Canadian Metals signs agreement to acquire FeTiV Minerals and appoints Gerald Panneton as Chairman and CEO
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Canadian Metals Inc. CSE: CME
Canadian Metals signs agreement to acquire FeTiV Minerals’ interest
on 5 iron projects in Quebec, and appoints Gérald Panneton as
Chairman & CEO
July 8, 2019 Montréal, Québec. - Canadian Metals Inc. (“CME” or the “Company”)
(CSE: CME) is pleased to announce that it has entered into an option agreement (the
“Option Agreement”) with FetiV Minerals Inc. (“FMI”), a private exploration company, to
acquire a 100% interest in the Mouchalagane, Silicates Lake, Seignelay, Lac Robot and
Baie-Trinité iron projects (the “Iron Projects”), located in the Province of Québec.
Principal Terms of the Option Agreement
Under the terms of the Option Agreement, CME has the right to acquire FMI’s 80% interest
in the Iron Ore Projects by way of acquiring 100% of the outstanding securities of FMI (the
“Acquisition”). Each of the Iron Projects is subject to a 2 % Net Smelter Return (NSR)
royalty, half of which can be bought back for $5M.
In order to complete the Acquisition, CME must pay: (i) $5M in common shares (each a
“Share”) of the Company and $5M in cash on or before December 31, 2019; and (ii) an
additional $5M in Shares and $5M in cash on or before December 31, 2020, subject to
the total number of Shares issued being less than 100% of the number of Shares
outstanding prior to the Option Agreement. The first $5,000,000 in Shares will be subject
to a voluntary escrow, with an initial 20% release upon issuance and 40% release s on
each of 6 and 12 months thereafter.
Pursuant to the Option Agreement, CME will immediately become the operator of the Iron
Projects.
Project Summaries
Three of five properties being acquired, have been drilled in the past, and have a combined
conceptual estimated resource of 2,430 – 3,940 Mt at an average grade of approximately
30% (Table 1). The other two Iron Projects are new discoveries with no resources.
The conceptual estimates show the exploration potential and allow for the prioritizing of
iron resource targets in preparation for an initial drilling program to be conducted on the
Property. The Company is planning to carry out diamond -drilling, followed by a Mineral
Resource Estimate, on priority targets by 2020.
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Table 1
Iron Project Conceptual Estimate* (Mt)
Mouchalagane 1315 - 2,440
Silicates Lake 400 - 500
Seignelay 715 - 1,000
Total 2,430 - 3,940
*Conceptual estimates , as defined by the National Instrument 43 -101 Standards of
Disclosure for Mineral Projects, are intended to demonstrate the potential tonnage and
grade, expressed as ranges, of mineralized iron formations underlying the Iron Projects.
The Mouchalagane Property incorporates 98 claims covering a total of 52.17 km2 that
are locally underlain by iron formation horizons of the Sokoman Formation. The Property
is located in the northwestern part of the Gagnon Terrane in the southern part of the
Labrador Trough and comprises the South Mountain Block (29 claims), Crazy Lake Block
(47 claims), and the South Parr Block (22 claims). Conceptual resource estimates, based
on shallow drilling in the early 1960’s, are summarized in Table 2.
Table 2
Area Dimensions (km) Volume Range
(million m3)
Conceptual Tonnage
Range* (Mt)
South Mountain 2.5 x 1.4 x 0.15 (depth) 135-250 430-800
Crazy Lake (east &
west) 2.5 x 1.4 x 0.50 (depth) 100-190 325-600
South Parr 3.7 x 0.6 x 0.25 (depth) 210-390 560-1,040
Total: 445-830 1,315-2,440
*Conceptual estimates, as defined by the National Instrument 43 -101 Standards of
Disclosure for Mineral Projects, are intended to demonstrate the potential tonnage and
grade, expressed as ranges, of mineralized iron formations underlying the Iron Projects.
The Silicates Lake Property comprises 173 claims covering 91.85 km 2 in the south -
central part of the Gagnon Terrane. The western part of the Property is transected by the
Trans-Québec Labrador Road (Highway 389). The Silicates Lake Property is underlain by
approximately 40 km (aggregate strike length) of narrow, sinuous synforms of iron
formation horizons that host several deposits with historic resources (Table 3) .
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Table 3
Occurrence Historic
Resource* Fe % Based on: Year Reference
Lac Athol
North 5.08 Mt 30.20% 3 holes 1961 GM12097,
GM13035
Lac Hoares
East/West 19.3 Mt 30.00% Geophysics 1961 GM12097,
GM13035
Lac Silicates
West 35.56 Mt 31.00% 5 holes 1961 GM12097,
GM13035
Lac Silicates
East (Brutus) 305 Mt 29.40% 18 holes 1961 GM12097,
GM13035
Lac Silicates
East (Brutus) 165 - 353 Mt 29.40% 18 historic
holes (1961) 2013 GM67717
Totals: 225-413 Mt 26 holes
*Historic resources are not NI 43-101 compliant and have no demonstrated economic
viability. The grade and tonnage of the so-called resources are considered uncertain at
best, as there has been insufficient exploration to categorize them as a Mineral Resource
as defined by the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Standards
on Mineral Resources and Reserves. Furthermore, it is uncertain whether further
exploration will result in classification of the resources to Inferred, Indicated or Measured
Mineral Resource categories.
The Seignelay Property comprises five separate but localized blocks of claims (112
claims in total, covering 59.14 km2) in the northwestern part of the Gagnon Terrane. The
claims cover parts of a 25 km, northeast-southwest stretch of ground underlain by
narrow, poly-deformed synforms of iron formation that host seven (7) occurrences with
historic estimated resources (Table 4).
Table 4
Occurrence Historic Resource* (Mt) Fe Grade Based on: Drilled in: Reference
Group 4B 126 31.0% 19 holes 1959 GM10541
Group 4D 18.1 34.6% 8 holes 1959 GM34295
Group 5N 140 31.5% 12 holes 1958 GM10540
Group 5S 46.8 32.2% 23 holes 1961 GM11827
Group 6N 76.6 32.3% 8 holes 1960 GM11812
Group 6S 26.2 36.0% 3 holes 1961 GM34296
Group 7 33.1 34.9% 18 holes 1959-1962 GM34297
Totals: 466.8 91 holes
*Historic resources are not NI 43-101 compliant and have no demonstrated economic
viability. The grade and tonnage of the so-called resources are considered uncertain at
best, as there has been insufficient exploration to categorize them as a Mineral Resource
as defined by the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Standards
on Mineral Resources and Reserves. Furthermore, it is uncertain whether further
exploration will result in classification of the resources to Inferred, Indicated or Measured
Mineral Resource categories.
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Qualified Person
John Langton, P.Geo., a Qualified Person as defined under NI 43-101, has reviewed and
approved the scientific and technical content of this press release.
Related Party Transaction
The independent member of the Board of CME reviewed the terms of the Acquisition and
determined that it is in the best interest of CME to acquire the FETIV iron ore deposits
considering, among other things, their conceptual values and the upside they represent in
a very good market for Iron ore.
The Acquisition will constitute a "related party transaction" within the meaning of
Multilateral Instrument 61 -101 - Protections of Minority Security Holders in Special
Transactions ("MI 61 -101"). However, due to CME' current financial situation, the
Company is relying on the exemption from the formal valuation and minority shareholder
approval requirements of MI 61-101 contained in Section 5.5(g) and Section 5.7(1)(e) of
MI 61-101, respectively, on the basis of the "financial hardship" exemption therein.
The independent members of the Board, acting in good faith, has determined that due to
CME's current financial situation, that the Acquisition is designed to improve the
Company’s' situation, and that the terms of the Acquisition are reasonable in CME's
circumstances. As Stéphane Leblanc and Gérald Panneton disclosed an interest in the
Acquisition, the Acquisition was approved unilaterally by the independent members.
CME expects to file a material change report in respect of the related party transaction
less than 21 days prior to the closing of the Acquisition, which CME deems reasonable in
the circumstances so as to be able to proceed in an expeditious manner.
The Opti on Agreement remains subject to approval of the Canadian Securities
Exchange. The Shares issued as consideration under this Option Agreement will be
subject to a statutory hold period of four months and one day from the date of
issuance.
Management Change
CME is also pleased to announce the appointment of Gerald Panneton as the new
Chairman & CEO of the Company, effective immediately. Mr. Panneton replaces Michel
Gagnon and Stéphane Leblanc, who respectively held the roles of Chairman & CEO of
the Company. The appointment of Mr. Panneton is aligned with the Company's long-term
commitment to its current projects and has been done in anticipation of advancing the
Company's interests in the new Iron Projects.
Mr. Panneton is a geologist wi th over 30 years of experience in mineral exploration and
development, and was the founder, President and CEO of Detour Gold Corporation
(“Detour Gold” ) from its incorporation in July 2006 until November 2013. Under his
leadership, the Detour Lake project grew over tenfold from 1.5 million ounces in resources
to over 16 million ounces in reserves and into production. Today, the Detour Lake mine
ranks as one of the largest gold mines in Canada. Mr. Panneton helped raise
approximately $2.6 billion in capital while at Detour Gold. Mr. Panneton and his Detour
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Gold team were the recipients of the PDAC 2011 Bill Dennis Award for Canadian mineral
discoveries and prospecting success of the year.
From 1994 to 2006, Mr. Panneton was with Barrick Gold Corporation ( “Barrick Gold”)
where for the last six years of his tenure, he was Director of Advanced Projects and
Evaluations for the exploration and corporate development group. He was very
instrumental in bringing the Tulawaka and Buzwagi projects in Tanzania into production
after the Pangea Goldfields Inc. acquisition in 2000. Prior to Barrick Gold, he worked for
Lac Minerals Ltd., Placer Dome Inc. and Vior-Mazarin Group. Mr. Panneton received his
Bachelor of Science in Geology from the University of Montreal and his Master of Science
in Geology from McGill University.
Mr. Panneton is also the Executive Chairman of a private development exploration
Company, Gold Matter Corporation, which focus solely in the Gold space.
In connection with Mr. Panneton’s appointment, Stéphane Leblanc remains a Director of
the Board and will focus his activities as the Vice President of Corporate Development,
whereas Michel Gagnon will also remain a Director of the Board and President of the Audit
and Governance Committee.
About Canadian Metals Inc.
Canadian Metals is a diversified resource company focused on creating shareholder value
through the development of large-scale mineral deposits in specific commodities and safe
jurisdictions.
For more information, please contact:
Gérald Panneton
Chairman & CEO
Email: [email protected]
Stéphane Leblanc
Vice President Corporate Development
Email: : [email protected]
(418) 717-2553
Website: www.canadianmetalsinc.com
Cautionary Statements Regarding Forward-Looking Information
Certain statements in this news release constitute "forward -looking" statements. These statements relate to
future events or our future performance. Forward-looking statements include the closing of the Acquisition and
the statement that the Acquisition will permit CME to maximize the value of the Iron Ore Projects . All such
statements involve substantial known and unknown risks, uncertainties and other factors which may cause
the actual results, performance or achievements to vary from those expressed or i mplied by such forward -
looking statements. Forward -looking statements reflect current expectations regarding future events and
operating performance and speak only as of the date of this news release. Forward-looking statements involve
significant risks an d uncertainties, they should not be read as guarantees of future performance or results,
and they will not necessarily be accurate indications of whether or not such results will be achieved. A number
of factors could cause actual results to differ materia lly from the results discussed in the forward -looking
statements, including, but not limited to, that the closing will not occur. Although the forward -looking
statements contained in this news release are based upon what management of the Company believes are
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reasonable assumptions on the date of this news release, the Company cannot assure investors that actual
results will be consistent with these forward-looking statements. These forward-looking statement are subject
to certain risks and uncertainties an d other risks detailed from time -to-time in CME's ongoing filings with the
securities regulatory authorities, which filings can be found at www.sedar.com. These forward -looking
statements are made as of the date of this news release and CME disclaims any intent or obligation to update
any forward-looking statement, whether as a result of new information, future events or otherwise, unless
required by applicable securities laws..
Neither the CSE nor its Regulation Services Provider accepts responsibility for the adequacy or accuracy of
this release.