Concurrent Subscription Receipt Financing of Up to C$45 Million to Accelerate Production Ramp-Up, Fund Exploration Drilling and Provide Working Capital
Toronto, Ontario--(Newsfile Corp. - June 16, 2021) - Minto Explorations Ltd. ("Minto"), 1246778 B.C. LTD. ("778") and Pembridge Resources PLC ("Pembridge") are pleased to announce that they have entered into a series of agreements that will see Minto going public by way of a "reverse take-over" of 778 (the "RTO") together with a concurrent application to list the resulting issuer shares on the TSX Venture Exchange (the "Exchange"), as more particularly described in this news release. Minto is a proven copper producer generating cash flow from its Minto Mine (as defined below) in Yukon.
Investment Highlights
The entity resulting from the combination of 778 and Minto (the "Resulting Issuer"), which will be renamed Minto Metals Corp. ("Minto Metals"), will have the following attributes:
- 100% ownership of the cash flow generating Minto Mine located in the Minto Copper Belt in Yukon ("Minto Mine") with a large land package totaling ~26,000 ha
- No pre-production capital required, with targeted financing proceeds facilitating operational enhancements, near-mine and regional exploration and working capital
- Produces a premium concentrate (35% to 40% Cu) with a long-term offtake agreement with Sumitomo Canada Limited
- Experienced operating team and Board of Directors ("Board")
- Significant opportunities to create shareholder value through mine optimization and high impact, low risk exploration drilling
- Owns the only processing infrastructure in the region, providing opportunities for further production growth initiatives
On May 7, 2021, JDS Energy & Mining Inc. published a NI 43-101 Preliminary Economic Assessment Technical Report with an effective date of March 31, 2021 (the "PEA") in respect of the Minto Mine, which was prepared for Minto and 778:
- Indicated mineral resource of 11Mt @ 1.46% copper containing ~357Mlbs with an additional 13Mt mineral inferred resource @ 1.29% copper containing ~370Mlbs
- Significant gold and silver by-products
- Initial 8-year mine life with only ~60% of the current resource in the mine plan
- Average annual life of mine copper production of ~35-40Mlbs at C1 cash costs of US$2.20/lb and all-in sustaining costs ("AISC") of US$2.65/lb, generating significant operating cash flow in the current commodity price environment
- Attractive PEA economics with excellent leverage to current commodity price environment: after-tax net present value using an 8% discount rate ("NPV8%") of C$313 million at US$4.50/lb copper and FX rate of 0.82
The Minto Mine sits in a vastly underexplored 80-km long copper belt with numerous near-mine and regional targets, providing significant potential for mine life extension, in addition to infill drilling and mineral resource conversion.
The PEA is preliminary in nature and it includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. There is no certainty that the PEA will be realized. Mineral resources that are not mineral reserves do not have demonstrated economic viability.
Financing Details
As part of the RTO, Minto and 778 have entered into an engagement letter dated June 11, 2021 with Stifel GMP and Raymond James Ltd., as co-lead agents and joint bookrunners (the "Co-Lead Agents") on behalf of a syndicate of agents including Haywood Securities Inc. and Echelon Wealth Partners Inc. (collectively, the "Agents"), pursuant to which the Agents have agreed to sell, on a "best efforts" private placement basis, subscription receipts of 778 (the "Subscription Receipts") at a price of C$2.60 to C$2.80 per Subscription Receipt (the "Offering Price") for gross proceeds of up to C$45 million (the "Offering"). In addition, Minto and 778 have granted to the Agents an option (the "Agents' Option") to increase the size of the Offering to raise additional gross proceeds up to C$6.75 million. Closing of the Offering is expected to occur in July 2021.
The Subscription Receipts will be created and issued pursuant to the terms of a subscription receipt agreement (the "Subscription Receipt Agreement") to be entered into among the Co-Lead Agents, Minto, 778 and a mutually agreed upon licensed Canadian trust company to act as subscription receipt agent (the "Subscription Receipt Agent"). Each Subscription Receipt will be automatically converted, for no additional consideration or further action by the holder thereof, into one common share of 778, subject to adjustment in certain events, immediately before the completion of the RTO, upon the satisfaction or waiver of the Escrow Release Conditions (as will be defined in the Subscription Receipt Agreement), including that all conditions precedent to the RTO have been satisfied at or before 5:00 p.m. (Toronto time) on the date that is 120 days after the closing date of the Offering (the "Escrow Release Deadline"). As part of the RTO, the 778 common shares will be exchanged on a one-for-one basis for common shares of the Resulting Issuer ("Resulting Issuer Shares").
As consideration for their services provided in connection with the Offering, Minto and 778 have agreed to pay the Agents a cash commission (the "Cash Commission") equal to 6.0% of the aggregate gross proceeds received from the sale of the Subscription Receipts (2.0% with respect to the gross proceeds raised under Minto's "President's List").
Upon closing of the Offering, the aggregate gross proceeds of the Offering, less 20% of the Cash Commission and the Agents' expenses, will be deposited in escrow with the Subscription Receipt Agent pending satisfaction or waiver of the Escrow Release Conditions, in accordance with the provisions of the Subscription Receipt Agreement. If (i) the Escrow Release Conditions are not satisfied at or before the Escrow Release Deadline, (ii) the Amalgamation Agreement (as defined below) entered into in connection with the RTO is terminated, or (iii) Minto and 778 advise the Co-Lead Agents or announces to the public that it does not intend to satisfy the Escrow Release Conditions, each of the then issued and outstanding Subscription Receipts will be cancelled and the Subscription Receipt Agent will return to each holder of Subscription Receipts an amount equal to the aggregate Offering Price of the Subscription Receipts held by such holder plus an amount equal to the holder's pro rata share of any interest or other income earned on the escrowed funds (less applicable withholding tax, if any). To the extent that the escrowed funds are insufficient to refund such amounts to each holder of Subscription Receipts, 778 and/or Minto shall be liable for and will contribute such amounts as are necessary to satisfy the shortfall.
The net proceeds of the Offering will be used by the Resulting Issuer to fund operational improvements at the Minto Mine, near-mine exploration activities and for general corporate purposes including working capital following completion of the RTO.
Not for distribution to U.S. news wire services or for dissemination in the United States.
The securities under the Offering have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or the securities laws of any state of the United States and may not be offered, sold or delivered, directly or indirectly, in the United States or to, or for the account of benefit of, U.S. Persons (as such term is defined in Regulation S under the U.S. Securities Act), except pursuant to an exemption from the registration requirements of the U.S. Securities Act and applicable state securities laws. This news release does not constitute an offer to sell or solicitation of an offer to buy any of these securities in any jurisdiction in which the offering or sale is not permitted.
Transactions Details:
In order to effect the RTO, Minto and 778 have entered into an amalgamation agreement dated June 15, 2021 (the "Amalgamation Agreement"), pursuant to which the parties have agreed to complete the following transactions:
Prior to the completion of the RTO, 778 will take all necessary steps to give effect to, and to implement a consolidation of the common shares of 778 on the ratio that results in the post-consolidated common shares of 778 outstanding immediately prior to the closing of the RTO (but before the conversion of Subscription Receipts) having an aggregate value of C$850,000, based off the subscription price attributable to the Subscription Receipts (the "778 Consolidation");
As described above, upon satisfaction of the Escrow Release Conditions, the Subscription Receipts shall be converted into common shares of 778 and the escrowed funds shall be released to 778;
778 and Minto shall amalgamate pursuant to, and in accordance with, the terms of the Amalgamation Agreement, resulting in (among other things):
each shareholder of Minto receiving one Resulting Issuer Share in exchange for each common share of Minto held by such holder and the common shares of Minto being cancelled;
each shareholder of 778 receiving one Resulting Issuer Share in exchange for each common share of 778 held by such holder and the common shares of 778 being cancelled;
the resulting amalgamated entity will be named "Minto Metals Corp."; and
the current directors and officers of 778 will resign and Minto Metals will reconstitute its board of directors and management, as set out below.
- At closing of the RTO, Minto Metals is expected to be domiciled in British Columbia
The RTO is intended to be completed immediately prior to the listing of the Resulting Issuer Shares on the Exchange and will result in the business combination of 778 and Minto. The business of Minto will continue as the business of Minto Metals following completion of the RTO.
The RTO is subject to, among other things: (i) the completion of the Offering for aggregate gross proceeds of not less than C$40 million; (ii) the completion of the 778 Consolidation; (iii) Minto owning all of the rights and interests in and to the Minto Mine; (iv) the Resulting Issuer meeting the requirements of the Exchange for a Tier 1 mining issuer and the Exchange issuing conditional acceptance, subject to customary conditions of closing, for the listing of the Resulting Issuer Shares; (v) Minto having entered into an agreement with Pembridge to provide for the continuation of all of Minto's existing payments and assumption and indemnity obligations in favour of Pembridge; (vi) certain shareholders of Minto and Minto Metals entering into a registration rights agreement; (vii) certain shareholders of Minto entering into a voting agreement in respect of their respective Resulting Issuer Shares; (viii) not more than 10% of the shareholders of each of 778 and Minto having exercised dissent rights in respect of the amalgamation of such entities; (iv) each of the parties obtaining all necessary board, shareholder and regulatory approvals; and (x) other standard closing conditions. The RTO will be subject to the approval of the shareholders of 778 and the shareholders of Minto, which 778 and Minto anticipate they will obtain by way of unanimous written consent resolutions.
Certain Resulting Issuer Shares to be issued pursuant to the RTO are expected to be subject to restrictions on resale or escrow under the policies of the Exchange, including the securities to be issued to "Principals" (as defined under the policies of the Exchange), which will be subject to the escrow requirements of the Exchange.
In addition, it is a condition of closing of the Offering, that each of the directors, officers and insiders of Minto Metals and holders of 5% or more of the Resulting Issuer Shares, shall enter into lock-up agreements with the Agents, whereby each shall agree that, for a period of 180 days from the Escrow Release Date, they will not, directly or indirectly, dispose of or transfer any securities of the Resulting Issuer without the prior written consent of the Agents or pursuant to certain other limited exceptions.
On completion of the RTO, Minto Metals is expected to qualify as a Tier 1 mining issuer on the Exchange.
Management & Board of Minto Metals
Upon completion of the RTO, the Board of Minto Metals is expected to include Mr. Greg McKnight, Mr. Gati Al-Jebouri, Mr. Daniel Chandra, Ms. Edie Hofmeister, Mr. Lazaros Nikeas, Mr. Derek White and an additional individual who will be nominated by Cedro Holdings I, LLC prior to completion of the RTO. Information regarding this nominee will be included in a subsequent press release and the listing application to be prepared in connection with the RTO.
At completion of the RTO, management of Minto Metals will be led by Mr. Chris Stewart (President & Chief Executive Officer), Mr. Jack R. Cartmel (interim CFO), Mr. David Benson (VP Exploration), Mr. Brendan Zuidema (Mining Operations) and Mr. Dennis Bigras (Processing Operations). The new CFO is expected to join in July.
The following are biographies of the currently proposed directors and senior officers of Minto Metals:
R. Greg McKnight, Chairman
Greg McKnight has over 30 years of mining focused investment banking and corporate experience. He is currently the Co-Chairman of Northstar Gold Corp., a junior exploration company focused in Northeastern Ontario. For 15 years ending December 2018, he was the Executive Vice President, Business Development at Yamana Gold Inc. ("Yamana") where he helped grow the business from a junior gold producer to a senior gold and copper mining company with operations spanning multiple jurisdictions. During the year prior to joining Yamana, Mr. McKnight was instrumental in his capacity as an investment banker in structuring the reverse takeover transaction and raising the equity for Yamana that enabled the Company to recapitalize and re-position itself as a gold production company. Mr. McKnight holds a Bachelor of Commerce degree from the University of Toronto and a Masters of Business Administration from the Ivey School of Business at the University of Western Ontario. He also earned his ICD.D designation from the Canadian Institute of Corporate Directors in early 2021.
Gati Al-Jebouri, Director
Gati Al-Jebouri has 30 years of international operations and trading experience in the natural resources sector. He is CEO and Chairman of the Board of Directors of Pembridge from September 2019, having served as a non-executive director since September 2017. Prior to that Mr. Al-Jebouri worked at LUKOIL where he was VP Middle East Upstream and Managing Director of their 400,000 barrel per day Iraq operations. Before LUKOIL upstream management roles, Mr. Al-Jebouri was CFO and latterly CEO of LITASCO (LUKOIL International Trading and Supply Company). Mr. Al-Jebouri has also held positions of Deputy Minister of Energy and First Deputy Minister of Finance in Bulgaria. He holds a Civil Engineering degree from the University of Bristol and is a UK Chartered Accountant.
Daniel Chandra, Director
Daniel Chandra is currently a senior investment professional at Lion Point Capital, a value-focused investment fund based in New York City. He has over 20 years of investing experience across a range of industries and in equity, credit, and distressed debt. Daniel previously worked as a senior analyst and portfolio manager at DW Partners ("DW") and at DW predecessor Brevan Howard. Daniel received a Bachelor of Arts degree in Economics from Stanford University and a Masters of Business Administration from The Wharton School, University of Pennsylvania.
Edie Hofmeister, Director
Edie Hofmeister has worked as an advocate for extractive companies for 17 years. Most recently she served as EVP Corporate Affairs and General Counsel of Tahoe Resources where she headed the Legal, Sustainability and Government Affairs Departments. Since 2006 Edie has worked alongside rural and Indigenous communities in India, Peru, Guatemala and Canada to enhance food, work and water security. She serves as the Vice Chair of the International Bar Association's Business and Human Rights Committee. Edie received a Bachelor of Arts degree in international relations from UCLA, a Master of Arts degree in international peace studies from the University of Notre Dame and a Juris Doctor degree from the University of San Francisco.
Lazaros Nikeas, Director
Lazaros Nikeas has more than 20 years of strategy and capital markets advisory for resource, chemicals and industrial companies, with over US$25B of M&A transactions completed. He is currently a Principal Investment Manager of Weston Energy LLC, a Yorktown Partners LLC portfolio company with investments in energy minerals assets. Prior to that, he was a partner of Traxys Capital Partners, a private equity firm backed by The Carlyle Group. Previously he was the Head of North American Advisory for materials and mining for BNP Paribas, Partner with Hill Street Capital and M&A analyst for Morgan Stanley.
Derek White, Director
Derek White has over 33 years of experience in the mining and metals industry. He holds an undergraduate degree in Geological Engineering from the University of British Columbia and is also a Chartered Accountant. He is currently President & CEO of Ascot Resources Ltd. ("Ascot"). Prior to joining Ascot, Mr. White was the Principal of Traxys Capital Partners LLP, a private equity firm specializing in the mining and minerals sectors. Mr. White was President and CEO of KGHM International Ltd. from 2012 to 2015, and also held the positions of Executive Vice President, Business Development and Chief Financial Officer of Quadra FNX Mining Ltd. from 2004 to 2012. Mr. White has held executive positions with International Vision Direct Ltd., BHP-Billiton Plc, Billiton International Metals BV and Impala Platinum Ltd., in Vancouver, Toronto, London, The Hague, and Johannesburg. Mr. White is also an ICSA Accredited Director.
Chris Stewart, President & Chief Executive Officer
Chris Stewart is a Professional Engineer with over 27 years of management, operational and technical experience in the mining industry. Chris worked for the first 14 years of his career with DMC Mining building, expanding and operating various mine operations across Canada and the USA and for the past 13 years, he has worked for several mining companies. Prior to joining Minto Exploration, Chris was President & COO for McEwen Mining, a precious metals producer with operations in Canada, USA, Mexico and Argentina. Prior to that he held various senior roles including President & CEO for Treasury Metals, Vice President of Operations for Kirkland Lake Gold, President & CEO of Liberty Mines, BHP Billiton, Lake Shore Gold Corporation and DMC Mining Services. Chris holds a Bachelor of Science in Mining Engineering from Queen's University.
Jack Cartmel, Interim Chief Financial Officer
Jack Cartmel is a finance executive with 15+ years of experience in the mining industry with expertise in M&A, IPOs, taxation, public company accounting and disclosure, and financial and risk management. He is currently the Chief Financial Officer of Battery Mineral Resources. Prior to that Jack worked for Monument Mining, a mid-size gold producer in Asia, and White Tiger Gold, a mid-size gold producer, both of which are listed on the Toronto Stock Exchange.
Corporate Secretary
The corporate secretary role is currently managed by legal counsel to Minto, Edwards, Kenny & Bray LLP.
Minto Mine Overview and Mineral Resource Estimate
Minto operates the producing Minto Mine, which forms part of the Minto property. The Minto Mine has been in operation since 2007 with underground mining commencing in 2014. Since 2007, approximately 475Mlbs of copper have been produced from the Minto Mine.
The Minto property (the "Minto Property") is located west of the Yukon River, about 20 km WNW of Minto Landing, the latter on the east side of the river, and approximately 250 road-km north of the City of Whitehorse, the capital city of Yukon. The property is accessible by Yukon Highway 2 to Minto Landing. The property is serviced by a spur of the main Yukon electrical grid.
The Minto Property comprises 164 Yukon quartz mining claims covering 2,760 hectares. In addition, Minto Metals also controls prospective exploration land comprising 1,184 Yukon quartz mining claims covering 24,071.6 hectares.
A group of investors, including Pembridge, acquired Minto in June of 2019, at which time the Minto Mine was in a state of temporary closure. Minto's current mine operations are based on underground mining, a process plant to produce high-grade copper, gold and silver concentrate and all supporting infrastructure associated with a remote location in Yukon.
The current mineral resource at the Minto Mine, which has an effective date of January 1, 2021 is summarized in the table below. The mineral resource consists of an indicated mineral resource of 11.1Mt at a grade of 1.46% copper containing ~357Mlbs of copper and an inferred mineral resource of 13.0Mt at a grade of 1.29% copper containing ~370Mlbs of copper. In addition to copper, the Minto Mine also produces gold and silver.
NI 43-101 Mineral Resources
| Type | Class | Cut-Off | Tonnes | In-Situ Grades | Metal Content | |||
| C$/t milled | (kt) | Cu (%) | Au (gpt) | Ag (gpt) | Cu (klbs) | Au (kozs) | ||
| Open Pit | Indicated | $35 | 3,480 | 1.16% | 0.36 | 3.33 | 88,915 | 40 |
| Inferred | 1,986 | 1.04% | 0.28 | 3.01 | 45,566 | 18 | ||
| U/G | Indicated | $70 | 7,612 | 1.59% | 0.61 | 5.4 | 267,632 | 149 |
| Inferred | 11,027 | 1.34% | 0.53 | 4.83 | 324,539 | 189 | ||
| Total | Indicated | 11,092 | 1.46% | 0.53 | 4.75 | 356,548 | 189 | |
| Inferred | 13,013 | 1.29% | 0.49 | 4.55 | 370,104 | 207 | ||
Notes:
- Resources are reported using the 2014 CIM Definition Standards and were estimated using the 2019 CIM Best Practices Guidelines.
- Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
- Metal prices of US$1500/oz Au, US$18/oz Ag, US$3.10lb Cu.
- The following NSR calculations are used to determine cutoff grades: for open pit: NSR = CDN$61.688*Cu% + CDN$21.384*Au gpt + CDN$0.0599*Ag gpt, for Underground: NSR = CDN$68.946*Cu% + CDN$37.842*Au gpt + CDN$0.0862*Ag gpt.
- For the NSR calculations: a currency exchange rate of 0.76 US$ per CDN$; 95% payable Cu, 77% payable Au and Ag; offsite costs (refining, transport and insurance) of US$240.39/dmt; royalties as described in Section 19.
- The following equations are used for metallurgical recovery: Rec Cu = 95.5% + 1.07*CU% - 113*TCu/Ascu to a Maximum of 95%, Rec Au = 20.99*Au gpt + 62.01; Rec Ag = 100 *(0.694+0.019*Ag gpt) both to a maximum of 85%.
- The Mineral Resource has been confined by a "reasonable prospects of eventual economic extraction" pit or underground shape using the 130% base case NSR for the Ridgetop open pit and the 100% NSR case for the Area 118 pit and by a confining shape for the underground.
- Mining costs are CD$3.70/t for open pit, CDN$41.03/t for underground, Processing costs are CDN$19/t.
- Pit slope angles are assumed at 45º.
- The specific gravity of the deposit has been assigned based on domain as between 2.578 and 2.849 based on sg measurements in the Minto deposit.
- Numbers may not add due to rounding.
Minto Mine PEA Summary
The PEA outlines a mining operation with combined open pit and underground mined resources expected to be processed over an eight-year period ending in 2028. A summary of the PEA results can be found below and are available on SEDAR (www.sedar.com) under 778's issuer profile:
Life of Mine Production
| Unit | Years 1 to 5 | Life of Mine | |
| Total Mill Production | 000s tonnes | 6,885 | 10,893 |
| Annual Mill Production | 000s tonnes | 1,377 | 1,405 |
| Average Grades | |||
| Copper | % | 1.43 | 1.34 |
| Gold | g/t | 0.58 | 0.54 |
| Silver | g/t | 5.1 | 4.7 |
| Total Payable Production | |||
| Copper | 000s lb | 190,615 | 276,633 |
| Gold | 000s oz | 88 | 129 |
| Silver | 000s oz | 645 | 930 |
| Avg. Annual Payable Prod. | |||
| Copper | 000s lb | 38,123 | 35,691 |
| Gold | 000s oz | 18 | 17 |
| Silver | 000s oz | 129 | 120 |
Summary of Project Economics
The following tables set out the metal prices of copper, gold and silver used in the economic evaluation of the project, respectively. A foreign exchange rate of 0.76 USD:CDN was used for the project economic evaluation, the summary of project economics are presented below4,5:
| unit | 2021 | 2022 | 2023+ | |
| Copper | US$/lb | $3.40 | $3.25 | $3.10 |
| Gold | US$/oz | $1,850 | $1,625 | $1,550 |
| Silver | US$/oz | $24.00 | $21.00 | $18.50 |
| Unit | Value | |
| Net Revenues | C$M | 1,147 |
| Operating Costs | C$M | 800 |
| Cash Flow from Operations | C$M | 348 |
| Total Capital Costs1 | C$M | 185 |
| C1 Costs (net)2 | US$/lb | 2.20 |
| AISC (net)3 | US$/lb | 2.71 |
| Net Pre-Tax Cash Flow | C$M | 163 |
| Pre-Tax NPV 8% | C$M | 134 |
| Total Taxes | C$M | 29 |
| Net After-Tax Cash Flow | C$M | 133 |
| Net After-Tax NPV 8% | C$M | 111 |
Notes:
- Includes sustaining, exploration, closure and reclamation capital costs.
- C1 formula: (Operating Costs + Refining Costs + Royalties - By Product Credits) / Cu lb
- AISC formula: (Operating Costs + Refining Costs + Royalties + Sustaining Capital + Closure - By Product Credits) / Cu lb
- Please see Non-IFRS Measures below
- The PEA is preliminary in nature and it includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. There is no certainty that the PEA will be realized. Mineral resources that are not mineral reserves do not have demonstrated economic viability.
Sensitivities
The Minto Mine is most sensitive to the price of copper price and USD:CDN exchange rate followed by on-site operating costs. The table below provides a range of discounted project after-tax NPV8% values in Canadian dollars for a variety of fixed copper prices and exchange rates which highlight the range of spot values that have been seen over the past three years.
Minto Mine After-Tax NPV8% Sensitivity Based on Fixed Copper Price and FX Rate (Gold = US$1,550/oz & Silver = US$18.50/oz)
| Copper Price (US$/lb) | |||||||
| $4.75 | $4.50 | $4.25 | $4.00 | $3.50 | $3.10 | ||
| Exchange Rate (USD: CAD) | 0.84 | $335 | $294 | $251 | $208 | $106 | $14 |
| 0.82 | $355 | $313 | $269 | $225 | $125 | $32 | |
| 0.80 | $375 | $331 | $288 | $243 | $144 | $50 | |
| 0.78 | $395 | $351 | $307 | $261 | $163 | $69 | |
| 0.76 | $419 | $373 | $327 | $281 | $183 | $90 | |
| 0.74 | $443 | $395 | $348 | $301 | $203 | $111 | |
In accordance with NI 43-101, the technical report for the Minto Mine has been filed on SEDAR (www.sedar.com) under 778's issuer profile.
Qualified Person
The scientific and technical content of this news release has been reviewed and approved by Chris Stewart, P.Eng. President and Chief Executive Officer of Minto, who is a "qualified person" for purposes of NI 43-101.
Principals or Insiders of Minto Metals
In addition to the forgoing proposed directors and officers, the following are the person that are expected to qualify as Principals and Insiders (as those terms are defined in the Exchange policy) of Minto Metals:
| Cedro Holdings I, LLC | Anticipated to hold in excess of 10% of the Resulting Issuer Shares |
| Pembridge Resource plc | Anticipated to hold in excess of 10% of the Resulting Issuer Shares |
| Copper Holdings LLC | Anticipated to hold in excess of 10% of the Resulting Issuer Shares |
Selected Financial Information
The following table sets out selected financial information with respect to Minto as at the dates noted. The selected financial information is derived from Minto's financial statements for the audited 12-month periods ending on December 2019 and 2020, and the unaudited 3-month period ended March 31, 2021.
| Stated in thousands of Canadian dollars | As at December 31, 2019 (audited) | As at December 31, 2020 (audited) | As at March 31, 2021 (unaudited) | ||||||
| Total assets | $ | 72,904 | $ | 81,318 | $ | 90,968 | |||
| Total liabilities | $ | 77,692 | $ | 100,311 | $ | 113,289 | |||
| Shareholders' equity | ($4,788 | ) | $ | (18,993 | ) | $ | (22,321 | ) | |
| Revenues | $ | 25,865 | $ | 79,323 | $ | 27,408 | |||
| Net Profits / Losses | $ | (12,887 | ) | $ | (18,993 | ) | $ | 2,461 |
Further financial information will be included in the listing application to be prepared in connection with the RTO.
Exchange Matters and Sponsorship
As at the date hereof, neither the common shares of 778 nor the common shares of Minto are listed on any stock exchange. A condition precedent to completion of the RTO is the conditional approval of the listing of the Resulting Issuer Shares on the Exchange. A listing application in respect of the Resulting Issuer Shares, which will include further details of the RTO, will be filed on 778's issuer profile on SEDAR at www.sedar.com, provided the Exchange's conditional approval of the listing of the Resulting Issuer Shares has been obtained. There can be no assurance that the Exchange will grant such conditional approval or that the RTO will be completed as proposed or at all. The Proposed Transaction is not a "Non-Arm's Length Qualifying Transactions" (as such term is defined under the policies of the Exchange).
Sponsorship of a reverse take-over transaction is required by the Exchange unless exemptions have been granted in accordance with the policies of the Exchange. 778 and Minto intend to apply for an exemption from the sponsorship requirements based upon the Offering and/or other exemptions available under the policies of the Exchange. There is no assurance that 778 and Minto will ultimately obtain an exemption from sponsorship.
About Minto Explorations Ltd.
Minto operates the producing Minto Mine located in the Minto Copper Belt, Yukon. The Minto Mine has been in operation since 2007 with underground mining commencing in 2014. Since 2007, approximately 475Mlbs of copper have been produced from the Minto Mine. The current mine operations are based on underground mining, a process plant to produce high-grade copper, gold and silver concentrate and all supporting infrastructure associated with a remote location in Yukon. The Minto Property is located west of the Yukon River, about 20 km WNW of Minto Landing, the latter on the east side of the river, and approximately 250 road-km north of the City of Whitehorse, the capital city of Yukon.
For further information, please contact Minto Explorations Ltd:
Chris Stewart, P.Eng.
President & CEO
cstewart@mintomine.com
tel: 647-523-6618
About 778
778 is a company formed pursuant to the laws of British Columbia and is a reporting issuer in the Provinces of Alberta and British Columbia. 778 currently has issued and outstanding 3,000,000 778 common shares and 75,000 incentive stock options to acquire 75,000 778 common shares at a price of $0.10 per share which options shall be exercised prior to completion of the RTO.
For further information:
1246779 B.C. Ltd.
James Ward, Director
Phone: (416) 897-2359
Email: james@wardfinancial.ca
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.
Completion of the RTO is subject to a number of conditions, including but not limited to, Exchange acceptance and receipt of all required shareholder approvals. There can be no assurance that the RTO will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the listing application to be prepared in connection with the RTO, any information released or received with respect to the RTO may not be accurate or complete and should not be relied upon.
The Exchange has in no way passed upon the merits of the RTO and has neither approved nor disapproved the contents of this press release.
All information contained in this news release with respect to 778, Minto, and the Minto Mine was supplied by the parties, respectively, for inclusion herein, and 778 and its directors and officers have relied on Minto for any information concerning such party.
Forward-Looking Statements
This news release contains "forward-looking information" and "forward-looking statements" (collectively, "forward-looking statements") within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as "expects", or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "budget", "scheduled", "forecasts", "estimates", "believes" or "intends" or variations of such words and phrases or stating that certain actions, events or results "may" or "could", "would" , "might " or "will" be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements. In this news release, forward-looking statements relate, among other things, to: mineral resource estimates and the assumptions on which they are based, including geotechnical and metallurgical characteristics of rock confirming to sampled results and metallurgical performance; tonnage of ore to be mined and processed; ore grade and recoveries; assumptions and discount rates being appropriately applied to the PEA; prices for copper, silver and gold remaining as estimated; availability of funds for Minto Metal's projects; capital, decommissioning and reclamation estimates; the terms and conditions of the RTO, the Offering, the 778 Consolidation, the exchange ratios for the common shares of 778 and Minto in connection with the RTO; the business and operations of 778, Minto and Minto Metals; go-forward directors and management of Minto Metals; the use of proceeds from the Offering, exceptions from the sponsorship requirements from the Exchange; the trading of the Resulting Issuer Shares; and the receipt of director, shareholder and regulatory approvals.
Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: Minto's limited operating history; the existence of mineral resources and mineral resources on Minto Metal's properties; the ability to carry out operations in accordance with plans in the event of disruptions; the ability to convert mineral resource estimates previously classified as inferred to indicated or measured; the uncertain nature of estimating mineral resources; fluctuations in spot and forward prices of gold, silver, base metals or certain other commodities; operational risks inherent in the business of mining; satisfaction or waiver of all applicable conditions to the completion of the RTO (including receipt of all necessary shareholder, stock exchange and regulatory approvals or consents, and the absence of material changes with respect to the parties and their respective businesses); ability to close the Subscription Receipt financing on the proposed terms or at all; the synergies expected from the RTO not being realized; business integration risks; fluctuations in general macroeconomic conditions; fluctuations in securities markets; fluctuations in currency markets (such as the Canadian dollar to United States dollar exchange rate); change in national and local government, legislation, taxation, controls, regulations and political, judicial or economic developments; risks and hazards associated with the business of mining and resource extraction, generally (including environmental hazards, industrial accidents, unusual or unexpected formations pressures, cave-ins and flooding); inability to obtain adequate insurance to cover risks and hazards; risks related to outbreaks or threats of outbreaks of viruses, other infectious diseases or other similar health threats, such as the novel coronavirus outbreak; the presence or development of laws, rulings and regulations that may impose restrictions on the mining and resource extraction industry; employee relations; relationships with and claims by local communities and Indigenous populations; increasing costs associated with mining and resource extraction inputs and labour; the speculative nature of the metals extraction industry (including the risks of not obtaining necessary licenses, permits and approvals from government authorities); title to properties; expectations regarding the entering into of material contracts and investor relations agreements; expectations regarding escrow restrictions imposed on the Resulting Issuer's securities; expectations regarding principal security holders of the Resulting Issuer and the identity and shareholdings thereof; expectations regarding compensation of directors, officers and employees of the Resulting Issuer; expectations regarding corporate governance and committees of the Board of the Resulting Issuer; and expectations regarding reliance on a waiver from the sponsorship requirements of the Exchange. There can be no assurance that forward looking statements 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 the forward-looking statements and information contained in this news release. Except as required by law, 778 and Minto assume no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change, except as required by law. The terms and conditions of the RTO may change based on 778's due diligence (which will be limited as 778 intends to rely upon the due diligence conducted by the Agents in connection with the Offering) and the receipt of tax, corporate and securities law advice for both 778 and Minto. The statements in this press release are made as of the date of this news release.
CAUTIONARY NOTE REGARDING NON-IFRS FINANCIAL MEASURES
There are certain non-IFRS financial measures in this news release, including C1 cash cost and AISC per pound of copper sold. These non-IFRS financial measures do not have any standardized meaning and therefore may not be comparable to similar measures presented by other issuers. Accordingly, these financial measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with International Financial Reporting Standards ("IFRS"). See below for a reconciliation of the foregoing non-IFRS measures to their most directly comparable measures calculated in accordance with IFRS.
| C1 Cash Costs and AISC | ||
| Parameters | C$/t processed | US$/lb Cu |
| Mining Costs | $36.34 | $1.09 |
| Processing Costs | $18.30 | $0.55 |
| G&A Costs | $18.76 | $0.56 |
| Transport + TCRCs | $12.12 | $0.36 |
| By-Product Credits | ($13.71) | ($0.41) |
| Royalties | $1.80 | $0.05 |
| C1 Cash Costs | $73.61 | $2.20 |
| Sustaining Capital | $14.81 | $0.44 |
| Closure Costs | $2.16 | $0.06 |
| All-In Sustaining Costs | $90.59 | $2.71 |
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