Barsele and Gold Line Announce Merger to Create Scandinavian Focused District-Scale Gold Exploration & Development Company
Barsele and Gold Line Announce Merger to Create Scandinavian Focused
District-Scale Gold Exploration & Development Company
VANCOUVER, BC
and
TORONTO
,
Dec. 13, 2023
/CNW/ - Barsele Minerals Corp. ("
Barsele
") (TSXV: BME) (OTC: BRSLF) and Gold Line Resources
Ltd. ("
Gold
Line
") (TSXV: GLDL) (OTC: TLLZF) are pleased to announce that they have entered into an arrangement agreement (the "Arrangement
Agreement"), dated
December 12, 2023
, pursuant to which Barsele will acquire all of the issued and outstanding common shares of Gold Line (the "Gold
Line Shares") in exchange for common shares of Barsele (the "Barsele Shares") by way of a plan of arrangement (the "Transaction", with Barsele following
completion of the Transaction referred to as the "Resulting Issuer").
The Transaction will create a combined company with a leading gold portfolio underpinned by the advanced stage Barsele gold project (the "Barsele Project")
currently being advanced by Barsele in partnership with Agnico Eagle Mines Limited ("Agnico").
The Transaction will consolidate a large and prospective gold exploration portfolio in
Sweden
and
Finland
; this includes a district-scale property package situated
on the prolific Gold Line Mineral Belt in
Sweden
, totalling over 104,000 hectares, and the Oijärvi gold project (the "Oijärvi Project") located in the Oijärvi
Greenstone Belt of
Finland
.
Transaction Highlights:
Consolidating a Prolific Gold District
– The Transaction brings together the advanced stage Barsele Project with a district-scale exploration portfolio to
consolidate a significant license position in the Gold Line Mineral Belt of
Sweden
. The Barsele Project lies in the heart of the district with an open pit and
underground Indicated Resource of 324 koz gold and an Inferred resource of 2.086 Moz gold (see Appendix, Table 1 for Barsele's 2019 NI 43-101 Mineral
Resource) currently being advanced under a joint venture partnership with Agnico. Gold Line's flagship projects, Paubäcken and Storjuktan are located to the
immediate south and immediate north of the Barsele Project, and the combined total belt position exceeds 100km of regional first-order structural corridor.
District-Scale
Exploration Portfolio in
Sweden
– Combined exploration portfolio totalling over 104,000 hectares across 41 semi-contiguous exploration
permits will be one of the largest license packages in Scandinavia. The commanding land position will cover the majority of the underexplored and highly
prospective Paleoproterozoic Gold Line greenstone belt and covers more than 100 km of strike length of the regional Gold Line structural corridor. This belt is
host to the development stage +1 Moz Faboliden deposit, and past-producing Svartliden and Blaiken deposits. Exploration work undertaken by Gold Line on
the 100%-owned Paubäcken and Storjuktan projects has continued to demonstrate the potential of the belt, yielding positive drill results, including
22.5m
of
2.4g/t gold at
45m
and
14.6m
of 2.5 g/t gold at
142m
in recent drill programs completed at Paubäcken where only
600m
of a 5km structure has been tested.
Attractive Portfolio Gold Project in
Finland
– High grade Oijärvi Project located in the Oijärvi Greenstone Belt of
Finland
presents a stand-alone belt-scale
opportunity for the Resulting Issuer. The Oijärvi Project includes the Kylmäkangas gold-silver underground deposit with an Indicated Resource of 159 koz
AuEq grading 4.6 g/t AuEq and an Inferred Resource of 152 koz AuEq grading 2.9 g/t AuEq. (see Appendix, Table 2 for Kylmäkangas 2022 NI 43-101
Mineral Resource). The Oijärvi Project was purchased from Agnico in 2021 and significant opportunity exists for resource expansion and additional regional
discoveries.
Transaction Synergies
– Opportunity to deliver cost efficiencies and remove duplicative costs by optimizing resources of the Resulting Issuer and provide
for more efficient advancement of the Resulting Issuer's assets as a single portfolio with a focus on delivering maximum value for shareholders.
Enhanced Leadership
– Resulting Issuer will be led by an enhanced board and management team with a track record of success in exploration,
development, mining operations, financing, and capital markets.
Taj Singh
, currently President and CEO of Gold Line will become President and CEO of the
Resulting Issuer and
Toby Pierce
, currently Chair of Gold Line, will become Chair of the Resulting Issuer.
Gary Cope
, President and CEO of
Barsele
, commented:
"This Transaction is a unique opportunity to bring together complementary assets and teams to
create a leading gold company with a district-scale focus in Scandinavia.
Barsele
is delighted to welcome
Taj Singh
as the new President and CEO and
Toby
Pierce
as Chair following closing
. The
leadership changes
and acquisition of
Gold Line
's
district-scale exploration portfolio and the Oijärvi
Project allows the
creation of a
larger,
stronger and more diversified company with improved access to capital and
one of the largest
gold exploration portfolios in
Scandinavia
."
Taj Singh
,
President and
CEO of
Gold Line
, commented:
"We are very pleased to be combining with
Barsele
. The
Barsele
team has done a tremendous job
advancing the
Barsele
Project from an exploration
stage project to a joint venture with Agnico
. This combination gives
Gold Line
shareholders a more
immediate re-rating and return potential through the advanced stage
Barsele
Project, while
maintaining exposure to the new
discovery potential across
our
district-scale gold
exploration
p
ortfolio."
Concurrent with the Transaction, Barsele intends to undertake a financing to raise approximately
$1.0 million
in a non-brokered private placement (the "Concurrent
Private Placement") to fund the exploration programs across the combined portfolio of the Resulting Issuer, costs related to the proposed Transaction, and for
working capital and general corporate purposes. Further details of the Concurrent Private Placement are outlined below.
Transaction Terms
Pursuant to the terms and conditions of the Arrangement Agreement, the holders of the issued and outstanding Gold Line Shares will receive 0.7382 of a
Barsele Share for each one (1) Gold Line Share (the "Exchange Ratio") held immediately prior to closing of the Transaction. Gold Line options and warrants that
are outstanding at the effective time of the Transaction will be exercisable in accordance with their terms and based on the Exchange Ratio for similar securities to
purchase Barsele Shares. The Transaction will be carried out by way of a court-approved plan of arrangement under the
Business Corporations Act
(
British
Columbia
).
Upon completion of the Transaction, the Resulting Issuer will continue to be listed on the TSX Venture Exchange ("TSXV") under the existing name and ticker
symbol of Barsele. Excluding shares that will be issued in connection with the Concurrent Private Placement at closing, existing shareholders of Barsele will own
approximately 80% of the Resulting Issuer's outstanding shares and existing shareholders of Gold Line will own approximately 20% of the Resulting Issuer
outstanding shares on an undiluted basis.
The Arrangement Agreement contains customary deal-protection provisions including a non-solicitation covenant in respect of Gold Line, a right of Barsele to
match any superior proposal as defined and described in the Arrangement Agreement. Under certain circumstances, if the Arrangement Agreement is terminated
Barsele would be entitled to a termination fee of
$400,000
. Additionally, each party is entitled to an expense reimbursement fee in certain circumstances.
Full details of the Transaction will be included in a management information circular to be mailed to Gold Line shareholders and will be available on SEDAR+ in the
coming weeks. In addition, a copy of the Arrangement Agreement will be filed under each company's profile on SEDAR+.
Conditions to Completion
The completion of the Transaction is subject to a number of terms and conditions, including, without limitation, the following: (a) approval of the Gold
Line shareholders, as described below; (b) approval of the TSXV; (c) issuance of a final order by the British Columbia Supreme Court; (d) completion of the
Concurrent Private Placement; and, other standard conditions of closing for a transaction of this nature. There can be no assurance that all necessary approvals
will be obtained or that all conditions to completion of the Transaction will be satisfied.
The Transaction is subject to approval at a special meeting of Gold Line shareholders (the "Gold Line Meeting") and requires an affirmative vote in favour o the
Transaction from 66.67% of the votes cast by Gold Line shareholders at the Gold Line Meeting. The Transaction is not subject to any minority approval required
under either the policies of the TSXV or Multilateral Instrument 61-101 –
Protection of Minority Security Holders in Special Transactions
. Barsele does not
require shareholder approval of the Transaction.
Board of Directors and Management of Resulting Issuer
Upon closing of the Transaction, the board of directors of the Resulting Issuer (the "Resulting Issuer Board") will be comprised of five (5) directors, including two
(2) nominees of Gold Line and three (3) nominees of Barsele. Mr.
Taj Singh
will assume the role as President, CEO and Director of the Resulting Issuer and lead
the combined management and project team of the Resulting Issuer.
Benjamin Gelber
of Gold Line will assume the VP Exploration role of the Resulting Issuer.
The Resulting Issuer Board is expected to be made up of Gold Line directors Mr.
Toby Pierce
(Non-executive Chair) and Mr.
Taj Singh
and Barsele directors
Gary Cope
and
Ross Wilmot
, as well as new incumbent Mr.
Marc Legault
. Mr. Legault is a geologist and spent 34 years working at Agnico, including experience
on the Barsele Project, and retired from Agnico in 2022 as a Senior Vice-President.
Transaction Timeline
Pursuant to the Arrangement Agreement and subject to satisfying all necessary conditions and receipt of all required approvals, the parties anticipate completion
of the Transaction in
February 2024
. In connection with completion of the Transaction, the Gold Line Shares will be de-listed from the TSXV and following closing,
Gold Line will make an application to cease to be a reporting issuer under Canadian securities laws.
Recommendations by the Boards of Directors and Fairness Opinion
The board of directors of Barsele unanimously approved the entering into of the Arrangement Agreement. After consultation with its financial and legal advisors,
the board of directors of Gold Line (the "Gold Line Board") unanimously approved the entering into of the Arrangement Agreement. The Gold Line Board
recommends that Gold Line shareholders vote in favour of the Transaction. PI Financial Corp. provided a fairness opinion to the Gold Line Board stating that, as
of the date of such opinion and based upon and subject to the assumptions, limitations and qualifications stated in such opinion, the consideration to be received
by Gold Line shareholders under the Transaction is fair, from a financial point of view, to such Gold Line shareholders.
Voting Support Agreements
In connection with signing of the Arrangement Agreement, certain directors, officers and shareholders of Gold Line have entered into voting support agreements
with Barsele, agreeing to vote their Gold Line Shares in favour of the Transaction at the Gold Line Meeting. An aggregate of 7,996,260 Gold Line Shares,
representing approximately 17% of the issued and outstanding Gold Line Shares are subject to these voting support agreements.
Concurrent Private Placement
In connection with the Transaction, Barsele proposes to undertake the Concurrent Price Placement to raise aggregate proceeds of approximately
$1.0 million
through the sale of up to 6,700,000 subscription receipts (the "Subscription Receipts") of Barsele at a price of
$0.15
per Subscription Receipt. Each Subscription
Receipt will entitle the holder thereof to receive, for no additional consideration and without further action on part of the holder thereof, at the effective time of the
Transaction, one unit (each, a "Unit") of Barsele. Each Unit will consist of one Barsele Share (each, a "Sub Receipt Share") and one-half of one common share
purchase warrant (each whole common share purchase warrant, a "Warrant"). Each Warrant will entitle the holder thereof to purchase one Barsele Share (each,
a "Warrant Share") at a price equal to
$0.25
per Barsele Share for a period of two (2) years following the date of issuance of the Warrant. The Subscription
Receipts, Sub Receipt Shares, Warrants and Warrant Shares will be subject to a statutory four-month hold period following closing of the Concurrent Private
Placement.
The gross proceeds of the Concurrent Private Placement to be held in escrow pending the satisfaction of the escrow release conditions, including the satisfaction
of the conditions to the closing of the Transaction, and certain other customary conditions. Barsele may pay cash finder's fees to certain finders in respect of
subscriptions received from investors in the Concurrent Private Placement, subject to entering into customary finder's fee agreements with such finders and the
policies of the TSXV. The Concurrent Private Placement is subject to approval of the TSXV.
Advisors and Counsel
PI Financial Corp. is acting as financial advisor to Gold Line. Stikeman Elliott LLP is acting as legal counsel to Barsele and
Cassels Brock
& Blackwell LLP is
acting as legal counsel to Gold Line.
Qualified Persons
Art Freeze
, P.Geo. is a Qualified Person as set out under National Instrument 43-101 -
Standards of Disclosure for Mineral Projects
("NI 43-101") and has
reviewed and approved the scientific and technical information in this news release with respect to Barsele and its assets.
Benjamin Gelber
, M.Sc., P.Geo. is a Qualified Person as set out under NI 43-101 and has reviewed and approved the scientific and technical information in this
news release with respect to Gold Line and its assets.
About Barsele Minerals Corp.
Barsele is a Canadian-based junior exploration company managed by the Belcarra Group, comprised of highly qualified mining professionals. Barsele's main
property is the Barsele Gold Project in Västerbottens Län,
Sweden
, a joint venture with Agnico Eagle. A NI 43-101 Technical Report on the Barsele Project with
an effective date of
February 21st, 2019
, was filed on SEDAR+ on
April 2nd, 2019
. This NI 43-101 Technical Report and Mineral Resource Estimate (Amended)
for the Barsele Property was modified and filed on SEDAR+ on
December 16, 2020
.
About Gold Line Resources Ltd.
Gold Line is focused on acquiring mineral properties with exceptional exploration potential in the most prolific gold-producing regions of
Sweden
and
Finland
, both
regarded as top-tier mining jurisdictions and emerging exploration frontiers. Both countries possess prospective mineral endowments, stable tenures,
straightforward permitting, favorable tax regimes and supportive geopolitical landscapes. Gold Line's Swedish projects are located in the Gold Line Mineral Belt
and Skellefteå Belt of north-central
Sweden
and the Mjøsa-Vänern Belt in the southwest. In
Finland
, Gold Line holds the entire underexplored Oijärvi Greenstone
Belt located in the north of the country.
Cautionary Note Regarding Forward Looking Information
This press release contains statements which constitute "forward-looking information" within the meaning of applicable securities laws, including statements
regarding the plans, intentions, beliefs and current expectations of Barsele, Gold Line and the Resulting Issuer with respect to future business activities and
operating performance. Forward-looking information is often identified by the words "may", "would", "could", "should", "will", "intend", "plan", "anticipate", "believe",
"estimate", "expect" or similar expressions and include information regarding: (i) expectations regarding whether the proposed Transaction will be consummated,
including whether conditions to the consummation of the Transaction will be satisfied, or the timing for completing the Transaction, (ii) expectations regarding
whether the proposed Concurrent Private Placement will be consummated, including whether conditions to the consummation of the Concurrent Private Placement
will be satisfied, or the timing for completing the Concurrent Private Placement, (iii) expectations regarding the potential benefits and synergies of the Transaction
and the ability of the Resulting Issuer to successfully achieve its business objectives, including integrating the companies or the effects of unexpected costs,
liabilities or delays, (iv) expectations regarding additions to mineral resources and reserves and future production, (v) expectations regarding financial strength,
free cash flow generation, trading liquidity, and capital markets profile, (vi) the Gold Line Meeting, (vii) use of proceeds of the Concurrent Private Placement, (viii)
the composition of the Resulting Issuer Board and senior management of the Resulting Issuer; and (ix) expectations for other economic, business, and/or
competitive factors.
Investors are cautioned that forward-looking information is not based on historical facts but instead reflect Barsele's and Gold Line's respective management's
expectations, estimates or projections concerning future results or events based on the opinions, assumptions and estimates of management considered
reasonable at the date the statements are made. Although Barsele and Gold Line each believe that the expectations reflected in such forward-looking information
are reasonable, such information involves risks and uncertainties, and undue reliance should not be placed on such information, as unknown or unpredictable
factors could have material adverse effects on future results, performance or achievements of the Resulting Issuer. Among the key factors that could cause actual
results to differ materially from those projected in the forward-looking information are the following: the ability to consummate the Transaction; the ability to
consummate the Concurrent Private Placement; the ability to obtain requisite court, regulatory and shareholder approvals and the satisfaction of other conditions
to the consummation of the Transaction on the proposed terms and schedule; the ability of Barsele and Gold Line to successfully integrate their respective
operations and employees and realize synergies and cost savings at the times, and to the extent, anticipated; the potential impact on exploration activities; the
potential impact of the announcement or consummation of the Transaction on relationships, including with regulatory bodies, employees, suppliers, customers and
competitors; the re-rating potential following the consummation of the Transaction; changes in general economic, business and political conditions, including
changes in the financial markets; changes in applicable laws; compliance with extensive government regulation; and the diversion of management time on the
Transaction. This forward-looking information may be affected by risks and uncertainties in the business of Barsele and Gold Line and market conditions. This
information is qualified in its entirety by cautionary statements and risk factor disclosure contained in filings made by Barsele and Gold Line with the Canadian
securities regulators, including Barsele's and Gold Line's respective financial statements and related management's discussion and analysis for the financial year
ended
December 31, 2022
and their respective interim financial reports and related management's discussion and analysis for the period ended
September 30,
2023
filed with the securities regulatory authorities in certain provinces of
Canada
and available at
www.sedarplus.com
.
Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking information prove incorrect, actual results
may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. Although Barsele and Gold Line have
attempted to identify important risks, uncertainties and factors which could cause actual results to differ materially, there may be others that cause results not to
be as anticipated, estimated or intended Barsele and Gold Line do not intend, and do not assume any obligation, to update this forward-looking information except
as otherwise required by applicable law.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility
for the adequacy or accuracy of this release.
Appendix – Mineral Resource Tables
Table 1: Barsele Deposit 2019 Base Case Scenario using
US$1,300
gold price per ounce and 0.5 g/t cut-off for open pit and a 1.5 g/t cut-off for bulk
underground and 1.8 g/t cut-off for select underground.
Indicated Resource
Inferred Resource
Cut-off
Mass
Au
Au
Mass
Au
Au
(g/t)
(Mt)
(g/t)
(koz)
(Mt)
(g/t)
(koz)
Pit Constrained
0.5
3.5
1.32
147
1.8
1.59
93
Bulk Underground
1.5
1.4
2.53
117
8.8
2.58
728
Selective Underground
1.8
0.7
2.75
60
14.9
2.64
1,265
Total
5.6
1.81
324
25.5
2.54
2,086
Table 2: Kylmäkangas Deposit 2022 Base Case Scenario using
US$1,657
gold price and
US$21.52
silver price and 1.5 g/t gold cut-off for underground.
Indicated Resource
Inferred Resource
Mass
Au
Ag
AuEq
Au
Ag
AuEq
Mass
Au
Ag
AuEq
Au
Ag
AuEq
Mt
g/t
g/t
g/t
koz
koz
koz
Mt
g/t
g/t
g/t
koz
koz
koz
1.07
4.1
35.4
4.6
143
1,220
159
1.63
2.7
15.2
2.9
142
795
152
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SOURCE
Barsele Minerals Corp.
View original content:
http://www.newswire.ca/en/releases/archive/December2023/13/c0188.html
%SEDAR: 00037711E
For further information:
Barsele Minerals Corp., Gary Cope, President & CEO and Director, T: (604) 687-8566, E: [email protected], W:
www.barseleminerals.com; Gold Line Resources Ltd., Taj Singh, President & CEO and Director, T: (416) 568-1027, E: [email protected], W:
www.goldlineresources.com
CO: Barsele Minerals Corp.
CNW 08:00e 13-DEC-23