Bonterra to Acquire Metanor, Expanding Strategic Position in Urban Barry Camp and De-risking Potential Path to Production
1680‐200 Burrard Street
Vancouver, BC V6C 3L6
Office: 604.678.5308
TF: 855.678.5308
www.bonterraresources.com
Bonterra to Acquire Metanor, Expanding Strategic Position in
Urban Barry Camp and De-risking Potential Path to Production
June 18, 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 they have entered into a binding letter of intent dated June 17, 2018 (the
"LOI") to combine Bonterra and Metanor (the “Transaction”) to create an exciting new advanced
Canadian gold exploration and de velopment company focused on be coming the 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, for each Metanor share. Immediately prior to the comple tion of the Metanor acquisition,
Bonterra will spin out its Larder Lake assets in Ontario, Canad a, and a specified amount of cash
(the “Spin-Out”), in order to create a well-capitalized and exc iting new exploration opportunity
for its shareholders.
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 proforma 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.
- 2 -
The creation of a well-capitaliz ed spin out exploration company (“Spinco”), to unlock the
value of Bonterra’s Larder Lake gold asset, and allowing for a focused exploration effort and
advancement of these assets.
Nav Dhaliwal, President and CEO of Bonterra, said, “Bonterra has been an extremely
successful exploration company and must conti nue to evolve and participate in growth
opportunities. We have quickly and efficiently discovered and developed the Gladiator deposit
over the past two years, and now look to put our exploration skills and experience to work on the
larger combined land package. We believe we w ill be able to develop a much larger and more
significant resource profile w ithin the Urban Barry Ca mp. The availability and ownership of a
permitted and expandable processing facility certainly places Bonterra in an excellent position to
rapidly and cost effectively become a significant Quebec based gold producer.
Greg Gibson, Chairman and Inte rim CEO of Metanor, commented, “Putting together two,
arguably, undervalued companies like Metanor and Bonterra is ext remely beneficial and logical
in a number of ways. Resource growth, exp loration synergies and de-risking the path to
production are all considerations, as well as potential to access different and larger markets and
shareholders. I look forward to working with the Bonterra team, as the combined effort provides
the opportunity to create significant shareholder value.”
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 announced transaction with Beaufield Resources, and 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.
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.
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.
- 3 -
Addition of key strategic institu tional, corporate and retail s hareholders to broaden
existing base.
Under the terms of the LOI, Bonterra will acquire all of the issued and outstanding common shares
of Metanor (the "Transaction") for C$0.73 in equity consideration per share (the "Purchase Price"),
at an exchange ratio of 1.6039 Bont erra shares for each Metanor share (the “Exchange Ratio”),
representing an aggregate transaction value of C$78 million on a fully diluted in-the-money basis.
The Purchase Price represents a 40% premium to the VWAP of Metanor's common shares on the
TSXV on June 15, 2018 and a premium of 30% to the closing price as of such date.
Upon completion of the Transaction, existing Bonterra and Metan or shareholders will own
approximately 58% and 42% of the pro forma company, respectively.
Immediately prior to the completion of the proposed Transaction, Bonterra will complete the Spin-
Out of its Larder Lake, Ontario project to current shareholders of Bonterra in order to create a new
exploration company Spinco focused on the growth of this multi- deposit high grade project.
Spinco will be well capitalized with C$7 million of cash. Furth er details of the Spin-Out will be
included as part of an information circular to be distributed prior to a Bonterra shareholder meeting
to approve the Transaction and the Spin-Out.
Wexford Capital LP, Kirkland Lake Gold Ltd., Eric Sprott, Van E ck Associates Corp. and other
shareholders controlling greater than 50% of Metanor’s voting securities as of June 18, 2018, have
provided their support for the proposed Transaction.
Transaction Summary and Timing
Metanor and Bonterra expect the Transaction will take place by way of a plan of arrangement
whereby Bonterra, and/or a wholly owned subsidiary, will enter into an arrangement agreement
with Metanor in accordance with the terms of the LOI.
Pursuant to the terms of the LOI, the completion of the Transaction is conditional upon a number
of items, including, without limitation: (a) approval by the shareholders of Bonterra and Metanor,
such approval to be the affirmative vote of the holders of 66 2 /3% of the issued and outstanding
plus any minority approvals if so required pursuant to Multilat eral Instrument 61-101; (b) each
party shall have performed and complied in all material respect s with all of the covenants and
obligations thereof required to b e performed by them prior to t he completion of the Transaction;
(c) the representations and warranties of each party set out in the LOI being true and accurate, in
all material respects; (d) the receipt of all regulatory and other required approvals; (e) other normal
conditions precedent, including the absence of a material adver se effect in Bonterra or Metanor;
(f) all material third party consents shall have been obtained; (g) 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; (h) the execution, delivery and
continued enforceability of required support agreements; (i) co mpletion of satisfactory due
diligence by Bonterra and Metanor ; and, (j) receipt of all nece ssary regulatory approvals by the
regulatory authorities.
- 4 -
The LOI contains customary deal support provisions, including a reciprocal break fee of C$3.75
million, payable if the proposed Transaction is not completed in certain circumstances. In addition,
the LOI includes mutual customa ry non-solicitation covenants to gether with customary
exemptions to permit each party’s board of directors to exercis e its fiduciary duties, as well as a
right to match any superior proposal that may arise.
Full details of the Transaction will be included in the formal definitive agreement and management
information circulars to be file d with the regulatory authoriti es and mailed to Metanor’s and
Bonterra’s shareholders in accordance with applicable securities laws. All shareholders are urged
to read the information circulars once they become available as they will contain additional
important information about the Transaction.
The Transaction is expected to be completed in the third quarte r of 2018 or such later date as the
parties may agree. A special meeting of the shareholders of each of Bonterra and Metanor will be
held at a time yet to be determined to approve the proposed transaction.
Advisors and Counsel
Sprott Capital Partners acted as financial advisor to Bonterra and Miller Thomson LLP acted as
Bonterra's legal advisors.
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.
- 5 -
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.
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 Mines a resource estimate as reported 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.” Bonterra considers the historical estimate to b e 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 Bon terra has not done sufficient work to
classify the historical estimate as current mineral resources o r 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 Gold Price of 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
- 6 -
43,970 ounces were extracted from three small pits between 2008 and 2010. The gold
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 BOARD OF DIRECTORS,
Nav Dhaliwal, President & CEO
Bonterra 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
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.
- 7 -
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.