Buckhaven Provides Update on its Proposed Qualifying Transaction
Buckhaven Provides Update on its Proposed Qualifying Transaction
Vancouver, British Columbia --(February 12, 2021) - Buckhaven Capital Corp. (TSXV: BKH.P)
(“Buckhaven”) is pleased to provide an update to its proposed qualifying transaction (previously
announced on August 18, 2020 and November 3, 2020) (the " Transaction"). In furtherance of the
Transaction, Buckhaven, 1271860 B.C. Ltd. (“Buckhaven Subco”), 1254688 B.C. Ltd. ("125"), and Ag-
Mining Investments AB ("AG-Mining") have entered into a master agreement dated October 30, 2020 (the
"Business Combination Agreement "), which sets forth the terms and conditions upon which 125 will
acquire Buckhaven by way of reverse t akeover in accordance with the policies of the TSX Venture
Exchange ("TSXV"). As part of the proposed Transaction, the combined entity will be renamed “Andean
Precious Metals Corp.”. Upon completion of the proposed Transaction, the combined entity will continue
to carry on the business of 125. It is intended that the proposed transaction, when completed, will constitute
the qualifying transaction of Buckhaven pursuant to Policy 2.4 -- Capital Pool Companies of the TSXV
corporate finance manual.
125 was incorporated under the Business Corporations Act (British Columbia), and its head and registered
office is located in Vancouver, B.C. Ag-Mining is a Swedish investment firm and is the 100-percent owner
of the San Bartolome silver operation in Potosi, Bolivia. Currently, Ag -Mining is processing ore from its
own mining rights and ore purchased from independent third-party operators in Bolivia.
Financing
In connection with the Transaction 125 is proposing to complete a best efforts brokered private placement
of subscription receipts (“ Subscription Receipts”) comprised of 13,657,000 Subscription Receipts at a
price of $1.00 per Subscription Receipt for gross proceeds of $13,657,000 (“ Financing”). Sprott Capital
Partners L.P. (" Sprott") is acting as agent in connection with the Financing. Each Subscription Receipt
shall automatically convert to one common share of 125 (each, an "Underlying Share"), upon the delivery
by the Corporation and Sprott to Capital Transfer Agency ULC (the " Escrow Agent") of a release notice
signed by each of 125 and Sprott (the " Release Notice") confirming the satisfaction of certain conditions
(collectively, the "Escrow Release Conditions") which will include, among other things, that all conditions
precedent to the closing of the Transaction have been satisfied or waived including the receipt of all
necessary regulatory approvals.
On closing the gross proceeds from the financing less 50% of Sprott's commission and all of its expenses
will be placed into escrow with the Escrow Agent.
In the event that the Escrow Agent does not receive the Release Notice prior to 5:00 pm. (Toronto time) on
March 30, 2021 (the " Release Deadline"), or if prior to such time, the Corporation advises Sprott or
announces to the public that it does not intend to satisfy the Escrow Release Conditions, the Subscription
Receipts shall be null and void and the Escrow Agent will disburse the escrowed funds together with interest
to the subscribers and 125 will make up any shortfall between the amount of the escrowed funds and the
original subscription price.
If the Escrow Release Conditions are satisfied on or before the Release Deadline the escrowed funds will
be released to 125. Followin g their release to 125 it is anticipated that such funds will be used for
operational, exploration and generative activities on the San Bartolome silver operation and for general
corporate purposes.
Upon the satisfaction of the Release Conditions and following a consolidation of Buckhaven’s outstanding
common shares on a 1.5-for-1 basis (“Consolidation”), each Underlying Share will be exchanged for one
post-Consolidation common share of Buckhaven (“ Common Share ”). Upon completion of the
Transaction, all 125 common shares exchanged for Common Shares will not be subject to a legend except
for any imposed by the TSXV.
In connection with the Financing, Sprott will receive a cash commission of 6% of the gross proceeds of the
Financing, payable as to fifty percent (50%) on the closing date and as to the remaining fifty percent (50%)
upon satisfaction of the Escrow Release Conditions and the release of the escrowed funds.
Selected Pro Forma Consolidated Financial Information
The following table sets forth certain financial information of Buckhaven as at August 31, 2020 and of 125
as at September 30, 2020, and pro forma financial information as at September 30, 2020, for the resulting
issuer, on a consolidated basis, after giving effect to the Transaction and the Co ncurrent Financing and
certain other adjustments. All figures presented in the following table are presented in thousands of US
dollars.
Buckhaven
as at August
31, 2020
(unaudited)(1)
($)
125
as at
September 30,
2020
(unaudited)
($)
Pro Forma
Adjustments
(unaudited)
($)
Resulting
Issuer
Pro Forma
as at
September
30, 2020
(unaudited)
($)
Balance Sheet Data
Current Assets US $191 US $51,565 US $9,262 US $61,018
Total Assets US $191 US $81,429 US $9,262 US $90,882
Current Liabilities US $3 US $23,596 US ($10,296) US $13,303
Total Liabilities US $3 US $46,624 US ($10,296) US $36,331
Shareholders’
Equity
US $188 US $34,805 US $19,558 US $54,551
(1) Financial information for Buckhaven in the following table was extracted in Buckhaven’s presentation
currency (Canadian dollars) and converted to US dollars at a fixed exchange rate of 1.00 to 1.30 USD,
being the exchange rate as of August 31, 2020.
Update on the Transaction
In addition to completion of the Financing, the closing is conditional upon the Consolidation and
Buckhaven’s name being changed to “Andean Precious Metals Corp.”, both of which will be effected by
approval of Buckhaven’s board of directors prior to closing. A technical report on the Properties wil l be
filed on SEDAR following the closing.
In connection with the approval by the TSXV of the Transaction, Consolidation, name change and
Financing, Buckhaven is in the process of preparing a filing statement in compliance with TSXV policies
which will be filed under Buckhaven's profile on www.sedar.com no less than seven business days prior to
completion. The filing statement will contain detailed information concerning 125 and its business and
operations, including audited financial statements. Buckhaven anticipates that the Transaction will be
completed on or before March 30, 2021.
Pursuant to the Transaction, it is anticipated that Buckhaven will acquire all of the common shares of 125
at the closing in consideration for 154,536,764 Buckhaven common shares at a deemed price of $0.27 per
share (post -Consolidation) as well as the issuance of 2, 327,826 stock options and 7,200,000 RSUs.
Following the closing of the Transaction it is anticipated that the current shareholders of Buckhaven will
own approximately 1.5% of the outstanding Common Shares of Buckhaven and the shareholders of 125
will hold the remaining outstanding Common Shares.
125 and its Business
125 is a private company incorporated under the BCBCA on June 25, 2020 for the purpose of completing
the Transaction. 125 is a holding company with operating subsidiaries in Bolivia which are engaged in the
exploration, exploitation, treatment, refining and commerc ialization of ore containing silver and gold,
which it extracts from its own mining rights and also through purchases from third parties’ ore.
125’s wholly -owned subsidiary, AG -Mining, completed the acquisition of a 100% interest in Empresa
Minera Manquiri SA (“ Manquiri”) from Coeur Mining, Inc. AG -Mining also holds a portfolio of early -
stage mineral properties located in Bolivia and is currently conducting exploration activities on these
properties.
Manquiri is a precious metal mining and processing company based in Bolivia with offices in La Paz, Potosi
and Oruro. It owns and operates the San Bartolome mine and processing facility, near Potosi, Bolivia. Coeur
completed construction at San Bartolome and commenced production in 2008. The primary source of
revenue received by the corporate group of 125 is from the sale of ore from the San Bartolome mine directly
to refiners.
To feed the San Bartolome Mill, Manquiri holds direct mining rights with the Bolivian state mining
company, Corporacion Minera de Bolivia. Currently, these mining rights cover Manquiri’s activities on
three project areas, comprised of the following:
• San Bartolome
• El Asiento
• Tatasi-Portugalete
Management of the Resulting Issuer
Under the articles of Buckhaven and applicable corporate law, the maximum number of directors that may
be appointed without shareholder approval is four. At this time, on completion of the Transaction, the board
is expected to consist of Mr. Luis da Silva, Mr. Alberto Morales, Mr. Fraser Buchan and Mr. Peter Gundy.
Details of the proposed officers and directors of the resulting issuer are as follows:
Luis Cabrita da Silva, Proposed President and Chief Executive Officer and Director. Mr. da Silva is an
experienced metals and mining executive having served as CEO of listed Canadian companies and at a
senior level in multinationals. Mr. da Silva has a proven track record in value creation for shareholders by
forging relationships and ma naging complex entities with large, international joint venture partners,
including Severstal and POSCO. Between 2007 and 2013, Mr. da Silva presided over the restructuring of
Mano River Resources resulting in the formation of Aureus Mining Inc, Afferro M ining Inc and Stellar
Diamonds Ltd, all Canadian and/or London listed companies. Mr. da Silva served on the Board of all three
companies and was instrumental in strategy development and multiple financings. Between 2014 and 2018,
Mr. da Silva was presiden t and CEO of GB Minerals Ltd until its acquisition by Castlelake,
L.P./Itafos. Since 2018, Mr. da Silva has been principal and co -founder of Ambercon International
Holdings, a private resources company. He is a graduate Mining Engineer from the Camborne School of
Mines and received his M.B.A. from the Cranfield School of Management.
Jeff Chan, Proposed Chief Financial Officer. Mr. Chan is an experienced financial executive in the mining
and healthcare industries, having held senior leadership roles in several Canadian publicly held companies
on the TSX, TSX -V and CSE. Most recently, Mr. Chan was the CFO of a privately held cannabinoid
technology company. Previously, he served as Interim CFO and Vice President, Finance at Liberty Health
Sciences, where he led the growth of its financial operations subsequent to Liberty’s spinoff from Aphria
Inc., and Vice President, Finance at Orvana Minerals Corp. where he closed several transformational debt
financings. Mr. Chan is a Chartered Professional Accountant (CA , CPA) and holds a B.Comm from the
University of Toronto.
Simon Griffiths, Proposed Chief Operating Officer. Simon Griffiths has extensive global experience in
the resources industry, both public and private companies in developed and emerging economies. He is a
Chartered Mining Engineer and Qualified Person (QP) having held senior technical and operational
leadership roles. At TSX/ASX listed OceanaGold he was Director of Operations at Haile Gold mine after
leading the technical due diligence for the $480 million acquisition. At Newcrest Mining (ASX), TWSP
Ltd and Solid Energy (NZX) Simon has managed multiple technical studies for major resource projects in
Australia, West Africa, Mozambique, Philippines, Indonesia, New Zealand and USA. Commodity
experience is mainly gold, silver and copper but also includes coal, iron ore and industrial minerals. He has
championed environmental engineering in mine design, ore reserve governance protocols and re-engineered
major mining operations delivering significant valuation uplift. He has an undergraduate B.Eng degree and
Masters in Mining Engineering from Camborne School of Mines and a Masters in Mineral Economics from
Curtin Business School, Western Australia.
Alberto Morales, Proposed Executive Chairman and Director. Alberto Morales has over 30 years of
experience specialized in corporate finance, mergers and acquisitions and corporate restructurings. He has
also participated individually in other private equity and venture capital projects as co-developer, investor
and/or advisor in telecommunications, aviation, tourism, financial services and asset management, mining
and alternative energy. He has participated in the planning, formation, development and consolidating
stages of various start-up business ventures. He holds a Bachelor’s degree in Law from the University of
Monterrey (1984) and a Master’s degree in Compared Law from the New York University School of Law
(1987), and was admitted to practice law in Mexico in 1985 and in the State of New York in 1989.
Robert Buchan, Proposed Director. Bob Buchan is the founder, former CEO and Chairman of Kinross
Gold, the 5 th largest gold producer in the world. Mr. Buchan has served as a director of numerous public
companies, including as the chairman of Polyus Gold, the 4th largest gold producer in the world. Mr. Buchan
has been an advocate for the mining industry in Canada and around the world, and has promoted education
and innovation, mostly notably through the establishment and funding of the Robert M. Buchan School of
Mining at Queen’s University.
Peter Gundy, Proposed Director. Peter Gundy is the founder of Neo Material Technologies Inc. (“NEM”),
serving as CEO and chairman from 1992 to 2008. Mr. Gundy created one of Canada’s most successful
small/medium enterprises operated by Canadians in China and South East Asia. With manufacturing plants
in China and Thailand, NEM became #1 in the world in powerful high -tech magnetic materials for the
world’s electronic industries (NEM’s proprietary material was used in eve ry hard drive manufactured).
NEM became # 1 globally in the production of advanced rare earths also used in the global electronics
industries and automotive sector. In 2012, NEM was sold to Molycorp for $1.1 billion. Mr. Gundy has
served as a director with numerous publicly traded companies, including Banro Corp., True Gold Mining
Inc., and Clifton Star Resources Corp.
Upon completion of the Transaction, the following persons are anticipated to beneficially own, directly or
indirectly, or exercise control or direction over, more than 10% of the voting securities of Buckhaven:
Name and Municipality of Residence Amount Outstanding after Giving Effect to the
Transaction with $13,657,000 raised on the Concurrent
Financing
Number of Securities Percentage of Total
PMB Partners LP, an Ontario limited
partnership controlled by Alberto Morales
82,325,000
Common Shares
52.43%
2176423 Ontario Inc. an Ontario
corporation controlled by Mr. Eric Sprott
21,854,664
Common Shares
13.92%
Additional Transaction Information
The proposed Transaction is not a “Non -Arm’s Length Qualifying Transaction” within the meaning of
TSXV Policy 2.4 Capital Pool Companies, therefore approval of Buckhaven’s shareholders is not required.
The Company entered into a finder’s fee agreement with Cottingham Capital LLC, a corporation existing
pursuant to the laws of Tennessee (the “Finder”). Pursuant to the terms of the finder’s fee agreement, and
subject to TSXV approval, the Finder shall receive a fee of 116,667 Common Shares at a deemed issue
price of $0.36 per share. The Finder is arm’s length to all parties.
Buckhaven will be seeking a waiver of the sponsorship requirements of TSXV Policy 2.2 Sponsorship and
Sponsorship Requirements, but there is no assurance that such waiver will be granted.
Trading in the Buckhaven Common Shares has been halted as a result of the signing of the Business
Combination Agreement. Trading in the Buckhaven Common Shares will remain halted pending the review
of the proposed Transaction by the TSXV. There can be no assurance that trading in the Buckhaven shares
will resume prior to the completion of the Transaction.
Additional Information
All information contained in this press release with respect to Buckhaven and 125 was supplied by the
respective parties, for inclusion herein, and each party and its directors and officers have relied on the other
party for any information concerning the other party.
Additional terms of the Transaction were previously disclosed in the press releases of Buckhaven and 125
dated August 18, 2020 and November 3, 2020 and are available on Buckhaven’s SEDAR profile at
wwww.sedar.com
For further information:
Buckhaven Capital Corp.
Bob Buchan, Director
(416) 274 -7333
1254688 BC Ltd.
Fraser Buchan, Director
(416) 473-4099
Reader Advisory – Cautionary Statements
Completion of the transaction is subject to a number of conditions, including but not limited to, Exchange
acceptance and if applicable pursuant to Exchange Requirements, majority of the minority shareholder
approval. Where applicable, the 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 transaction, any information released or received with respect to the
transaction may not be accurate or complete and should not be relied upon. Trading in the securi ties of a
capital pool company should be considered highly speculative.
The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed transaction and has
neither approved nor disapproved the contents of this press release
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.
This press release may contain forward-looking information, such as statements regarding the completion
of the Transaction, the satisfaction of the Escrow Release Conditions and the conditions to closing, the use
of the proceeds from the Financing, and future plans and objectives of Buckhaven. There can be no
assurance that such statements will prove to be accurate and actual results, and future events could differ
materially from those anticipated in such statements. Important factors that could cause actual results to
differ materially from Buckhaven's expectations include the failure to satisfy the conditions to completion
of the Transaction set forth above and other risks detailed from time to time in the filings made by the
Company pursuant to applicable Canadian securities laws.
The reader is cautioned that assumptions used in the preparation of any forward-looking statements herein
may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those
predicted, as a result of numerous known and unknown ris ks, uncertainties, and other factors, many of
which are beyond the control of Buckhaven. As a result, Buckhaven cannot guarantee that the Transaction
will be completed on the terms and within the time disclosed herein or at all. The reader is cautioned not to
place undue reliance on any forward -looking information. Such information, although considered
reasonable by management at the time of preparation, may prove to be incorrect, and actual results may
differ materially from those anticipated. Forward -looking statements contained in this news release are
expressly qualified by this cautionary statement. The forward -looking statements contained in this news
release are made as of the date of this news release and the Company will update or revise publicly any of
the included forward-looking statements as expressly required by Canadian securities law.
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