Oro X and Mines and Metal Trading (Peru) PLC Announce Business Combination to Create Silver X Mining Corp.
Oro X and Mines and Metal Trading (Peru) PLC
Announce Business Combination to Create
Silver X Mining Corp.
/NOT FOR DISSEMINATION IN
THE UNITED STATES
OR FOR DISTRIBUTION TO
UNITED
STATES
NEWS WIRE SERVICES/
Creates new growth-focused silver producer in
Peru
Multi-asset company led by team with proven track record
Concurrent minimum
C$14,000,000
financing to fund
30,000 m
exploration and
development drilling campaign at Nueva Recuperada project
VANCOUVER, BC
,
Feb. 11, 2021
/CNW/ -
ORO
X MINING CORP.
(TSX-V: OROX) (OTC Pink:
WRPSF)
("
Oro X
" or the "
Company
") and Mines and Metals Trading (
Peru
) PLC ("
MMTP
", also
commercially known as
"Latitude Silver"
) are pleased to announce the signing of a business
combination agreement (the "
Business Combination Agreement
"). Pursuant to the Business
Combination Agreement, Oro X will acquire 100% of the issued and outstanding shares of MMTP
(the "
Transaction
").
With a team led by CEO
Jose Garcia
, Executive Chairman
Luis Zapata
, and Lead Advisor
Paul
Matysek
, Silver X will be
Latin America's
next low-cost silver producer. The combination of Oro X's
and MMTP's teams, assets and operational experience creates a growth-focused platform primed
to consolidate the fragmented Peruvian silver landscape.
Upgrading and expanding MMTP's Nueva Recuperada inferred resource pursuant to a NI 43-101
Technical Report for Recuperada Project,
Peru
with an effective date of
October 15, 2020
(the
"
Recuperada
Technical Report
"), from 7.3 million tonnes (Mt) at 130.38 g/t Ag and increasing
processing capacity beyond 600 tpd at the operating plant has the potential to create significant
near-term positive cashflow. The inferred resources estimated are 7,324,400 T at grades of 130.38
gm/T Ag, 3.17% Pb/T, 2.04% Zn/T.
Additionally, the anticipated minimum
C$14,000,000
Financing (as defined herein) will provide the
resources to develop the now-consolidated, approximately 15,000 Ha Nueva Recuperada district
and to create shareholder value in a multi-asset portfolio.
SILVER X HIGHLIGHTS
Consolidated silver district
– Approximately 15,000 Ha of total concessions at the Nueva
Recuperada project hosts 90 known productive veins in
Peru's
premier silver belt.
Significant current silver resource –
The Recuperada Technical Report includes an inferred
resource of 7.3 million tonnes (Mt) at 130.38 g/t Ag, 3.17% Pb and 2.04% Zn
.
High impact drill campaigns –
Planned 30,000 meters of exploration and development drilling
in 2021 includes targets at Esperanza and Maria Luz along with continued exploration of the
Coriorcco gold project.
Strong financial platform –
Well funded pro forma treasury with synergies to reduce
corporate G&A and a strategy to monetize select non-core assets.
Experienced team –
Executive team, directors and advisors with proven mining pedigree have
created over CAD
$3.2 billion
in shareholder value over the past 13 years.
José García, CEO of Latitude said: "Through this Transaction, Latitude Silver takes one step further
in the fast-track development that the company has embarked upon since its inception. This
outstanding team is committed to developing one of the most agile mining companies in the sector,
combining operations with high-quality exploration and resource development. This is great news for
all of our stakeholders and strategic partners, and we look forward to continue working with all of
them. Also, we appreciate Oro X's and Latitude Silver's investors support to the Transaction, and
we remain committed to delivering great results over the next few years."
Luis Zapata
, CEO of Oro X said: "From founding Oro X barely thirteen months ago to now having
completed three increasingly significant transactions, I could not be happier for our shareholders as
we become a high-growth silver producer. I look forward to working with José Garcia as the
incoming CEO of Silver X. I will continue to ensure that the new company has the proper capital
markets exposure and following to complement our operational excellence."
Paul Matysek
, Lead Advisor to Oro X said: "The combination of Oro X and Latitude to form Silver X
creates a dynamic platform primed to consolidate a myriad of high-quality silver-centric projects that
require financing, improved structure, and local knowledge. Silver X will be led by a team with a
proven track record of operating assets and creating shareholder value. I look forward to seeing the
Silver X team build a high-growth silver producer that will take advantage of the exciting M&A
opportunities throughout the region."
About MMTP
MMTP is a private mining company with a mission to realize the full value of underdeveloped silver
projects across
Latin America
. MMTP's only asset is the Nueva Recuperada silver-lead-zinc project,
located in Huancavelica,
Peru
. It consists of 218 concessions covering approximately 15,000
hectares, that host a network of 90 known mineral-bearing veins, advanced infrastructure from
historical underground mining operations, and a fully permitted and operational 600 tonnes per day
and (210,000 tonnes per year) ore processing plant.
MMTP acquired the Nueva Recuperada project from Compañía de Minas Buenaventura SAA
(NYSE: BVN) in 2017 and rapidly restarted commercial operations. MMTP has also increased its
mineral concession package from the original 6,000 Ha to approximately 15,000 Ha via strategic
acquisitions from companies including Pan American Silver (TSX: PAAS).
The Nueva Recuperada Project hosts an inferred resource estimate pursuant to a NI 43-101
Technical Report for Recuperada Project,
Peru
with an effective date of
October 15
, 2020 (the
"
Recuperada
Technical Report
"), of 7,324,400 T at grades of 130.38 gm/T Ag, 3.17% Pb/T,
2.04% Zn/T. The key assumptions, parameters, and methods used to estimate MMTP's mineral
resources includes the verifiable portion of the historic (Buenaventura, Panamerican Silver) data by
site visits, core examination and database confirmation and physical verification of the current Gemin
and MMTP exploration data.
The Recuperada property is fully permitted and is operating per Peruvian law. MMTP has the
approved, required operations notices and the required closure/rehabilitation plan. The Recuperada
Technical Report states "Potential risks for starting mine operations and permitting are considered to
be minimal. In
Peru
, the social risk is the potentially largest risk for mining projects. The local
communities are long-time mining communities and have large portions of their populations as
miners. The communities also are welcoming to the mining industry. Environmental and cultural risks
are relatively minor. Risks in the permitting with the government is also of minor, almost unlikely
levels."
Current MMTP development and exploration targets at Nueva Recuperada include:
Tangana –
7M tonnes of 43-101 inferred silver resources currently being processed at the
Recuperada Plant
María Luz –
High grade silver vein system
For a complete overview of all Silver X assets please refer to the Investor Presentation now hosted
at
www.oroxmining.com
.
Transaction Summary
The Transaction, if completed, is anticipated to be a Fundamental Acquisition for Oro X, as defined
under the policies of the TSX Venture Exchange (the "
Exchange
"). The Transaction is an arm's
length transaction and Oro X anticipates that shareholder approval from Oro X's shareholders will
not be required. Pursuant to Exchange policy, Oro X's common shares have been halted and will
remain halted until all required documentation has been filed and accepted by the Exchange, and
permission to resume trading has been granted.
Pursuant to the terms of the Business Combination Agreement, Oro X will acquire all of the MMTP
common shares (the "
MMTP Shares
") as part of a merger of equals. Each MMTP Share will be
exchanged for 28.828 (the "
Exchange Ratio
") common shares of Oro X (an "
Oro X Share
"),
resulting in an aggregate of approximately
42,969,000 Oro
X Shares to be issued to the MMTP
shareholders pursuant to the Transaction.
The transactions contemplated by the Business Combination Agreement are subject to, among other
things: (i) the completion of a financing for minimum gross proceeds of
C$14,000,000
, as described
below; (ii) the approval of MMTP shareholders; (iii) the receipt of all necessary consents, approvals,
authorizations (including Exchange approval) for the Transaction; (iv) certain changes to the board of
directors and management of Oro X, as described below; and (v) other conditions which are
customary for a transaction of this type.
A termination fee of
C$2,500,000
is payable by Oro X or MMTP, as applicable, if the Business
Combination Agreement terminates under certain circumstances.
The Company also anticipates paying a finder's fee consisting of 1,250,000 Shares in connection
with the Transaction to an arm's length third party.
The Transaction remains subject to TSX Venture Exchange (the "
Exchange
") acceptance.
Management and Board Appointments and Significant Shareholders
On closing of the Transaction, Oro X anticipates that two members of its current board of directors
will resign and that José Maria García Jimenez and
Sebastian Wahl
will be appointed in their place
to hold office until the next annual meeting of Oro X shareholders. The parties have also agreed to
appoint a third director to be determined but is expected to be agreed upon as Mr.
Mike Hoffman
,
the former Chairman of Trevali Mining.
Luis Zapata
is expected to resign as Chief Executive Officer of Oro X and to be appointed as the
Company's Executive Chairman. Mr. García Jimenez will become Oro X's Chief Executive Officer
and Mr. Wahl will become the Vice President of Corporate Development.
Pursuant to the Transaction, José Maria García Jimenez and
Sebastian Wahl
, the two largest
shareholders of MMTP, are expected to receive 13,385,128 and
12,866,244 Oro
X Shares,
respectively, in exchange for their MMTP Shares, equal to 15.6% and 15% of the outstanding Oro X
Shares upon closing of the Transaction, assuming gross proceeds of
C$14,000,000
raised pursuant
to the Financing.
Below is a brief description of the backgrounds of each of José Maria García Jimenez and
Sebastian Wahl
.
José Maria García Jimenez
Mr. García is a Mining Engineer with 17 years of experience across
Peru
,
Chile
,
Australia
,
Spain
and
Switzerland
; having worked for
Anglo American
, Inmet Mining and BHPB among others. Mr.
García holds a MSc in Mining Engineering from Madrid Polytechnic University, a Master of
Philosophy in Mineral Economics from the
University of Queensland
, Australia and is a Global
Leadership Fellow from the World Economic Forum. Mr. García is also a Professional Engineer
(
Spain
). He is currently a Director and Chief Executive Officer of MMTP and its operating subsidiary,
Mines & Metals Trading (
Peru
) SAC (2016 - present). Previously, he was a co-founder of and
consultant at Mining Sense Global SL (2013 - 2016), a mining consulting firm focused on mining
project evaluation, economics, and strategy, an Associate Director of Mining and Metals at the
World Economic Forum (2011 - 2014) and worked in various mining engineering roles with mining
and professional mining services firms.
Sebastian Wahl
Mr. Wahl is an executive with over a decade of experience in the investment industry, mining and
commodities trading. Mr. Wahl holds a BBA from the Graduate School of Business Administration
Zurich. He is currently a director of Mines & Metals Trading (
Peru
) SAC (2016 to present).
Previously, he was a project development and assessment consultant and member of the Strategic
Advisory Committee of Affinity Gold Corp. (2014 - 2015).
Financing
Oro X and MMTP expect to engage a syndicate of agents co-led by Echelon Wealth Partners Inc.
("
Echelon
") and Red Cloud Securities Inc. (collectively, the "
Agents
") in connection with a "best
efforts" private placement financing (the "
Financing
") of subscription receipts (the "
Subscription
Receipts
").
Pursuant to the terms of the Business Combination Agreement, and concurrent with the closing of
the Transaction, the parties will complete the Financing of Subscription Receipts of a company to be
incorporated ("
MMTP Finco
"), as a wholly-owned
British Columbia
incorporated subsidiary of
MMTP, for gross proceeds of a minimum of
C$14,000,000
. Oro X and MMTP intend to use the
proceeds of the Financing, subject to the satisfaction of the Escrow Release Conditions (as defined
below), to develop the Nueva Recuperada project, complete a planned
30,000 m
drill campaign and
to provide general working capital.
The gross proceeds from the issuance of Subscription Receipts will be deposited with a subscription
receipt agent (the "
Subscription Receipt Agent
") in escrow (the "
Escrowed Proceeds
") pursuant
to a subscription receipt agreement (the "
Subscription Receipt Agreement
"). It is anticipated that
the Escrowed Proceeds will be released by the Subscription Receipt Agent to MMTP Finco upon
receipt of a notice (the "
Release Notice
") to the Subscription Receipt Agent from Oro X, MMTP and
MMTP Finco indicating (a) all conditions to the completion of the Transaction pursuant to the
Business Combination Agreement have been satisfied or waived to the satisfaction of the Agents,
acting reasonably, (b) the receipt of all court, regulatory, shareholder and third-party approvals, if
any, required in connection with the Transaction, (c) the distribution of: (i) the securities underlying
the Subscription Receipts; and (ii) the Oro X Shares to be issued in exchange for MMTP Shares
pursuant to the Transaction being exempt from applicable prospectus and registration requirements
of applicable securities laws, and (d) Oro X and MMTP not having committed any breach of the
agency agreement for the Financing that has not been cured within five (5) days of the receipt of
written notice from Agents (collectively, the "
Escrow Release Conditions
").
Upon and subject to the receipt by the Subscription Receipt Agent of the Release Notice the
Escrowed Proceeds shall be released to MMTP Finco and the holders of Subscription Receipts will
be issued securities of MMTP Finco, which are to be then exchanged for Oro X securities on a one-
for-one basis upon completion of a three-cornered amalgamation between MMTP Finco, a wholly
owned subsidiary of Oro X and Oro X as part of the Transaction.
Change of Name
On the closing of the Transaction, subject to Exchange acceptance, the Company anticipates
changing its name to Silver X Mining Corp.
Advisors and Counsel
Echelon is acting as financial advisor and McMillan LLP and Dentons is acting as legal counsel to
Oro X. Gowling WLG (
Canada
) LLP is acting as legal counsel to MMTP.
About Oro X Mining
Oro X Mining is a Canadian exploration company currently targeting high grade gold exploration in
Peru
. The Company's flagship asset is the Coriorcco Gold Project in Ayacucho,
Peru
. Founders and
management have a successful track record of increasing shareholder value. For more information
visit our website at
www.oroxmining.com
.
Qualified Person
Mr. John E. Bolaños, who is a qualified person under NI 43-101, has reviewed and approved the
technical content of this news release for Oro X. Mr. Bolaños is a M.Sc. Mining Geologist from
Camborne School of Mines (U.K.) and a Professional Geologist Eng. from The Central University of
Ecuador
(honours degree). He is a registered member (ID 4172671) of the Society for Mining,
Metallurgy & Exploration (SME) of
the United States
; Director of the Ecuadorian College of
Engineers in Geology, Mines, Oil and Environment; and a member of the Mining Chamber of
Ecuador
. He has 27 years of experience in the exploration and mining industry throughout the
Americas.
Mr. A.
David Heyl
who is a qualified person under NI 43-101, has reviewed and approved the
technical content of this news release for MMTP. Mr. Heyl, B.Sc., C.P.G., QP is a Certified
Professional Geologist and Qualified Person under NI 43-101. With over 25 years of field and upper
management experience, Mr. Heyl has a solid geological background in generating and conducting
exploration and mining programs for gold, rare earth metals, and base metals, resulting in several
discoveries. David has 20 years of experience in
Peru
. He worked for
Barrick Gold
, was the
exploration manager for Southern Peru Copper, and spent over ten years working in and supervising
underground and open pit mining operations in
Peru
This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the
securities described in this news release in
the United States
. Such securities have not been, and
will not be, registered under the United States Securities Act of 1933, as amended (the "U.S.
Securities Act"), or any state securities laws, and, accordingly, may not be offered or sold within
the
United States
, or to or for the account or benefit of persons in
the United States
or "U.S. Persons",
as such term is defined in Regulation S promulgated under the U.S. Securities Act, unless registered
under the U.S. Securities Act and applicable state securities laws or pursuant to an exemption from
such registration requirements.
ON BEHALF OF THE BOARD
Luis Zapata
CEO & Director
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined
in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy
of this release.
Cautionary Statement Regarding "Forward-Looking" Information
Some of the statements contained in this news release are forward-looking statements and
information within the meaning of applicable securities laws. Forward-looking statements and
information can be identified by the use of words such as "expects", "intends", "is expected",
"potential", "suggests" or variations of such words or phrases, or statements that certain actions,
events or results "may", "could", "should", "would", "might" or "will" be taken, occur or be achieved.
Forward-looking statements in this news release include statements in respect of the completion of
the Transaction, the Company's exploration plans for the Company's properties, the terms of the
Financing, the use of proceeds from the Financing and the completion of the Transaction. Forward-
looking statements and information are not historical facts and are subject to a number of risks and
uncertainties beyond the Company's control. Actual results and developments are likely to differ, and
may differ materially, from those expressed or implied by the forward-looking statements contained
in this news release. Accordingly, readers should not place undue reliance on forward-looking
statements. the Company undertakes no obligation to update publicly or otherwise revise any
forward-looking statements, except as may be required by law.
SOURCE
Oro X Mining Corp.
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For further information:
Oro X Mining Corp., Luis Zapata, CEO, 604 358 1382 |
CO: Oro X Mining Corp.
CNW 08:30e 11-FEB-21