ENP Newswire -
Release date- 25022014 -
The main asset of Pan American is its interest in the
The Proposed Transaction
The structure of the proposed Transaction remains subject to review and consultation by the parties; however, the Letter of Intent anticipates that Canarc would acquire all of the outstanding common shares of Pan American (the 'Shares') and that the shareholders of Pan American would receive 0.82 (the 'Exchange Ratio') of a common share of Canarc and 0.25 of a warrant of Canarc (each whole warrant being a 'Warrant') for each Share held.
The proposed Exchange Ratio implies a 25% premium to the volume weighted average price of the Shares over the last 20 trading days and accounts for the USD to CAD currency conversion. Each Warrant would be exercisable to purchase one common share of Canarc at an exercise price equal to
Pan American has granted Canarc a 130 day period of exclusivity (the 'Exclusivity Period') to complete its due diligence and negotiate a definitive agreement with respect to the Transaction. The Letter of Intent terminates on
Pursuant to the terms of the Letter of Intent, Canarc has agreed to pay
Canarc plans to use commercially reasonable efforts to raise up to
Following the completion of the Transaction, Pan American will have the right to nominate two persons to the board of directors of the combined company. The remainder of the board will be nominees of Canarc.
The Transaction remains subject to the parties negotiating and entering into a definitive agreement by
The Board of Directors of Canarc and the Strategy Committee of Pan American Board of Directors have approved the proposed transaction.
Mr. Catalin Chiloflischi, CEO of Canarc, stated: 'I would like to thank the Pan American management team and board of directors for their confidence in our ability to grow the
La Cieneguita Highlights
Four concessions totalling 822 hectares, located in the
Measured and Indicated Mineral Resources of 509,800 ounces of gold, 37.6 million ounces of silver, 120.1 million pounds of lead and 191.7 pounds of zinc;
Inferred Mineral Resources of 352,200 ounces of gold, 21 million ounces of silver, 67.2 million pounds of lead and 111.2 pounds of zinc;
Open pit gold-silver mine currently operating at 700 tpd producing gold-silver concentrates since 2010 and
The proposed business combination will maximise
Canarc has not yet independently verified Pan American's NI 43-101 reserves and resources nor its preliminary economic assessment, available on www.sedar.com nor the production numbers and therefore is not relying on them at this stage.
Canarc plans to complete a more detailed assessment of the
Transaction Rationale for Canarc
Potential to transition Canarc into a producer over the near term;
Near term access to cash flow to facilitate growth;
Potential to increase Canarc's total gold equivalent resources and
Potential to grow into a mid-tier gold producer over the medium term.
Transaction Rationale for Pan American
Participation by Pan American shareholders in the upside potential of both Pan American's
Pan American shareholders would own shares in a larger company with two gold projects located in mining favorable jurisdictions (
Access to a proven team of mine finders, builders and operators is a key to success at
Improved financial standing, significantly improved liquidity and a combined broader access to capital.
Pan American retained
Canarc also announces that it is arranging, on a best efforts basis, a private placement to raise up to CA$2.2 million. The private placement will be of up to 22 million units priced at CA$0.10 per unit and may be partially brokered, at the Company's discretion. Each unit will be comprised of one common share and one half of a common share purchase warrant, each full warrant giving the holder the right to purchase one additional common share at a price of CA$0.15 within a three year period. The Company may pay up to 7% commission in cash or units to appropriate brokers and finders for arranging this financing.
The aforementioned transaction and private placement are each subject to
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Cautionary Note Regarding Forward-Looking Statements
This news release contains 'forward-looking statements' within the meaning of
Forward-looking statements in this news release include, but are not limited to, statements with respect to the potential Transaction, the completion of a private placement, the benefits of the potential Transaction, the merits of the mineral properties of Canarc and Pan American, the future performance of Canarc and Pan American, mineral resource estimates and the Company's plans and exploration programs for its mineral properties, including the timing of such plans and programs.
In certain cases, forward-looking statements can be identified by the use of words such as 'plans', 'has proven', 'expects' or 'does not expect', 'is expected', 'potential', 'appears', 'budget', 'scheduled', 'estimates', 'forecasts', 'at least', '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', 'should', 'might' or 'will be taken', 'occur' or 'be achieved'.
Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.
Such risks and other factors include, among others, risks related to the Company's ability to negotiate a definitive agreement with Pan American and complete the Transaction, the Company's ability to complete a private placement, uncertainties inherent in the estimation of mineral resources; commodity prices; changes in general economic conditions; market sentiment; currency exchange rates; the Company's ability to continue as a going concern; the Company's ability to raise funds through equity financings; risks inherent in mineral exploration; risks related to operations in foreign countries; future prices of metals; failure of equipment or processes to operate as anticipated; accidents, labor disputes and other risks of the mining industry; delays in obtaining governmental approvals; government regulation of mining operations; environmental risks; title disputes or claims; limitations on insurance coverage and the timing and possible outcome of litigation.
Although the Company has attempted to identify important factors that could affect the Company and may cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended.
There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, do not place undue reliance on forward-looking statements. All statements are made as of the date of this news release and the Company is under no obligation to update or alter any forward-looking statements except as required under applicable securities laws.
Forward-looking statements are based on assumptions that the Company believes to be reasonable, including expectations regarding the ability of the Company to negotiate a definitive agreement with Pan American and complete the Transaction, the ability of the Company to complete a private placement, the merits of the mineral properties of the Company and Pan American, the accuracy of the mineral resource estimates of the Company and Pan American, mineral exploration and development costs; expected trends in mineral prices and currency exchange rates; that the Company's activities will be in accordance with the Company's public statements and stated goals; that there will be no material adverse change affecting the Company or its properties; that all required approvals will be obtained and that there will be no significant disruptions affecting the Company or its properties.
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