Bonterra and Metanor Enter into Definitive Agreement
Bonterra and Metanor Enter into Definitive Agreement
July 23, 2018: Bonterra Resources Inc. ("Bonterra" or the "Company") (TSX-V: BTR,
US:BONXF, FSE:9BR1) and Metanor Resources Inc. ("Metanor") (TSX -V:MTO) a r e
pleased to announce that, further to their news release dated June 18, 2018, they have entered into
a definitive arrangement agreement dated July 20, 2018 (the "Ar rangement Agreement") to
combine Bonterra and Metanor (the “Transaction”) to create an e xciting new advanced Canadian
gold exploration and development company focused on becoming th e leader in the building out
and future mining development of the Urban Barry Quebec Gold Camp.
The Transaction contemplates that Bonterra will acquire all of the issued and outstanding common
shares of Metanor for C$0.73 in equity consideration, at an exc hange ratio of 1.6039 Bonterra
shares (the “Purchase Price”) for each Metanor share by way of plan of arrangement under the
Canada Business Corporations Act (the “CBCA”). The Purchase Price represents a 40% premium
to the 30-day VWAP of Metanor's common shares on the TSXV on Ju ne 15, 2018 (the last
unaffected trading price prior to the announcement of the Trans action) and a premium of 30% to
the closing price as of such date. Upon completion of the Trans action, existing Bonterra and
Metanor shareholders will own approximately 58% and 42% of combined company, respectively.
Immediately prior to the completion of the Metanor acquisition, Bonterra will spin out its Larder
Lake assets and liabilities in Ontario, Canada and $7 million i n cash (the “Spin-Out”) in order to
create a new exploration company (“Spinco”), by way of plan of arrangement under the Business
Corporations Act (British Columbia) (the “BCBCA”).
Metanor has called a special meeting of its shareholders and op tionholders (the “Metanor
Meeting”) to approve the Transaction on September 18 th, 2018. Bonterra has called a special
meeting of its shareholders and optionholders (the “Bonterra Me eting”) on the same date to
approve the Spin-Out. Further information regarding the Transac tion and the Spin-Out will be
contained in the management information circulars to be sent to securityholders in connection with
the Metanor Meeting and Bonterra Meeting.
The board of directors of Metanor, following consultation with its legal advisors and receipt of a
favourable fairness opinion by Red Cloud Klondike Strike Inc., has approved the Transaction. The
directors of Metanor will recommend that Metanor securityholder s vote in favour of the
Transaction in the information circular to be mailed to Metanor securityholders in respect of the
Metanor Meeting.
The board of directors of Bonterra, following consultation with its financial and legal advisors and
receipt of a favourable fairness opinion by PI Financial Corp., has approved the Transaction and
the Spin-Out. The directors of Bonterra will recommend that Bon terra securityhol ders vote in
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favour of the Spin-Out in the info rmation circular to be mailed to Bonterra securityholders in
respect of the Bonterra Meeting.
Highlights of the Transaction:
Creation of an exciting precious metals growth exploration, dev elopment and production
company located in one of the best mining jurisdictions in the world.
The combined entity will have one of the largest contiguous lan d packages located in the
highly prospective Urban Barry gold camp.
Control of three advanced high grade gold deposits (Gladiator, Bachelor, B arry) and
significant regional priority targets with resource upside potential.
100% control and operator of the only permitted gold mill in the region, that pr ovides an
expandable centralized production facility, surrounded by great er than 15 known gold
deposits within a 100km radius.
De-risking of the Gladiator project: Bonterra’s delivery of its updated National Instrument
43-101 resource for the Gladiator Gold Deposit remains on schedule for 2H/2018. Metanor’s
mill infrastructure provides Bonterra the opportunity to signif icantly reduce the capital
requirements and compress the timelines to advance the Gladiato r project to potential
production.
Maintains strong balance sheet : The pro forma company will have approximately C$32
million in cash on hand, after the Spin-Out, to further advance t h e G l a d i a t o r p r o j e c t t o
production, and increase production at Bachelor and Barry.
The creation of Spinco, a well- capitalized exploration company, to unlock the value of
Bonterra’s Larder Lake gold asse t , a n d a l l o w f o r a f o c u s e d e x p loration effort and
advancement of these assets.
Benefits to Bonterra
Provides Bonterra with a clear and cost-effective pathway to bring its Gladiator deposit into
production.
Addition of the Bachelor Mine and the Barry Deposit and associa ted exploration potential
to its existing resource portfolio.
Consolidates the entire southern portion of the Urban Barry Camp, when combined with the
recently executed option agreement with Beaufield Resources, an d places Bonterra as one
of the largest landholders in the region.
Access to and control of an expandable mill/processing facility , centrally located in the
Urban Barry Camp, further de-risking the Gladiator Gold Deposit.
Adds tremendous exploration poten tial to Bonterra’s portfolio w ith several high priority
regional targets to explore.
Addition of strong technical team and increased knowledge base of this rich camp.
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Benefits to Metanor
Immediate and significant premium of approximately 40% based on the 30-day volume
weighted average price (“VWAP”) on the TSX Venture Exchange (“TSXV”) on June 15,
2018 (the last unaffected trading day prior to announcement of the Transaction).
Superior financial strength a nd flexibility to simultaneously i ncrease production and
exploration programs while leveraging and enhancing existing infrastructures.
Exposure to potential long-life asset to supplement current production.
Increased trading liquidity, enhanced value proposition and capital markets profile.
Increased exposure to institutional, corporate and retail investors.
Transaction Summary and Timing
Pursuant to the Arrangement Agreement, the Transaction will tak e place by way of a plan of
arrangement under the CBCA whereby Bonterra will acquire all of the issued and outstanding
common shares of Metanor. Optionholders of Metanor will receive replacement Bonterra options,
entitling them to receive on exercise common shares of Bonterra, subject to an adjustment to reflect
the Transaction. Holders of outstanding warrants of Metanor wil l have their warrants adjusted to
reflect the Transaction and will not be receiving replacement warrants. The Transaction is subject
to the approval of 66 2/3% of Metanor shareholders and optionholders in attendance and v oting at
the Metanor Meeting. Shareholders and optionholders of Metanor will be voting on the approval
of the Transaction only and will not be voting on the Spin-Out.
Pursuant to the Arrangement Agreement, the Spin-Out will take p lace by way of a plan of
arrangement under the BCBCA where by Bonterra will assign its La rder Lake property and $7
million in cash to Spinco. Each holder of Bonterra common share s will receive one Spinco
common share for each seven Bonterra shares held. The Spin-Out will take place immediately
prior to the Transaction and as a result shareholders of Metanor will not be entitled to receive any
interest in Spinco. The Spin-Out is subject to the approval of 662/3% of Bonterra shareholders and
optionholders in attendance and voting at the Bonterra Meeting. Shareholders and optionholders
of Bonterra will be voting on the approval of the Spin-Out only and will not be voting on the
Transaction.
In addition to the securityholder approvals referred to above, pursuant to the terms of the
Arrangement Agreement, the completion of the Transaction is conditional upon a number of items,
including, without limitation: (a) each party shall have perfor med and complied in all material
respects with all of the covenants and obligations thereof required to be performed by them prior
to the completion of the Transac tion; (b) the representations a nd warranties of each party set out
in the Arrangement Agreement being true and accurate, in all ma terial respects; (c) the receipt of
all regulatory and other required approvals, including approval of the TSX Venture Exchange; (d)
other normal conditions precedent, including the absence of a m aterial adverse effect in Bonterra
or Metanor; (e) all material third party consents shall have be en obtained; (f) holders of no more
than 5% of the outstanding shares of Bonterra and no more than 5% of the outstanding shares of
Metanor shall have exercised their rights of dissent in respect of the Transaction; and (g) the
execution, delivery and continued enforceability of required support agreements.
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The Arrangement Agreement contai ns customary deal support provi sions, including a reciprocal
break fee of C$3.75 million, payable if the Transaction is not completed in certain circumstances.
In addition, the Arrangement Agreement includes mutual customar y non-solicitation covenants
together with customary exemptions to permit each party’s board of directors to exercise its
fiduciary duties, as well as a right to match any superior proposal that may arise.
Full details of the Transaction and the Spin-Out will be includ ed in the management information
circulars to be filed with the regulatory authorities and maile d to Metanor’s and Bonterra’s
securityholders in accordance with applicable securities laws. All securityholders are urged to read
the information circulars once they become available as they wi ll contain additional important
information about the Transaction and the Spin-Out.
The Transaction is expected to be completed by the end of Septe mber 2018 or such later date as
the parties may agree.
Advisors and Counsel
Sprott Capital Partners and PI Financial Corp. acted as financi al advisors to Bonterra and Miller
Thomson LLP acted as Bonterra's legal advisor.
Irwin Lowy LLP acted as Metanor's legal advisor.
About Bonterra
Well financed with approximately $65 million raised since 2017.
Strong Shareholder Base including: Eric Sprott, Van Eck, Kirkland Lake Gold
Gladiator Gold Deposit:
o Deposit extension and resource expansion underway with 60,000 m completed in 2017
and 70,000 m planned for 2018.
o Advancing to the completion of an updated NI 43-101 Mineral Res ource Estimate in
the second half of 2018.
o Drilled dimensions of the Gladiator Gold Deposit are currently outlined to a depth of
over 1,000 m below surface, and a strike length of 1,300 m.
o Gladiator remains open in all directions, where at least six di stinct sub-parallel zones
or mineralized horizons have been identified.
o Drilling is currently focused on the continued expansion of Gla diator Gold Deposit
and exploration targets within the 10,541-hectare Urban-Barry property.
Larder Lake Gold Property:
o 100% controlled 2,221-hectare in the Cadillac-Larder Break camp in Ontario (refer to
March 17, 2016 news release highlighting historical gold resource).
o Excellent access to three high grade gold deposits between Kirk land Lake and
Virginiatown.
o The Larder Lake project contains a historic mineral resource set out in the below table
with three gold deposits situated along the Cadillac Break between Kirkland Lake and
Virginiatown. The combined contiguous land package is more than 10 km in length.
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Disclosure of Historical Mineral Resource Estimates:
The Larder Lake project contains a historic estimate. In August 15, 2011, P&E Mining
Consultants prepared for Kerr Mi nes a resource estimate as repo rted in a technical report
titled “43-101 Technical Report and Updated Resource Estimates on the Larder Lake
Property, Larder Lake, Ontario for Bear Lake Gold Ltd.” Bonterr a considers the historical
estimate to be relevant and reliable given that it was prepared under NI 43-101 standards.
Bonterra considers this resource estimate to be historical; it has not independently verified
it. A qualified person of Bonterra has not done sufficient work t o c l a s s i f y t h e h i s t o r i c a l
estimate as current mineral resources or mineral reserves, and Bonterra is not treating the
historical estimate as current mineral resources.
*2011 Total Resource Estimate @ 2.5 g/t Au Cut-Off Utilizing Go l d P r i c e o f
US$1,207/oz(1)(2), dated August 15, 2011 by P&E Mining Consultants
Bear Lake Deposit and Cheminis Deposit
Classification Tonnes Grade (Au g/t) Contained Ounces (Au)
Indicated 335,000 4.07 43,800
Inferred 5,141,000 5.55 917,000
(1) Mineral resources which are not mineral reserves do not ha ve demonstrated economic viability. The estimate of mineral resou rces
may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant issues.
(2) The quantity and grade of reported inferred resources in this estimation are uncertain in nature and there has been insuffi cient
exploration to define these inferred resources as an indicated or measured mineral resource and it is uncertain if further expl oration
will result in upgrading them to an indicated or measured mineral resource category.
Dale Ginn, P.Geo. has approved the technical information contained in this release. Mr. Ginn is a
Director and Vice President of E xploration of Bonterra and is a Qualified Person as defined by
National Instrument 43-101.
About Metanor
Metanor Resources Inc. is an emerging gold producer having its main assets, the Bachelor Mine
and the Barry project, in addition to over 15,000 ha of exploration property, located in the mining-
friendly jurisdiction of Quebec in the heart of the Urban-Barry Camp.
The Bachelor mine extracts gold from a series of sub-vertical narrow veins using an underground
long-hole mining method with access through conventional track drifts from a vertical shaft, and
the new sector below level 14 is accessed from a ramp system. The ore is processed on site in a
mill using carbon in pulp to separate the gold from the ore. A ll the lodging facilities are on site,
connected to the power grid, and accessible from a paved highwa y. Metanor is in the permitting
process, to increase the daily capacity of the mill from 800 tonnes per day to 2,400 tonnes per day.
The Barry project is located in the Urban-Barry camp, 110 km ea st from the city of Lebel-sur-
Quévillon, and 110 km south of the Bachelor mill. 624,414 tonn es of ore grading 2.2 g/t Au for
43,970 ounces were extracted from three small pits between 2008 and 2010. The gold
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mineralization at the Barry proj ect is structurally controlled and is hosted in a sheared basalt
containing quartz-carbonate-albi te veins with pyrite. Metanor h as identified three main sub-
vertical shear zones and approximately ten secondary lower dipping tension veins. These structures
are open in all directions. The Company completed construction of a new camp in May, to
accommodate the additional workers required to proceed with the 50,000 underground bulk sample
scheduled to be completed by the Q4 in 2018.
Pascal Hamelin, P. Eng., President of Metanor, is the Qualified Person of Metanor as defined under
National Instrument 43-101 and has reviewed and approved the te chnical information relating to
Metanor contained in this news release.
ON BEHALF OF THE RESPECTIVE BOARDS OF DIRECTORS,
Nav Dhaliwal, President & CEO
Bonterra Resources Inc.
Greg Gibson, Interim CEO
Metanor Resources Inc.
For further information regarding the contents of this news release please contact:
Bonterra: Nav Dhaliwal, President and CEO
Telephone: (604) 678-5308
Email: [email protected]
Metanor: Pascal Hamelin, President and COO
Telephone: (819) 825-8678
Email: [email protected]
Cautionary Statement:
Certain information contained in this press release constitutes “forward-looking information", within the meaning of
Canadian legislation concerning the business, operations and financial performance and condition of Bonterra and
Metanor.
Generally, these forward-looking statements can be identifie d by the use of forward-looking terminology such as
"plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", “forecasts", "intends",
"anticipates" or "does not anticipate", or "believes", or va riations of such words and ph rases or state that certain
actions, events or results "may", "could", "would", "might " or "will be taken", "occur", "be achieved" or “has the
potential to”.
Forward looking statements contained in this press release may include statements regarding our ability to complete
the Transaction and benefits of the Transaction and the Spin-Out, which involve known and unknown risks and
uncertainties which may not prove to be accurate. Actual results and outcomes may differ materially from what is
expressed or forecasted in these forward-looking statements. Such statements are qualified in their entirety by the
inherent risks and uncertainties surrounding future expectations. Among those factors which could cause actual
results to differ materially are the following: uncertainties as to the timing of the Transaction and satisfaction of the
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conditions thereto, market conditions and other risk factor s listed from time to time in reports filed with Canadian
securities regulators on SEDAR at www.sedar.com.
Neither the TSX nor the TSX Venture Exchange nor its Regula tion Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.