12 Exploration Inc. (CSE TWLV) (“
12Ex”) announces
that it has signed a binding letter agreement (the “
Letter
Agreement”) with 79North Ltd.
(“
79North”), a privately held corporation existing
under the laws of Ontario, which outlines the general terms and
conditions pursuant to which 12Ex shall acquire all of the issued
and outstanding shares of 79North (the
“
Transaction”). The Letter Agreement was
negotiated at arm’s length and is effective as of April 29,
2020.
79North is a Toronto-based exploration and
development company focused on the acquisition, exploration and
development of properties which are prospective for gold and other
metals. 79North is lead by a team with deep mineral exploration
expertise and track record of discoveries and exits in South
America and globally. 79North currently holds an indirect interest
in mineral concessions in northern Suriname (formerly Dutch
Guiana), and aims to become the premier junior exploration company
in this underexplored district of the prolific Guiana Shield. 79
North’s growing portfolio of high-quality targets which have not
undergone modern exploration or drilling have a long history of
artisanal mining and are strategically located within close
proximity to modern gold mines operated by major mining companies.
The registered office address of 79North is located at 82 Richmond
Street East, Suite 306, Toronto, Ontario, M5C 1P1.
Terms of the Transaction
The Transaction is expected to proceed by way of
a three cornered amalgamation (the “Amalgamation”)
pursuant to which 79North shall amalgamate with a wholly-owned
subsidiary of 12Ex, and 12Ex will acquire all of the issued and
outstanding common shares of 79North (the “79North
Shares”) in exchange for common shares of 12Ex
(“12Ex Shares”) on the basis of one 12Ex Share for
each 79North Share issued and outstanding, as a result of which
79North will be a wholly-owned subsidiary of 12Ex. The Amalgamation
will also provide that all outstanding warrants and broker warrants
to purchase 79North Shares shall remain outstanding and thereafter
entitle the holders thereof to acquire equivalent securities of
12Ex in lieu of 79North on the same terms and conditions.
Prior to the completion of the Transaction, the
parties will complete a non-brokered private placement of
subscription receipts of each of 79North (“79North
Subscription Receipts”) and 12Ex (the “12Ex
Subscription Receipts” and together with the 79North
Subscription Receipts, the “Subscription
Receipts”) at a price of C$0.15 each to raise targeted
aggregate gross proceeds of C$3,000,000 (the
“Offering”). The gross proceeds from the
sale of the Subscription Receipts will be held in escrow by an
escrow agent acceptable to 12Ex and 79North. Immediately prior to
the completion of the Transaction upon satisfaction of the
conditions which will be set forth in the certificates representing
the Subscription Receipts the gross proceeds will be released from
escrow and, (i) each 79North Subscription Receipt shall be
converted into one unit, consisting of one 79North Share and one
share purchase warrant of 79North; and (ii) each 12Ex Subscription
Receipt shall be converted into one unit, consisting of one 12Ex
Share and one share purchase warrant of 12Ex. Following completion
of the Transaction, each whole share purchase warrant of 79North
and 12Ex underlying the Subscription Receipts will entitle the
holder thereof to acquire an additional 12Ex Share at a price of
C$0.25 until the date that is 36 months following the closing of
the Transaction, subject to customary anti dilution
provisions. 79North and 12Ex may issue broker warrants and
pay finder’s fees in connection with the Offering upon terms to be
determined.
The net proceeds from the Offering will be used
to fund exploration and development of 12Ex’s property interests
and for general corporate purposes following the completion of the
Transaction.
Officers and Board of
Directors
Upon completion of the Transaction, all
directors and officers of 12Ex will resign, the board of directors
will be increased to consist of four directors, and the nominees of
79North will be appointed as directors and officers of 12Ex. The
following sets out the names and backgrounds of the persons that
are proposed to be the directors and officers of 12Ex following
completion of the Transaction.
Jon North, Ph.D., P.Geo. — President,
Chief Executive Officer and Chairman of the Board. Jon
North has more than 30 years of experience in mineral exploration
worldwide. In the early part of his career he completed
undergraduate and graduate degrees in geology leading to a Ph.D.
awarded in 1993 at the University of Western Ontario. He then
worked with major mining companies such as Western Mining
Corporation and BHP until 1997. Since 1997, he has been the
founding director of numerous junior mining companies including
North Atlantic Resources Ltd. that discovered the FT gold deposit
in Mali, and most recently, Northquest Ltd., that was taken over by
Nordgold N.V. in 2016 subsequent to the discovery of the Pistol Bay
gold deposit in Nunavut, Canada.
Carmelo Marrelli, CA, CPA, CGA, ACIS —
Chief Financial Officer. Carmelo Marrelli is the principal
of Marrelli Support Services Inc., a firm that has delivered
accounting and regulatory compliance services to listed companies
on various exchanges for over twenty years. In addition, Mr.
Marrelli also controls DSA Corporate Services Inc., a firm
providing corporate secretarial and regulatory filing services. Mr.
Marrelli is a Chartered Professional Accountant (CPA, CA, CGA), and
a member of the Institute of Chartered Secretaries and
Administrators, a professional body that certifies corporate
secretaries. He received a Bachelor of Commerce degree from the
University of Toronto.
Elaine Ellingham, P.Geo. —
Director. Elaine Ellingham is an experienced mining
executive and geologist with over 30 years of experience in the
mining industry. Ms. Ellingham is a consultant providing strategic
management services to international mining clients. She has held
roles as interim CEO for Richmont Mines Ltd. and Senior Vice
President, Investor Relations with Iamgold Corporation. Elaine
spent eight years with the Toronto Stock Exchange, in a number of
capacities including National Leader of Mining, and Manager,
Company Listings. She has a range of experience in mineral
exploration, corporate development and investor relations for
mining companies, including Campbell Resources Inc., Rio Algom
Exploration Inc., and St. Joe Canada Inc. Elaine is currently a
Director of Alamos Gold Inc. (TSX/NYSE), Almaden Minerals Ltd.
(TSX/NYSE MKT) and Blue Thunder Mining Inc. (TSXV). She has an
M.Sc. in Geology and an MBA, both from the University of
Toronto.
Daryl Hodges, M.Sc. — Director.
Daryl Hodges has been involved in the mining industry for 40 years,
beginning in 1977 as a geophysical operator north of Kidd Creek in
Timmins, Ontario. Daryl has explored for gold across Canada, and
completed his M.Sc. thesis on the geology and geochemistry of a
gold deposit in Val d’Or, Quebec. He has been involved in
discoveries of gold (Hoyle Pond, Hammond Reef), Tin-Tungsten
(Sisson Brook, New Brunswick), copper-zinc (Snow Lake, Manitoba),
nickel-copper (Manitoba), and worked internationally in Russia
(Noril’sk), Finland (Keivitsa), Philippines and China in project
generation and development. After leaving Falconbridge in 1996, he
worked as a mining analyst and investment banker at HSBC and
Jennings Capital. As a co-founder, Chief Executive Officer, and
Chairman of Jennings Capital, Daryl was instrumental in its growth
into a substantial boutique investment dealer. He is currently
President of Ladykirk Capital Advisors Inc., and a Director of HPQ
Silicon Resources, and Chief Executive Officer of private company
Ancient Strains Limited.
Philip MacDonnell, CA CPA —
Director. Philip MacDonnell started in the mining business
working underground at Noranda Mines, then diamond drilling in
northern Quebec. Subsequent to earning a business degree and CPA
degree, he participated in the start up of an international
investment dealer that expanded to offices across Canada and
Europe. Following that, he joined the venture capital business
raising capital and acting as an advisor. He sits on many boards
including a gold mining company in Africa and a large drilling
company in South America and commonly serves as chair of the Audit
Committee.
Capitalization
As of the date hereof, (i) 12Ex has 10,010,000
12Ex Shares issued and outstanding, as well as 320,000 broker
warrants (each exercisable to acquire one 12Ex Share) and options
to acquire an aggregate of 500,000 12Ex Shares; and (ii) 79North
has 43,133,953 79North Shares issued and outstanding together with
an aggregate of 11,032,400 share purchase warrants (each
exercisable to acquire one 79North Share) and 1,726,783 broker
warrants (each exercisable to acquire one 79North Share and
one-half of one share purchase warrant of 79North).
Based upon the number of issued and outstanding
shares in each of 12Ex and 79North on the date hereof, upon
completion of the Transaction and the targeted Offering to raise
aggregate gross proceeds of $3,000,000, it is expected that 12Ex
will have approximately 73,143,953 12Ex Shares issued and
outstanding (non-diluted), of which the current shareholders of
12Ex will hold 10,010,000 12Ex Shares representing approximately
13.7%, the former shareholders of 79North will hold 43,133,953 12Ex
Shares representing approximately 58.9%, and the purchasers under
the Offering will hold 20,000,000 12 Ex Shares representing
approximately 27.3% (assuming no exercise of any convertible
securities of 12Ex or 79North prior to closing).
In addition, upon completion of the Transaction
and the targeted Offering to raise aggregate gross proceeds of
$3,000,000, 12Ex will also have outstanding 500,000 stock options,
31,352,400 share purchase warrants, and 1,726,783 broker warrants
(each exercisable to acquire one 12Ex Share and one-half of one
share purchase warrant of 12Ex), not accounting for any exercises
thereof prior to closing of the Transaction or any broker warrants
to be issued in connection with the Offering.
Conditions to Transaction
The Transaction is subject to various conditions,
including as follows:
- completion of satisfactory due
diligence;
- 12Ex and 79North entering into a
definitive agreement (the “Definitive Agreement”)
in respect to the Transaction;
- the accuracy of the respective
representations and warranties of each of 12Ex and 79North in the
Definitive Agreement;
- completion of the Offering and the gross proceeds from the sale
of the Subscription Receipts being released from escrow; and
- receipt of all requisite shareholder, third party and
regulatory approvals relating to the Transaction, including,
without limitation, approval of the Canadian Securities Exchange,
will have been obtained.
Additional Information Regarding the
Transaction
The Letter Agreement contains standard
confidentiality and standstill provisions, and representations and
warranties of the parties. The final legal structure for the
Transaction will be determined after the parties have considered
all applicable tax, securities law, and accounting
efficiencies.
The Transaction is expected to be completed as
soon as reasonably practicable. The Letter Agreement may be
terminated in specified circumstances, including in the event the
Definitive Agreement is not entered into by June 5, 2020.
The Transaction remains subject to the receipt
of all applicable shareholder, regulatory and third party
approvals.
Further Information
All information contained in this news release
with respect to 12Ex and 79North was supplied by the parties
respectively, for inclusion herein, without independent review by
the other party, and each party and its directors and officers have
relied on the other party for any information concerning the other
party.
For further information regarding the
Transaction, please contact:
Eric Klein, President12 Exploration Inc.
Telephone: (416) 725-7570Email:
erklein25@gmail.com
Jon North, President and Chief Executive
Officer79North Ltd.
Telephone: (416) 786-6348Email:
jon@79north.ca
CAUTIONARY NOTE REGARDING
FORWARD-LOOKING INFORMATION:
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: the terms and conditions of the
proposed Transaction; the terms and conditions of the proposed
Offering; use of funds; and the business and operations of 12Ex
after completion of the proposed Transaction. 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: general business,
economic, competitive, political and social uncertainties; and the
delay or failure to receive board, shareholder or regulatory
approvals. There can be no assurance that such 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, 12Ex and 79North assume no
obligation to update the forward-looking statements of beliefs,
opinions, projections, or other factors, should they change, except
as required by law.
12 Exploration (CSE:TWLV)
Historical Stock Chart
Von Sep 2024 bis Okt 2024
12 Exploration (CSE:TWLV)
Historical Stock Chart
Von Okt 2023 bis Okt 2024