Oceanus Resources Corporation ("Oceanus" or the "Company") (TSXV:OCN) and El Tigre Silver Corp. ("El Tigre") (TSXV:ELS) are pleased to announce that they have entered into an arrangement agreement (the "Agreement") to combine their respective companies by way of a statutory plan of arrangement pursuant to the Business Corporations Act (British Columbia) (the "Transaction"), under which Oceanus will acquire all of the outstanding common shares of El Tigre ("El Tigre Shares") in exchange for common shares of Oceanus ("Oceanus Shares") that values El Tigre at approximately $6,000,000.
The Transaction will combine Oceanus's La Lajita high grade gold property located in Durango, Mexico (the "La Lajita Property") with El Tigre's tailings reprocessing project and its rights to mineral concessions in north-eastern Sonora, Mexico (the "El Tigre Property") into one business.
Pursuant to the Agreement, Oceanus will acquire each outstanding El Tigre Share in exchange for 0.2839 of one Oceanus Share (the "Exchange Ratio"). In connection with the Transaction, "in-the-money" warrants and stock options to purchase El Tigre Shares will be transferred to El Tigre in exchange for that number of El Tigre Shares as is equal to the value of the "in-the- money" amount of the warrant or option, and such El Tigre Shares so issued will be subsequently treated as per the remainder of the outstanding El Tigre Shares in the arrangement. Outstanding warrants and options that are not "in-the-money" will be cancelled.
Also pursuant to the Transaction, Oceanus will provide a secured loan to El Tigre in the amount of up to $700,000.
The Exchange Ratio represents consideration to El Tigre shareholders of $0.0954 per El Tigre Share based on a price of $0.336 for each Oceanus Share. This value implies a 46.8% premium over the September 15, 2015 closing price of the El Tigre Shares of $0.065.
Recommendation of the El Tigre Board
Both companies' Boards of Directors have approved the terms of the proposed Transaction and determined that the proposed Transaction is in the best interests of their respective shareholders based on a number of factors, including, in the case of El Tigre, a fairness opinion from its financial advisor, Evans & Evans Inc. The El Tigre Board recommends that the El Tigre securityholders vote in favour of the Transaction.
El Tigre Management and Shareholder Support
Each of the officers and directors of El Tigre and certain other shareholders of El Tigre have agreed to enter into voting support agreements with Oceanus supporting the Transaction, pursuant to which they will vote their El Tigre Shares in favour of the arrangement resolution. The El Tigre Shares held by such officers, directors, and shareholders represent approximately 41% of the outstanding El Tigre Shares.
The Transaction will be carried out by way of court-approved plan of arrangement and will require the approval of at least 66⅔% of the votes cast in person or by proxy of the securityholders of El Tigre at a special meeting of El Tigre shareholders to be held no later than sixty days after the date of the Agreement. In addition to the approval of El Tigre securityholders, the Transaction is also subject to the receipt of all necessary regulatory, court and other approvals, including Mexican regulatory approvals, the completion of a financing transaction of up to $2,000,000 by Oceanus, and the satisfaction of certain other closing conditions customary for a transaction of this nature.
The Agreement includes customary deal protection provisions including, among other things, a non-solicitation covenant (subject to "fiduciary out" provisions that entitle a party to consider and accept a superior proposal in certain circumstances), and a right in favour of Oceanus to match any such superior proposal, in certain circumstances. The Agreement provides for a termination fee and a cost reimbursement fee payable by El Tigre to Oceanus in certain circumstances if the Transaction is not completed.
Meeting materials regarding the Transaction are expected to be mailed to the El Tigre securityholders for a special meeting to take place in early November 2015, with closing expected to occur as soon as reasonably practicable following the securityholders' vote and regulatory approval.
Copies of the Agreement, the voting agreements, the meeting materials and related documents will be filed under the SEDAR profiles of both Oceanus and El Tigre at www.sedar.com.
Oceanus's financial advisor is PI Financial Corp. and El Tigre's financial advisor is Evans & Evans Inc.
As a result of this transaction, El Tigre will not be proceeding with the shares for debt settlement that was previously announced on June 26, 2015.
Furthermore, El Tigre has entered into a final settlement agreement with Wealthcorp, LLC to settle the outstanding litigation between the parties that was previously announced on January 22, 2015 and April 2, 2015.
About Oceanus Mining Limited
Oceanus Resources Corporation is a precious metals exploration company run by a team of experienced mine finders. Oceanus is currently advancing the La Lajita Property located in the Sierra Madre Gold and Silver Belt near Durango, Mexico.
About El Tigre Silver Corp.
El Tigre, through its subsidiaries, holds the rights to the El Tigre Property where it has been advancing its tailings reprocessing project.
Cautionary Statement Regarding Forward-Looking Information
This news release contains forward-looking statements and forward-looking information within the meaning of United States and Canadian securities laws, respectively. The use of any of the words "expect", "potential", "target", "anticipate", "continue", "estimate", "objective", "may", "will", "project", "should", "believe", "plans", "intends" and similar expressions are intended to identify forward-looking information or statements. More particularly and without limitation, this news release contains forward-looking statements and information concerning: the timing and anticipated receipt of required regulatory, court, and securityholder approvals for the arrangement; the ability of Oceanus and El Tigre to satisfy the other conditions to, and to complete, the arrangement; the anticipated timing of the mailing of the information circular regarding the arrangement, the anticipated timing of the meeting of El Tigre shareholders to vote on the arrangement, and the closing of the Transaction.
In respect of the forward-looking statements and information concerning the anticipated completion of the proposed Arrangement and the anticipated timing for completion of the Arrangement, Oceanus and El Tigre have provided them in reliance on certain assumptions that they believe are reasonable at this time, including assumptions as to the time required to prepare and mail shareholder meeting materials, including the required information circular; the ability of the parties to receive, in a timely manner, the necessary regulatory, court, shareholder and other third party approvals; and the ability of the parties to satisfy, in a timely manner, the other conditions to the closing of the Arrangement. These dates may change for a number of reasons, including unforeseen delays in preparing meeting materials, inability to secure necessary shareholder, regulatory, court or other third party approvals in the time assumed or the need for additional time to satisfy the other conditions to the completion of the Arrangement, including with respect to obtaining additional financing. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this news release.
Since forward-looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, the risk that the transaction may not close when planned or at all or on the terms and conditions set forth in the arrangement agreement; the failure to obtain the necessary shareholder, Court, regulatory and other third party approvals required in order to proceed with the transaction; the expected synergies from the Transaction not being realized; business integration risks; operational risks in the development and exploration of precious metals properties; delays or changes in plans with respect to exploration or development projects or
capital expenditures; the uncertainty of mineral reserve and mineral resource estimates; uncertainties inherent to feasibility and other economic studies; health, safety and environmental risks; metal and commodity price and exchange rate fluctuations; marketing and transportation; loss of markets; environmental risks; competition; incorrect assessment of the value of acquisitions; ability to access sufficient capital from internal and external sources; and changes in legislation, including but not limited to tax laws, royalties and environmental regulations and risks inherent to operating in developing countries. In addition, the failure of El Tigre to comply with the terms of the Agreement may result in El Tigre being required to pay a non-completion or other fee to Oceanus, the result of which could have a material adverse effect on El Tigre's financial position and results of operations and its ability to fund growth prospects and current operations.
Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on other risks and factors that could affect the operations or financial results of Oceanus and El Tigre are included in reports on file with applicable securities regulatory authorities, including but not limited to, Oceanus's Annual Information Form for the fiscal year ended March 31, 2015 which may be accessed on Oceanus's SEDAR profile at www.sedar.com.
Management has included the above summary of assumptions and risks related to forward looking information provided in this news release in order to provide shareholders with a more complete perspective on the proposed transaction and such information may not be appropriate for other purposes. Actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward looking statements will transpire or occur, or if any of them do so, what benefits may be derived there from.
The forward-looking statements and information contained in this news release are made as of the date hereof and neither Oceanus nor El Tigre undertake any obligation to publicly update or revise any forward-looking statements or information, whether as a result of new information, future events, or results or otherwise, other than as required by applicable securities laws.
This announcement is for informational purposes only and does not constitute an offer to purchase, a solicitation of an offer to sell a share or a solicitation of a proxy.
|ON BEHALF OF|
OCEANUS RESOURCES CORPORATION
|ON BEHALF OF |
EL TIGRE SILVER CORP.
|Glenn Jessome||Ernie Elko|
|President and CEO||Chairman, CEO, and Director|
|FOR FURTHER INFORMATION, CONTACT:||FOR FURTHER INFORMATION, CONTACT:|
|Glenn Jessome, President and CEO||Rob Grace, Corporate Communications|
|(902) 492-0298||Telephone: (604) 639-0044|
Neither 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 release.