Kerr Mines and Bear Lake Gold Announce Agreement to Combine the Companies
TORONTO, ONTARIO and LONGUEUIL, QUEBEC -- (Marketwired) -- 01/24/14
-- Kerr Mines Inc. ("Kerr Mines") (TSX:KER) and Bear Lake Gold Ltd.
("Bear Lake") (TSX VENTURE:BLG) are pleased to announce that they
have entered into a letter agreement to combine the two companies
Under the terms of the letter agreement, Kerr Mines proposes to issue
1.4 units (each, a "Unit") of Kerr Mines for every one (1) common
share of Bear Lake (the "Exchange Ratio"). Each Unit will consist of
one Kerr Mines share and one-half of one Kerr Mines warrant. Each
whole Kerr Mines warrant will entitle the holder thereof to purchase
one Kerr Mines share at an exercise price of $0.16 per Kerr Mines
Share for a period of two (2) years from the closing of the
Transaction. Currently Kerr Mines has approximately 427 million
shares issued and outstanding while Bear Lake has approximately 136
million shares issued and outstanding. As a result, approximately
190,934,163 Kerr Mines Units will be issued to former Bear Lake
shareholders to acquire the 100% interest in Bear Lake. It is
anticipated that the Transaction will be completed prior to the
proposed acquisition of American Bonanza Mining Corp. by Kerr Mines,
announced on January 23, 2014 (the "American Bonanza Transaction").
In addition, each holder of the stock options of Bear Lake
outstanding as of the date of completion of the Transaction will
receive such number of replacement stock options of Kerr Mines
adjusted in accordance with the Exchange Ratio pursuant to the terms
of the Transaction.
"We are pleased with the acquisition of Bear Lake which adds an
additional 13 km strike-length of the prolific Cadillac Larder Lake
break to the Kerr Mines land package, an inferred resource estimate
of nearly 1 MM oz grading over 5 g/t Au and a strategic partnership
through an option and joint venture with Gold Fields on the Bear Lake
property," said Greg Gibson, President and CEO of Kerr Mines.
As approved by the shareholders of Kerr Mines at the annual and
special meeting of the shareholders of Kerr Mines held on December
19, 2013, the Kerr Mines Shares will, following completion of the
Transaction and the American Bonanza Transaction, be consolidated on
a 1 for 15 basis.
Pursuant to the terms of the letter agreement, Bear Lake will be
entitled to nominate one person to the board of directors of Kerr.
Kerr Mines has also agreed to advance $300,000 to Bear Lake to
satisfy certain amounts and payables outstanding of Bear Lake until
completion of the Transaction.
Kerr Mines and Bear Lake intends to complete the Transaction pursuant
to a plan of arrangement under the Business Corporations Act
(Ontario). Completion of the Transaction will be subject to certain
customary conditions including, without limitation: (a) satisfactory
due diligence; (b) receipt of all necessary consents, waivers,
permits, exemptions, orders and approvals, including court approval
of the plan of arrangement and the approval of each of the Toronto
Stock Exchange (the "TSX") and the TSX Venture Exchange (the "TSXV"),
as applicable; and (c) receipt of shareholder approval of the
Transaction by the Bear Lake and Kerr Mines shareholders.
Subject to obtaining all required regulatory and court approvals and
the satisfaction or waiver of other closing conditions, it is
anticipated that the Transaction will be completed by the end of
April 2014. Primary Capital Inc. is acting as financial advisor to
About Kerr Mines Inc.
Kerr Mines, a Canadian-based exploration and development company, is
the owner of the McGarry gold mine in Ontario's Kirkland Lake area.
Including the McGarry Mine property, Kerr Mines has established a
sizeable footprint of contiguous gold properties in Virginiatown on
the prolific Larder Lake-Cadillac Break that extends 200 km east-west
straddling the Ontario and Quebec border and that have produced 95
million ounces of gold in past operations. The McGarry Mine consists
of 33 contiguous patented mining claims, including three licenses of
occupation, totaling 484 hectares. The McGarry Mine is fully
permitted and all equipment and systems at the site have been brought
up to standards.
In addition, in December 2010, Kerr Mines signed a definitive
five-year option agreement for the purchase of up to 100 percent of
the mineral rights on the Kerr-Addison property, which is adjacent to
the McGarry Mine. The Kerr-Addison Gold Mine was one of Canada's
largest gold producers, producing more than 11 million ounces of gold
during a 58-year operating life from 1938 to 1996. In December 2012,
Kerr Mines completed the purchase of the mineral rights on 18 mining
claims totaling 627 acres (the Barber-Larder Property) located on the
western boundary of the McGarry Mine.
About Bear Lake Gold Ltd.
The Company's Larder Lake gold project located on the Cadillac-Larder
Lake Break in north-eastern Ontario is being explored under an option
and joint venture agreement with Gold Fields Abitibi Exploration
Corporation (a subsidiary of Gold Fields Limited) entitling Gold
Fields to acquire up to 60% of the Larder Lake gold project by
spending up to C$40 million over 5 years. Gold Fields has spent over
$5 million in exploration on the Larder Lake Project, therefore
satisfying the $5 million minimum spending requirement under the
Neither the TSXV, the TSX 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 and has
in no way passed upon the merits of the Transaction and has neither
approved nor disapproved of the contents of this press release.
Not for distribution to U.S. Newswire Services or for dissemination
in the United States. Any failure to comply with this restriction may
constitute a violation of U.S. Securities laws.
Completion of the Transaction is subject to a number of conditions
including but not limited to TSX and TSXV acceptance, as applicable,
and if applicable, receipt of approval by Bear Lake and Kerr Mines
shareholders to the Transaction. Where applicable, the Transaction
cannot close until the required shareholder approval is obtained.
There can be no assurance that the 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 Transaction, any information released or received with
respect to the Transaction may not be accurate or complete and should
not be relied upon.
Cautionary Statements Regarding Forward Looking Information
This press release contains "forward-looking information" within the
meaning of Canadian securities legislation. All information contained
herein that is not clearly historical in nature may constitute
forward-looking information. Generally, such forward-looking
information can be identified by the use of forward-looking
terminology such as "plans", "expects" or "does not expect", "is
expected", "budget", "scheduled", "estimates", "forecasts",
"intends", "anticipates" or "does not anticipate", or "believes", or
variations of such words and phrases or state that certain actions,
events or results "may", "could", "would", "might" or "will be
taken", "occur" or "be achieved". Forward-looking information is
subject to known and unknown risks, uncertainties and other factors
that may cause the actual results, leve
l of activity, performance or
achievements of Kerr Mines or Bear Lake to be materially different
from those expressed or implied by such forward-looking information,
including but not limited to: (i) the possibility that the
Transaction would not be completed; (ii) volatile stock price; (iii)
the general global markets and economic conditions; (iv) the
possibility of write-downs and impairments; (v) the risk associated
with exploration, development and operations of mineral deposits;
(vi) the risk associated with establishing title to mineral
properties and assets; (vii) the risks associated with entering into
joint ventures; (viii) fluctuations in commodity prices; (ix) the
risks associated with uninsurable risks arising during the course of
exploration, development and production; (x) competition faced by the
resulting issuer in securing experienced personnel and financing;
(xi) access to adequate infrastructure to support mining, processing,
development and exploration activities; (xii) the risks associated
with changes in the mining regulatory regime governing the resulting
issuer; (xiii) the risks associated with the various environmental
regulations the resulting issuer is subject to; (xiv) risks related
to regulatory and permitting delays; (xv) risks related to potential
conflicts of interest; (xvi) the reliance on key personnel; (xvii)
liquidity risks; (xviii) the risk of potential dilution through the
issue of resulting issuer common shares; (xix) the resulting issuer
does not anticipate declaring dividends in the near term; (xx) the
risk of litigation; and (xxi) risk management.
Forward-looking information is based on assumptions management
believes to be reasonable at the time such statements are made,
including but not limited to, completion of the Transaction,
continued exploration activities, no material adverse change in metal
prices, exploration and development plans proceeding in accordance
with plans and such plans achieving their stated expected outcomes,
receipt of required regulatory approvals, and such other assumptions
and factors as set out herein. Although Kerr Mines and Bear Lake have
attempted to identify important factors that could cause actual
results to differ materially from those contained in the
forward-looking information, there may be other factors that cause
results not to be as anticipated, estimated or intended. There can be
no assurance that such forward-looking information will prove to be
accurate, as actual results and future events could differ materially
from those anticipated in such forward-looking information. Such
forward-looking information has been provided for the purpose of
assisting investors in understanding Kerr Mines and Bear Lake's
business, operations and exploration plans and may not be appropriate
for other purposes. Accordingly, readers should not place undue
reliance on forward-looking information. Forward-looking information
is made as of the date of this press release, and Kerr Mines and Bear
Lake do not undertake to update such forward-looking information
except in accordance with applicable securities laws.
Bear Lake Gold Ltd.
Chairman of the Board and Interim CEO
Kerr Mines Inc.
President and CEO
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