Pinehurst Announces Entering into a Definitive Agreement with Silver Bullet Mines
Pinehurst Announces Entering into a Definitive Agreement with Silver Bullet Mines
TORONTO, November 12, 2020 (GLOBE NEWSWIRE) — Pinehurst Cap ital I Inc. (TSXV:
PHT.P) (the “ Corporation ” or “ Pinehurst”), a capital pool company listed on the TSX Venture
Exchange (“ TSXV ”), and Silver Bullet Mines Inc. (“ Silver Bullet”, and together with Pinehurst,
the “ Parties ”), a mining company focused on silver exploration at its 100% owned Black Diamond
Property located near Globe, Arizona (the “ Property ”), are pleased to announce that the Parties
have entered into a binding definitive agreement effective November 12, 2020 (the “ Definitive
Agreement”) pursuant to which the Parties intend to complete a business combination transaction,
which, subject to certain conditions and applicable shar eholder and regulatory approvals, will
result in a reverse takeover of Pinehurst by Silver Bu llet (the “ Transaction ”). The combined
public company resulting from the Transaction (the “ Resulting Issuer ”) will carry on the business
of Silver Bullet.
Black Diamond Technical Report
Pinehurst and Silver Bullet are also pleased to announce that they are in receipt of a technical
report (the “ Technical Report”) dated November 3, 2020 titled “Black Diamond Property, Gil a
County, Arizona” prepared by Robert G. Komarechka, P.G eo. in accordance with National
Instrument 43-101 – Standards of Disclosure for Mineral Projects (“ NI 43-101 ”) in respect of the
Property. Highlights of the Technical Report Include:
The Property is located in the Globe copper camp of G ila Country in central Arizona,
approximately 90 miles (145km) east of Phoenix. The Property is centred on the Richmond Basin,
9 miles (14.5km) north of the city of Globe, and the site of high-grade silver discoveries in the
1870s. Silver discoveries on the Property first brought the mining industry to the Globe copper
camp in the 1870s. The first major discovery being the Old Dominion copper mine, started in 1873,
that produced over 800 million pounds in its 50-year life. The Globe copper camp is near its 150th
year of continuous operation as a major copper mining and production center. The past producing
mines of the Richmond Basin included the McMorris, La Platt a, Silver Nugget, Seven Sisters,
Helene, Chilson Shafts and others based on the silver-coppe r veins of the area. These past
producers provide the initial exploration and development targets for Silver Bullet. These mines
are also part of the Arizona silver belt that extends from the famous Silver King mine near
Superior, Arizona and is now attracting other silver exploration companies to this prolific area for
mineral discovery.
The Property includes 232 Bureau of Land Management (“ BLM ”) claims in a large block totalling
approximately 4,790 acres (1,938 ha) of land within the Tonto National Forest. The Property is
road accessible from the city of Globe. The Property is in good standing with BLM fees paid to
September 1, 2021.
Silver Bullet also holds a lease on the Buckeye Patent of approximately 16 acres (6.5 ha) and
contained within the Property. The lease agreement with the local land-owners is in good standing
and is in place for 17 more years from the date of this report with escalating annual payments.
The Property shows various types of mineralization th at could be associated with the Laramide-
age intrusives and the overall structural trends. The McMorris Mine vein, trending west-northwest
and the Buckeye Mine vein, trending northeast, are thought to be epithermal in origin along pre-
existing structures. These occurrences lie along the Arizona Silver Belt that extends from the Silver
King mine near Superior, Arizona in the west. The Black Copper Prospect shows more
characteristics of a skarn and again appears to be associated with a northeast structural feature.
Recent exploration within the last 10 years on the Pro perty is at a modestly advanced stage with
no defined resources but includes several programs by previo us option holders. Initially, a
reconnaissance map of limited extent was undertaken on the claim area at the time to locate the
main workings and geology. Of the many historic workings on the Property three main target areas
were selected and targeted for further work. The McMorris Vein Area, Black Copper Prospect and
the Buckeye Mine. The recent historic work done on the Property is described below.
Work on the McMorris Vein Area by Trueclaim Resources (US) Inc. in 2011 was focussed on six
accessible old trenches that were mapped and sampled. Th e best sampling results of this work
included a 15 foot (4.572m) section along the McMorris Vein grading 33 oz/ton Ag (1,138.29 g/t
Ag). Note that these assay values may not be representative of the average grade for the entire vein
as they represent the average of spot samples along the length surveyed within the trenches.
At the Black Copper Prospect (previously known as the Ir on Nugget Prospect) the best sample
returned a high of 7.45% copper with over 2 g/t (0.058 oz/t) of gold. This prospect is described as
a potential skarn target as the mineralization contains massive magnetite and is proximal to
limestone. This target is especially interesting as significant silver, copper and gold mineralization
was mined in the area from such styles of mineralizatio n outside of the Black Diamond claim
group, as illustrated by the historic Old Dominion Mine, located outside of the Property less than
10 km away. The Old Dominion, the first major mine of th e Globe copper camp, produced over
850 million pounds of copper, plus silver and gold over its 50 y ears of operations. This deposit
highlights one style of potential target for the Proper ty. An NI 43-101 compliant technical report
“Iron Nugget Property Arizona USA” was prepared in 2013 by Nick Barr for Trueclaim Resources
(US) Inc.
The third prospective area to see recent localized ex ploration is the Buckeye Mine located on
patented land. This site saw mapping and sampling as a first round of work. This was followed by
rehabilitation of the decline tunnel access to the vein. Limited test mining of silver-copper
mineralization recovered the heavier silver bearing miner als using gravity separation to yield
material for the production of dore bars. Approximately 500 ounces (14.17 kg) in dore bars were
produced in 2017 from this operation. Also in 2017, the vein w as tested with diamond drilling of
14 holes totaling 8,000 feet (2,438 m) each intersecting the v ein at varying depths up to 800 feet
(244 m) below the mine workings and for over 1200 ft (366m), along strike, confirming continuity
of the vein with it being open along strike and dip. Si gnificant historic anecdotal accounts of
production from The Buckeye Mine and historic grades up to 8, 970 oz/ton silver (307,542.7 g/t)
silver with 30.7% copper in select grab sampling from the vein mineralization were reported.
The Property also saw the start of a soil geochemis try sampling program. This program was
initiated by Northern Sphere Mining Inc. in 2017 on three s mall blocks yielding a total of
approximately 800 multi-element assay results. The resul ts of this program highlighted several
anomalous areas for copper, silver, zinc, and manganese. The blocks cover, or are adjacent to, the
three targeted prospects discussed above, the McMorris Vein, the Black Copper and the Buckeye
Mine. The limits of these anomalous areas are not define d. A continuing sampling program will
be part of the proposed exploration plans on the Property.
The soil geochemical surveys were later complemented in 2018 by Northern Sphere Mining Inc.
with a regional hyperspectral survey which identified area s of rock alteration that appear to be
indicative of mineralization coincident with several o f the geochemical anomalies. The spectral
survey also indicated potential structural corridors, one along the eastern side of the project within
the Black Diamond Property, that will be examined in the upcoming exploration program.
The Property is at a near advanced stage exploration but with no resources and a further drill
program being planned. Mineralization is identified on the Property at several key prospects. The
styles of mineralization are known and have delivered si gnificant assay results. The Property is
also advanced in terms of development with the completi on of test mining, underground bulk
sampling, and proven silver beneficiation work at the Buc keye Mine in 2017. Only limited
exploration programs were conducted thus far at the thre e target areas. The full extent of the
mineralization at these prospects and along their host ing structures is to be investigated in the
upcoming recommended programs. As well, the evaluation of many past workings and
identification of new targets will be undertaken with the expansion of the soil geochemical surveys
to the rest of the Property tied in with ground truthing o f the hyperspectral anomalies. It is hoped
this work will identify additional mineralization corridors for epithermal silver mineralization and
vector further exploration activity towards any further skarn or even underlying copper porphyry
targets on the Property.
The recommendations and plans also include continuation of the test mining and bulk sampling at
the Buckeye Mine. Due to the advanced stage of development on this target and its existing
underground workings, further understanding of the continuity of the vein system and the ability
to sample, follow and define the existing mineralization will be facilitated using drilling from the
underground workings. Silver Bullet plans to process and recov er the metals from further bulk
sampling from the Buckeye Mine at an offsite mill to be l ocated on private land in the Globe-
Miami area. This procedure is recommended due to the acces s allowed by the private land status
of the patent lands at Buckeye. It will also develop op erational efficiencies when the exploration
program proceeds to the McMorris Mine area. The minera lization at the McMorris Mine area is
similar in nature to the Buckeye and underground access for ex ploration and development are in
place as well, however old workings need to be accessed, rehabilitated and then used for future
exploration and development.
The recommended exploration and development programs fo r these programs is approximately
$2.5 million in Phase 1. There is significant opportunity to expand the exploration programs in a
Phase 2 program once key targets for resource delineation are identified. Phase 2 would require an
initial budget of C$2 million. An added 15% contingency would b ring the total to approximately
$5 million for both programs.
Note that a qualified person has not done sufficient work to classify the historical estimates
as current mineral resources or mineral reserves, and Si lver Bullet is not treating the
historical estimates as current mineral resources or mineral reserves.
The Technical Report can be found on Silver Bullet’s web site at www.silverbulletmines.com.
Ronald Wortel, President of Silver Bullet states “we are confident the technical report presents the
potential for high grade silver on the Property. The rep ort also covers the copper potential as we
are in a copper camp. The Old Dominion style of mineralization and its trend is noted, and
alteration that suggests we look at the copper porphyry target is there as well. We are pleased that
the report is completed and provides the plan for moving t his exciting project to discovery and
development".
The Transaction
Under the terms of the Definitive Agreement, the Transaction will be completed by way of a three-
cornered amalgamation (the “ Amalgamation ”) among Pinehurst, Silver Bullet, and Pinehurst I
Acquisition Corp. (“ Subco ”), a wholly owned subsidiary of Pinehurst incorporated for the
purposes of completing the Transaction, under the Canada Business Corporations Act . The
Amalgamation will result in Silver Bullet combining it s corporate existence with Subco, and the
entity resulting from the Amalgamation will be a wholly-owned subsidiary of Pinehurst.
Silver Bullet Financing
In connection with the Transaction, Silver Bullet int ends on completing a non-brokered private
placement (the “ Financing ”) of aggregate proceeds of not less than C$3,000,000 by the is suance
of units (the “ Units ”) at a price of thirty cents (C$0.30) per Unit (the “ Offering Price ”). Each Unit
will consist of one common share and one-half of one common share purchase warrant, with each
whole warrant being exercisable for one common share at an exercise price of fifty cents (C$0.50)
for a two-year term. Silver Bullet may engage an agent (the “ Agent”) to act on a “commercially
reasonable efforts” basis for the Financing and in connection therewith may pay a commission to
the Agent in an amount to be determined. The proceeds of t he Financing will be used to fund the
recommended exploration program on the Property, conti nuing operating expenses, and for
general working capital purposes.
Shareholders Meetings
Prior to the completion of the Transaction, Pinehurst intends to hold an annual, general and special
meeting of shareholders to approve certain matters requ ired to be completed in connection with
the Transaction pursuant to the Definitive Agreement, inc luding, among other things, (i) a
consolidation of the issued and outstanding common shares of Pinehurst (the “ Pinehurst Shares ”)
on the basis of C$700,000 divided by the Offering Price (the “ Consolidation ”), (ii) the Board and
Management Reconstitution (as defined and described below), and (iii) a change in the name of
Pinehurst to “Silver Bullet Mines Corp.” or such other name as may be accepted by the relevant
regulatory authorities and acceptable to Silver Bullet (th e “ Name Change ”). Silver Bullet also
intends to hold a special meeting of its shareholders to a pprove, among other things, the
Transaction and the Amalgamation.
Proposed Directors and Officers of the Resulting Issuer
Upon completion of the Transaction, it is anticipated that the board of directors and management
of the Resulting Issuer will be reconstituted such that the directors of the Resulting Issuer will be
comprised of John Carter, Ronald Wortel, Peter Clausi a nd Jon Wiesblatt and two (2) other
nominees of Silver Bullet (the “ Board and Management Reconstitution ”). Further details about
the proposed nominee directors and officers of the Res ulting Issuers (including biographies) will
be provided in a comprehensive press release at such time as the Parties have settled upon all
nominees.
Closing Conditions
Completion of the Transaction is subject to a number of conditions customary to transactions of
the nature of the Transaction, including, but not limited to: (i) the receipt of all required regulatory,
corporate, shareholder, stock exchange, and third-party ap provals, and (ii) the completion of the
Financing, the Consolidation, the Name Change and the Boa rd and Management Reconstitution.
There can be no assurance that any one or more of the Transaction, the Financing, the
Consolidation, the Name Change, the Board and Managemen t Reconstitution, and/or any other
matters to be undertaken in connection with the Transac tion will be completed as proposed or at
all.
Additional details of the Transaction will be availabl e in the disclosure document to be prepared
in connection with the Transaction (the “ Disclosure Document”).
The management information circular prepared in respect of the meeting of the shareholders of
Pinehurst (the “ Pinehurst Circular ”), and the Disclosure Document will be filed and be available
for viewing on SEDAR under the Corporation’s profile.
For further information, please contact:
David Rosenkrantz
Pinehurst Capital I Inc., CEO
p: 416-865-0123
Peter M. Clausi
Silver Bullet Mines Inc., VP Capital Markets
p: 416-890-1232
Information concerning Silver Bullet has been provided to the Corporati on by Silver Bullet for
inclusion in this press release.
Completion of the Transaction is subject to a number of conditions, including but not limited to,
TSXV acceptance and if applicable pursuant to Exchange Requirements (as that term is defined in
the policies of the TSXV), majority of the minority shareholder approval. Where applicable, the
Transaction cannot close until the required shareholder approval is obtained. There can be no
assurance that the Transaction will be completed as proposed or at all.
Readers are cautioned that, except as disclosed in the management information circular or filing
statement to be prepared in connection with the Transaction, any information released or received
with respect to the Transaction may not be accurate or complete and should not be relied upon.
Trading in the securities of a capital pool company should be considered highly speculative.
The TSXV has in no way passed upon the merits of the proposed transaction and has neither
approved nor disapproved the contents of this press release. Neither the TSXV nor its Regulation
Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for
the adequacy or accuracy of this release.
The securities referenced herein have not been, nor will be, regi stered under the United States
Securities Act of 1933, as amended, and may not be offered or sold within the United States or to,
or for the account or benefit of, U.S. persons absent U.S. registration or an applicable exemption
from U.S. registration requirements. This release does not constitute an offer for sale of securities
in the United States.
Cautionary and Forward-Looking Statements
This news release contains certain statements that co nstitute forward-looking statements as they
relate to Pinehurst, Silver Bullet, their respective l eadership teams and the intended Resulting
Issuer. Forward-looking statements are not historical fact s but represent management's current
expectation of future events, and can be identified by w ords such as “believe”, “expects”, “will”,
“intends”, “plans”, “projects”, “anticipates”, “esti mates”, “continues” and similar expressions.
Although management believes that the expectations rep resented in such forward-looking
statements are reasonable, there can be no assurance that they will prove to be correct.
By their nature, forward-looking statements include assumptions and are subject to inherent risks
and uncertainties that could cause actual future results, c onditions, actions or events to differ
materially from those in the forward-looking statements. If and when forward-looking statements
are set out in this new release, Pinehurst will also s et out the material risk factors or assumptions
used to develop the forward-looking statements. Except as expressly required by applicable
securities laws, Pinehurst assumes no obligation to upda te or revise any forward-looking
statements. The future outcomes that relate to forwar d-looking statements may be influenced by
many factors, including but not limited to: closing on the T ransaction as described above in a
timely manner; SARS CoV-2; reliance on key personnel; s hareholder and regulatory approvals;
activities and attitudes of communities local to the loca tion of the Property; risks of future legal
proceedings; income tax matters; availability and ter ms of financing; distribution of securities;
commodities pricing; currency movements, especially a s between the USD and CDN; effect of
market interest rates on price of securities; and, potential dilution. SARS CoV-2 creates risks that
at this time are immeasurable and impossible to define.
This news release is approved by Ronald J. Wortel, P. Eng , the President of Silver Bullet, who is
a Qualified Person in accordance with NI 43-101