Portage Updates on Proposed Amalgamation with Tri-Star Resources PLC
Under the Amalgamation Agreement, Tri-Star Resources and Portage have agreed to effect the Acquisition by way of a three cornered amalgamation between Portage, Tri-Star Resources and Tri-Star Canada pursuant to which Tri-Star Canada and Portage shall combine their businesses, assets and liabilities. In consideration for the amalgamation, Portage shareholders (other than dissenting Portage shareholders) will receive 7.159849116794373 ordinary shares in the capital of Tri-Star Resources ("Tri-Star Shares") for every one Portage share held. Pursuant to the Amalgamation Agreement, Tri-Star Canada and Portage will be amalgamated and will continue as one company ("Amalco"). Amalco will continue with the name Tri-Star Antimony Canada Inc. and will be a wholly owned subsidiary of Tri-Star Resources. Assuming there are no dissenting Portage shareholders, Tri-Star Resources will issue to Portage shareholders a total of 1,086 million new Tri-Star Shares with a value of GBP2.7 million (based on the closing mid market share price of Tri-Star Resources on August 2, 2013 of 0.25 pence). Assuming no dissenting Portage shareholders, following completion of the Acquisition, Portage shareholders will hold approximately 15.9% of the issued share capital of Tri-Star Resources at that time.
The Acquisition is conditional on the approval of the Amalgamation Agreement by a two-thirds majority of Portage shareholders voting at the Portage shareholder meeting that has been convened in Toronto for September 12, 2013 at 10:00a.m. Completion of the Acquisition and admission of the new Tri-Star Shares to trading on AIM is expected to take place on September 18, 2013.
Portage owns the Bald Hill deposit, which is one of the largest undeveloped antimony projects in Canada. Drilling to date has indicated a potential quantity and grade, which is the target of further exploration, in the 725,000 to 1,000,000 tonne range grading 4.11% to 5.32% contained antimony. Exploration surveys have defined a 1km long extension to the mineralized zone which remains open in all directions. The potential quantity and grade is conceptual in nature as there has been insufficient exploration to define a mineral resource and it is uncertain whether further exploration will result in the target being delineated as a mineral resource. Portage owns 100% interest in 891 claims within the Annidale Gold Belt, which covers approximately 200 sq km surrounding the Bald Hill deposit, and which hosts a number of historic gold and antimony occurrences.
In addition, Portage has interests in two gold deposits, both of which are NI 43-101 compliant. The first of these, Golden Pike, which is 100% owned by Portage, has an inferred mineral resource of 214,800 tonnes grading 9.6 grams per tonne ("g/t") for 66,300 ounces of contained gold and the second, Golden Ridge, in which Portage has a 60% interest (under a joint venture with Cliffs Chromite Resources Inc.), has inferred mineral resources of 17,780,000 tonnes at 0.91 g/t gold for 520,200 ounces of gold. Both of these gold projects are viewed as non-core by Tri-Star Resources.
Rockport Mining Corp., a wholly owned subsidiary of Portage, has other earlier-stage gold and base metal properties including Armstrong Brook, Oak Bay, Mount Pleasant NE and Otter Lake.
The completion of the Acquisition is subject to a number of conditions, including:
- the representations and warranties given by Portage and by Tri-Star remaining true and accurate in all material respects at completion;
- there being no material adverse change affecting Portage or Tri-Star before completion;
- the exercise, termination or release of options held over Portage;
- the agreement of certain creditors of Portage (that are related parties to Portage) to settle outstanding claims against Portage;
- receipt of approval of the Amalgamation by Portage from the Canadian National Stock Exchange; and
- application being made for the admission of the new Tri-Star Shares to be issued to the Portage shareholders to trading on AIM.
In connection with the annual and special meeting of Portage Shareholders to be held on September 12, 2013, to approve, among other things, the Acquisition, Portage will file an Information Circular with Canadian securities regulators, containing certain information on Tri-Star Resources and the Acquisition, which will be posted to Portage shareholders on or about August 14, 2013.
Pursuant to the Letter of Intent announced on May 2, 2013, Tri-Star Resources paid an initial exclusivity fee of CDN$50,000 upon execution of the Letter of Intent and has made three further monthly exclusivity payments of CDN$25,000 each to Portage. A further payment of CDN$85,000, to be satisfied by the issue of 14 million Tri-Star Shares to creditors of Portage, will be made upon completion of the Acquisition.
Upon completion of the Acquisition, Amalco will assume the liabilities of Portage, which are expected to consist of: (i) short term liabilities to related party creditors of Portage of CDN$400,000, which will be discharged on closing by a cash payment by Tri-Star Resources of CDN$300,000 together with the issue of a further 20 million new Tri-Star Shares to the creditors; (ii) promissory notes issued by Portage to certain trade creditors amounting to approximately CDN$454,000, which will need to be satisfied by Amalco within 30 days of completion of the Acquisition; and (iii) provisions and accrued liabilities for approximately CDN$396,000.
On completion of the Acquisition and subject to the completion of customary due diligence, it is intended that Ken Hight, Chairman and CEO of Portage, will join the board of Tri-Star Resources as an Executive Director.
Roger Dahn, P. Geo. (New Brunswick), Vice President-Exploration of Portage, is designated as the Qualified Person under National Instrument 43-101 and has reviewed and approved the contents of this news release.
Update on the Tri-Star Roaster Project
Tri-Star Resources has announced previously that it has established a joint venture in Ras Al-Khaimah with Union International Holding Group ("Union") for the construction of its proposed antimony roaster facility. Tri-Star Resources has by press release today confirmed that negotiations are ongoing with Union and other potential joint venture and financing parties in the Gulf region with a view to securing the final location of, and financing for, this project.
Emin Eyi, Tri-Star Resources' Managing Director, has relocated to the Gulf so as to be able to manage the roaster project more effectively.
Commenting on the Amalgamation, Ken Hight said:
"I am delighted that we have been able to sign the Amalgamation Agreement and look forward to completing the transaction following the Portage shareholders' meeting in September. The Amalgamation is an important step in setting a path to production for Portage shareholders, positioning Portage as a key component in an integrated antimony producer and giving Portage shareholders access to a much larger capital base."
Portage Minerals Inc. is a mineral exploration corporation exploring for gold in Eastern Canada. Further information about Portage can be accessed on the Company's website at www.portagemineralsinc.com and on the SEDAR website at www.sedar.com. The common shares of Portage trade on the Canadian National Stock Exchange ("CNSX") as a mining issuer under the trading symbol "RKX".
The Canadian National Stock Exchange has not reviewed this press release and does not accept responsibility for the adequacy or accuracy of this news release.
Cautionary Statement Regarding Forward-Looking Information
This press release contains "forward-looking information" within the meaning of Canadian securities legislation. Forward-looking information is based upon the Company's beliefs, estimates and opinions as at the date of this press release, which the Company believes are reasonable, but no assurance can be given that these will prove to be correct. Furthermore, the Company undertakes no obligation to update or revise forward-looking information contained herein if these beliefs, estimates and opinions or other circumstances should change, except as otherwise required by applicable law.
Forward-looking information relates to future events or to future conditions, performance or results of operations and reflects current expectations or beliefs regarding such matters including, but not limited to, information or statements with respect to: (i) the amount of mineral resources; (ii) exploration, development and production activities, including information regarding the potential mineralization and resources; (iii) the amount of future output over any period; (iv) net present value and internal rates of return of the mining operation; (v) assumptions relating to capital costs, operating costs and other cost metrics; (vi) assumptions relating to gross revenues, operating cash flow and other revenue metrics; (vii) assumptions relating to future price and demand for lithium and other macroeconomic metrics; (viii) exploration and development plans, including anticipated costs and timing thereof, time frames for completion, and anticipated time to production; (ix) mine potential and expected mine life; and (x) sources of and anticipated financing requirements.
All information other than matters of historical fact may be forward-looking information. In some cases, forward-looking information can be identified by the use of words such as "seek", "expect", "anticipate", "budget", "plan", "project", "estimate", "assume", "continue", "forecast", "intend", "believe", "predict", "potential", "target", "strategy", "goal", "may", "could", "would", "might", or "will" and similar words or phrases (including negative variations) suggesting future outcomes or statements regarding an outlook.
Forward-looking information is based upon certain assumptions by the Company or its consultants and other important factors that, if untrue, could cause the actual results, performances or achievements of the Company to be materially different from future results, performances or achievements expressed or implied by such information. Such information is based on numerous assumptions regarding present and future business strategies and the environment in which the Company will operate in the future, including the price of antimony, anticipated costs and ability to achieve goals. Certain important factors that could cause actual results, performances or achievements to differ materially from those in the forward-looking information include, but are not limited to: (i) required capital investment and estimated workforce requirements; (ii) estimates of net present value and internal rates of return; (iii) future demand and market prices for antimony; (iv) receipt of regulatory approvals on acceptable terms within commonly experienced time frames; (v) anticipated timelines for the commencement of production; (vi) anticipated timelines for community consultations and the impact of those consultations on the regulatory approval process; and (vii) future exploration plans and objectives.
By its nature, forward-looking information involves known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements, or industry results, to differ materially from those expressed or implied by such forward-looking information. Some of the risks and other factors that could cause actual results to differ materially from those expressed in the forward-looking information contained in this press release include, but are not limited to, risks and uncertainties relating to: (i) the interpretation of drill results, the geology, grade and continuity of mineral deposits and conclusions of economic evaluations; (ii) results of feasibility studies, and the possibility that future exploration, development or mining results will not be consistent with the Company's expectations, (iii) the outcome of litigation in which the Company is or may in the future become involved; (iv) risks relating to possible variations in reserves, grade, planned mining dilution and ore loss, or recovery rates and changes in project parameters as plans continue to be refined; (v) mining and development risks, including risks related to accidents, equipment breakdowns, labour disputes (including work stoppages and strikes) or other unanticipated difficulties with or interruptions in exploration and development; (vi) risks related to the inherent uncertainty of production and cost estimates and the potential for unexpected costs and expenses; (vii) risks related to future commodity demand and price and foreign exchange rate fluctuations; (viii) the uncertainty of profitability based upon the cyclical nature of the industry in which the Company operates; (ix) risks related to failure to obtain adequate financing on a timely basis and on acceptable terms or delays in obtaining governmental approvals or in the completion of development or construction activities; (x) risks related to environmental regulation and liability; (xi) political and regulatory risks associated with mining and exploration; (xii) risks related to the uncertain global economic environment; and (xiii) other risks and uncertainties related to the Company's prospects, properties and business strategy. Although the Company has attempted to identify important factors that could cause actual results or events to differ materially from those described in the forward-looking information, investors and others are cautioned that this list is not exhaustive and there may be other factors that the Company has not identified. Readers are cautioned not to place undue reliance on forward-looking information contained in this press release. All forward-looking information contained in this press release or incorporated by reference herein is expressly qualified by this cautionary note. For more information on the risks, uncertainties and assumptions that could cause the Company's actual results to differ from current expectations, please refer to the Company's public filings available at www.sedar.com.
Portage Minerals Inc.
Ken Hight, President and CEO
CHF Investor Relations
Robin Cook, Senior Account Manager
(416) 868-1079 x228