A news release with respect to the material changes referred to in this report was
FORM 51-102F3
MATERIAL CHANGE REPORT
ITEM 1. NAME AND ADDRESS OF COMPANY
Benz Mining Corp. (the “Company”)
Suite 2501 – 550 Burrard Street
Vancouver, BC V6C 2B5
ITEM 2. DATE OF MATERIAL CHANGE
November 4, 2024 and November 13, 2024
ITEM 3. NEWS RELEASES
A news release with respect to the material changes referred to in this report was
disseminated by the Company on November 5, 2024 and November 13, 2024 through the
facilities of Newsfile Corp., and subsequently filed on SEDAR+ on November 5, 2024 and
November 13, 2024, respectively.
ITEM 4. SUMMARY OF MATERIAL CHANGE
On November 4, 2024, the Company entered into a binding, conditional share purchase
agreement (the “SPA”) to acquire 100% of the Glenburgh Gold Project (“Glenburgh”) and
Mt Egerton Gold Project (“ Mt Egerton”, and together with Glenburgh, the “ Projects”)
located in the Gascoyne region of Western Australia from Spartan Resources Limited
(ASX: SPR) (“ Spartan”) (collectively, the “ Acquisition”). The Company is proposing to
acquire the Projects by acquiring a 100% interest in each of Gascoyne Resources (WA) Pty
Ltd (“Gascoyne”) and Egerton Exploration Pty Ltd (“Egerton”) from Spartan in accordance
with the terms of the SPA. Closing of the Acquisition (the “ Completion”) is subject to
certain conditions precedent.
On November 5, 2024, in connection with the Acquisition, the Company announced the
Acquisition and that it also received binding firm commitments from new and existing
shareholders of the Company, each of whom is an institutional and/or sophisticated
investor, to raise approximately A$4 million (before costs) through a private placement
of approximately 18.2 million fully paid CHESS Depositary Interests (“ CDIs”), each CDI
representing one underlying common share in the Company (each, a “ Share”) on a one
for one basis (“New CDIs”) at an issue price of A$0.22 per New CDI (the “Placement”).
On November 13, 2024 the Company announced that, further to its announcement dated
November 5, 2024, it successfully completed the Placement of 18,181,820 New CDIs at a
price of A$0.22 per New CDI to raise approximately A$4 million (before costs).
ITEM 5.1 FULL DESCRIPTION OF MATERIAL CHANGE
Acquisition
On November 5, 2024, the Company announced that it entered into the SPA in respect of
the Acquisition. The Company is proposing to acquire Gascoyne and Egerton from Spartan
in accordance with the terms of the SPA for the following consideration:
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A$1 million cash payable to Spartan, with A$500,000 payable upon Completion
and the remaining A$500,000 payable to Spartan on the date that is 12 months
after Completion;
33,000,000 fully paid CDIs in the Company (the “Consideration CDIs”) to be issued
to Spartan at Completion, and subject to voluntary escrow for a period of 12
months from Completion; and
deferred consideration of up to A$6 million, to be paid in cash or issued in fully
paid CDIs (the “Milestone CDIs”), at the Company's election, to Spartan upon the
Company satisfying each of the following milestones:
o A$2 million, payable upon the first to occur of (i) the Company declaring
an inferred, indicated and/or measured Mineral Resource Estimate from
the Projects containing 500,000oz Au at a cut-off grade of at least 2.0g/t
Au and (ii) production of 500,000oz Au from the Projects.
o A$2 million, payable upon the first to occur of (i) the Company declaring
an inferred, indicated and/or measured Mineral Resource Estimate from
the Projects containing 1,000,000oz Au at a cut-off grade of at least 2.0g/t
Au and (ii) production of 1,000,000oz Au from the Projects; and
o A$2 million, payable upon the first to occur of (i) the Company declaring
an inferred, indicated and/or measured Mineral Resource Estimate from
the Projects containing 1,500,000oz Au at a cut-off grade of 2.0g/t Au and
(ii) production of 1,500,000oz Au from the Projects,
(together, the “Milestone Payments”).
If the Company elects to issue Milestone CDIs to satisfy a Milestone Payment, the number
of Shares to be issued will be calculated using a deemed issue price of the higher of the
20-day VWAP of the Company's Shares and A$0.088 per Share. If the Company's 20-day
VWAP falls below A$0.088 per share at the time the Milestone Payment is due, the
Company may elect to satisfy the Milestone Payment by issuing such number of Shares
to Spartan (as approved by shareholders at the Company's Annual General and Special
Meeting) and the balance of the payment in cash. The Company may only elect to issue
Milestone CDIs subject to certain conditions being met, including that any issuance of
Milestone CDIs to Spartan will occur before 15 December 2029, following which any
Milestone Payment must be paid to Spartan in cash, and the Company having obtained
all necessary regulatory and shareholder approvals to issue the relevant Milestone CDIs
to Spartan.
The Consideration CDIs and any Milestone CDIs will rank equally with existing Shares on
issue.
From Completion, subject to Spartan (or its related bodies corporate) holding, in
aggregate, at least 10% of the Shares on issue (on an undiluted basis):
Spartan is entitled to appoint a nominee director to the Company’s board of
directors (the “Board”). If Spartan's holding falls below this threshold, or there is
a change of control of Spartan, Spartan must procure that its appointed director
resigns from the Board; and
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Spartan has a right to participate in future Benz equity financing.
Spartan expects to nominate Mr. Nicholas Jolly as its nominee director from Completion.
Completion of the Acquisition is subject to the satisfaction or waiver of the following
conditions precedent.
a. the Company obtaining confirmation from ASX that ASX Listing Rule 11.1.3 does
not apply to the Acquisition;
b. the Company completing the Placement and demonstrating that it has (or will
have) A$5 million cash in bank immediately after Completion;
c. the Company and Spartan agreeing, in principle, to a preliminary budget for
exploration on the Projects for the 24 months immediately following
Completion, which will provide for a minimum of A$3 million being spent on
exploration on the Projects;
d. the Company obtaining all required regulatory approvals including the requisite
final acceptance from the TSX Venture Exchange in respect of the Acquisition
and the Placement;
e. the issuance of the Consideration CDIs are exempt from the prospectus and
registration requirements under applicable securities laws; and
f. Spartan:
i. obtaining a deed of release to secure the release of Gascoyne and
Egerton from the Tembo Royalty Deed, Tembo Mortgage and Taurus
Royalty Deed (and, if applicable, any mining mortgage registered
pursuant to the Taurus Royalty Deed), and all conditions precedent in
that deed of release having been satisfied or waived;
ii. procuring that Egerton, Gascoyne and the relevant counterparties enter
into new royalty and security arrangements: (A) with the Tembo parties
(or Osisko Gold Royalties (Australia) Pty Ltd (Osisko), as applicable) on
substantially the same terms as the Tembo
iii. Royalty Deed and the Tembo Mortgage; and (B) with Taurus Mining
Royalty Fund LP (Taurus) on substantially the same terms as the Taurus
Royalty Deed (and if applicable, any mining mortgage registered
pursuant to the Taurus Royalty Deed); and
iv. procuring that Egerton, Gascoyne and the relevant counterparties enter
into a tripartite deed governing the exercise of the respective royalty
buy-back rights under the: (A) Tembo Royalty Deed and the new royalty
arrangements between Egerton, Gascoyne and Osisko or the Tembo
parties (as applicable); and (B) Taurus Royalty Deed and the new royalty
arrangements between Egerton, Gascoyne and Taurus, and all
conditions precedent in the tripartite deed having been waived, in each
case on terms acceptable to Spartan and the Company.
On November 5, 2024, the Company announced that the conditions precedent contained
in paragraphs (a), (c) and (e) have been satisfied, and expects to be in a position to satisfy
the condition precedent in paragraph (b) following completion of the Placement and the
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condition precedent in paragraph (d) after its Annual General and Special Meeting which
is expected to be held on December 17, 2024. The conditions precedent must be satisfied
or waived by no later than February 3, 2025 or such later period as agreed between the
parties.
Under the SPA, Spartan has given standard warranties with respect to title, capacity,
solvency, compliance with laws and Gascoyne and Egerton's assets. Similarly, Benz has
given standard warranties with respect to authority and capacity and compliance with the
ASX Listing Rules and the Corporations Act 2001 (Cth).
The SPA contains standard termination provisions which provide for either party to
terminate the agreement prior to Completion. Termination events include where the
conditions precedent have not been satisfied or waived by February 3, 2025; if either
Benz, Spartan, Gascoyne or Egerton suffer an insolvency event; if a party fails to perform
and comply, in all material respects, with its material obligations under the SPA, or if a
'Material Adverse Change' occurs in respect to either party. A 'Material Adverse Change'
includes any event or circumstance which has, or could be reasonably expected to have,
a material adverse effect on the business, assets, liabilities, operations, financial or
trading position or prospects of the relevant party as a direct result of, among other
things, the Company’s news releases and/or implementation of the SPA.
Placement
On November 5, 2024, in connection with the Acquisition, the Company announced it
received binding firm commitments from new and existing shareholders of the Company,
each of whom is an institutional and/or sophisticated investor, to raise approximately A$4
million (before costs) through a placement of approximately 18.2 million fully paid CDIs,
each New CDI representing one underlying common share in the Company on a one for
one basis at an issue price of A$0.22 per New CDI.
The issue price represents a 10.97% discount to the 5-day volume-weighted average price
of the Company's CDIs on the ASX prior to the date of the news release dated November
5, 2024.
Net proceeds raised from the Placement will be used to:
Complete the Acquisition;
Support a rapid scale-up in gold exploration activities, including resource drilling
and regional exploration target generation activities on the Glenburgh and Mt
Egerton Projects; and
General working capital.
The Placement is not conditional on completion of the Acquisition. If the Acquisition does
not complete, the funds raised from the Placement will be used to undertake drilling
activities on the Company's Eastmain Project and for general working capital purposes.
The New CDIs offered under the Placement are expected to be issued and commence
trading on the ASX on or about November 14, 2024 and, upon issue, will rank equally with
existing CDIs on issue.
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Euroz Hartleys Limited (“Euroz Hartleys”) acted as Sole Lead Manager and Bookrunner to
the Placement. The Company will pay Euroz Hartleys a fee equal to 6% of the gross
proceeds of the Placement.
On November 13, 2024 the Company announced that, further to its announcement dated
November 5, 2024, it successfully completed the Placement of 18,181,820 New CDIs at a
price of A$0.22 per New CDI to raise approximately A$4 million (before costs). Euroz
Hartleys acted as Sole Lead Manager and Bookrunner to the Placement and were paid a
commission in the amount of A$220,000.02 (plus GST).
The Placement remains subject to the final approval of the TSX Venture Exchange. The
securities issued in connection with the Placement are subject to a statutory hold period
in Canada of four months and one day
For additional information, please see the Company’s news releases dated November 5,
2024 and November 13, 2024, a copy of which is attached as Schedule “A” and “B” hereto,
respectively.
ITEM 5.2 DISCLOSURE ON RESTRUCTURING TRANSACTION
Not applicable.
ITEM 6. RELIANCE ON SUBSECTION 7.1(2) OF NATIONAL INSTRUMENT 51-102
Not applicable.
ITEM 7. OMITTED INFORMATION
Not applicable.
ITEM 8. EXECUTIVE OFFICER
Contact: Evan Cranston, Chief Executive Officer
Telephone: (778) 785-3000
ITEM 9. DATE OF REPORT
November 14, 2024
Schedule "A"
News Release dated November 5, 2024
[see attached]
Benz to Acquire WA Gold Projects from
Spartan Resources Firm Commitments
Received for A$4 Million Placement
HIGHLIGHTS
Agreement signed to acquire the Glenburgh Gold Project and the Mt Egerton Gold Project, located
in Western Australia, from Spartan Resources Limited (ASX: SPR).
Acquisition transforms Benz into a multi-jurisdictional gold focused company, aligned with the
Company's strategy of growing and developing high-grade gold assets in top-tier mining regions.
Glenburgh has a granted mining lease and a Mineral Resource Estimate of
16.3Mt at 1g/t Au for
510,100 ounces
within an 786km
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largely untested package.
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Transaction complements and strengthens Benz's existing high-grade resource at Eastmain, which
currently stands at 5.1Mt at 6.1g/t Au for
1,005,000 ounces
.
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Benz plans to apply proven advanced geoscientific techniques to unlock the high-grade gold
potential at Glenburgh and Mt Egerton; two high-growth-potential projects that have been largely
underexplored by modern exploration techniques.
While previous exploration efforts at Glenburgh focused on shallow lower-grade open pit
resources, Benz will focus on the vast underexplored high-grade potential. Recent results from
high-grade Zone 126 deposit at Glenburgh illustrates wide high-grade zones open in all directions:
8m at 11.6g/t Au
28m at 5g/t Au
24m at 9.1g/t Au
14m at 8.9 g/t Au
Glenburgh shares very similar geological characteristics and setting to the world class Tropicana
gold discovery.
The Mt Egerton Project, also on granted mining leases, includes the high-grade Hibernian
Underground Mine. Previous high-grade intercepts for immediate follow up include:
5m at 96.7g/t Au
4m at 91.9g/t Au
4m at 75.3g/t Au
11m at 42.5g/t Au
To fund the Acquisition, Benz will use existing cash and funds raised from a placement to
sophisticated, professional and institutional investors for which the Company has received firm
commitments for approximately A$4 million (before costs).
Spartan will become a strategic cornerstone shareholder, owning approximately 15% of Benz
upon completion of the transaction, and will provide ongoing geological support to Benz.
Spartan's General Manager, Nick Jolly, to join the Board as Spartan's Director-elect.
Toronto, Ontario--(Newsfile Corp. - November 5, 2024) - Benz Mining Corp. (ASX: BNZ) (
Benz
or
the
Company
) is pleased to announce it has entered a binding, conditional share purchase agreement
(
SPA
) to acquire 100% of the Glenburgh Gold Project (
Glenburgh
) and Mt Egerton Gold Project (
Mt
Egerton
) (together, the
Projects
) located in the Gascoyne region of Western Australia from Spartan
Resources Limited (ASX: SPR) (
Spartan
) (
Acquisition
). Completion of the Acquisition is subject to
certain conditions precedent which are summarised in Appendix 1.
In connection with the Acquisition, the Company has also received binding firm commitments from new
and existing shareholders of the Company, each of whom is an institutional and/or sophisticated
investor, to raise approximately A$4 million (before costs) through a placement of approximately 18.2
million fully paid CHESS Depositary Interests (
CDIs
), each CDI representing one underlying common
share in the Company on a one for one basis (
New
CDIs
) at an issue price of A$0.22 per New CDI
(
Placement
).
Benz Executive Chairman, Evan Cranston, commented:
"We are delighted to announce this strategic acquisition for Benz, marking our evolution into a multi-
jurisdictional, pure gold-focused company. The addition of the Glenburgh and Mt Egerton Gold
Projects in Western Australia, alongside our high-grade Eastmain Gold Project in Quebec, solidifies
our position as a leading explorer in premier gold regions.
"At Glenburgh, with its historical Mineral Resource of 16.3Mt at 1g/t Au for 510,100 ounces of
contained gold, we see substantial untapped potential. Our focus will be on the high-grade zones that
remain underexplored, applying advanced geological techniques to unlock the Project's full value. Mt
Egerton, which includes the high-grade Hibernian Underground Mine, adds significant opportunity for
rapid high grade resource growth through targeted exploration.
"We welcome Spartan as a strategic cornerstone investor with aligned interests to extract value from
these great projects. We thank our loyal shareholders for their continued support and welcome new
shareholders to an exciting journey ahead."
Spartan Interim Executive Chairman, Simon Lawson, commented:
"We're excited to partner with Benz to unlock the incredible potential of the Glenburgh and Mt Egerton
assets as well as gaining exposure to the incredibly high-grade opportunity at Benz's Eastmain Gold
Project. Bring on the results!"