Abcourt Announces Non-Binding Letter of Intent to Acquire Pershimex
For immediate release
TSX Venture: ABI.V
ABCOURT ANNOUNCES NON-BINDING LETTER OF INTENT TO ACQUIRE
PERSHIMEX
Rouyn-Noranda, Canada, June 9, 2022 – Abcourt Mines Inc. (“Abco urt” or the
“Corporation”) (TSX Venture: ABI) is pleased to announce that it has entered into a non-binding
letter of intent dated June 9, 2022 (the “LOI”) with Pershimex Resources Corporation
(“Pershimex”) (TSX Venture: PRO) in respect of a proposed transaction, whereby the Corporation
would acquire all of the issued and outstanding securities of Pershimex by way of a three-cornered
amalgamation (the “Transaction”). The proposed Transaction will create value for shareholders
of both companies and is part of Abcourt’s vision to create a larger and more diversified emerging
gold producer and explorer in Québec. The Proposed Transaction provides a compelling
investment opportunity for existing and potential new investors that we believe will result in
significant share price appreciation for shareholders of both companies.
TRANSACTION HIGHLIGHTS
Highlights of the combined company includes:
~510 km 2 of strategic landholdings across major gold districts in central Québec;
o We estimate that post-transaction, Abcourt will have the 3 rd largest aggregate
landholdings amongst gold explorers/developers in the regions s urrounding
Rouyn-Noranda, Amos, Val-d'Or and Lebel-sur-Quevillon
A large and diversified project portfolio in Québec, which inc ludes:
o 2 underground gold mines that are currently on care-and-mainte nance and
awaiting restart (Sleeping Giant and Elder gold mines),
o an operating 750 tpd mill at the Sleeping Giant mine site,
o 14 early-to-advanced stage gold exploration projects hosting m any known
deposits,
o a feasibility stage zinc-silver project (Abcourt-Barvue) and a nearby satellite
deposit (Vendome);
Potential for substantial synergies from (i) mining and proces sing the 5,000-tonne bulk
sample at the historical Pershing-Manitou mine; (ii) consolidat ing and optimizing
exploration and development activities in the region; and (iii) corporate overhead costs;
and
Larger capital markets profile that will better position the c ombined company to attract new
institutional and high net worth retail investors.
The proposed Transaction will provide significant benefits to P ershimex shareholders, which
includes:
An immediate offer premium of 27.2% over Pershimex’s trailing 5-day VWAP;
Transition from a microcap Québec gold explorer to a high-grow th, emerging gold
producer;
Near-term upside from the re-start of the Sleeping Giant gold mine;
Utilize Abcourt’s Sleeping Gi ant mill and operating expertise and experience to maximize
the value of the Pershing-Manitou Project; and
Upside from the potential monetization of Abcourt’s non-core a ssets.
Pascal Hamelin, President and CEO of Abcourt, says: “I am very pleased to see this proposed
transaction that will unlock the value of both companies by combining our talented technical teams
and project portfolios. Given that we operate in the same regi on, this is a logical and synergistic
transaction to create a stronger Québec gold company. I look f orward to working with the team
at Pershimex to build a significant gold explorer and operator in the Abitibi Greenstone Belt.”
TRANSACTION SUMMARY
Pershimex shareholders will receive 0.5714 pre-consolidation common shares of Abcourt (each,
an “Abcourt Pre-Consolidation Share”) in exchange for each common share of Pershimex (each,
a “Pershimex Share”) (collectively, the “Exchange Ratio”). The Exchange Ratio implies a
consideration of C$0.038 per Pershimex Share based on the volum e weighted average price
(“VWAP”) of Abcourt’s common shares on the TSX Venture Exchange (the “TSXV”) over the five
trading days ending June 8, 2022 and results in the following offer premiums:
27.2% premium to Pershimex’s 5-day VWAP and a 22.9% premium t o its 20-day VWAP
over the period ending June 8, 2022; and
33.3% premium over Pershimex’s previous day close based on the implied offer price of
C$0.040 per Pershimex share calculated using Abcourt’s closing share price as of June
6, 2022, which is the day prior to the date that the Board of Directors of Pershimex entered
into the LOI.
Pursuant to the proposed Transaction, the combined company will be 81.2% owned by Abcourt
shareholders and 18.8% owned by Pershimex shareholders.
As part of the proposed Transaction, all outstanding options of Pershimex will be exchanged for
economically equivalent options to purchase Abcourt Shares (subject to an adjustment based on
the Exchange Ratio and Share Consolidation described below) and holders of Pershimex
warrants will be entitled, in accordance with the terms of such warrants, to receive Abcourt Shares
on the exercise of such warrants (subject to adjustment based on the Exchange Ratio and Share
Consolidation described below).
The proposed Transaction is expected to be structured as a three-cornered amalgamation under
the Canada Business Corporations Act (“CBCA”), pursuant to whic h a wholly-owned subsidiary
to be incorporated by the Corporation under the CBCA (“Subco”) would amalgamate with
Pershimex, with the entity resulting from such amalgamation becoming a wholly-owned subsidiary
of Abcourt. The proposed Transaction will be subject to Abcourt , Pershimex and Subco
(collectively, the “Parties”) entering into an amalgamation agr eement (the “Amalgamation
Agreement”), which will contain terms and conditions customary for transactions of this nature,
including non-solicitation provisions, expense reimbursement pr ovisions, rights to match and
mutual termination fees payable in certain circumstances where a Party elects not to proceed with
the proposed Transaction.
In connection with the proposed Transaction, Pershimex will hav e the right to nominate one
director to the board of directors of Abcourt.
The Parties will use their best efforts to negotiate and finalize the Amalgamation Agreement and
other transaction documents on or before June 30, 2022, or such other date as mutually agreed
by Abcourt and Pershimex. To facilitate this expeditious process, Pershimex has entered into an
exclusivity agreement with Abcourt, and Abcourt and Pershimex h ave entered into a mutual
confidentiality agreement to facilitate the completion of remai ning technical, financial and legal
due diligence. Subject to entering into the Amalgamation Agreem ent, closing of the proposed
Transaction will be subject to numerous approvals including, but not limited to:
(i) the approval of Pershimex shareholders of the Transaction t o take place at a special
meeting of Pershimex shareholders to be announced by Pershimex at a later date,
including
at least two-thirds of the votes cast by Pershimex shareholder s and the Pershimex
option holders voting as a single class, and
a simple majority of the votes cast by Pershimex shareholders, excluding for this
purpose the votes of “related parties” and “interested parties” and other votes
required to be excluded under Multilateral Instrument 61-101 Protection of Minority
Security Holders in Special Transactions: and
(ii) customary regulatory and stock exchange approvals.
No shareholder vote for the approval of the proposed Transactio n is required by Abcourt
shareholders. The Parties anticipate the completion of the prop osed Transaction by September
30, 2022.
The proposed Transaction has the full endorsement of the Board of Directors of both Abcourt and
Pershimex. The Board of Directors of Pershimex anticipates issu ing its formal recommendation
to Pershimex shareholders upon entering into the Amalgamation Agreement. The Amalgamation
Agreement is anticipated to include customary support agreements by all directors and executive
management of Pershimex to vote their Pershimex Shares in favour of the proposed Transaction.
SHARE CONSOLIDATION & NAME CHANGE
Concurrent and prior to closing the Transaction, Abcourt intend s to complete a share
consolidation on the basis of 7 existing Abcourt common shares for each post-consolidation
common share (the “Share Consolidation”). The proposed Share Co nsolidation would reduce
Abcourt’s current shares outstanding from 328,289,130 to 46,898 ,447. In addition, the newly
created company will be rebranded with a new corporate name to be determined by the
management of Abcourt at a later date. The Share Consolidation and name change will be subject
to the approval of the majority of shareholders of Abcourt at a special shareholder meeting, which
is expected to be held prior to the completion of the proposed Transaction.
ADVISORS
Red Cloud Securities Inc. is acting as financial advisor to Abc ourt in connection with the
Transaction, and Lavery de Bill, L.L.P. is acting as the legal advisor to Abcourt in connection with
the proposed Transaction.
QUALIFIED PERSON
Pascal Hamelin has reviewed and approved the scientific and tec hnical information contained in
this news release. Pascal Hamelin is a qualified person within the meaning of the National
Instrument 43-101 - Standards of Disclosure for Mineral Projects, and is also President, CEO of
Abcourt.
ABOUT ABCOURT MINES INC.
Abcourt Mines Inc. is a gold producer and a Canadian exploration corporation with strategically
located properties in northwestern Québec, Canada. Abcourt owns the Sleeping Giant mill and
mine where it concentrates its activities.
For more information about Abcourt Mines Inc., please visit our web site at www.abcourt.com
and consult our filings under Abcourt's profile on www.sedar.com.
Pascal Hamelin
President and CEO
T: (819) 768-2857
Dany Cenac Robert, Investor Relations
Reseau ProMarket Inc.,
T: (514) 722-2276, post 456
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain information contained herein may constitute “forward-lo oking information” or “forward-looking
statements” under Canadian securities legislation. Generally, forward-looking information can be identified
by words such as "pro forma", "p lans", "expects", "may", "shoul d", "could", "will", "budget", "scheduled",
"estimates", "forecasts", "intend s", "anticipates", "believes", or variations including negative variations
thereof of such words and phrases that refer to certain actions , events or results that may, occur or be
taken or achieved. Such forward-looking statements, including but not limited to statements relating to: the
ability of the Parties to satisfy the conditions precedent to t he Transaction; the anticipated closing, timing,
benefits and effects of the Transaction; and expected developme nt and operations, involve risks,
uncertainties and other factors which may cause the actual resu lts to be materially different from those
expressed or implied by such forw ard-looking statements or forw ard-looking information. Such factors
include, among others, the terms of the Amalgamation Agreement including the exercise of any termination
rights, the inability of the Parties to satisfy or waive in a t imely manner the conditions to the closing of the
Transaction, the inability of the Corporation to realize the be nefits of the Transaction, the risks related to
the exploration, development and mining operations; the impacts of macroeconomic developments as well
as the impact of the COVID-19 pandemic; and any material adverse effect on the business, properties and
assets of the Corporation. There can be no assurance that such statements will prove to be accurate, as
actual results and future events could differ materially from t hose anticipated in such statements.
Accordingly, readers should not place undue reliance on forward -looking statements and forward-looking
information. The Corporation will not update any forward-looking statements or forward-looking information
that are incorporated by reference herein, except as required by applicable securities laws.
The TSX Venture Exchange and its regulatory service provider (as defined in the policies of the
TSX Venture Exchange) assume no responsibility for the adequacy or accuracy of this press
release.