.Geo, Director
Dr. Cruise is an exploration and mining professional with over of 25 years’ global experience, having discovered, developed and operated mines in Europe, South America, Canada and Africa. Dr. Cruise currently serves as CEO of New Pacific Metals Corp., having previously founded Trevali Mining where he grew the Company from an initial discovery to a global leading zinc producer. He has held a variety of professional and executive positions with Anglo American plc and various publicly listed exploration and development stage companies. Dr. Cruise holds a Bachelor of Geology and a Doctorate of Geology from the University of Dublin, Trinity College. He is a professional member of the Institute of Geologists and the European Federation of Geologists.
Rich Leveille, P.Geo, Director
Mr. Leveille has a lifetime’s worth of experience in the mining sector, having grown up in major copper camps in the western US where his father worked for Kennecott. He has a B.S. Geology from the University of Utah and an M.S. in geology at the University of Alaska, Fairbanks. He worked for a progression of companies including AMAX, Kennecott, Rio Tinto, Phelps Dodge and Freeport-McMoRan in the US and internationally, where he was directly involved with and/or managed teams that made several major discoveries. His last corporate position was Sr VP Exploration for Freeport-McMoRan, based in Phoenix. Mr. Leveille retired in September 2017 and has devoted his time since then to hiking, backpacking, fishing, writing, advocacy for immigrants and geological consulting.
Paul Robertson, Chief Financial Officer
Mr. Robertson is a Chartered Accountant with extensive experience in the mining sector, including assisting junior resource companies with their financial reporting and regulatory requirements. He has over sixteen years of accounting, auditing, and tax experience including working with Ernst & Young from 1999 to 2005. Currently, he is the managing partner of Quantum Advisory Partners LLP, a professional services firm dedicated to assisting publicly listed companies with their financial reporting, taxation and regulatory requirements. He was previously the CFO of Grayd Resource Corporation that was acquired by Agnico Eagle in 2011. Mr. Robertson holds a BA from the University of Western Ontario (1993) and obtained his Chartered Accountant designation from the British Columbian Institute of Chartered Accountants in 1997.
David Garofalo, Special Advisor to the Board of Directors
David Garofalo, currently a Director of Alto Verde, will remain involved as Special Advisor to the Board of Directors of Newco. Mr. Garofalo is an accomplished mining executive with 30 years’ experience in the creation and growth of multi-billion-dollar mining business across multiple continents. Mr. Garofalo has served as Chairman, President and CEO of Gold Royalty Corp. since August 2020. Formerly, he was the President and CEO of Goldcorp Inc., a position he held from 2016 until its sale to Newmont Corporation in 2019. Prior to Goldcorp, he was President, CEO and Director of Hudbay Minerals Inc, (2010-2016), Senior Vice President, Finance and CFO and Director of Agnico-Eagle Mines Limited (1998-2010) and Treasurer of Inmet Mining Corporation (1990-1998). Mr. Garofalo was recognized as the Mining Person of the Year by the Northern Miner in 2012 and was named Canada’s CFO of the Year by Financial Executives International Canada in 2009. He holds a B. Comm with distinction from the University of Toronto, is a fellow of Chartered Professional Accountants (FCPA, FCA) and a Certified Director of the Institute of Corporate Directors (ICD.D). He is also a Director of the great Vancouver Board of Trade and the Vancouver Symphony Orchestra.
Filing Statement and Information Circular:
In connection with the Proposed Transaction and pursuant to the requirements of the TSXV, the Company will file a filing statement or a management information circular on its issuer profile on SEDAR at www.sedar.com, which will contain details regarding the Proposed Transaction, the Consolidation, the Name Change, the Financing and Alto Verde.
Sponsorship of the Proposed Transaction is required by the TSXV unless an exemption from the sponsorship requirement is available. The parties anticipate that an exemption from the sponsorship requirement will be available under TSXV Policy 2.2, however in the event that such an exemption is not available, the parties will seek a waiver of any requirement for a sponsor. In the event that an exemption is not available and a waiver is not obtained, the parties will update the markets accordingly.
Trading in the common shares of the Company is currently halted in compliance with the policies of the TSXV. The Company anticipates that trading will remain halted pending the review of the Proposed Transaction by the TSXV.
Subject to approval of the TSXV, in connection with closing of the Proposed Transaction, the Company will issue up to 917,385 common shares (on a post-Consolidation basis) to certain arm’s length parties as a finder’s fee in connection with the Proposed Transaction. No other finder’s fee or commission is payable in connection with the Proposed Transaction, other than fees and commissions that may be payable in connection with the Financing (the final terms of which will be set out in a subsequent news release).
The scientific and technical information in this press release has been reviewed and approved by Scott Jobin-Bevans, Ph.D., PMP, P.Geo., Principal Geoscientist and Managing Director at Caracle Creek International Consulting Inc., who is an independent consultant and Qualified Person as defined in National Instrument 43-101.
About Apogee Minerals Ltd.:
Apogee Minerals Ltd. is a mineral exploration company. Our goal is to build shareholder value through mineral project acquisitions and advancement, as well as new mineral discoveries.
To find out more about Apogee Minerals Ltd. (TSX-V: APMI) visit the Company’s website: www.apogeemineralsltd.com
Apogee Minerals Ltd.
CEO and Director
For further information, please contact:
Apogee Minerals Ltd.
Riley Trimble, Director
Tel: (604) 416-2978
Alto Verde Copper Inc.
Chris Buncic, President
Completion of the Proposed Transaction is subject to a number of conditions, including but not limited to, TSXV acceptance and if applicable, disinterested shareholder approval. Where applicable, the Proposed Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the transaction 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 Proposed Transaction, any information released or received with respect to the Proposed Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of Apogee Minerals Ltd. should be considered highly speculative. The TSXV has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this news release.
The TSXV has in no way passed upon the merits of the Proposed Transaction and has neither approved nor disapproved the contents of this news release.
Neither the TSXV 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 news release.
Cautionary Statements Regarding Forward-Looking Information
This news release contains forward-looking information within the meaning of Canadian securities laws. Such information includes, without limitation, information regarding the structure of the Proposed Transaction, the terms and conditions of the Proposed Transaction, the Consolidation, the Name Change, the terms of the Financing. the composition of the board of directors and officers of the Resulting Issuer upon completion of the Proposed Transaction, the intention of the parties to seek a sponsorship exemption or waiver, the issuance of subsequent news releases, and Alto Verde’s future exploration plans. Although the Company believes that such information is reasonable, it can give no assurance that such expectations will prove to be correct.
Forward looking information is typically identified by words such as: “believe”, “expect”, “anticipate”, “intend”, “estimate”, “postulate” and similar expressions, or are those, which, by their nature, refer to future events. The Company cautions investors that any forward-looking information provided by the Company is not a guarantee of future results or performance, and that actual results may differ materially from those in forward looking information as a result of various factors, including, but not limited to: the Company’s ability to complete the Proposed Transaction; the expected timing and terms of the Proposed Transaction and the Financing; the state of the financial markets for the Company’s securities; the state of the natural resources sector in the event the Proposed Transaction is completed; recent market volatility and potentially negative capital raising conditions resulting from the continued COVID-19 pandemic and risks relating to the extent and duration of such pandemic and its impact on global markets; the Company’s ability to raise the necessary capital or to be fully able to implement its business strategies; and other risks and factors that the Company is unaware of at this time.
The forward-looking statements contained in this news release are made as of the date of this news release. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
The securities referred to in this news release have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons absent U.S. registration or an applicable exemption from the U.S. registration requirements.
This news release does not constitute an offer for sale of securities, nor a solicitation for offers to buy any securities.