Canadian Zinc Corporation (TSX:CZN)(OTCQB:CZICF) ("Canadian Zinc") and Messina
Minerals Inc. (TSX VENTURE:MMI) ("Messina") are pleased to announce that they
have entered into a binding agreement whereby Canadian Zinc will acquire all of
the outstanding shares of Messina in exchange for common shares of Canadian
Zinc, and will also purchase the private placement of Messina shares announced
August 30, 2013.
Under the terms of the Agreement, Canadian Zinc will acquire all of the
outstanding common shares of Messina in exchange for common shares of Canadian
Zinc by way of a statutory plan of arrangement on the basis of one share of
Canadian Zinc for 5.9 shares of Messina (the "Exchange Ratio"). Completion of
the arrangement is subject to approval by the Messina shareholders, regulatory
and court approvals, and other customary closing conditions.
In addition, Canadian Zinc has also agreed to immediately purchase, in a
non-brokered private placement financing, 3,000,000 Messina common shares at a
price of $0.05 per share, for a total consideration of $150,000 (the "Private
Placement"). Closing of the Private Placement will occur as soon as possible
after acceptance for filing of the Private Placement by the TSX Venture Exchange
and receipt of all other required regulatory approvals.
John Kearney, Chairman, President and Chief Executive Officer of Canadian Zinc,
commented, "This acquisition of Messina is a continuation of Canadian Zinc's
strategy of building a growth focused base metal producer in North America and
represents an excellent value opportunity for shareholders of both companies.
The combination of Messina's assets in central Newfoundland, and in particular
its Boomerang and Domino deposits, with Canadian Zinc's existing extensive
properties in the same area, and in particular, our Lemarchant Deposit, will
provides both critical mass and synergies in the highly prospective Central
Newfoundland region."
Peter Tallman, President and Chief Executive Officer of Messina, commented,
"Messina's vision to create a mining enterprise in Newfoundland is shared by
Canadian Zinc. The addition of Messina's key resources at Boomerang and Long
Lake into Canadian Zinc's Newfoundland portfolio creates a combination with the
threshold needed to attain that vision. Messina's shareholders now have the
opportunity to participate in prospective production at the Prairie Creek Mine,
the zinc potential of Newfoundland, and the creation of a mid-tier zinc
producer."
Messina
Messina is a mineral exploration company focused on exploring and advancing its
base metal and gold properties in central Newfoundland. Messina's flagship
project is its 100% interest in the Tulks South Property, which includes the
Boomerang, Domino and Long Lake base and precious metal-rich volcanogenic
massive sulphide ("VMS") deposits.
Messina has completed National Instrument ("NI") 43-101 mineral resource
estimates at the Boomerang and Domino deposits summarized as follows:
-- Boomerang deposit: Indicated mineral resource of 1.36 million tonnes
grading 7.1% Zn, 3.0% Pb, 0.5% Cu, 110 g/t Ag and 1.7 g/t Au; and
Inferred mineral resource of 0.28 million tonnes grading 6.7% Zn, 2.9%
Pb, 0.4% Cu, 96.5 g/t Ag and 1.3 g/t Au;
-- Domino deposit (adjacent to Boomerang): Inferred resource estimate: 0.41
million tonnes grading 6.3% Zn, 2.8% Pb, 0.4% Cu, 94 g/t Ag and 0.6 g/t
Au,
See Messina Minerals Inc. Technical Report, dated August 1, 2007, Tulks South
Property, Central Newfoundland, Canada, filed on SEDAR.
In addition Messina has also completed a NI 43-101 resource estimate for the
Long Lake Main Zone deposit summarized as follows:
-- Indicated mineral resource: 0.41 million tonnes grading 7.8% Zn, 1.6%
Pb, 1.0% Cu, 49 g/t Ag and 0.57 g/t Au;
-- Inferred mineral resource: 0.08 million tonnes grading 5.8% Zn, 1.2% Pb,
0.7% Cu, 34 g/t Ag and 0.48 g/t Au.
See Independent Technical Report, dated March 13, 2012, Main Zone of Messina
Minerals Inc. Long Lake Volcanic Massive Sulphide Project, Newfoundland and
Labrador, Canada, filed on SEDAR.
The Boomerang and Long Lake deposits have some of the highest grade
characteristics in the region. Exploration upside and resource expansion
potential is believed to exist from numerous identified targets at surface and
along strike to the northeast of the Boomerang deposit and at the Long Lake
deposit.
Canadian Zinc
Canadian Zinc owns the Prairie Creek Mine, an advanced-staged zinc-lead-silver
property located in the Northwest Territories of Canada with a 1,000 tonne per
day mill and associated infrastructure.
The Prairie Creek deposit hosts Measured and Indicated Resources of 5.43 million
tonnes grading 10.8% zinc, 10.2% lead, 160 grams silver per tonne and 0.31%
copper, which includes a reserve of 5.22 million tonnes averaging 9.4% zinc,
9.5% lead, 151 grams silver per tonne. In addition, there are Inferred Resources
of 6.24 million tonnes grading 14.5% zinc, 11.5% lead, 229 grams per tonne
silver and 0.57% copper and additional exploration potential (Technical Report
dated June 15, 2012, filed on SEDAR). Canadian Zinc is moving through the final
regulatory permitting stage towards the development of the Prairie Creek Mine.
The Mackenzie Valley Land and Water Board (the "MVLWB") completed its regulatory
process July 5, 2013 by finalizing a Type "A" Water Licence and forwarding it to
the Minister of Aboriginal Affairs and Northern Development Canada with the
recommendation that the Minister approve and sign the Licence. The MVLWB has
previously issued three Land Use Permits and a Type "B" Water Licence to the
Company for future operations. Upon Ministerial approval of the Type "A" Water
Licence, the Company will have in hand all permits necessary to support future
mining and milling operations at Prairie Creek.
Canadian Zinc also owns a 100% interest in the South Tally Pond property in
central Newfoundland, located immediately southwest of Teck Resources Limited's
Duck Pond Cu-Zn mine and mill complex, which includes the Lemarchant deposit,
which has NI 43-101 Indicated mineral resources of 1.24 million tonnes grading
5.38% Zn, 1.19% Pb, 0.58% Cu, 59 g/t Ag and 1.0 g/t Au; and Inferred mineral
resources of 1.34 million tonnes grading 3.7% Zn, 0.86% Pb, 0.41% Cu, 50 g/t Ag
and 1.0 g/t Au, (Technical Report entitled "NI 43-101 Technical Report and
Mineral Resource Estimate on the Lemarchant Deposit, South Tally Pond VMS
Project, Central Newfoundland, Canada" and dated effective March 2, 2012).
Transaction Highlights
-- Further consolidation of a premier base and precious metals exploration
and development company with high grade projects located in established
mining jurisdictions in Canada.
-- Strengthens Canadian Zinc's presence in Atlantic Canada where the
company also owns a 100% interest in the South Tally Pond VMS Project in
Newfoundland following its acquisition of Paragon Minerals Corporation
(see press release dated September 24, 2012).
-- Allows Messina shareholders to participate in the upside from the
advancement of the Prairie Creek Project, one of the highest grade zinc
projects in the world, through permitting, construction and production
as well as the continued exploration and development of the South Tally
Pond and Tulks South Projects.
-- The combined company will be better positioned to expand and advance the
development of both the South Tally Pond and Tulks South Projects
through feasibility studies.
-- Increased diversification across multiple projects for Canadian Zinc and
Messina shareholders and enhanced capital markets profile of the
combined enlarged company. Upon completion of the Arrangement, Canadian
Zinc and Messina shareholders will own approximately 98.8% and 1.2% of
the combined company, respectively.
-- The Exchange Ratio implies a 188% premium to the closing share price of
Messina on the TSX Venture Exchange ("TSXV") on September 11, 2013 and a
181% premium to Messina's 30-day volume weighted average price ("VWAP")
for the period ended September 11, 2013.
-- Based on the closing share price of Canadian Zinc on the Toronto Stock
Exchange ("TSX") on September 11, 2013, the Exchange Ratio implies an
offer price of C$0.115 per Messina common share and values Messina's
equity at C$1.5 million on a fully diluted in-the-money basis.
Terms of the Business Combination between Canadian Zinc and Messina
-- The acquisition of the common shares of Messina by Canadian Zinc will be
accomplished by a statutory plan of arrangement, (the "Arrangement")
whereby Messina will merge with a wholly owned subsidiary of Canadian
Zinc.
-- Canadian Zinc will acquire all of the outstanding common shares of
Messina at an exchange ratio of 0.16949 of a share of Canadian Zinc for
each share of Messina (the "Exchange Ratio") and Canadian Zinc will
issue 2.1 million shares of Canadian Zinc in exchange for 12.6 million
common shares of Messina currently outstanding.
-- Upon completion of the Arrangement, all currently outstanding share
purchase warrants and options of Messina will be exchanged for share
purchase warrants and options of Canadian Zinc, pro rata, and at the
Exchange Ratio and adjusted exercise prices.
-- Completion of the Arrangement will be subject to, among other things,
the favourable vote of 66 2/3% of the votes cast by Messina shareholders
and, if required, by a simple majority of the votes cast by
"disinterested" Messina shareholders, pursuant to Multilateral
Instrument 61-101 "Protection of Minority Shareholders in Special
Transactions", at a special meeting of Messina shareholders to be called
to approve the transaction which is expected to take place in October
2013.
-- Completion of the Arrangement will be subject to receipt of necessary
consents, approvals and other authorizations by applicable regulatory
authorities, any necessary third party approvals, Court approval and
other customary closing conditions.
In the event that the Arrangement is not approved by Messina shareholders, or if
for any other reason (other than through the failure of Canadian Zinc to satisfy
any conditions or perform any covenants provided for in the Agreement), the
Arrangement is not completed, Canadian Zinc will be entitled to the immediate
payment by Messina of a "break fee" of C$150,000.
The Board of Directors of Messina has unanimously approved the Agreement and
will recommend that Messina shareholders vote in favour of the transaction.
Messina and Canadian Zinc shareholders as well as all other interested parties
are advised to read the materials relating to the Agreement and the proposed
Arrangement that will be filed by Messina with securities regulatory authorities
in Canada when they become available. Anyone may obtain copies of these
documents when available free of charge at the Canadian Securities
Administrators' website at www.sedar.com.
Canaccord Genuity Corp. is acting as financial advisor to Canadian Zinc.
Terms of the Private Placement Financing in Messina
Canadian Zinc has agreed to purchase in a non-brokered private placement
financing, 3,000,000 common shares (the "Shares") of Messina at a price of
C$0.05 per share for a total consideration of C$150,000. This Private Placement
is in substitution for the private placement financing announced by Messina on
August 30, 2013. The closing of the Private Placement will be subject to
acceptance by the TSX Venture Exchange and all other required regulatory
approvals. The completion of the Private Placement is not conditional upon the
completion of the Arrangement.
Canadian Zinc does not currently own, control or direct, directly or indirectly,
any securities of Messina and on the closing of the Private Placement will own
3,000,000 common shares of Messina. On issuance, the Shares will represent
approximately 19.3% of Messina's issued and outstanding common shares,
calculated on a non-diluted basis, assuming that no outstanding convertible
securities of Messina are exercised.
Canadian Zinc will acquire the Shares for investment purposes, and will acquire
the balance of all issued and outstanding Messina shares on completion of the
Arrangement. An early warning report will be filed with applicable securities
regulators which will be available on SEDAR (www.sedar.com) and a copy of which
may be obtained by contacting Canadian Zinc as follows:
Suite 1710, 650 West Georgia Street
PO Box 11644
Vancouver, British Columbia
V6B 4N9
Attention: Secretary
Telephone: (604) 688-2001
Fax: (604) 688-2043
Email: invest@canadianzinc.com
About Canadian Zinc Corporation
Canadian Zinc is a TSX-listed exploration and development company trading under
the symbol "CZN". The Company's key projects are the 100%-owned Prairie Creek
property, an advanced staged zinc-lead-silver property, located in the Northwest
Territories in Canada and the 100% owned South Tally Pond project, which
includes the Lemarchant deposit, along with other property interests in central
Newfoundland.
About Messina Minerals Inc.
Messina Minerals Inc. is a Canadian mineral exploration company listed on the
TSX Venture Exchange under the symbol "MMI". The Company has completed NI 43-101
complaint technical reports for zinc-lead-copper-silver-gold mineral resources
at "Boomerang", "Domino", and "Main Zone" on the Tulks South Project located in
central Newfoundland, Canada.
Risk and Uncertainties
Canadian Zinc's business and results of operations are subject to numerous risks
and uncertainties, many of which are beyond its ability to control or predict.
Because of these risks and uncertainties, actual results may differ materially
from those expressed or implied by forward looking statements, and investors are
cautioned not to place undue reliance on such statements, which speak only as of
the date hereof.
Investors are advised to review the discussion of risk factors associated with
Canadian Zinc's business set out in its Annual Information Form for the year
ended December 31, 2012, which has been filed with the Canadian Securities
Regulators on SEDAR (www.sedar.com). The risks and uncertainties, as summarized
in its MD&A and in other Canadian and U.S. filings, are not the only risks
facing the company. Additional risks and uncertainties not currently known to
the company, or that are currently deemed to be immaterial, also may materially
adversely affect Canadian Zinc's business, financial condition and/or operating
results.
Alan Taylor, P.Geo., Chief Operating Officer, Vice President Exploration and a
Director of Canadian Zinc Corporation, is a Non-Independent Qualified Person for
the purposes of National Instrument 43-101 and has approved this press release.
Peter Tallman, P.Geo., President and CEO of Messina Minerals Inc. and a
Qualified Person as defined by NI 43-101, has supervised the preparation of the
scientific and technical information on Messina disclosed in this news release,
is a Non-Independent Qualified Person for the purposes of NI 43-101 and has
approved this press release.
Cautionary Statement - Forward Looking Information
This press release contains certain forward-looking information, including,
among other things, the expected completion of acquisitions and the advancement
of mineral properties. This forward looking information includes, or may be
based upon, estimates, forecasts, and statements as to management's expectations
with respect to, among other things, the completion of transactions, the issue
of permits, the size and quality of mineral resources, future trends for the
company, progress in development of mineral properties, future production and
sales volumes, capital costs, mine production costs, demand and market outlook
for metals, future metal prices and treatment and refining charges, the outcome
of legal proceedings, the timing of exploration, development and mining
activities, acquisition of shares in other companies and the financial results
of the company. There can be no assurances that such statements will prove to be
accurate and actual results and future events could differ materially from those
anticipated in such statements. Mineral resources that are not mineral reserves
do not have demonstrated economic viability. Inferred mineral resources are
considered too speculative geologically to have economic considerations applied
to them that would enable them to be categorized as mineral reserves. There is
no certainty that mineral resources will be converted into mineral reserves.
Cautionary Note to United States Investors
The United States Securities and Exchange Commission ("SEC") permits U.S. mining
companies, in their filings with the SEC, to disclose only those mineral
deposits that a company can economically and legally extract or produce. Certain
terms are used in this press release, such as "measured," "indicated," and
"inferred" "resources," which the SEC guidelines prohibit U.S. registered
companies from including in their filings with the SEC.
FOR FURTHER INFORMATION PLEASE CONTACT:
Canadian Zinc Corporation
John F. Kearney
Chairman
(416) 362-6686
(416) 368-5344 (FAX)
Canadian Zinc Corporation
Alan B. Taylor
VP Exploration & Chief Operating Officer
(604) 688-2001 or Tollfree: 1-866-688-2001
(604) 688-2043 (FAX)
Canadian Zinc Corporation
Steve Dawson
VP Corporate Development
(416) 203-1418
(416) 368-5344 (FAX)
invest@canadianzinc.com
www.canadianzinc.com
Messina Minerals Inc.
Peter Tallman
President and Chief Executive Officer
(604) 688-1508
(604) 629-7971 (FAX)
info@messinaminerals.com
www.messinaminerals.com
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