AbraPlata and Aethon Execute Definitive Arrangement Agreement Creation of a Well-Funded, Precious-Metals Focused Advanced Exploration Company Supported by Key Cornerstone Investors SSR Mining Inc. and Altius Minerals Corp.
AbraPlata and Aethon Execute Definitive Arrangement Agreement
Creation of a Well-Funded, Precious-Metals Focused Advanced Exploration Company Supported by Key
Cornerstone Investors SSR Mining Inc. and Altius Minerals Corp.
Toronto: September 12, 2019: AbraPlata Resource Corp. (“AbraPlata”) (TSX-V: ABRA & OTCPK: ABBRF) and
Aethon Minerals Corp. (“Aethon”) (TSX-V: AET) are pleased to announce that they have entered into a definitive
combination agreement (the “Definitive Agreement”), dated September 11, 2019, pursuant to which AbraPlata will
acquire all of the outstanding common shares of Aethon (the “Aethon Shares”) (the “Proposed Transaction”) further
to the non-binding letter of intent announced on July 29, 2019 . The Proposed Transaction will be implemented by
way of a plan of arrangement pursuant to the Canada Business Corporations Act (the “Arrangement” ). Aethon
shareholders will vote on the Arrangement at a special meeting of Aethon shareholders (the “Aethon Meeting”) with
closing expected to take place by December 31, 2019.
Under the terms of the Definitive Agreement, all of the issued and outstanding Aethon Shares will be exchanged
on the basis of 3.75 AbraPlata common shares (each whole share, an “AbraPlata Share”) for each Aethon Share
(the “Exchange Ratio”). The Exchange Ratio is the same as was announced on July 29, 2019. Aethon’s largest
shareholder, Fondo De Inversion Privado Mining Equity, which holds approximately 40% of the outstanding Aethon
Shares on a non -diluted basis has entered into support agreements with AbraPlata to vote its Aethon Shares in
favour of the Arrangement.
The Proposed Transaction, upon completion, is expected to benefit shareholders of both companies by creating a
well-funded, advanced-stage silver and gold focused exploration company that also will hold a portfolio of early-
stage precious metal and copper exploration properties in Argentina and Chile . All dollar amounts in Canadian
dollar unless otherwise noted.
Highlights of the Transaction
• Creation of a well -funded, advanced -stage exploration company. The combined company will have a
strong balance sheet with no debt, and a n attractive mineral property portfolio including the advanced -stage
Diablillos silver-gold project located in the mining-friendly province of Salta, Argentina, and a large prospective
exploration land package in Chile.
• Significant Exploration Potential. Aethon and AbraPlata believe exploration potential exists to increase
resources significantly, especially gold resources , at Diablillos . Hydrothermal breccias at the main Oculto
deposit extend into the basement and have strong potential for high grade gold mineralization that remains
largely untested.
• Enhanced market presence. The combined company is expected to appeal to a broader shareholder base
and improve share trading liquidity.
• Streamlined cost structure. The combined company would benefit from a streamlined cost structure due to
the assets of both companies being consolidated into a single entity managed by a single management and
technical team.
• Compelling value proposition. The combined company is expected to have industry-leading leverage among
silver and gold exploration companies based on AbraPlata's large mineral resource at Diablillos, which contains
81 million oz of silver and over 732,000 oz of gold (Indicated - Table 1) or 140 million oz silver-equivalent (based
on equivalency at current spot metal prices).
• Key Strategic Investors. The combined company is expected to have strong support from its largest
shareholders which would include SSR Mining Inc. (“SSRM”) and Altius Minerals Corp.
Table 1: AbraPlata - Diablillos Mineral Resource Estimates (April 2018)
Category Deposit
Tonnage
(000t)
Ag
(g/t)
Au
(g/t)
Contained Ag
(000 oz Ag)
Contained Au
(000 oz Au)
Indicated Oculto 26,850 93.0 0.85 80,300 732
Indicated Fantasma 200 98.3 - 650 -
Total Indicated 27,100 93.1 0.84 80,940 732
Inferred Oculto 1,000 46.8 0.89 1,510 29
Inferred Fantasma 80 75.3 - 190 -
Total Inferred 1,100 48.8 0.83 1,690 29
Notes:
1. Full details of the mineral resource estimates can be found in a report by RPA Inc. titled "Technical Report on the Diablillos Project,
Salta Province, Argentina" dated April 16, 2018. This report can be found under AbraPlata's profile on www.SEDAR.com.
2. CIM definitions were followed for Mineral Resources.
3. Mineral Resources are estimated at a cut off grade of 40 g/t AgEq for Oculto and 40 g/t Ag for Fantasma.
4. Mineral Resources are estimated using long-term metal prices of US$1,500/oz Au and US$23/oz Ag.
5. Average bulk density is 2.22 t/m3 for the Indicated category and 2.29 t/m3 for Inferred for Oculto and 2.00 t/m3 for both Indicated
and Inferred categories for Fantasma.
6. The estimate was constrained by pit shells for both Oculto and Fantasma
Benefits to AbraPlata Shareholders
• Securing funding to facilitate the advancement of the Diablillos project by conducting a comprehensive drilling
program and , if warranted, the preparation of an underground preliminary economic assessment due to
Aethon's cash position ($3.2 million at June 30, 2019).
• Gaining exposure to Aethon’s large and prospective land position in Chile, which includes the Arcas project for
which an Earn -In with Option to Joint Venture agreement was recently executed with a subsidiary of the Rio
Tinto Group (see Aethon press release dated September 11, 2019).
• Expertise provided by Aethon’s executive management team, and adding Altius Minerals as a strategic
cornerstone shareholder.
• Favourable renegotiation of the Diablillos property payment terms with SSRM.
Benefits to Aethon Shareholders
• Receiving a significant premium to the Aethon share price prior to the announcement of the transaction and
resulting in increased trading liquidity and capital markets exposure.
• Exposure to an advanced -stage, silver -gold exploration project containing an existing Indicated mineral
resource of 81 million oz of silver and 7 32,000 oz of gold , as a result of more than US$ 35 milion worth of
historical exploration expenditures.
• Immediate exploration upside with potential for a gold rich zone extending into the basement of the existing
Oculto deposit on the Diablillos property.
• Board of directors with extensive knowledge of Argentina and the Diablillos project, and adding SSRM as a
strategic cornerstone shareholder.
• Continued exposure to the exploration upside potential from the combined companies' properties.
Terms of the Definitive Agreement
The execution of the Definitive Agreement follows the announcement by way of a joint press release dated July 29,
2019 that AbraPlata and Aethon had entered into a non -binding letter of intent in respect of a proposed merger
between the two companies. AbraPlata and Aethon are parties dealing at arm’s length. There are no finder's fees
payable in association with the Proposed Transaction.
Pursuant to the Arrangement, AbraPlata will issue approximately 103.6 million AbraPlata Shares to Aethon
shareholders, and Aethon and AbraPlata shareholders will own approximately 52% and 48% of the combined entity,
respectively, prior to the issuance of additional shares to SSRM in exchange for certain key concessions outlined
further below. This represents a premium of 42% to Aethon's 10-day VWAP as of July 26, 2019.
Subject to TSX Venture Exchange (the "TSX-V") and any other required regulatory authority approval, outstanding
Aethon options and warrants will be exercisable in accordance with their terms into AbraPlata Shares at the
Exchange Ratio until their expiry date.
Implementation of the Arrangement is subject to approval by at least two -thirds of the votes cast by all Aethon
shareholders at the Aethon Meeting. In addition to shareholder approval, completion of the Arrangement is subject
to the receipt of court and regulatory approvals, including stock exchange approvals, as well as certain other closing
conditions customary in transactions of this nature.
The Arrangement Agreement contains customary non -solicitation provisions and both parties have agreed for the
payment of a break fee of $ 250,000, in the event that either party terminates the Arrangement under certain
prescribed circumstances, including termination in connection with pursuing an alternative transaction.
SSRM, the original vendor of the Diablillos property to AbraPlata, has indicated its intention to support the Proposed
Transaction and, subject to its completion, to agree to defer the Diablillos property payments of US$5 million ,
currently due by November 1, 2019, and US$7 million , currently due by November 1, 2021, by up to three years
and nine months and waive all remaining advance royalty payments (totaling US$750,000). As consideration for
the payment concessions, SSR M will receive upon closing of the Proposed Transaction and subject to TSX -V
approval (i), the greater of (a) 24.15 million common shares in AbraPlata, and (b) such number of common shares
in AbraPlata that results in SSRM owning 17.65% of the issued and outstanding common shares in AbraPlata after
taking into account the closing of the Proposed Transaction but excluding any common shares of AbraPlata issued
in a financing transaction the proceeds of which are used to fund the potential $200,000 payment to SSRM or for
general corporate purposes (the “Enlarged AbraPlata Share Capital”) and (ii) the payment , to be decided by
AbraPlata, of either $200,000 or the issuance of such number of common shares in AbraPlata that results in SSRM
owning 19.9% of the Enlarged AbraPlata Share Capital.
AbraPlata currently has approximately 96.7 million common shares issued and outstanding. Following the
Proposed Transaction and the issuance of 24.15 million common shares to SSRM, AbraPlata will be expected to
have approximately 224.4 million common shares issued and outstanding.
Full details of the A rrangement will be included in the management information circular to be filed with regulatory
authorities and mailed to the A ethon shareholders in accordance with applicable securities laws. The record date
for the Aethon Meeting will be announced in the near future.
Board Recommendation
The board of directors of A ethon (the "A ethon Board"), following a review of the terms and conditions of the
Arrangement Agreement and consideration of a number of factors, has unanimously determined that the
Arrangement is in the best interests of A ethon shareholders and is fair, from a financial point of view, to A ethon
shareholders and will recommend that Aethon shareholders vote in favour of the Proposed Transaction.
Prior to the execution of the Arrangement Agreement, Red Cloud Klondike Strike Inc. provided an opinion that,
based upon and subject to the assumptions, limitations and qualifications in such opinion, the c onsideration to be
received by Aethon shareholders is fair, from a financial point of view, to Aethon shareholders. A copy of the fairness
opinion will also be included in the Aethon management information circular.
The board of directors of AbraPlata has unanimously approved the Proposed Transaction.
Management Team and Board of Directors
Upon closing of the Proposed Transaction, the combined company will continue under the name of AbraPlata
Resource Corp. and will be led by Aethon’s current executive management team, with Mr. John Miniotis being
appointed as the President and Chief Executive Of ficer. Upon closing of the Proposed Transaction, the Board of
Directors of AbraPlata will be re-constituted to consist of the following six directors:
• Robert Bruggeman (Non-Executive Chairman)
• Hernan Zaballa
• John DeCooman
• Jens Mayer
• Sam Leung
• Flora Wood
Aethon Delisting and SEDAR
If the A rrangement is completed, the A ethon Shares will be delisted from the TSX -V. A copy of the Definitive
Agreement will be available under the respective issuer profiles of Aethon and AbraPlata on SEDAR at
www.sedar.com.
Advisors Counsel
MLT Aikins LLP is acting as AbraPlata’s legal advisor. Red Cloud Klondike Strike Inc. is acting as financial advisor
to the Board of Directors of Aethon. Dentons Canada LLP is acting as Aethon’s legal advisor.
Qualified Persons
All scientific and technical information in this news release has been approved by Willem Fuchter, PhD PGeo,
director of AbraPlata Resource Corp. and a qualified person as defined by National Instrument 43-101.
About Aethon Minerals
Aethon Minerals is a mineral exploration company focused on creating shareholder value. Aethon has a large
prospective land position consisting of over 100,000 hectares along prolific mining belts located in the Antofagasta
and Maricunga regions of northern Chile. Aethon believes it is uniquely positioned for growth and is actively pursuing
selective exploration-stage growth opportunities. Aethon is based in Toronto, Canada, and is listed on the TSX -V
under the symbol “AET”.
About AbraPlata
AbraPlata is focused on exploring and advancing its flagship Diablillos silver -gold property. In addition, AbraPlata
owns the highly prospective Cerro Amarillo property with its cluster of five mineralized Cu -(Mo-Au) porphyry
intrusions located in a mining camp hosting the behemoth El Teniente, Los Bronces, and Los Pelambres porphyry
Cu-Mo deposits. As well, AbraPlata is exploring Aguas Perdidas, its wholly owned Patagonia -style epithermal Au-
Ag property. AbraPlata is based in Vancouver, Canada, and is listed on the TSX-V under the symbol “ABRA”.
For further information please contact:
John Miniotis Rob Bruggeman
Interim Chief Executive Officer Interim Chief Executive Officer
Aethon Minerals Corp. AbraPlata Resource Corp.
[email protected] [email protected]
Tel: 416-306-8334 Tel: +1 416-884-3556
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 news release.
This press release contains "forward -looking information" within the meaning of applicable Canadian securities
laws. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans,
projections, objectives, assumptions or future events or performance (often, but not always, identified by words or
phrases such as "believes", "anticipates", "expects", "is expected", "scheduled", "estimates", "pending", "intends",
"plans", "forecasts", "targets", or "hopes", or variations of such words and phrases or statements that certain actions,
events or results "may", "could", "would", "will", "should" "might", "will be taken", or "occur" and similar expressions)
are not statements of historical fact and may be forward-looking statements. Forward-looking information herein
includes, but is not limited to, statements that address activities, events or developments that Aethon and AbraPlata
expect or anticipate will or may occur in the future, including statements with respect to the Proposed Transaction
and the likelihood that the Proposed Transaction will be consummated on the terms and timeline provided herein
or at all, the benefits of the Proposed Transaction to AbraPlata and Aethon and the receipt of all required approvals
including, without limitation, the Aethon shareholders and applicable regulatory, court and stock exchanges.
In respect of the forward-looking statements and information concerning the likelihood that the Proposed
Transaction will be consummated and the anticipated benefits of the completion of the Proposed Transaction,
Aethon and AbraPlata have provided such statements and information in reliance on certain assumptions that they
each believe are reasonable at this time, including assumptions as to the ability of the parties to receive, in a timely
manner and on satisfactory terms, the necessary regulatory, court, stock exchange and shareholder approvals
where applicable; the ability of the parties to satisfy, in a timely manner, the other conditions to the completion of
the Proposed Transaction; general assumptions respecting the business and operations of both Aethon and
AbraPlata, including that each business will continue to operate in a manner consistent with past practice and
pursuant to certain industry and market conditions; and other expectations and assumptions concerning the
Proposed Transaction. Although Aethon and AbraPlata believe that the expectations reflected in these forward-
looking statements are reasonable, neither Aethon nor AbraPlata can give assurance that these expectations will
prove to have been correct, that the Proposed Transaction will be completed or that it will be completed on the
terms and conditions contemplated in this press release.
Factors that could cause future results or events to differ materially from current expectations expressed or implied
by the forward-looking statements include significant transaction costs or unknown liabilities; general business,
economic, competitive, political and social uncertainties; the state of capital markets; risks relating to (i) the ability
of the parties to satisfy the closing conditions set out in the Definitive Agreement, including receipt of all requisite
regulatory, court and stock exchange approvals, as applicable; (ii) an alternative transaction materializing prior to
the completion of the Proposed Transaction; (iii) the impact on the respective businesses, operations and financial
condition of AbraPlata and Aethon resulting from the failure to complete the Proposed Transaction on terms
described or at all; (iv) unforeseen challenges in integrating the businesses of AbraPlata and Aethon, (vii) failure to
realize the anticipated benefits of the Proposed Transaction, (viii) other unforeseen events, developments, or factors
causing any of the aforesaid expectations, assumptions, and other factors ultimately being inaccurate or irrelevant;
and other risks described in AbraPlata’s and Aethon’s documents filed on the SEDAR website at www.sedar.com.
Statements of mineral resources also constitute forward-looking information to the extent they represent estimates
of mineralization that will be encountered on a property and/or estimates regarding future costs, revenues and other
matters. Although Aethon and AbraPlata have attempted to identify important factors that could cause actual
actions, events or results to differ materially from those described in forward-looking information, there may be other
factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no
assurance that such information will prove to be accurate, and actual results and future events could differ materially
from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking
information. Neither Aethon nor AbraPlata undertakes to update any forward-looking information except in
accordance with applicable securities laws.
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