Genius Properties Ltd. Announces Acquisition in Peru and Corporate Reorganization
Genius Properties Ltd. CSE: GNI
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NEWSWIRE SERVICES
Genius Properties Ltd. Announces Acquisition in Peru
and Corporate Reorganization
SAINT-SAUVEUR, QUEBEC--(Marketwired - June 13, 2017) – Genius Properties Ltd. -
June 13, 2017 - (CSE:GNI)(CSE:GNI.CN)(CNSX:GNI) ("Genius") announced today it
has entered into a binding letter of intent dated June 12, 2017 (the "Letter of Intent"), with
Cerro de Pasco Resources S.A. ("Cerro"), a corporation incorporated under the laws of
Peru, pursuant to which Genius intends to acquire all the issued a nd outstanding shares
of Cerro (the "Proposed Transaction"). Cerro's main asset is an option to acquire 100%
interest in the El Metalurgista Concession (where the so-called Quiulacocha Tailings and
Excelsior Stockpile are located), located in Peru (the "Pr operty"). Upon exercise of such
option, Cerro will become the Property's sole legal and beneficial owner.
Summary of the Proposed Transaction
The Proposed Transaction is an arm's length transaction and is subject to a number of
conditions precedents, including a due diligence on Cerro and the Property and the receipt
of all requisite regulatory and corporate and shareholder approvals.
Pursuant to the Proposed Transaction, Genius shall acquire all of the issued and
outstanding common shares of Cerro de Pasco, for the following considerations:
1. upon execution of the Letter of Intent, Genius will pay an amount of US$100,000 to
Cerro;
2. on or prior to July 31, 2017, Genius will pay an amount of US$200,000 to Cerro; if the
Cerro shareholders do not approve the Proposed Transaction before August 31, 2017,
such amount of US$200,000 will be converted into a loan, to be reimbursed by Cerro
on or prior to August 31, 2018 and which shall bear interest at the rate of 5% per
annum;
3. on or prior to September 30, 2017 , Genius will make available an amount of
US$1,000,000, and on or prior to December 31, 2017, Genius will make available an
additional amount of US$1,200,000, such aggregate amount of US $2,200,000 to be
expended on the Property, for a metallurgical test, preparation of a National Instrument
43-101 technical report, development of the Property and to cover capital requirements
related to community relations, permitting and general and administrative expenses;
Cerro and Genius will determine together how such amount will be spent; and
4. after Genius will have made available such aggregate amount of US$2,500,000,
Genius will issue to the Cerro shareholders a sufficient number of common shares of
its capital stock in exchange for their Cerro shares to allow the Cerro shareholders to
hold, after such issuance, in the aggregate, 75% of the total number of Genius common
shares issued and outstanding.
Spin-Off of Mining Properties
As part of the Proposed Transaction, immediately before issuing shares to the Cerro
shareholders, Genius will spin off all of its current mining properties into a newly created
wholly-owned subsidiary ("Subco"). Genius intends to re -distribute a majority of the
common shares of Subco to its own shareholders, as a dividend and to list Subco on a
stock exchange. Genius intends to continue the exploration and development of its current
mining properties through Subco.
The Property
• The Cerro de Pasco area in Peru became one of the world's richest silver producing
regions after the precious metal was discovered in 1630.
• Profits from the exploitation of the Cerro Pasco mine built the city of Lima, funded a
war with Chile, helped construct the infamous La Oroya Smelter and the highest railway
line in the world which is still used to transport mineral concentrates to Lima today.
• The mine was acquired in 2003 from the Peruvian state by Volcan Companía who
owned and managed the mine until its shutdown in 2013. Two concentrators with a
total capacity of 13,000tpd have been on care and maintenance since.
• A historical stockpile (Excelsior) containing at least 104 million tonnes of mixed material
containing recoverable zinc, lead and silver was accumulated from over 25 years of
mining. The mine was zinc -focused, and anything that did not meet the 4.5 % Zn
average RoM feed ended up on this stockpile.
• A historical tailing dam (Quiuilacocha) estimated to contain at least 70 million tonnes
of material including recoverable gold, silver, zinc, lead and copper was used for almost
100 years before it was replaced by the new Rancas TSF facility in 2003/4.
• Grab samples in 2007 taken from the Cu/Au -rich portion of the tailings dam returned
assay values of 1.4g/t gold and 1% Cu, reflecting the 8 -12% Cu RoM mill feed
established between 1898 and 1953.
• Much of the Excelsior stockpile and nearby Quiulacocha tailings dam adjacent to the
mine was acquired in 2012 by Cerro
• Cerro has advanced the project through resource evaluation and metallurgical testing
with positive results on the Excelsior stockpile and the company is about to conduct a
20kt bulk processing test using Volcan's processing facilities.
• The Excelsior stockpile has been extensively explored by RC drilling, trenching and
metallurgical test work programs.
Closing Conditions
Genius's obligation to complete the Proposed Transaction will be subject to the following
conditions:
1. satisfactory completion of its due diligence investigations of the Property, which has to
be completed on or prior to July 14, 2017;
2. formal approval of the Proposed Transaction by Genius's board of directors,
shareholders and by any required regulatory bodies and third parties;
3. execution of the definitive agreement, with customary representations and guarantees;
and
4. spin off by Genius of its assets in Subco, as described above.
Cerro's obligation to complete the Proposed Transaction will be subject to the following
conditions:
1. satisfactory completion of its due diligence investigations of Genius, which has to be
completed on or prior to July 14, 2017
2. formal approval of the Proposed Transaction by Cerro's board of directors and
shareholders and by any required regulatory bodies and third parties; and
3. appointment of additional directors, so that the Board of Directors of Genius post
closing be composed of six members, of which four will be designated by Cerro.
Closing
Closing of the Proposed Transaction is scheduled to occur on or about the third quarter of
2017.
Exclusivity
Cerro has granted an exclusivity to that until the earlier of the termination of the Letter of
Intent or July 31, 2017 (the " Exclusivity Period") and has agreed not to solicit, entertain
or accept any purchase offer or proposal whatsoever relating to the Property or Cerro nor
to enter into or continue negotiations or discussions with any third party, in respect of the
direct or indirect acquisition of all or any part of the shares or assets of Cerro or the
Property, in any manner whatsoever or in respect of any proposed amalgamation, merger
or combination of the Property and the business of any person or of any other transaction
of any nature whatsoever which would be inconsistent with the Proposed Transaction
contemplated by the Letter of Intent.
About Genius Properties
Genius is a Canadian mineral exploration company focused on developing projects with
some of the world's most critical metals and minerals.
Qualified Person
The technical content of this press release was approved by Dr. Michel Boily, PhD, geo,
a qualified person (QP) as defined by National Instrument 43-101.
Cautionary Statements Regarding Forward Looking Information
This news release contains forward-looking information within the meaning of applicable
Canadian securities laws. All information other than historical fact is forward -looking
information. Forward-looking information relat es to future events or future performance
and is based on GNI current internal expectations, estimates, projections, assumptions
and beliefs. Forward-looking information is often, but not always, identified by the use of
words such as "expect", "project", "proposed", "intend", "seek", "anticipate", "budget",
"plan", "continue", "estimate", "forecast", "may", "will", "predict", "potential", "targeting",
"could", "might", "should", "believe" and similar expressions. Although management
considers the assumptions and estimates, reflected in forward-looking information, to be
reasonable, based on information currently available, there can be no assurance that such
information will prove to be correct. As a consequence, actual results may differ materially
from those anticipated.
Undue reliance should not be placed on forward -looking information which is inherently
uncertain, and subject to known and unknown risks and uncertainties (both general and
specific) and other factors that contribute to the possibility that the future events or
circumstances contemplated by the forward looking information will not occur or that may
cause the actual results, level of activity, performance or achievements of Genius it be
materially different from those expressed or implied by such forward-looking information.
These risks include, but are not limited to risks associated with general economic
conditions, the actual results of current exploration activities, conclusions of economic
evaluations, changes in project parameters as plans continue to be refined, future metal
prices, financial risks and substantial capital requirements.
Further information regarding certain of these risks (as well as risks relating generally to
Genius' business) may be found under the headings "Risks and Uncertainties", "Forward-
Looking Information" and "Financial risk factors" in the latest Genius' Management's
Discussion & Analysis on www.sedar.com. Readers are cautioned that the foregoing list of
factors that may affect future results is not exhaustive. The forward -looking statements
contained in this news release are made as of the date hereof and GNI does not undertake
any obligation to update publicly or to revise any of the included forward -looking
statements, except as required by applicable law. The forward -looking statements
contained herein are expressly qualified by this cautionary statement.
Neither the CSE nor its Regulation Services Provider accepts responsibility for the adequacy
or accuracy of this release.
Contact Information
Guy Goulet
President & CEO
514-294-7000