Sprott Resource and Adriana Resources Receive Support From Leading Independent Proxy Advisors ISS and Glass Lewis For Business Combination
Sprott Resource and Adriana Resources Receive Support From
Leading Independent Proxy Advisors ISS and Glass Lewis For
Business Combination
TORONTO, Jan. 16, 2017 (GLOBE NEWSWIRE) -- Sprott Resource Corp. ("SRC") (TSX:SCP) and Adriana
Resources Inc. ("ADI") (TSX -V:ADI) are pleased to announce that leading proxy advisory firms Institutional
Investor Services ( “ISS”) and Glass, Lewis & Co., LLC ( “Glass Lewis ”) have recommended that SRC
shareholders vote in favour of the proposed business combination (the “Business Combination ”) of SRC
and ADI pursuant to which SRC would become a wholly -owned subsidiary of ADI and SRC shareholders
would receive 3.0 ADI common shares per common share of SRC. Glass Lewis did not issue a
recommendation to shareholders of ADI on the proposed business combination.
The ISS report notes: “the proposed combination will provide shareholders of the company with an
increased NAV at $150 million as well as a stronger balance sheet with a cash balance of $55 million with
no debt. The arrangement will also provide the combined entity new capital from private placements and
increased liquidity for new and existing investments. In light of the favourable market reaction and the
reasonable strategic rationale, shareholder approval of the arrangement is warranted. ”
In addition, the Glass Lewis report notes: “the proposed arrangement is expected to result in greater scale,
financial strength and an improved capital markets profile compared to the standalone SRC, provides
existing SRC shareholders with exposure to ADI's interest in the Lac Otelnuk iron ore project, aligns the
retained majority equity interests of SRC shareholders in the combined company with those of Sprott and
experienced resource investors, is expected to narrow the gap between market prices and NAV and
enhances the management team of the combined company. ”
If shareholders approve the Business Combination, and the other conditions to its implementation are
satisfied, current SRC shareholders will hold approximately 57% of the outstanding common shares of the
combined entity and current ADI shareholders will hold approximately 31% of the outstanding common
shares of the combined entity.
Welcoming the ISS and Glass Lewis recommendations, SRC ’s chief executive, Steve Yuzpe said: “We are
very pleased that both ISS and Glass Lewis are recommending that shareholders vote in favour of the
proposed business combination of SRC and ADI. We firmly believe this transaction will create a stronger
company and benefit all shareholders. ”
Mike Harrison, ADI’s chief executive said: “The support of these leading proxy firms further validates the
recommendations of both the SRC and ADI boards that shareholders should vote in favour of the proposed
transactions.”
We encourage all SRC and ADI shareholders to read the joint management proxy circular with regards to
the Business Combination involving SRC and ADI which was mailed to shareholders of record as of
December 19, 2016 and is available on SEDAR at www.sedar.com. The joint management proxy circular
provided by SRC and ADI contains a detailed description of the Business Combination.
The Board of Directors of SRC unanimously recommends (Peter Grosskopf and Steve Yuzpe
being interested directors, abstained from voting) that SRC shareholders vote FOR the
Business Combination involving ADI to be considered at the special meeting of SRC
shareholders.
The Board of Directors of ADI recommends that ADI shareholders vote FOR the Business
Combination involving SRC and the related transactions and the name change to be considered
at the special meeting of ADI shareholders.
SRC and ADI shareholders are reminded to vote before the proxy cut ‐‐‐‐off time at 9:00 a.m.
(Toronto Time) and 10:30 a.m. (Toronto Time), respectively, on Monday, January 23, 2017.
If you require any assistance in completing your proxy, please consult with our proxy solicitor,
Kingsdale Shareholder Services ( “Kingsdale”) by telephone at 1 -888-518-6805 toll‐free in North America
or call collect at 416 ‐867‐2272 outside of North America or by e ‐mail at
[email protected] . Kingsdale provides support for shareholders in English and French.
About Sprott Resource Corp.
SRC is a publicly -listed private equity firm focused on the natural resource sector. The company currently
has investments in energy production and services, mining and agriculture. SRC creates value for its
investors by applying a disciplined investment process to deploy capital while managing risk within highly
cyclical sectors. SRC is a business builder that is committed to being a value -added partner with proven
management teams. SRC supports its investments through active management and the provision of long -
term capital, as well as strategic, financial and governance oversight. Founded in 2007, SRC is based in
Toronto, Canada and is managed by an experienced team of private equity specialists, supported by the
technical and investment resources of Sprott Inc. and its subsidiaries and affiliates. Management of SRC is
dedicated to generating long -term superior returns on capital for its shareholders, while focusing on risk
management and real wealth preservation. To learn more, please visit www.sprottresource.com.
About Adriana Resources Inc.
ADI owns 40% of the Lac Otelnuk iron ore project in Northern Quebec. ADI ’s 60% joint venture partner in
Lac Otelnuk Mining Ltd. ("LOM JV") is WISCO International Resources & Investment Limited, a subsidiary of
Bao Wu Steel Ltd. In April 2015, the LOM JV published a NI 43 -101 compliant Technical Report on the
feasibility of the Lac Otelnuk project. ADI reported a cash position of $28.6 million as at September 30,
2016. The LOM JV is currently on care and maintenance and has a cash position of $7.9 million as of
September 30, 2016. ADI has a Board of Directors and management team with extensive experience in the
resource sector and has been undertaking a strategic review of opportunities to create shareholder value
while the LOM JV project is on care and maintenance.
Forward -Looking Information and Statements
Certain statements in this press release contain forward -looking information (collectively referred to herein
as the "Forward -Looking Statements") within the meaning of applicable securities laws including, but not
limited to, statements about: the completion of the proposed transactions, including the Transaction and
expected timing; the anticipated benefits of the Transaction to SRC and its securityholders and to ADI and
its securityholders; the timing and anticipated receipt of required stock exchange, court and securityholder
approvals for the proposed transactions; the ability of SRC and ADI to satisfy the other conditions to, and
to complete, the Transaction; the anticipated mailing of the joint information circular regarding the
Transaction; the intended transition from a private equity firm to a diversified holding company and
anticipated benefits therefrom; and similar statements concerning anticipated future events, results,
circumstances, performance or expectations, that reflect management's current expectations and are
based on information currently available to management of SRC, ADI and their respective subsidiaries.
Forward-Looking Statements are based on a number of expectations or assumptions which have been
used to develop such statements and information but which may prove to be incorrect. Although SRC and
ADI believe the expectations and assumptions reflected in such Forward -Looking Statements are
reasonable, undue reliance should not be placed on Forward -Looking Statements because SRC can give
no assurance that such expectations and assumptions will prove to be correct. The Forward -Looking
Statements included in this news release are not guarantees of future performance and should not be
unduly relied upon. Such information and statements, including the assumptions made in respect thereof,
involve known and unknown risks, uncertainties and other factors, which may cause actual results or
events to differ materially from those anticipated in such Forward -Looking Statements, including, but not
limited to, a failure to realize the anticipated benefits of the Transaction and to successfully integrate SRC
and ADI and the failure of SRC or ADI to obtain necessary securityholder, regulatory, court and other third
party approvals, or to otherwise satisfy the conditions to the Transaction, in a timely manner, or at all. The
foregoing list of factors is not exhaustive. Additional information on other factors that could affect the
operations or financial results of SRC, ADI and the combined company are included in reports on file with
applicable securities regulatory authorities, including, but not limited to, those listed under the heading
"Risk Factors" in SRC's annual information form dated March 4, 2016 and those listed under the heading
"Risks and Uncertainties" in ADI's Management's Discussion and Analysis for the Year Ended December
31, 2015 dated February 26, 2016. Should one or more of these risks or uncertainties materialize, or
should assumptions underlying the Forward -Looking Statements prove incorrect, actual results,
performance or achievements could vary materially from those expressed or implied by the Forward -
Looking Statements contained in this news release.
The Forward -Looking Statements contained in this news release speak only as of the date of this news
release, and each of SRC and ADI do not assume any obligation to publicly update or revise any of the
included Forward -Looking Statements, whether as a result of new information, future events or otherwise,
except as may be expressly required by applicable securities laws. Neither the Toronto Stock Exchange nor
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 press release.
Source: Sprott Resource Corp. and Adriana Resources Inc.
FOR FURTHER INFORMATION PLEASE CONTACT:
Sprott Group of Companies
Glen Williams
Director of Communications
416-943-4394
Adriana Resources Inc.
Michael Harrison
Chief Executive Officer
416-363-2200