Southern Empire to Acquire MAS Gold to Establish an Advanced Stage Gold Exploration and Development Company
Southern Empire to Acquire MAS Gold to
Establish an Advanced Stage Gold Exploration
and Development Company
VANCOUVER, BC
,
July 13, 2020
/CNW/ - Southern Empire Resources Corp. (Southern Empire;
TSX-V: SMP) (
Frankfurt
: 5RE) and MAS Gold Corp. (MAS Gold; TSX-V: MAS) are pleased to
announce that they have entered into a binding agreement dated
July 11, 2020
(the "
Agreement
")
whereby Southern Empire has agreed to acquire all of the issued and outstanding common shares of
MAS Gold (the "
Transaction
").
Highlights of the Transaction
MAS Gold has two advanced stage gold deposits having NI 43-101 mineral resources located in the
La Ronge Gold Belt of
Saskatchewan, Canada
:
the
North Lake Gold Deposit
containing 417,000 ounces gold (oz Au) is comprised of an
Inferred Mineral Resource of 14,110,00 tonnes (t) grading 0.92 grams gold per tonne (g Au/t)
the
Greywacke North Gold Deposit
containing 95,600 oz Au is comprised of an Indicated
Mineral Resource of 255,500 t at 9.92 g Au/t, plus an Inferred Mineral Resource of 59,130 t at
7.42 g Au/t, at a cut-off grade of 5 g Au/t
Significant potential for resource expansion exists at both Greywacke North and
North Lake
Excellent exploration potential also exists for MAS Gold's Preview-North Property (which hosts
the Point gold deposit),
Henry Lake
and
Elizabeth Lake
properties.
The combined entity will have a strong balance sheet, with no debt and a cash position of
approximately
$5.5 million
, which will be used to target expansion of the current NI 43-101 resources
as well as exploration and development on all of Southern Empire's projects.
Chief Executive Officer of Southern Empire,
Dale Wallster
, stated:
"With this transaction, Southern
Empire will emerge as a company having NI 43-101 gold resources in
Saskatchewan
, annually
ranked as one of the best mining jurisdictions in the world, which we will target to expand and
enhance. Together with our
Oro Cruz
and Eastgate gold projects in the southwestern
U.S.A.
we will
be a multi-asset, advanced stage gold exploration and development company with holdings in
some of the best mining jurisdictions in the world. Southern Empire has a strong treasury, an
award-winning technical team and management with strong track records in the capital markets."
Details of the Arrangement
The Transaction will be effected by way of a court approved plan of arrangement under the
Business Corporations Act
(
British Columbia
). Under the terms of the Agreement, each shareholder
of MAS Gold will receive 1 common share of Southern Empire ("
Southern Empire Share
") for
every 8.5 common shares of MAS Gold. Assuming completion, and none of the options or share
purchase warrants of MAS Gold being exercised prior to closing of the Transaction, Southern
Empire will issue a total of 5,828,090 Southern Empire Shares to the shareholders of MAS Gold.
Based on a price of
$1.19
per Southern Empire Share, being the closing price of Southern Empire
on
July 10, 2020
, the 8.5 to 1 conversion ratio represents an offer price of
$0.145
per MAS Share,
being a premium of 21% of MAS Gold's closing price on
July 10, 2020
.
Following the completion of the Transaction, Southern Empire will have 56,734,890 issued and
outstanding shares, of which the former shareholders of MAS Gold will hold approximately 10.3%.
All outstanding options and warrants of MAS Gold will remain outstanding (if not exercised prior to
closing of the Transaction) and will be adjusted to give effect to the Transaction in accordance with
their respective terms or pursuant to the Agreement.
After taking into consideration, among other things, the terms of the Transaction, the
recommendation of the special committee of independent MAS Gold directors established to review
the Transaction and discussions with its advisors, MAS Gold's board of directors has concluded that
the Transaction is in the best interests of MAS Gold and has approved the Agreement. MAS Gold's
board of directors intends to recommend in the management information circular to be mailed in
connection with the MAS Gold shareholder meeting that the MAS Gold shareholders vote in favour
of the Transaction.
Similarly, after taking into consideration, among other things, the terms of the Transaction, the
Southern Empire board of directors has concluded that the Transaction is in the best interests of
Southern Empire and has approved the Agreement.
The Transaction will require the approval by at least 66 2/3% of the votes cast on the special
resolution by MAS Gold shareholders and, if required, Southern Empire shareholders present in
person or represented by proxy at the shareholder meetings. The Transaction may also require the
approval of a majority of the votes cast by minority shareholders of MAS Gold for the purposes of
Multilateral Instrument 61-101.
Mr. Netolitzky is Chairman and director of Southern Empire and Chief Executive Officer, President
and a director of MAS Gold and
Andrew Davidson
is Chief Financial Officer of each of Southern
Empire and MAS Gold.
The Transaction is subject to due diligence by each party, shareholder approval, applicable
regulatory and TSX Venture Exchange approvals and satisfaction of customary provisions. The
Transaction is expected to close in the second half of 2020.
The Agreement includes customary deal protection provisions, including a break fee of
$250,000
payable by a breaching party, and a right to match and a non-solicitation provision in favour of
Southern Empire.
Details of the Transaction, including a summary of the terms and conditions of the Agreement, will
be disclosed in the management information circular of MAS Gold which will be mailed to the
securityholders of MAS Gold and will also be available on SEDAR at
www.sedar.com
.
None of the securities to be issued have been or will be registered under the United States
Securities Act of 1933, as amended (the "
U.S. Securities Act
"), or any state securities laws, and
any securities issued in the Transaction are anticipated to be issued in reliance upon available
exemptions from such registration requirements pursuant to Section 3(a)(10) of the U.S. Securities
Act and applicable exemptions under state securities laws. This press release does not constitute an
offer to sell or the solicitation of an offer to buy any securities.
Management Team and Board of Directors
The parties anticipate that the management team and board of directors for Southern Empire will
remain unchanged. The management team will continue to be
Dale Wallster
(CEO and President)
and
Andrew Davidson
(Chief Financial Officer), and the board of directors will be
Ron Netolitzky
(Chairman),
Dale Wallster
,
Bryan Slusarchuk
,
James Currie
and a mutually agreed representative of
the current MAS Gold board of directors.
James Hutton
will remain as an advisor to the company.
Qualified Person
The scientific and technical information contained in this news release has been prepared, reviewed,
verified and approved by
David Tupper
, P.Geo. (
British Columbia
), Southern Empire's VP
Exploration and a Qualified Person within the context of Canadian Securities Administrators' National
Instrument 43-101;
Standards of Disclosure for Mineral Projects.
About Southern Empire Resources Corp.
Southern Empire is focused on the acquisition, exploration and development of gold deposits in
North
America
, currently having two projects in the American southwest.
In the Cargo Muchacho mountains of
Imperial County
, southeast
California
, Southern Empire holds
options to acquire a 100% interest in the 2,160 hectares (5,338 acre) Oro Cruz Property located
approximately 22.5 kilometres (km; 14 miles) southeast of the Mesquite gold mine of Equinox Gold
Corp.
With a history that includes extensive drilling and large-scale open pit and underground mining that
was suspended during the gold market downturn in 1996, the Oro Cruz Gold Project hosts numerous
exploration targets in addition to a high-grade oxide gold zone that, based on the historical mine
operation records, is amenable to conventional heap leach extractive methods.
Southern Empire also owns an 85% interest in the 817 hectares (2,020 acre) Eastgate Gold Project,
located 81 kilometres (50 miles) southeast of the city of
Fallon
in
Churchill County, Nevada
. Southern
Empire has just completed six HQ-size core drill holes at Eastgate, in a drill program targeting
previously reverse circulation drilled, high-grade gold/silver epithermal vein systems. Selective core
samples have been submitted to ALS
USA
Inc.'s laboratories in
Reno, Nevada
and assay results will
be released after they become available. Permitting for the next phase of drilling has been initiated.
About MAS Gold Corp.
MAS Gold Corp. is a Canadian mineral exploration company focused on road-accessible exploration
projects located in the La Ronge Gold Belt of
Saskatchewan
. MAS Gold's Greywacke and Preview
North Gold Projects are located within 10 km of Highway 102, approximately 60 km west of the
producing Seabee and Santoy gold mines operated by SSR Mining Inc.
The Greywacke North gold deposit for which a Mineral Resource of 255,500 t at 9.92 g Au/t has
been estimated in the Indicated category, plus an Inferred Mineral Resource of 59,130 t at 7.42 g
Au/t, at a cut-off grade of 5 g Au/t (see MAS Gold's NI 43-101 Technical Report of
June 1, 2016
) is
one of several known stratabound, high-grade gold-bearing zones on the Greywacke Lake Property.
The
North Lake
gold deposit, located on the Preview North property, has an Inferred Mineral
Resource estimated at 417,000 ounces of gold contained in 14,110,000 t grading 0.92 g Au/t; see
MAS Gold's News Release dated
March 25, 2020
and the NI 43-101 Technical Report dated
April
10, 2020
.
On behalf of the Board of Directors of Southern Empire Resources Corp.,
Dale Wallster
, CEO and Director
Cautionary Notice on Forward-Looking Information
Information set forth in this news release contains forward-looking statements that are based on
assumptions as of the date of this news release. These statements reflect management's current
estimates, beliefs, intentions and expectations. They are not guarantees of future performance.
Each of Southern Empire and MAS Gold cautions that all forward looking statements are inherently
uncertain and that actual performance may be affected by a number of material factors, many of
which are beyond their respective control. Such factors include, among other things: risks and
uncertainties relating to each of Southern Empire and MAS Gold's limited operating history, ability to
complete the proposed Transaction (including obtaining all necessary shareholder and regulatory
approvals), the need to comply with environmental and governmental regulations, results of
exploration programs on their projects and those risks and uncertainties identified in each of their
annual and interim financial statements and management discussion and analysis. Accordingly,
actual and future events, conditions and results may differ materially from the estimates, beliefs,
intentions and expectations expressed or implied in the forward-looking information. Except as
required under applicable securities legislation, neither Southern Empire nor MAS Gold undertakes
no obligation to publicly update or revise forward-looking information.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined
in the policies of the Exchange) accepts responsibility for the adequacy or accuracy of this
release.
SOURCE
Southern Empire Resources Corp.
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http://www.newswire.ca/en/releases/archive/July2020/13/c3366.html
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For further information:
on Southern Empire please visit our website www.smp.gold or contact:
Lubica Keighery, (778) 889-5476, [email protected]
CO: Southern Empire Resources Corp.
CNW 13:12e 13-JUL-20