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August 15, 2022
Vancouver, British Columbia—American Pacific Mining Corp (CSE: USGD / FWB: 1QC / OTCQX: USGDF) (“APM”) and Constantine Metal Resources Ltd. (“Constantine”) (TSXV: CEM/OTCQX:CNSNF) announce that they have entered into a definitive agreement (the “Definitive Agreement”) pursuant to which APM will acquire all of the issued and outstanding common shares of Constantine (the “Transaction”) in an all-share transaction, providing Constantine shareholders with an immediate upfront premium of 48.6% based on each company’s respective 20-day volume weighted average price (“VWAP”).
The combined company will be a premier exploration and development company in the western USA with two projects being aggressively advanced under strategic partnerships with well-respected major metal producers and an expanded portfolio of prospective precious and base metals assets.
Highlights of the Transaction and Strategic Rationale:
CEO of American Pacific Mining, Warwick Smith, stated: “This is a transformational step for American Pacific as the Palmer Project gives us an established PEA-stage asset with a tremendous amount of exploration upside. We are very impressed with the quality of technical work completed by Constantine and Dowa to-date and look forward to collaborating with our new partners and stakeholders to expand resources and realize the full potential of this high-grade VMS system while continuing to deliver exposure to progress and new discoveries across our existing portfolio of highly prospective past-producing exploration projects.”
CEO of Constantine Metal Resources, Garfield MacVeigh, commented: “Constantine is pleased to enter into this agreement and our Board unanimously recommends the transaction to shareholders at a significant market premium. We believe American Pacific’s focus, financing capabilities and breadth of exploration experience in the US will result in Palmer reaching its full potential. We would like to thank our shareholders, the team at Constantine, our Board and our joint venture partner at Palmer, Dowa, for all their support.”
Constantine shareholders will be entitled to receive 0.881 (the “Exchange Ratio”) of a common share of APM for each share of Constantine held (the “Consideration”). All outstanding stock options of Constantine will be exchanged for options of APM and all warrants of Constantine will become exercisable to acquire common shares of APM, in amounts and at exercise prices adjusted in accordance with the Exchange Ratio. The Consideration values Constantine at approximately C$0.43 per share, representing a premium of approximately 48.6% to Constantine shareholders, based on the 20-day VWAP of each company as of the close of trading on August 12, 2022. Upon completion of the Transaction, Constantine shareholders will hold approximately 31.4% of APM shares on an outstanding basis.
The Definitive Agreement for the Transaction includes customary provisions, including non-solicitation, right to match, and fiduciary out provisions, as well as certain representations, covenants and conditions which are customary for a transaction of this nature. The Definitive Agreement provides for a C$850,000 termination fee payable by Constantine to APM in the event of a superior proposal, and a reduced break fee of $500,000 payable in the event of a no-vote by Constantine securityholders in certain circumstances. The Transaction is expected to be completed by way of a court-approved Plan of Arrangement under the Business Corporations Act (British Columbia)(the “Arrangement”) and will be subject to securityholder approval at a meeting of Constantine securityholders, which is expected to take place in October 2022, with the Transaction expected to close shortly thereafter. Under the Definitive Agreement, APM has also agreed to commit to fund C$5,000,000 for the Palmer Project in 2022 in accordance with the approved project program and budget.
Closing of the Transaction is subject to the receipt of applicable regulatory approvals, Constantine securityholder approval and the satisfaction of certain other closing conditions customary for transactions of this nature.
It is anticipated that any securities to be issued under the Arrangement will be offered and issued in reliance upon the exemption from the registration requirements of the U.S. Securities Act of 1933 provided by Section 3(a)(10) thereof. This press release does not constitute an offer to sell, or the solicitation of an offer to buy, any securities.
Board of Director’s Recommendation and Voting Support
The Arrangement has been unanimously approved by the board of directors of both APM and Constantine. Directors and senior officers of Constantine along with certain Constantine shareholders, being Michael Gentile and John Tognetti, holding in the aggregate approximately 27% of the outstanding Constantine shares, have each entered into customary voting and support agreements to, among other things, vote in favour of the Arrangement at the special meeting of Constantine securityholders to be held to consider the Transaction.
Advisors and Counsel
McMillan LLP is acting as American Pacific’s legal advisor. Agentis Capital Mining Partners is acting as financial advisor to Constantine and Blake, Cassels & Graydon LLP is acting as Constantine’s legal advisor.
Agentis Capital Mining Partners has provided a fairness opinion to the Board of Directors of Constantine stating that, as of the date of the opinion, and based upon and subject to the assumptions, limitations and qualifications stated in the opinion, the consideration to be received by the shareholders of Constantine is fair, from a financial point of view, to the shareholders of Constantine.
About American Pacific Mining Corp.
American Pacific Mining Corp. is a gold explorer focused on precious metal opportunities in the Western United States. The Madison Mine in Montana, under option to joint venture with Kennecott Exploration Company, is the Company’s flagship asset. The Gooseberry Gold-Silver Project and the Tuscarora Gold Project are two high-grade, precious metals projects located in key mining districts of Nevada, USA. The Company’s mission is to grow by the drill bit and by acquisition.
About Constantine Metal Resources Ltd.
Constantine is a mineral exploration company led by an experienced and proven technical team with a focus on the Palmer copper-zinc-silver-gold-barite project (the “Palmer Project”) being advanced as a joint venture between Constantine and Dowa Metals & Mining Co., Ltd. (“Dowa”), with Constantine as operator. The Palmer Project is a high-grade volcanogenic massive sulphide-sulphate (“VMS”) project located in a very accessible part of coastal Southeast Alaska, with road access to the project and within 60 kilometers of the year-round deep-sea port of Haines.
On Behalf of the Board of American Pacific Mining Corp.
CEO & Director
Corporate Office: Suite 910 – 510 Burrard Street Vancouver, BC, V6C 3A8 Canada
Investor Relations, Meredith Eades: [email protected] Phone: 1-778-833-3962
On Behalf of the Board of Constantine Metal Resources Ltd.
President & CEO
Corporate Office: Suite 320 – 800 West Pender Street Vancouver, BC, V6C 2V6 Canada
For further information please contact:
Garfield MacVeigh, President or Michael Vande Guchte, VP Exploration
Phone: 604-629-2348. Email: [email protected]
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