The purpose of the Share Exchange is to facilitate a significant turnaround for Santa Fe and a material new opportunity for Canarc driven by the appointment of Canarc nominees to the Santa Fe management team and Board of Directors, the re-capitalization of Santa Fe, the re-structuring of Santa Fe secured debt and re-development of its Summit gold-silver mine in
In connection with the strategic Share Exchange:
-- Santa Fe's senior secured creditors,
Waterton Global Value, L.P.("Waterton"), Sandstorm Gold Ltd. and Sandstorm Gold (Barbados) Ltd.("Sandstorm") have entered into respective agreements that demonstrate that they are supportive of the share exchange transaction and that they are amenable to restructuring collectively approximately $20 millionof Santa Fe indebtedness. -- Santa Fe has entered into a "best-efforts" Placement Agreement with an investment bank with which Canarc and Endeavour Silver have enjoyed a long standing relationship, pursuant to which will place an estimated $22 millionof 8% Gold Bonds Due in 2018 that are redeemable in cash or gold ETF. -- Effective today, Mr. Bradford Cooke, Chairman and Founder of Canarc and Founder and CEO of Endeavour Silver Corp. (NYSE:EXK and TSX:EDR) has been appointed as Chairman of Santa Fe and Santa Fe'sboard will consist of three current Santa Fedirectors: Jakes Jordan, Michael Heeleyand Erich Hofer, and two Canarc nominees: Bradford Cookeand Catalin Chiloflischi. To facilitate the appointment of Mr. Bradford Cookeand Catalin Chiloflischi to the Santa FeBoard, Pierce Carsonand Glenn Henricksen, have resigned as Directors of Santa Feeffective today. -- Also today, Canarc CEO, Catalin Chiloflischihas been appointed President and Chief Executive Officer and Director of Santa Feand Canarc Chief Operating Officer, Garry Bileshas been appointed Chief Operating Officer of Santa Fe.
-- "We strengthen our management team and Board of Directors with world- class talent: Canarc's Chairman and Founder, Mr.
Bradford Cooke, is also the founder and CEO of Endeavour Silver, a successful silver mining company with three operating mines in Mexico. Mr. Cookehas grown Endeavour Silver from start-up into a significant mid-tier silver and gold producer in 10 years and listed Endeavour on the TSX and NYSEwith a market cap of over $600 milliontoday. We believe that under his leadership, Canarc's seasoned management team of mine finders, builders and operators have the experience and capabilities to turn our Summit mine into a near-term profitable producing asset and execute a well- defined and focused growth strategy in Steeplerock mining district; -- We benefit from the restructuring of our Senior Debt. The Canarc team successfully sought the cooperation of Waterton and Sandstorm and their proven operating record and ability to attract capital was a fundamental driver in these discussions; -- We Benefit from the non-dilutive gold bond financing. Canarc introduced us to an investment bank to which Canarc and Endeavour Silver have enjoyed a long standing relationship and successfully negotiated the gold bond financing. Their operating experience and expertise were necessary elements for the investment bank agreeing to act as the lead placement agent for the gold bond financing - a major financing structure with almost no equity dilution to our stockholders; -- We Benefit from Canarc's High-Grade New Polaris Gold mine property. Canarc has spent over $28 millionon the discovery and delineation of a high grade gold deposit on its New Polaris Gold Mine Property in British Columbia, Canada. An NI 43-101 compliant resource for Canarc's New Polaris Projectconsists of approximately 1.4 million tons grading 0.36 oz per ton (opt) Au of measured and indicated resources, and about 2.0 million tons of inferred resources grading also about 0.36 opt Au. Through our 17 percent interest in Canarc, we anticipate future benefits as this project advances toward feasibility and production. -- We Maximize the Future Availability of our Net Operating Loss Carry- forwards. At March 30, 2014, Santa Fehad net operating loss carry- forwards of approximately $78 million. A primary driver underlying the share exchange structure was the desire to preserve this substantial off-balance sheet asset. Should the Summit mine reach its anticipated potential, these NOL carry-forwards should add significant future stockholder value."
Mr. Catalin Chiloflischi, CEO of Canarc and incoming CEO of
-- "We see an opportunity to replicate the success of the Endeavour business model. Endeavour grew into a strong mid-tier silver-gold mining company through strategic acquisitions of distressed mines in historic districts that held the potential for operational turn-arounds to return the mines to profitability, and new discoveries that could be fast- tracked to production to drive annual organic growth and unfold the full mineral potential of each district. Canarc sees a similar opportunity to create value out of
Santa Fe'sSummit mine and other properties by following Endeavour's successful business model; -- We Gain exposure to and management of a near-term producing gold-silver mine with significant turnaround potential. Santa Feplans to redevelop its high grade Summit gold-silver mine and Lordsburgmill into a near- term profitable producing asset which if successful would positively impact Santa Fe'sshare value and therefore Canarc's share value; -- We See an opportunity to acquire other old mines in the steeplerock district with good potential for new discoveries to drive organic growth. One of the keys to the Endeavour business model is acquiring additional properties and making new discoveries in order to drive organic growth. Canarc's management team is also intimately familiar with the low sulfidation epithermal, high grade vein mines that Endeavour operates. The Summit mine and Steeplerock district are prime examples of such mines, and Canarc sees a similar opportunity to acquire and explore other properties within the Steeplerock district; -- We Gain exposure to and management of Santa Fe'sother assets without exposure to their debts. Santa Feholds an option to purchase the Mogollongold-silver district and a lease on the Ortizgold mine properties in New Mexico. Canarc intends to more fully evaluate these assets for potential value creation, but does not have any liability for Santa Fe'sdebts. -- We can reduce our G&A costs by sharing management and staff with Santa Fe. By sharing certain management members and office staff between Canarc and Santa Fe, we should be able to reduce G&A costs for both companies; -- Canarc will continue to evaluate other strategic opportunities and advance its assets in an effort to create shareholder value. This is just the next step forward for Canarc in our drive to build a successful company. We view the junior gold mining sector as ripe for consolidation"
The foregoing description of the Share Exchange does not purport to be complete, and is qualified in its entirety by reference to the Agreement, which is included as Exhibit 2.1 to
Completion of the Share Exchange is subject to certain standard conditions, including the approval of
A joint conference call to discuss this transaction with shareholders and investors has been scheduled for
Conference Call Numbers
About Santa Fe Gold
Santa Fe Gold is a U.S.-based mining and exploration enterprise focused on acquiring and developing gold, silver, copper and industrial mineral properties.
To learn more about Santa Fe Gold, visit www.santafegoldcorp.com.
Canarc is a growth-oriented, gold exploration and mining company listed on the TSX (CCM) and the OTC-BB (CRCUF). Canarc is currently seeking a partner to advance its 1.1 million oz, high grade, underground, New Polaris gold mine project in
FORWARD-LOOKING AND CAUTIONARY STATEMENTS - SAFE HARBOR
This press release contains forward-looking statements. Those statements constitute forward-looking statements within the meaning of the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995 and forward-looking information under Canadian securities law. Forward-looking statements can be identified by the use of words such as "expects," "projects," "plans," "will," "may," "anticipates," believes," "should," "intend," "estimates," and other words of similar meaning. These statements include, among others, the anticipated purpose of the Share Exchange to facilitate a turn-around of
This press release does not constitute an offer to sell or a solicitation of an offer to buy the gold bonds, and shall not constitute an offer, solicitation or sale of any gold bonds in any jurisdiction in which such offer, solicitation or sale would be unlawful. This press release is being issued pursuant to and in accordance with Rule 135c under the Act.
FOR FURTHER INFORMATION PLEASE CONTACT: Santa Fe Gold Corp Catalin Chiloflischi President and Chief Executive Officer Toll Free: 1-877-684-9700 or (604) 685-9700 www.santafegoldcorp.com
Canarc Resource Corp.Catalin Chiloflischi CEO Toll Free: 1-877-684-9700 or (604) 685-9700 (604) 685-9744 (FAX) email@example.com Source: Canarc Resource Corp.