December 17, 2013
Silver Predator to Acquire Springer Tungsten Mine and Mill; Americas Bullion to Bolster Financial Support
Reno, Nevada, December 17, 2013: Silver Predator Corp. (TSX:SPD) (the “Company”) is pleased to announce that it has agreed with Americas Bullion Royalty Corp. (TSX: AMB) (“AMB”) to acquire the Springer Tungsten Mine and Mill along with several other projects, primarily in Nevada, in consideration of US$5,000,000, payable over three years, and the grant by the Company of a royalty interest in each of its properties held at closing (the “Acquisition”). Concurrent with the Acquisition, AMB will commit an additional US$1,800,000 by private placement to further fund the Company.
”The Springer project with its PEA exhibiting strong economics provides Silver Predator a unique opportunity to attract a joint venture partner on this advanced project,” said Nathan Tewalt, Chief Executive Officer. “These quality assets combined with financial support from Americas Bullion provides us with a stronger financial base for our Company.”
ACQUISITION OF SPRINGER MINING AND NEVADA ROYALTY
Under the terms of a binding letter agreement, the Company will acquire all of the outstanding shares of each of Springer Mining Company (“Springer Mining”) and Nevada Royalty Corp. (“Nevada Royalty”) from Golden Predator US Holding Corp. (“GPUS”), a wholly owned subsidiary of AMB. The assets of Springer Mining include the Springer underground mine and mill complex, including substantially all permits required for mining operations, 3,756 acres of fee land, 340 unpatented lode mining claims, 25 placer mining claims, and the Copper King Tungsten Property consisting of 7 patented and 9 unpatented mining claims, all of which are located in Pershing County, Nevada. The assets of Nevada Royalty include the Taylor mill property and equipment and water rights, the Humboldt mill site, and all patented and unpatented mining claims associated with the Modoc, Tempo, Yankee West, Guild/Skipjack, Flamingo and Lewiston properties, most of which are located in Nevada. The transaction will not include the sale of any royalties currently held by AMB. It is anticipated that, on completion of the Acquisition, the Taylor Mine and Mill along with the Springer Mine and Mill will be the principal assets of the Company.
Immediately prior to the Acquisition, AMB intends to complete a pre-closing reorganization, following which AMB will be a wholly-owned subsidiary of a new company, the common shares of which will continue to be listed on the TSX (“Newco”). As part of the reorganization, AMB will move all of its existing royalty interests out of Springer Mining and Nevada Royalty prior to the transfer to the Company. Newco will then cause GPUS to transfer all of the outstanding shares of Springer Mining and Nevada Royalty to the Company.
The Company will satisfy the purchase price in part by the issue to Newco, at closing, of such number of the Company’s common shares (“SPD Shares”) having an aggregate value of US$500,000, together with a convertible promissory note in the principal amount of US$4,500,000 bearing interest at 4% per annum and payable over a period of three years (the “Acquisition Note”). The balance of the purchase price will be satisfied by the grant to Newco of a royalty interest in each of its properties held at the closing of the Acquisition.
The SPD Shares issued at closing of the Acquisition will be issued at a deemed price per share equal to the volume weighted average trading price (VWAP) of the SPD Shares on the TSX for the seven trading days immediately preceding the date of the Company’s shareholder meeting called to approve the transaction (the “SPD Meeting”).
Under the terms of the Acquisition Note, the principal amount will become due as follows: US$1,000,000 on the first anniversary of the Acquisition, US$1,500,000 on the second anniversary and US$2,000,000 on the third anniversary, in each case with interest accumulated under the note as at such date. The Company may elect to pay the amount then due (including interest) either in cash or by the issue of SPD Shares (or any combination thereof). Any SPD Shares issued will be deemed issued at a price per share equal to the VWAP of the SPD Shares on the TSX for the fourteen trading days immediately preceding the date that is two days before the date of issue (subject to a 10% discount in the event the VWAP is at least CAD$0.36 but less than CAD$0.75, and a 15% discount in the event the VWAP is CAD$0.75 or more).
The Company has agreed that, until such time as it has paid the Acquisition Note in full, it will not sell, assign, transfer, joint venture, option or in any way encumber the shares of Springer Mining or Nevada Royalty (or any of the assets acquired therewith) without first obtaining the prior written consent of Newco (such consent not to be unreasonably withheld, conditioned or delayed).
If any time the Company elects to terminate the Acquisition or fails to make a payment under the Acquisition Note when due, the Company will be required to transfer the shares of Springer Mining and Nevada Royalty back to Newco and the Company will be deemed to have forfeited to Newco, without compensation, any portion of the purchase price then paid to Newco. In addition, Newco would also retain, without compensation to the Company, all of the royalty interests granted to Newco at the closing of the Acquisition; provided that if at such time SPD shall have paid Newco at least US$1,000,000 of the purchase price, SPD will retain 100% ownership of the Taylor Mill.
Completion of the Acquisition is subject to, among other conditions customary for a transaction of this nature, stock exchange regulatory approval, approval of the SPD and AMB shareholders, completion of the concurrent financing disclosed below, and completion of the entire transaction by not later than March 14, 2014.
AMB has also agreed to participate in a private placement in the Company for an additional approximately US$1,800,000 (approximately CAD$1,915,000) (the “Concurrent Financing”). On December 12, 2013, the Company announced the completion of an investment by AMB in the amount of approximately $271,000, with an additional approximately $229,000 to close after receipt by the Company of disinterested shareholder approval. The Company anticipates holding the shareholders’ meeting to approve the December 12th financing, the Concurrent Financing and the issuance of SPD Shares in connection with the Acquisition, in mid-February (the “SPD Meeting”).
The Concurrent Financing is anticipated to close on April 15, 2014, or an earlier date mutually agreed by the parties. The SPD Shares will be issued at price equal to the VWAP of the SPD Shares on the TSX for the seven trading days immediately preceding the date which is two days before the financing closing date.
Completion of the Concurrent Financing on the terms described aabove is subject to stock exchange regulatory approval and approval of the SPD shareholders.
COMPLETION OF THE TRANSACTION
It is intended that, immediately following closing, Newco will distribute to its shareholders such number of SPD Shares then held by it in order to reduce its post-transaction share position in SPD to 49% of the outstanding SPD Shares.
So long as Newco holds at least 15% of the outstanding SPD Shares, it will have a pre-emptive right to maintain its percentage shareholding. In addition, on completion of the Acquisition, SPD will reconstitute its board of directors such that it will be comprised of 7 members, 4 of whom will be directors nominated by SPD and three of whom will be nominated by Newco. The exact composition of the board will be disclosed in a subsequent news release, once determined by the parties. Nate Tewalt will continue in his role as the Chief Executive Officer. So long as Newco holds at least 20% of the outstanding SPD Shares it will be entitled to nominate two directors for election to the SPD board and thereafter one director until such time as it owns 10% or less of SPD.
Full details of the Acquisition and the related transactions disclosed herein will be included in a management information circular to be mailed to SPD shareholders in relation to the SPD Meeting.
The Acquisition is a “related party transaction” within the meaning of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”) and the policies of the TSX as a result of the fact that AMB currently owns, directly and indirectly, 25,476,535 shares, or approximately 37.51% of the Company’s issued and outstanding shares. In accordance with the requirements of MI61-101, the Company will seek disinterested shareholder approval in respect of the Acquisition. In addition, the Company may, subject to the availability of an exemption, be required to obtain a formal valuation.
The securities referenced in this news release have not been registered and may not be sold in the United States absent registration or an exemption from registration.
Americas Bullion Royalty Corp.
Americas Bullion Royalty Corp. invests in undervalued natural resource assets seeking to provide superior investment returns. Americas Bullion’s assets include royalty holdings across Mexico, Nevada, Wyoming, Oregon and California; the Springer Tungsten Mine and Mill; the Taylor mill and Humboldt mill site in Nevada; the Brewery Creek project, and a portfolio of Yukon exploration properties. The Company provides shareholders with the potential for exploration success through equity positions in related companies while continuing to advance and monetize its holdings. Additional details regarding AMB’s proposed reorganization are disclosed in AMB’s December 17, 2013 press release, a copy of which is available on the SEDAR website under the AMB’s issuer profile, at www.sedar.com.
Silver Predator Corp.
Silver Predator’s corporate mandate is to advance the previously operated Nevada-based Taylor project towards production. The Taylor project hosts a current resource estimate, open to expansion, and has potential to be a near-term producing asset. Current ongoing exploration in the surrounding district has identified the potential for discovery of additional silver and gold deposits. With quality assets in a world-class jurisdiction, and an exploration team with a history of success in Nevada, Silver Predator is positioned to advance new and existing discoveries towards production.
For additional information:
William M. Sheriff, Chairman
(208) 635 5415
Nathan A. Tewalt, Chief Executive Officer
(775) 284 1271
Information set forth in this news release may involve forward-looking statements under applicable securities laws. Forward-looking statements are statements that relate to future, not past, events. In this context, forward-looking statements often address expected future business and financial performance, and often contain words such as “anticipate”, “believe”, “plan”, “estimate”, “expect”, and “intend”, statements that an action or event “may”, “might”, “could”, “should”, or “will” be taken or occur, or other similar expressions. All statements, other than statements of historical fact, included herein including, without limitation; statements about the terms and completion of the Acquisition and Concurrent Financing are forward-looking statements. By their nature, forwardlooking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the following risks: failure to satisfy all conditions precedent to the Acquisition, including disinterested shareholder approval, stock exchange regulatory approval and completion of the Concurrent Financing, and the additional risks identified in the management discussion and analysis section of the Company’s interim and most recent annual financial statement or other reports and filings with the TSX and applicable Canadian securities regulators. Forward-looking statements are made based on management’s beliefs, estimates and opinions on the date that statements are made and the respective companies undertakes no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change, except as required by applicable securities laws. Investors are cautioned against attributing undue certainty to forward-looking statements.