Battery Metals Royalties to Acquire 45% Interest in Mongolian Coal Assets from Silver Elephant Mining For $6.3 Million
Battery Metals Royalties to Acquire 45% Interest in
Mongolian Coal Assets from Silver Elephant Mining For
$6.3 Million
Vancouver, British Columbia, April 4 , 2022 – Silver Elephant Mining Corp. (“Silver Elephant ”)
(TSX:ELEF, OTCQX:SILEF, Frankfurt:1P2N) and Battery Metals Royalties Corp. (“Battery”)
announce that they have entered into a binding letter of intent (the “LOI”) pursuant to which Battery
proposes to acquire a 45% equity interest of Silver Elephant’s wholly owned Mega Thermal Coal Corp.
(formerly Asia Mining Inc.) (“Mega Coal”), which owns and operates the Ulaan Ovoo and Chandgana
thermal coal mines in Mongolia through Mega Coal’s wholly-owned Mongolian subsidiaries.
The proposed transaction (“Transaction”) is a positive step to transform Silver Elephant to a pure silver
mining and exploration company by monetizing non-core assets; and includes the following key terms:
(a) Silver Elephant shall transfer a 45% equity interest in Mega Coal to Battery;
(b) Mega Coal and Battery will revise the terms of a net smelter royalty agreement dated August 25,
2021, as amended, between Mega Coal and Battery from US$2 per tonne of coal to 3% of gross
coal sales with a minimum royalty of US$3 per tonne of coal;
(c) Silver Elephant and Battery will revise the terms of a net smelter royalty agreement dated August
25, 2021, as amended, between Silver Elephant’s Bolivian subsidiaries and Battery to remove
the threshold price as a condition for royalty payments; and
(d) Silver Elephant will transfer to Mega Coal: (i) 9,000,000 Battery Shares; and (ii) 1,000,000
common shares of Flying Nickel Mining Corp. (“Flying Nickel Shares”) , currently held by Silver
Elephant, immediately prior to completion of the Transaction.
in exchange Battery will:
(a) issue 15,000,000 common shares of Battery (“Battery Shares”) to Silver Elephant;
(b) transfer 3,000,000 Flying Nickel Shares currently held by Battery to Silver Elephant; and
(c) under certain circumstances, pay Silver Elephant an additional Penalty (as defined below).
The total consideration is $6.3 million based on a deemed value of $0.30 per Battery Share and $0.60
per Flying Nickel Share;
In connection with the Transaction, it is expected that:
a) Silver Elephant will distribute the remaining 55% equity interest in Mega Coal to Silver Elephant
shareholders;
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b) B attery will change its name to Oracle Commodity Holdings Corp. and complete an equity private
placement offering (“Financing”) of up to 7,000,000 units of Battery (“ Units”) at a price per Unit
of $0.30 for aggregate gross proceeds of up to $2,100,000. Each Unit will consist of one Battery
Share and one Battery Share purchase warrant (a “ Warrant”). Each Warrant shall entitle the
holder thereof to purchase one additional Battery Share at a price of $0.35 at any time on or
before the 36 months anniversary of the date of issuance of the Warrants; and
c) B attery will subsequently seek to complete a listing of the Battery S hares on either the TSX
Venture Exchange or the Canadian Securities Exchange (the “Listing”). In the event the Listing
is not completed prior to July 15, 2022, Battery agrees that it shall issue to Silver Elephant a n
additional 1,000,000 Battery Shares in connection with closing of the Transaction (“Closing”) (the
“Penalty”). For avoidance of doubt, the Penalty is only applicable subject to Closing and shall
result in an aggregate of 16,000,000 Battery issued to Silver Elephant.
Silver Elephant and Battery believe the Transaction, among other things, will:
1. add current assets of Flying Nickel Shares and Battery Shares to Silver Elephant, and enable
Silver Elephant to further participate in the upside from Battery’s nickel, vanadium, and coal
royalty and equity holdings;
2. expand Battery’s equity portfolio, and enhance Battery’s investment appeal to facilitate its
Financing and Listing;
3. provide Silver Elephant shareholders direct participation in thermal coal by receiving Mega Coal
shares; and
4. provide Mega Coal with additional current assets and a broadened shareholder base to prepare
for a potential Canadian public listing and fundraising to ramp up its coal production, give n
current Newcastle thermal coal benchmark price is $255/tonne.
Pursuant to the LOI, the parties shall use commercially reasonable best efforts to enter into a Definitive
Agreement in respect of the Transaction on or before April 22, 2022. The expected Closing is July 15,
2022, subject to the satisfaction of all closing conditions. The LOI also includes a termination fee of
$1,500,000, payable by the terminating party in certain conditions. After careful consideration, the
independent directors of each of Silver Elephant and Battery have determined the Transaction to be in
the best interests of their respective company.
It is currently contemplated that the Transaction will be completed by way of a statutory plan of
arrangement pursuant to the Business Corporations Act (British Columbia) (the “BCBCA”), which will
require the approval of the Supreme Court of British Columbia. The final structure of the Transaction
will be subject to the receipt of tax, corporate, securities and other advice from the parties’ advisors.
Currently, Silver Elephant owns 31,730,11 0 common shares of Battery, representing 39.7 % of the
issued and outstanding common shares of Battery . Upon Closing, Silver Elephant is expected to hold
approximately 37,730,110 Battery Shares if no Penalty is applied or 38,730,110 if the Penalty is applied,
which is expected to represent approximately 39.7% of the issued and outstanding Battery Shares if no
Penalty is applied or approximately 40.3% of the issued and outstanding Battery Shares if the Penalty
is applied, in each case without accounting for any additional Battery Shares that may be issued
following the date hereof in connection with the Financing, the Listing or otherwise. In addition, upon
Closing, Mega Coal is expected to hold 9,000,000 Battery Shares representing 9.5% of the issued and
outstanding Battery Shares if no Penalty is applied or 9.4% of the issued and outstanding Battery Shares
if the Penalty is applied, in each case without accounting for any additional Battery Shares that may be
issued following the date hereof in connection with the Financing, the Listing or otherwise.
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The Transaction is a ‘related party’ transaction in accordance with Multilateral Instrument 61- 101 –
Protection of Minority Security Holders in Special Transactions (“MI 61- 101”). For Silver Elephant, the
Transaction is exempt from the valuation requirements by application of section 5.5(a) of MI 61- 101.
Further information regarding minority shareholder approval requirements and other disclosure
requirements under MI 61-101 will be provided in a subsequent news release.
Closing of the Transaction will be subject to such corporate and/or regulatory approvals as may be
required, including the approval of the Toronto Stock Exchange (the “TSX”), and such other
requirements as may be applicable under applicable laws and the policies of the TSX, including, if
applicable, approval of the shareholders of Silver Elephant and/or Battery.
Qualified Person
The technical contents of this news release have been prepared under the supervision of Danniel
Oosterman, VP Exploration. Mr. Oosterman is not independent of the company in that he is employed
by it. Mr. Oosterman is a qualified person as defined by the guidelines in NI 43-101.
About Mega Thermal Coal
Mega Thermal Coal owns and operates the following Mongolia projects:
Ulaan Ovoo: contains a measured 174.5 million tonnes and indicated 34.3 million tonnes of thermal coal
with an average GCV of over 5,000 kcal/kg ( as cited in T echnical Report by Wardrop Engineering,
December 13, 2010, available on SEDAR). Ulaan Ovoo has seen limited production between 2019 to
2022.
Chandgana Khavtgai: contains a measured and indicated 1. 05 billion tonnes of thermal co al with an
average GCV of 3,636 kcal/kg (as reported by Kravits Geological Services LLC, September 28, 2010,
available on SEDAR).
Chandgana Tal: contains a measured 124.4 million tonnes of thermal coal with an average GCV of
3,306 kcal/kg (as reported by John T. Boyd Company, February 2014, available on SEDAR).
About Silver Elephant
Silver Elephant Mining Corp. is a premier silver mining and exploration company which also owns 39%
of Battery Metals Royalties Corp. Silver Elephant’s flagship Pulacayo project received over 94,000
meters of drilling since the late 1990’s with a n indicated mineral resource of 106.7 million oz of silver,
1,385 million pounds of zinc, and 694 million pounds of lead, and an inferred mineral r esource of 13.1
million oz of silver, 123 million pounds of zinc and 62 million pounds of lead (prepared by Mercator
Geological Services Ltd, details provided in the Company’s news release dated October 13, 2020).
To find out more about Silver Elephant, visit www.silverelef.com.
About Battery Metals
Battery Metals Royalties Corp. is an investment company, spun-out from Silver Elephant Mining Corp.
Battery’s core assets include: (1) C ertain royalties on silver, nickel, vanadium , and coal projects; and
(2) 22,953,991 common shares (37% ownership) of Flying Nickel Mining Corp. (TSX: FLYN) and
22,953,991 common shares (46% ownership) of Nevada Vanadium Mining Corp.
To find out more about Battery Metals, visit www.royalbatt.com.
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SILVER ELEPHANT MINING CORP.
ON BEHALF OF THE BOARD
Greg Hall
Director
For more information about Silver Elephant, please contact Inves tor
Relations: +1.604.569.3661 ext. 101
BATTERY METALS ROYALTIES CORP.
ON BEHALF OF THE BOARD
Anthony Garson
Director
For more information about Battery, please contact Investor Relations:
+1.604.569.3661 ext. 101
Neither the Toronto Stock Exchange nor its Regulation Services Provider (as that term is defined in the
policies of the Toronto Stock Exchange) accepts responsibility for the adequacy or accuracy of this
release.
Cautionary Note Regarding Forward-Looking Statements and Reader Advisory
Certain statements contained in this news release, including, but not limited to, statements with respect to the
Transaction, the completion of the Transaction, the receipt of all necessary regulatory, shareholder and other approvals
as may be required pursuant to applicable laws and stock exchange policies, the satisfaction of all closing conditions to
the Transaction, the terms and conditions of the Transaction, among other things, and statements which may contain
words such as “expects”, “anticipates”, “intends”, “plans”, “believes”, “estimates”, or similar expressions, and statements
related to matters which are not historical facts, are forward- looking information within the meaning of applicable
securities laws. Such forward-looking statements, which reflect management’s expectations regarding the Transaction,
future growth of Battery and Mega Coal, results of operations, performance, business prospects and opportunities, are
based on certain factors and assumptions and involve known and unknown risks and uncertainties which may cause
the actual results, performance, or achievements to be materially different from future results, performance, or
achievements expressed or implied by such forward-looking statements.
These factors should be considered carefully, and readers should not place undue reliance on forward- looking
statements. Each of Silver Elephant and Battery believes that the expectations reflected in the forward- looking
statements contained in this news release and the documents incorporated by reference herein are reasonable based
on information available to it, but no assurance can be given that these expectations will prove to be correct. In addition,
although each of Silver Elephant and Battery has attempted to identify important factors that could cause actual actions,
events or results to differ materially from those described in forward looking statements, there may be other factors that
cause actions, events or results not to be as anticipated, estimated or intended. None of Mega Coal, Battery or Silver
Elephant undertakes any obligation to release publicly any future revisions to forward -looking statements to reflect
events or circumstances after the date of this news or to reflect the occurrence of unanticipated events, except as
expressly required by law.
Not for dissemination in the United States or for distribution to U.S. newswire services. The securities offered have not
been registered under the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act”), or any applicable state
securities laws and may not be offered or sold in the United States or to, or for the account or benefit of, a person in the
United States or a U.S. person (as defined in Regulation S under the U.S. Securities Act) absent registration under the
U.S. Securities Act and any applicable state securities laws, or compliance with an exemption therefrom. T his press
release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities
in any state in which such offer, solicitation or sale would be unlawful.
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Investors are cautioned that, none of the securities of Mega Coal or Battery are currently traded on any stock exchange
or market and there is no guarantee that the securities of Mega Coal or Battery will ever be listed for trading, and
accordingly, securityholders may not be able to sell their securities through the facilities of any stock exchange or market
at any time. This means that the securities of Mega Coal and Battery may be difficult to trade or sell. Even if any listing
is achieved, trading in the securities of Mega Coal and Battery should be considered highly speculative and investors
should only invest if they are ready to lose all of their investment.
There is no guarantee that the Transaction will be completed or even if any completed, will be on the terms currently
contemplated herein. The parties to the LOI may amend the terms of the Transaction at any time.