Benchmark Metals and Thesis Gold Announce Merger to Create Premier Precious Metals Project
Benchmark Metals and Thesis Gold Announce
Merger to Create Premier Precious Metals
Project
Vancouver, British Columbia--(Newsfile Corp. - June 5, 2023) - Benchmark Metals Inc. (TSXV: BNCH)
(OTCQX: BNCHF) (WKN: A2JM2X) ("
Benchmark
") and Thesis Gold Inc. (TSXV: TAU) (WKN:
A2QQ0Y) (OTCQX: THSGF) ("
Thesis
") are pleased to announce that they have entered into a definitive
arrangement agreement (the "
Arrangement Agreement
"), pursuant to which Benchmark will acquire all
of the issued and outstanding common shares of Thesis
(each, a "
Thesis Share
") by way of a court-
approved plan of arrangement under the
Business Corporations Act
(British Columbia) (the
"
Arrangement
" or the "
Transaction
").
Under the terms of the Transaction, Thesis shareholders will receive 2.5584 of a common share of
Benchmark (each whole share, a "
Benchmark Share
") for each Thesis Share held (the "
Exchange
Ratio
"). The Exchange Ratio implies consideration of C$0.96 per Thesis Share based on the closing
market price of the Benchmark Shares on the TSX Venture Exchange (the "
TSXV
") on June 2, 2023,
implying a premium of approximately 26.2% to the closing price of the Thesis Shares on the TSXV on
the same date. Based on the 20-day volume weighted average price of the Thesis Shares ending on
June 2, 2023, the Exchange Ratio implies a premium of 27.8% to Thesis Shareholders. Existing
shareholders of Benchmark and Thesis will own approximately 60% and 40%, respectively, of the
outstanding shares of the combined company (the "
Combined Company
") on the completion of the
Transaction.
Strategic Rationale for the Transaction
Increased Scale:
This transaction creates one of the largest precious metals development and
exploration companies in the prolific Toodoggone Mining District of British Columbia. It consolidates two
significant exploration projects, as the ongoing development of Benchmark's Lawyers project is adjacent
to high quality exploration targets on Thesis' Ranch Project. It has the potential to enhance Benchmark's
current
3.14 million ounces (Moz) of gold equivalent (AuEq)
1
measured and indicated (M&I) mineral
resources and 0.415 Moz AuEq
1
inferred mineral resources at Lawyers with high-grade, near-surface
mineralization at Ranch.
2
Growth and Catalysts:
Focused on resource growth, exploration, and discovery through 50,000m of
drilling in 2023 with the goal of defining a new combined Lawyers & Ranch resource estimate (Q1/Q2
2024). Following that, an updated PEA is expected to include high-grade underground ounces at
Lawyers and Ranch's maiden resource estimate (Q3 2024).
Strong Management Team
: Combining two of the leading gold exploration and development teams
with a proven track record of success across exploration, construction, capital markets, and M&A. The
combined team has a demonstrated track record of success in various stages of mining operations from
the exploration stage through to production.
Financial Synergies
: Efficient capital resource management benefiting from anticipated financial
synergies.
Access to Capital
: The Combined Company will have increased access to capital that will fuel growth
and development plans to further enhance shareholder value.
1
AuEq calculated on a 1:80 gold-to-silver ratio.
2
See NI 43-101 technical report titled: Preliminary Economic Assessment lawyers gold-silver project Stikine Terrane, BC. Dated December 22, 2022,
with an effective date of September 9, 2022 available under Benchmark Metals SEDAR profile at
www.sedar.com
, filed on January 12, 2023.
Keith Peck, an independent director of Benchmark and the Chair of the Benchmark Special
Committee
, stated, "The business combination with Thesis is an exciting transaction that is
transformative for both companies and their shareholders. The merger of these companies establishes a
leading precious metals development and exploration project in British Columbia with a strong balance
sheet, remarkable scale, significant growth potential, synergistic advantages, cost efficiencies, and,
ultimately, the potential to deliver an exceptional new world-class mining venture in a geographically
desirable location."
Ewan Webster, President, and CEO of Thesis Gold commented
,
"The merger of Benchmark and
Thesis will create a district scale development and exploration project with significant growth potential.
The combined company will be well capitalized to execute on a catalyst rich exploration and
development program over the next 12-15 months, with over 50,000 meters of drilling between both
projects, focusing on resource growth, exploration, and discovery; and the culmination of this work will
deliver an updated resource estimate encompassing ounces for both projects, including high-grade near
surface material at the Ranch Project; and an updated Preliminary Economic Assessment (PEA) will
add high-grade underground ounces from Lawyers and the newly delineated Ranch resource. For the
new PEA, the Combined Company anticipates increased per year production, high-grade starter pits,
rapid capital payback, materially improved Net Present Value (NPV) and Internal Rate of Return (IRR)
and extended mine life. These milestones and timelines have been developed to unlock substantial
value and solidify the potential of these two deposits into one world-class project."
Benefits to Benchmark and Thesis Shareholders
Enhanced Scale:
The combined project will consist of two top gold-silver projects in Canada not
currently controlled by a major, creating a foundation for building a Toodoggone focused, precious
metals developer.
Value Creation:
Combination of Lawyers and Ranch, with a sequenced and optimized exploration and
development strategy, is expected to result in greater value creation for shareholders of Thesis and
Benchmark that would not be possible on a standalone basis.
Strong Balance Sheet:
The Combined Company will have a significantly strengthened balance sheet,
including anticipated cash and cash equivalents of over approximately $28 million, with strong capital
market support, allowing for meaningful advancement and optimization at Lawyers along with furthering
exploration at Ranch.
Enhanced Capital Markets Profile:
The resulting entity will have increased size and trading liquidity in
Canada, enhancing the company's institutional investor following along with equity research.
Management Team and Board of Directors
The Combined Company's board of directors (the "
Combined Company Board
") will consist of seven
(7) directors, four (4) of whom will be nominated by Benchmark, consisting of John Williamson (who will
be appointed Chair), Keith Peck, Peter Gundy and Jody Shimkus, and three (3) of whom will be
nominated by Thesis, consisting of Ewan Webster, Nicholas Stajduhar and Thomas Mumford.
Reporting to the Combined Company Board, the Combined Company will be managed by Ewan
Webster, as Chief Executive Officer and President; Sean Mager, as Chief Financial Officer; and Ian
Harris, as Chief Operating Officer.
Recommendations
Recommendation of Thesis Special Committee and Thesis Board
The Thesis board of directors (the "
Thesis Board
") appointed a special committee (the "
Thesis
Special Committee
") to consider and make a recommendation to the Thesis Board with respect to the
Arrangement. After consultation with its financial and legal advisors, and on the unanimous
recommendation of the Thesis Special Committee, the Thesis Board unanimously determined that the
Arrangement is in the best interests of Thesis and its shareholders and approved the Arrangement
Agreement. Accordingly, the Thesis Board recommends that Thesis shareholders, as well as holders of
Thesis options and Thesis RSUs (collectively, the "
Thesis Securityholders
") vote in favour of the
resolution (the "
Arrangement Resolution
") to approve the Arrangement.
Canaccord Genuity Corp. provided a fairness opinion to the Thesis Special Committee and Thesis
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 paid under the Arrangement
is fair, from a financial point of view, to the Thesis shareholders. The full text of the fairness opinion,
which describes, among other things, the assumptions made, procedures followed, factors considered
and limitations and qualifications on the review undertaken, and the terms and conditions of the
Arrangement, will be included in the management information circular of Thesis (the "
Thesis Circular
"),
to be delivered to Thesis Securityholders in respect of a special meeting of the Thesis Securityholders to
consider the Arrangement (the "
Thesis Meeting
"), which is expected to take place no later than August
2023.
Recommendation of Benchmark Special Committee and Benchmark Board
The Benchmark board of directors (the "
Benchmark Board
") appointed a special committee (the
"
Benchmark Special Committee
") to consider and make a recommendation to the Benchmark Board
with respect to the Arrangement. After consultation with its financial and legal advisors, and on the
unanimous recommendation of the Benchmark Special Committee, the Benchmark Board unanimously
determined that the Arrangement is in the best interests of Benchmark and its shareholders and
approved the Arrangement Agreement.
Raymond James Ltd. provided a fairness opinion to the Benchmark Special Committee stating that, as
of the date of such opinion, and based upon and subject to the considerations, assumptions, limitations
and qualifications set out therein, the consideration to be provided under the Arrangement is fair, from a
financial point of view, to Benchmark.
Transaction Summary
The Arrangement will be effected by way of a court-approved plan of arrangement pursuant to the
Business Corporations Act
(British Columbia), requiring: (i) the approval of the Supreme Court of British
Columbia, and (ii) the approval of (A) 66⅔% of the votes cast on the Arrangement Resolution by Thesis
shareholders, voting as a single class; (B) 66⅔% of the votes cast on the Arrangement Resolution by the
Thesis Securityholders, voting together as a single class; and
(C) if required by the TSXV, a simple
majority of the votes cast on the Arrangement Resolution by Thesis shareholders, excluding Thesis
Shares held or controlled by persons described in items (a) through (d) of Section 8.1(2) of Multilateral
Instrument 61-101 -
Protection of Minority Security Holders in Special Transactions
, at the Thesis
Meeting.
Each of the directors and executive officers of Thesis, along with certain key Thesis shareholders,
representing an aggregate of approximately
19.4
% of the issued and outstanding Thesis Shares, have
entered into voting support agreements with Benchmark, pursuant to which they have agreed, among
other things, to vote their securities of Thesis in favour of the Arrangement at the Thesis Meeting.
The Arrangement Agreement includes customary representations and warranties for a transaction of this
nature as well as customary interim period covenants regarding the operation of Benchmark and Thesis'
respective businesses. The Arrangement Agreement also provides for customary deal-protection
measures. In addition to shareholder and court approvals, closing of the Transaction is subject to
applicable regulatory approvals, including, but not limited to, TSXV approval and the satisfaction of
certain other closing conditions customary for transactions of this nature. Subject to the satisfaction of
these conditions, Benchmark and Thesis expect that the Transaction will be completed in the third
quarter of 2023. Details regarding these and other terms of the Transaction are set out in the
Arrangement Agreement, which will be available under the SEDAR profiles of Benchmark and Thesis at
www.sedar.com
.
Following the completion of the Arrangement, the Combined Company will implement a 2.6:1 share
consolidation of its common shares (the "
Combined Company Shares
"), change its name to "Thesis
Gold Inc." and, subject to acceptance by the TSXV, adopt the trading symbol "TAU" in respect of the
Combined Company Shares, which will continue to be listed and posted for trading on the TSXV (along
with the Frankfurt Stock Exchange and the OTCQX) and the Thesis Shares will be de-listed from the
TSXV.
Advisors
Cassels Brock & Blackwell LLP is acting as legal advisor to the Benchmark Special Committee and
Harper Grey LLP is acting as legal advisor to Benchmark. Raymond James Ltd. is acting as financial
advisor to the Benchmark Special Committee.
Boughton Law Corporation and Aird & Berlis LLP are acting as Canadian legal advisors to Thesis.
Clarus Securities Inc. is acting as financial advisor to Thesis. Canaccord Genuity Corp. provided the
fairness opinion to the Thesis Special Committee.
Technical Disclosure and Qualified Person
The scientific and technical information contained in this news release was reviewed and approved on
behalf of Benchmark and Thesis by Michael Dufresne, M.Sc, P.Geol. (#48439), P.Geo. (#37074), a
"Qualified Person" (as defined in NI 43-101).
About Benchmark Metals
Benchmark Metals Inc. is a Canadian based gold and silver company advancing its 100% owned
Lawyer's Gold-Silver Project located in the prolific Golden Horseshoe of northern British Columbia,
Canada. The Project consists of three mineralized deposits that remain open for expansion, in addition
to +20 new target areas along the 20-kilometer trend. Benchmark trades on the TSX Venture Exchange
in Canada, the OTCQX Best Market in the United States, and the Tradegate Exchange in Europe.
Benchmark is managed by proven resource sector professionals, who have a track record of advancing
exploration projects from grassroots scenarios through to production.
Further details are available on Benchmark's website at:
https://benchmarkmetals.com/
.
About Thesis Gold
Thesis Gold is a Vancouver-based mineral exploration company focused on proving and developing the
resource potential of the 180km2 Ranch Gold Project located in the prolific Toodoggone Mining Camp
of northern British Columbia, approximately 300 km north of Smithers, British Columbia.
Further details are available on Thesis' website at:
https://www.thesisgold.com/
.
For further information or investor relations inquiries, please contact:
Benchmark Metals
Jim Greig
President and Director
Email:
Telephone: 1-780-437-6624
Thesis Gold
Dave Burwell
Vice President Corporate Development
Email:
Telephone: 403-410-7907
Toll Free: 1-888-221-0915
Nick Stajduhar
Director
Email:
Telephone: 780-701-3216
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 news release. No securities
regulatory authority has either approved or disapproved of the contents of this news release.
None of the securities to be issued pursuant to the Arrangement 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 issuable in the Arrangement 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.
Cautionary Statement Regarding Forward-Looking Information
This press release contains "forward-looking information" within the meaning of applicable Canadian
securities legislation. Generally, forward-looking information can be identified by the use of forward-
looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget",
"scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or
variations of such words and phrases or state that certain actions, events or results "may", "could",
"would", "might" or "will be taken", "occur" or "be achieved". These forward-looking statements or
information may relate to the Arrangement, including statements with respect to the expected benefits
of the Arrangement to the Combined Company, the Thesis Securityholders and Benchmark
shareholders, the anticipated dates of the mailing of the Thesis Circular and the date of the Thesis
Meeting, timing for closing of the Arrangement and receiving the required regulatory, Thesis
Securityholder and court approvals, stock exchange (including the TSXV) and other approvals, if at
all, the ability of Thesis and Benchmark to successfully close the Arrangement on the timing and
terms described herein, or at all, the filing of materials on SEDAR, the successful integration of
Thesis into the business of Benchmark, the prospects of the Lawyers Gold-Silver Project and Ranch
Gold Project, including mineral resources estimates and mineralization of each project, and any
expectations with respect to defining mineral resources or mineral reserves on any of Benchmark's or
Thesis' projects, the timing of, and successful completion, of the items set out under the heading
"Growth and Catalysts", all statements relating to anticipated benefits to be contained in the new PEA,
the anticipated makeup of the Combined Company Board and management, and any expectation
with respect to any permitting, development or other work that may be required to bring any of the
projects into development or production.
Forward-looking statements are necessarily based upon a number of assumptions that, while
considered reasonable by management at the time, are inherently subject to business, market and
economic risks, uncertainties and contingencies that may cause actual results, performance or
achievements to be materially different from those expressed or implied by forward-looking
statements. Such assumptions include, but are not limited to, assumptions regarding the Combined
Company following completion of the Arrangement, that the anticipated benefits of the Arrangement
will be realized, completion of the Arrangement, including receipt of required shareholder, regulatory,
court and stock exchange approvals, the ability of Thesis and Benchmark to satisfy, in a timely
manner, the other conditions to the closing of the Arrangement, other expectations and assumptions
concerning the Arrangement, and that general business and economic conditions will not change in a
material adverse manner. Although each of Benchmark and Thesis Gold have attempted to identify
important factors that could cause actual results to differ materially from those contained in forward-
looking information, there may be other factors that cause results not to be as anticipated, estimated
or intended. There can be no assurance that such information will prove to be accurate, as actual
results and future events could differ materially from those anticipated in such statements.
Accordingly, readers should not place undue reliance on forward-looking information. Other factors
which could materially affect such forward-looking information are described in the risk factors in each
of Benchmark's and Thesis' most recent annual management's discussion and analyses which have
been filed with the Canadian securities regulators and are available, respectively, on each Company's
profile on SEDAR at
www.sedar.com
. Benchmark and Thesis Gold do not undertake to update any
forward-looking information, except in accordance with applicable securities laws.
Such statements represent the current views of Benchmark and Thesis Gold with respect to future
events and are necessarily based upon a number of assumptions and estimates that, while
considered reasonable by Benchmark and Thesis Gold, are inherently subject to significant business,
economic, competitive, political and social risks, contingencies and uncertainties. Risks and
uncertainties include, but are not limited to the following: inability of Benchmark and Thesis Gold to
complete the Arrangement, a material adverse change in the timing of any completion and the terms
and conditions upon which the Arrangement is completed; inability to satisfy or waive all conditions to
closing the Arrangement as set out in the Arrangement Agreement; Thesis Securityholders not
approving the Arrangement; the TSXV not providing approval to the Arrangement and all required
matters related thereto; the inability of the consolidated entity to realize the benefits anticipated from
the Arrangement and the timing to realize such benefits, including the exploration and drilling targets
described herein and the completion of a resource estimate and updated PEA; the updated PEA
described herein not having the anticipated positive results; unanticipated changes in market price for
Thesis Shares and/or Benchmark Shares; changes to Benchmark's and/or Thesis' current and future
business plans and the strategic alternatives available thereto; growth prospects and outlook of
Benchmark's business, including commencing commercial production at the Lawyer's Project;
treatment of the Arrangement under applicable competition laws and the Investment Canada Act;
regulatory determinations and delays; any impacts of COVID-19 on the business of the consolidated
entity and the ability to advance the Combined Company projects; stock market conditions generally;
demand, supply and pricing for gold and silver; and general economic and political conditions in
Canada and other jurisdictions where the applicable party conducts business.
To view the source version of this press release, please visit
https://www.newsfilecorp.com/release/168724