NOT FOR DISSEMINATION IN THE UNITED STATES OR THROUGH U.S. NEWSWIRES
Further to a press release date June 16, 2014, Albion Petroleum Ltd. ("Albion")
(TSX VENTURE:ABP.H), a capital pool company on the NEX board of the TSX Venture
Exchange Inc. (the "TSXV") announces that it has entered into an arrangement
agreement dated July 1, 2014 (the "Arrangement Agreement"), with Sundance
Minerals Ltd. ("Sundance"). Immediately prior to the execution of the
Arrangement Agreement, Sundance: (i) purchased all of the issued and outstanding
securities of Minera Terra Plata, S.A. de C.V. ("Terra Plata"), an indirect
wholly owned subsidiary of First Majestic Silver Corp. ("First Majestic") and
0924682 B.C. Ltd. ("NumberCo") (collectively, the "Sundance Acquisitions"); and
(ii) completed a private placement for aggregate proceeds of $400,000 at a price
of $0.15 per common share of Sundance (the "Sundance Private Placement"). In
addition, Sundance has received subscriptions for a further 831,666 common
shares of Sundance ("Sundance Shares") at a price of $0.15 per share for further
aggregate proceeds of $124,750. The Qualifying Transaction (as defined below) of
Albion remains subject to Court, TSXV and regulatory approval, as well as the
approval of Sundance shareholders.
About Sundance and the Qualifying Property
Sundance is a company incorporated pursuant to the Canada Business Corporations
Act. Subsequent to the Sundance Acquisitions and the Sundance Private Placement,
Sundance has 44,985,398 Sundance Shares issued and outstanding (not including
the additional 831,666 Sundance Shares referred to above).
Sundance is an exploration company currently focusing on projects in Mexico and
the United States. Subsequent to the Sundance Acquisitions, Sundance has a
portfolio of 18 properties in Mexico and one in Nevada. The Qualifying Property
(as defined in the policies of the TSXV) for the Qualifying Transaction will be
the Miranda Gold Property, in Sonora State, Northern Mexico (the "Miranda
Property"). For further information on the Miranda Property, Sundance's other
properties and the properties of Terra Plata and NumberCo acquired pursuant to
the Sundance Acquisitions, please see Albion's news release dated June 16, 2014.
The Qualifying Transaction, the Arrangement and the Arrangement Agreement
Pursuant to the Arrangement Agreement, Albion will acquire Sundance by way of a
plan of arrangement (the "Arrangement") under the Canada Business Corporations
Act. In addition, immediately prior to the Arrangement, subject to Albion
shareholder approval, Albion will complete a consolidation of Albion Shares (the
"Consolidation") on the basis of one (1) post-consolidation Albion Share
("Resulting Issuer Shares") for each four (4) Albion Shares issued and
outstanding immediately prior to the Consolidation. In addition, in conjunction
with the Arrangement, subject to Albion shareholder approval, Albion will
continue under the British Columbia Business Corporations Act (the
"Continuation") and change its name to First Mining Finance Corp. (the "Name
Change"). The Arrangement, the Consolidation, the Continuation and the Name
Change are expected to constitute Albion's qualifying transaction (the
"Qualifying Transaction") as such term is defined in the policies of the TSXV.
The Qualifying Transaction is not a Non-Arm's Length Qualifying Transaction as
such term is defined under the policies of the TSXV.
Pursuant to the Arrangement, Albion will issue Resulting Issuer Shares to
Sundance shareholders in exchange for all of the issued and outstanding Sundance
Shares and common share purchase warrants to holders of Sundance common share
purchase warrants ("Replacement Warrants") and all options to purchase Sundance
Shares will be cancelled. Pursuant to the Arrangement Agreement, it is a
condition to closing that all of the issued and outstanding Albion options to
purchase Resulting Issuer Shares will be exercised or surrendered for
cancellation. The exchange ratio for the exchange of Sundance Shares for
Resulting Issuer Shares will be determined dividing the "Sundance Value" by the
"Albion Value". Pursuant to the Arrangement Agreement, Albion has been valued at
$800,000, and the "Albion Value" will be obtained by dividing $800,000 by the
number of Resulting Issuer Shares held by Albion shareholders immediately prior
to the Arrangement and after giving effect to the Consolidation. In addition,
Sundance has been valued at $10,900,000 plus: (i) the gross proceeds of any
financing completed prior to the Arrangement; plus (ii) the value of any
outstanding debt of Sundance settled in exchange for Sundance Shares prior to
the Arrangement, and the "Sundance Value" will be obtained by dividing this
amount by the number of Sundance Shares issued and outstanding immediately prior
to the Arrangement. Further information in respect of future financings and debt
settlements will be provided once further information becomes available.
Pursuant to the Arrangement Agreement, the obligations of the parties to
complete the Qualifying Transaction is subject to the satisfaction of conditions
precedent set forth in the Arrangement Agreement including, but not limited to:
(i) the receipt of all third party consents, necessary regulatory and TSXV
approvals, Sundance shareholder approval for the Arrangement, Albion shareholder
approval for the Consolidation, Continuation and the Name Change, and obtaining
the interim order and final order for the Arrangement; (ii) the absence of any
material breach of the representations, warranties and covenants made by each
party to the other; (iii) the absence of any material adverse change for either
of the parties; (iv) the options to purchase Albion Shares shall have been
cancelled; and (v) other conditions which are customary for a transaction such
as the Qualifying Transaction.
The Arrangement Agreement includes customary covenants for transaction such as
the Qualifying Transaction, including covenants to operate the businesses of the
parties in the ordinary course of business and maintain the mineral rights in
respect of the properties in good standing and covenants for the parties to
support the Qualifying Transaction. The Arrangement Agreement also includes
covenants to settle Sundance debt in cash or by the issuance of Sundance Shares.
The Arrangement Agreement also includes a covenant that all outstanding amounts
owed to First Majestic (US$500,000) and all other out-of-pocket expenses
incurred by First Majestic in connection with the Arrangement, shall be re-paid
by Albion to First Majestic in cash on the Effective Date.
A copy of the Arrangement Agreement will be filed under Albion's SEDAR Profile
at www.sedar.com.
The Sundance Meeting and the Albion Meeting
It is anticipated that the Sundance securityholder meeting to approve the
Arrangement will be held prior to October 30, 2014 (the "Sundance Meeting") and
that the Albion shareholder meeting to approve the Consolidation, Continuance
and Name Change will be held prior to September 19, 2013 (the "Albion Meeting").
The approval of the Arrangement by Sundance will require the approval of at
least 66 2/3% of the votes cast in person or by proxy of the Sundance
shareholder, warrantholders and optionholders (the "Sundance Securityholders"),
voting as a single class, at the Sundance Meeting. The approval of the
Consolidation, Continuance and the Name Change by Albion will require the
approval of at least 66 2/3% of the votes cast in person or by proxy of the
Albion shareholders at the Albion Meeting.
Board of Directors and Management
The parties have agreed that upon completion of the Qualifying Transaction, the
directors of the resulting issuer (the "Resulting Issuer") will be Keith
Neumeyer (Chairman), Raymond Polman, Ramon Davila, Chris Osterman, Raul Diaz and
David Shaw. For further information on the above directors, please see the June
16, 2014 news release.
Sponsorship
Sponsorship of the Qualifying Transaction is required pursuant to TSXV Policy
2.2 unless an exemption is obtained by Albion. Albion intends to apply for an
exemption to sponsorship. There is no guarantee that an exemption will be
granted by the TSXV. In the event sponsorship of the Qualifying Transaction is
required, information concerning same will be disclosed in a subsequent press
release.
Other Information In relation to the Qualifying Transaction
David Shaw, the President, Chief Executive Officer and a director of Albion, is
also a director of First Majestic. To the knowledge of Albion, no other
directors or officers of Albion are related parties to First Majestic, Sundance,
NumberCo or Terra Plata.
The parties intend that as a further condition to closing of the Qualifying
Transaction, the Resulting Issuer will enter into an agreement with First
Majestic granting it a right of first refusal in respect of any proposed sale by
the Resulting Issuer of its silver properties ("Silver Properties") following
the completion of the Qualifying Transaction (the "ROFR Agreement"). Albion
shall provide additional information with respect to the ROFR Agreement in a
subsequent news release.
Trading Halt
Trading in Albion's common shares on the NEX board of TSXV is halted and will
remain so until the documentation required by the TSXV in relation to the
Qualifying Transaction has been reviewed and accepted by the TSXV.
Subject to satisfaction or waiver of the conditions precedent discussed in this
press release and in the Arrangement Agreement, it is anticipated that the
completion of the Qualifying Transaction will be completed as soon as possible
after all approvals are obtained, and in any event, prior to December 31, 2014.
Other Information
Completion of the Qualifying Transaction is subject to a number of conditions,
including but not limited to, TSXV acceptance and if applicable pursuant to TSXV
requirements, majority of the minority shareholder approval. Where applicable,
the Qualifying Transaction cannot close until the required shareholder approval
is obtained. There can be no assurance that the Qualifying Transaction will be
completed as proposed or at all.
Investors are cautioned that, except as disclosed in the management information
circular or filing statement to be prepared in connection with the Qualifying
Transaction, any information released or received with respect to the Qualifying
Transaction may not be accurate or complete and should not be relied upon.
Trading in the securities of a capital pool company should be considered highly
speculative.
The TSXV has in no way passed upon the merits of the Qualifying Transaction and
has neither approved nor disapproved the contents of this press release.
All information contained in this press release with respect to the parties was
supplied by each of the parties for inclusion herein. Albion and its directors
and officers have relied exclusively on Sundance for any information concerning
same.
Forward-Looking Information: This press release may contain "forward-looking
information" within the meaning of applicable Canadian securities legislation.
All statements, other than statements of historical fact, included herein may be
forward-looking information. Generally, forward-looking information may be
identified by the use of forward-looking terminology such as "plans", " expects"
or "does not expect", "proposed", "is expected", "budgets", "scheduled",
"estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or
"believes", or variations of such words and phrases, or by the use of words or
phrases which state that certain actions, events or results may, could, would,
or might occur or be achieved. In particular, this press release contains
forward-looking information in relation to the Qualifying Transaction of Albion
including the completion of the Qualifying Transaction itself, the properties
which will be acquired pursuant to the Qualifying Transaction, the negotiation
and execution of the ROFR Agreement, potential private placement financings
conducted in conjunction with the Qualifying Transaction and the timing for such
financings, timing for the Sundance Meeting and Albion Meeting and timing for
completion of the Qualifying Transaction. This forward-looking information
reflects Albion's current beliefs and is based on information currently
available to Albion and on assumptions Albion believes are reasonable.
These assumptions include, but are not limited to: the satisfactory fulfilment
of all terms and conditions contained in any of the Arrangement Agreement; the
receipt of all required approvals including regulatory, TSXV, Court and
shareholder approvals; the terms of the ROFR Agreement; market acceptance of the
any financings conducted in respect of the Qualifying Transaction; and
successful completion of any financings conducted in respect of the Qualifying
Transaction. Forward-looking information is subject to known and unknown risks,
uncertainties and other factors that may cause the actual results, level of
activity, performance or achievements of Albion to be materially different from
those expressed or implied by such forward-looking information. Such risks and
other factors may include, but are not limited to: general business, economic,
competitive, political and social uncertainties; general capital market
conditions and market prices for securities, mining securities and junior market
securities; commodity prices; delay or failure to receive board or regulatory
approvals; the actual results of future exploration operations; natural resource
company market conditions and the market conditions of the natural resource
industry in general; competition; changes in legislation, including
environmental legislation, affecting Albion; timing and availability of external
financing on acceptable terms. Although Albion has attempted to identify
important factors that could cause actual results to differ materially from
those contained in forward-looking information, there may be other factors that
cause results not to be as anticipated, estimated or intended. Accordingly,
readers should not place undue reliance on forward-looking information. Readers
are cautioned that the foregoing list of factors is not exhaustive. Readers are
further cautioned not to place undue reliance on forward-looking statements as
there can be no assurance that the plans, intentions or expectations upon which
they are placed will occur. Such information, although considered reasonable by
management at the time of preparation, may prove to be incorrect and actual
results may differ materially from those anticipated. Forward-looking statements
contained in this press release are expressly qualified by this cautionary
statement. The forward-looking statements contained in this press release
represent the expectations of Albion as of the date of this press release and,
accordingly, are subject to change after such date. However, Albion expressly
disclaims any intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise,
except as expressly required by applicable securities law.
THIS PRESS RELEASE, REQUIRED BY APPLICABLE CANADIAN LAWS, IS NOT FOR
DISTRIBUTION TO U.S. NEWS SERVICES OR FOR DISSEMINATION IN THE UNITED STATES,
AND DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO SELL
ANY OF THE SECURITIES DESCRIBED HEREIN IN THE UNITED STATES. THESE SECURITIES
HAVE NOT BEEN, AND WILL NOT BE, REGISTERED UNDER THE UNITED STATES SECURITIES
ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED OR
SOLD IN THE UNITED STATES OR TO U.S. PERSONS UNLESS REGISTERED OR EXEMPT
THEREFROM.
Neither the TSXV nor its Regulation Services Provider (as that term is defined
in the policies of the TSXV) accepts responsibility for the adequacy or accuracy
of this release.
FOR FURTHER INFORMATION PLEASE CONTACT:
Albion Petroleum Ltd.
Jacqueline Danforth
(403) 693-8004
jdanforth@filersupport.com
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