Trillium Gold and Pacton Gold Combine to Create Dominant Strategic Land Position in Red Lake
NEWS RELEASE
Trillium Gold and Pacton Gold Combine to Create Dominant
Strategic Land Position in Red Lake
NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR
DISSEMINATION IN THE UNITED STATES
VANCOUVER, BC, March 16, 202 3 - Trillium Gold Mines Inc. (TSXV: TGM , FRA: 0702)
(“Trillium”) and Pacton Gold Inc. (TSXV: PAC, OTC: PACXF, FSE: 2NKM) (“Pacton”) are pleased
to announce that they have entered into an arrangement agreement dated March 15, 2023 (the
“Agreement”) to combine the two companies to create the leading gold explorer and dominant
strategic land holder, over 15 projects covering over 1,260 km 2 in the prolific Red Lake Mining
District of Northern Ontario (the “Transaction”).
Under the terms of the Agreement, Trillium and Pacton will merge on an at -market basis, with
each common shareholder of Pacton (each, a “Pacton Shareholder”) entitled to receive 1.275
common shares of Trillium (each whole such common share, a “Trillium Share”) in exchange for
each Pacton common share held (each, a “Pacton Share”). Upon completion of the Transaction,
existing Trillium and Pacton shareholders will own 53% and 47%, respectively, of the combined
company.
Transaction Highlights
• Establishes dominant and strategic land position in the prolific Red Lake Mining
District: With over 1,260 km2 of properties extending across the Red Lake Mining District,
the combined company’s property holdings will be larger than major gold producers in the
district such as Evolution Mining Limited (“Evolution”) and Kinross Gold Corporation
(“Kinross”).
• Substantial synergies: The companies expect material cost savings and synergies from
the consolidation of corporate overheads and exploration programs across this prolific
mineral district . Pacton’s Red Lake Gold Project is located within 20 km of Trillium’s
Newman Todd Complex and the western portion of its Confederation Belt properties. In
addition, Trillium’s Leo and Pakwash properties are located immediately south of Pacton’s
Dixie and Pakwash properties.
• Enhanced capital markets profile : The proposed Transaction will result in a greater
combined market capitalization and an expanded institutional investor base. Shareholders
are also expected to benefit from enhanced trading liquidity and a more robust treasury
following completion of the Transaction.
• Proven leadership and technical team with expanded board: The combined
company’s forward leadership and technical team represents over 150 years of
exploration and corporate development experience, with several senior geologists each
having decades of exploration expertise in the Red Lake Mining District . The proposed
Transaction will also add two experienced directors from Pacton to Trillium’s existing
board, increasing board depth and providing continuity for Pacton Shareholders.
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Russell Starr, President, CEO and Director of Trillium , commented, “ This combination
literally changes the map of the prolific Red Lake Mining District. With the addition of Pacton’s
neighbouring projects, Trillium will become the leading strategic landholder in the region. With
over 1,260 km2 of prospective ground, we will effectively increase and diversify our opportunities,
while realizing financial and operating synergies. Being the most dominant and strategic land
holder in the jurisdiction for gold, we will also seek to leverage the lithium and critical element
opportunities that exist throughout the combined land package.”
Nav Dhaliwal, President, CEO and Director of Pacton, further commented, “The combination
of Trillium and Pacton represents an all too rare outcome in our sector - real synergy. Our projects
are proximal, our corporate philosophies are consistent and cost efficiencies will be realized. The
new company shall be properly diversified and well positioned to achieve exploration success,
while putting under one roof an extensive land position that we expect will present strategic value
to other players in the industry.”
Benefits to Trillium Shareholders
• Increases Trillium’s land holdings in the Red Lake Mining District by over 36,000 hectares
(40% growth).
• Addition of Pacton’s Red Lake Gold Project, which is a 28,000 hectare land package
located in the heart of the Red Lake gold camp between Kinross’ Great Bear gold project
(acquired in February 2022 from Great Bear Resources for US$1.4 billion) and Evolution’s
Red Lake Operations.
• Leverages the significant work completed by Pac ton at the Red Lake Gold Project,
including 79 drill holes totaling 26,719 m and 1,011 surface samples. In 2022, a 15-hole
drill program totaling 5,698 m intersected multiple high-grade gold targets, including 0.5
m of 17.2 g/t Au, of which high-grade surface samples included 126.5 g/t Au and 23.3 g/t
Au. Pacton also identified a 2 km long gold-bearing trend at the Claremont Target, which
has widespread, anomalous gold with exposed zones that are up to 60 m long and 50 m
wide.
• Addition of Pacton’s 46.7% interest in the Sidace Project pursuant to its joint venture with
Evolution. Sidace is an 8,600 hectare property located at the northern extent of the Red
Lake Greenstone Belt. Over 80,000 m of past and recent drilling have defined three zones
of high-grade and widespread gold mineralization. In 2021, 17 of the 18 holes drilled at
Sidace intercepted gold, including 9.0 g/t Au over 2.3 m, 1.3 g/t Au over 75.2 m , 1.5 g/t
Au over 61.2 m and 20.6 g/t Au over 1.0 m.
• Pacton has a strong existing balance sheet of cash and cash equivalents.
Benefits to Pacton Shareholders
• Ownership in a larger, more diversified gold explor ation company with s ubstantial
exposure to over 89,600 hectares of prospective properties in the Red Lake Mining
District.
• Trillium’s extensive Confederation Belt property holdings spans over 115 km along
favourable structure s, which is several times larger than Kinross’ LP F ault Zone . In
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addition to gold targets, these properties ha ve substantial potential to host significant
critical metals including copper, nickel, cobalt, lithium, zinc, molybdenum, indium and
gallium.
• Trillium’s greater Newman Todd project hosts over 20 high-grade zones and has a sizable
historic NI 43 -101 resource estimate. More than 31,000 m of drilling over 2020 to 2022
has been completed by Trillium , targeting high -grade veins with comparable width s to
historical drilling ( >55,000 m up to 2013 ), on the Newman Todd and Rivard projects,
located 26 km from Evolution’s Red Lake Operations.
• Enhanced market capitalization in combination with research coverage , a strong
institutional and retail investor base, and greater trading liquidity.
Transaction Procedures
The proposed merger will be completed by way of plan of arrangement (the “Arrangement”) under
the Business Corporations Act (British Columbia) resulting in Pacton becoming a wholly owned
subsidiary of Trillium. The Transaction will require approval of at least 66 2/3 percent of the votes
cast by shareholders of Pacton at a special meeting of shareholders expected to be held in the
second quarter of 2023 (the “Pacton Meeting”). All of the directors and senior officers of Pacton
have entered into voting and support agreements with Trillium in support of the Transaction.
The Arrangement will also provide for the issuance of Trillium stock options to Pacton
optionholders in exchange for t heir existing Pacton options. Pacton optionholders who do not
exercise their Pacton options prior to the effective time of the Arrangement will receive Trillium
stock options to purchase Trillium common shares, in number and at exercise prices adjusted by
the exchange ratio. Under the Arrangement , all existing warrants of Pacton will become
exercisable to acquire Trillium common shares, in number and at exercise prices adjusted by the
exchange ratio.
In addition to Pacton shareholder approval and court approvals, the Transaction is subject to
applicable regulatory approvals including approval of the TSX Venture Exchange (“TSX-V”) and
the satisfaction of certain other closing conditions.
The Agreement includes customary provisions including non -solicitation provisions, a right for
Trillium to match any superior proposal, and a termination fee payable in certain circumstances.
Currently there are 79,586,665 Trillium share s issued and outsta nding. Upon closing of the
Transaction Trillium is expected to have 149,070,735 shares issued and outstanding. Full details
of the Transaction will be included in the management information circular of Pacton describing
the matters to be considered at the Pacton Meeting, which is expected to be mailed to the Pacton
Shareholders in the second quarter 2023, and made available on SEDAR under Pacton’s issuer
profile at www.sedar.com.
The Transaction is a result of arm’s length negotiations between the parties and there is no
finder's fee associated with the Transaction. Financial advisors to Pacton are expected to receive
advisory fees customary of transactions of this nature which will be described in more detail in
Pacton’s management information circular in respect of the Transaction.
Board of Directors’ Recommendations
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The Board of Directors of Pacton has unanimously approved the proposed Transaction and
unanimously recommends that Pacton Shareholders vote in favour of the proposed Transaction.
Haywood Securities Inc. has provided a fairness opinion to the Board of Directors of Pacto n
stating that, as of the date hereof, and based upon and subject to the assumptions, limitations,
and qualif ications set forth therein , the consideration to be received by Pacton Shareholders
pursuant to the proposed Transaction is fair, from a financial point of view, to the Pacton
Shareholders.
Additionally, the Board of Directors of Trillium has unanimously approved the proposed
Transaction.
Board and Management
It is intended that, upon the closing of the Transaction, the Board of Directors of the combined
company will consist of six members, of which two members shall be selected by Pacton and four
members shall be selected by Trillium.
Qualified Persons
William Paterson , P.Geo., VP Exploration of Trillium, is a Qualified Person as defined under
National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43 -101”). Mr.
Paterson has reviewed and approved the scientific and technical information in this press release
relating solely to Trillium.
Dale Ginn, P.Geo., Executive Chairman of Pacton, is a Qualified Person as defined under NI 43-
101. Mr. Ginn has reviewed and approved the scientific and technical information in this press
release relating solely to Pacton.
Advisors and Legal Counsel
Red Cloud Securities Inc. is acting as financial advisor to Trillium and its Board of Directors.
Fasken Martineau DuMoulin LLP is acting as legal counsel to Trillium.
Haywood Securities Inc. is acting as financial advisor to Pacton and its Board of Directors. Cozen
O’Connor LLP is acting as legal counsel to Pacton.
Webcast
Trillium and Pacton will host a joint webcast tomorrow, March 17, 2023 at 1:00 p.m. Eastern
Time / 10:00 a.m. Pacific Time to discuss the Transaction.
Login to the webcast: https://redcloudfs.com/rcwebinar-tgm-3
About Trillium Gold Mines Inc.
Trillium Gold Mines Inc. is a growth focused company engaged in the business of acquisition,
exploration and development of mineral properties located in the Red Lake Mining District of
Northern Ontario. As part of its regional -scale consolidation strategy , the Company has
assembled one of the largest prospective land packages in and around the Red Lake mining
district in proximity to major mines and deposits, as well as along the Confederation Lake and
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Birch-Uchi greenstone belts. The Company recently clos ed acquisitions effectively extending its
contiguous land position over more than 100 km of favourable structures on trend with Kinross
Gold’s Great Bear Project and Evolution Mining’s Red Lake Operation. In addition, the Company
has interests in highly prospective properties in Larder Lake and Shining Tree, Ontario.
Visit Trillium’s website at www.trilliumgold.com.
About Pacton Gold Inc.
Pacton Gold is a Canadian exploration company with key strategic partners focused on the
exploration and development of high-grade mineral resource properties in Ontario, Canada. The
Company also owns a strategic portfolio of prospective projects in Western Australia.
Visit Pacton’s website at www.pactongold.com.
For further information, please contact:
Trillium Gold Inc.
Russell Starr
President, CEO and Director
Donna Yoshimatsu
VP Corporate Development and Investor
Relations
Tel: (416) 722-2456
Email: [email protected] or
Website: www.trilliumgold.com
Pacton Gold Inc.
Nav Dhaliwal
President, CEO and Director
Tel: 1-(855)-584-0258
Email: [email protected]
Website: www.pactongold.com
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is
defined in the policies of the TSX Venture Exchange) accepts responsibility for the
adequacy or accuracy of this release.
Cautionary note regarding forward-looking statements
This news release contains forward -looking information, which involves known and unknown risks,
uncertainties and other factors that may cause actual events to differ materially from current expectations.
This news release contains forward -looking information, which involves known and unknown risks,
uncertainties and other factors that may cause actual events to differ materially from current expectations.
Forward-looking information includes but is not limited to, completion of the proposed Transaction, receipt
of all shareholder and court approvals, the completion of other regulatory approvals, the mailing of the
management information circular, the completion of a concurrent private placement and, anticipated cash
balance and anticipated cost savings following completion of the Transaction among other things. These
statements are based on each of the management of Trillium and Pacton, respectively, reasonable
assumptions, estimates, expectations, analyses and opinions, which are based on each management’s
experience and perception of trends, current conditions and expected developments, and other factors that
management believes are relevant and reasonable in the circumstances, but which may prove to be
incorrect. Such factors, among others, include: impacts arising from the global disruption caused by the
Covid-19 coronavirus outbreak, business integration risks; fluctuations in general macroeconomic
conditions; fluctuations in securities markets; fluctuations in spot and forward prices of gold or certain other
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commodities; change in national and local government, legislation, taxation, controls, regulations and
political or economic developments; risks and hazards associated with the business of mineral exploration,
development and mining (including environmental hazards, industrial accidents); inability to obtain
adequate insurance to cover risks and hazards; the presence of laws and regulations that may impose
restrictions on mining; employee relations; relationships with and claims by local communities and
indigenous populations; availability of increasing costs associated with mining inputs and labour; the
speculative nature of mineral exploration and development (including t he risks of obtaining necessary
licenses, permits and approvals from government authorities); and title to properties.
Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only
as of the date of this press release. The companies disclaim any intention or obligation, except to the extent
required by law, to update or revise any forward-looking statements, whether as a result of new information,
future events or otherwise.