Generation Mining Sells Davidson Molybdenum Property
Generation Mining Sells Davidson Molybdenum Property
TORONTO--(BUSINESS WIRE)--September 13, 2023--Generation Mining Limited
(TSX: GENM; OTCQB: GENMF) (“Gen Mining” or the “Company”) has agreed to
sell its rights and interests in an option agreement (the “Davidson Agreement”) to
acquire a 100% interest in six (6) mineral leases (the “Davidson Property”) hosting a
molybdenum-tungsten deposit, located near the town of Smithers, British Columbia,
to Moon River Capital Ltd. (“Moon River”), a capital pool company listed on the
TSX Venture Exchange, for $630,000 in cash, 9.0 million common shares of Moon
River and certain nomination and pre-emptive shareholder rights described below (the
“Proposed Transaction”). Moon River intends for the Proposed Transaction to
constitute its Qualifying Transaction under the rules of the TSX Venture Exchange.
Following completion of the transaction, Moon River will engage in exploration and
development activities in order to advance a preliminary economic assessment on the
Davidson Property.
Paul Murphy, independent Lead Director of Gen Mining of Gen Mining stated, “The
Davidson Property is a large molybdenum-tungsten deposit which deserves additional
attention and resources in this robust market for both molybdenum and tungsten. Ian
McDonald, Interim Chief Executive Officer and a Director of Moon River, is the
former Executive Chairman and CEO of Thompson Creek Metals Company Inc.,
which was focused on molybdenum production and was previously involved with the
Davidson Property through Patent Enforcement & Royalties Ltd. (a predecessor
company to Thompson Creek), which completed a resource evaluation on the property
in 2004/2005. Given our focus on developing the Marathon Palladium-Copper
Project, this deal with Moon River meets two key goals. It allows Gen Mining to
retain an interest in the property and for the Davidson Property to get the attention it
so richly deserves.” Mr. Murphy went on, “The approval of this transaction by the
independent members of the Board signifies the strength and prudence of the deal,
reflecting the commitment of both parties to a successful outcome.”
Following an unsolicited offer from Moon River to acquire the Company’s rights and
interests in the Davidson Property, the independent directors of the Company (which
excluded Messrs. Levy and Knoll who currently serve as directors of Moon River),
engaged Accelera Capital Inc. (“Accelera”) to provide independent financial advisory
services to the Company. Accelera canvassed a broad range of potential purchasers
and two competing offers from third parties were received. After negotiating with the
offerors and inviting them to enhance their initial proposals in their submission of
final offers, the independent directors of the Company, in consultation with Accelera,
concluded that the terms and conditions of the final revised Moon River offer were the
most favourable for the Company and its shareholders, as Moon River offered near
term cash consideration and continued exposure to further exploration and
development of the Davidson Property through the equity ownership position. In
addition, the proposed Transaction was subject to less execution risk than the
competing offers.
The transaction is subject to customary closing conditions and is expected to be
completed by the end of October. Following the closing of the transaction, the
Company is expected to hold between 29% and 31% of the Common Shares of Moon
River. It will also have the right to appoint a director to the Board of Moon River and
will have pre-emptive shareholder rights for as long as it continues to hold more than
10% of Moon River’s issued and outstanding common shares.
About the Company
Gen Mining’s focus is the development of the Marathon Project, a large undeveloped
palladium-copper deposit in Northwestern Ontario, Canada. The Company released
the results of the Feasibility Study Update on March 31, 2023.
The Feasibility Study Update estimated a Net Present Value (using a 6% discount
rate) of C$1.16 billion, an Internal Rate of Return of 25.8%, and a 2.3-year payback.
The mine is expected to produce an average of 166,000 ounces of payable palladium
and 41 million pounds of payable copper per year over a 13-year mine life (“LOM”).
Over the LOM, the Marathon Project is anticipated to produce 2,122,000 ounces of
palladium, 517 million lbs of copper, 485,000 ounces of platinum, 158,000 ounces of
gold and 3,156,000 ounces of silver in payable metals. For more information, please
review the Feasibility Study Update dated March 31, 2023, filed under the Company’s
profile at SEDAR.com or on the Company’s website at
https://genmining.com/projects/feasibility-study/.
The Marathon Property covers a land package of approximately 22,000 hectares, or
220 square kilometres. Gen Mining owns a 100% interest in the Marathon Project.
Qualified Person
The scientific and technical content of this news release was reviewed, verified, and
approved by Drew Anwyll, P.Eng., M.Eng, Chief Operating Officer of the Company,
and a Qualified Person as defined by Canadian Securities Administrators National
Instrument 43-101 - Standards of Disclosure for Mineral Projects.
Forward-Looking Information
This news release contains certain forward-looking information and forward-looking
statements, as defined in applicable securities laws (collectively referred to herein as
"forward-looking statements"). Forward-looking statements reflect current
expectations or beliefs regarding future events or the Company’s future performance.
All statements other than statements of historical fact are forward-looking statements.
Often, but not always, forward-looking statements can be identified by the use of
words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates",
"continues", "forecasts", "Projects", "predicts", "intends", "anticipates", "targets" or
"believes", or variations of, or the negatives of, such words and phrases or state that
certain actions, events or results "may", "could", "would", "should", "might" or "will"
be taken, occur or be achieved, including statements related to the anticipated timing
for the closing of the transaction; the Company’s expected percentage ownership of
Moon River; Moon River’s business plans; and the life of mine, mineral production
estimates, payback period, and financial returns from the Marathon Project. All
forward-looking statements, including those herein, are qualified by this cautionary
statement.
Although the Company believes that the expectations expressed in such statements are
based on reasonable assumptions, such statements are not guarantees of future
performance and actual results or developments may differ materially from those in
the statements. There are certain factors that could cause actual results to differ
materially from those in the forward-looking information. These include the timing for
Moon River and its development activities at the Davidson Property; the progress of
the planned updated technical report on the Davidson Property, and the impact of
COVID-19, inflation, global supply chain disruptions and the war in Ukraine on , key
inputs, staffing and contractors, commodity price volatility, uncertainties involved in
interpreting geological data environmental compliance and changes in environmental
legislation and regulation, relationships with First Nations communities, exploration
successes, and general economic, market or business conditions, as well as those risk
factors set out in the Company’s annual information form for the year ended
December 31, 2022, and in the continuous disclosure documents filed by the Company
on SEDAR at www.sedar.com. Readers are cautioned that the foregoing list of factors
is not exhaustive of the factors that may affect forward-looking statements.
Accordingly, readers should not place undue reliance on forward-looking statements.
The forward-looking statements in this news release speak only as of the date of this
news release or as of the date or dates specified in such statements.
Investors are cautioned that any such statements are not guarantees of future
performance and actual results or developments may differ materially from those
projected in the forward-looking information. For more information on the Company,
investors are encouraged to review the Company’s public filings on SEDAR at
www.sedar.com. The Company disclaims any intention or obligation to update or
revise any forward-looking information, whether as a result of new information,
future events or otherwise, other than as required by law.
Contacts
Jamie Levy
President and Chief Executive Officer
(416) 640-2934 (O)
(416) 567-2440 (M)
Ann Wilkinson
Vice President, Investor Relations
(416) 640-3954 (O)
(416) 357-5511 (M)