American Pacific Mining to acquire Constantine Metal

Aug 15, 2022

2022-08-15 09:15 ET – News Release

See News Release (C-USGD) American Pacific Mining Corp (2)

Mr. Warwick Smith of American Pacific Mining reports

AMERICAN PACIFIC MINING TO ACQUIRE CONSTANTINE METAL RESOURCES

American Pacific Mining Corp. and Constantine Metal Resources Ltd. have entered into a definitive agreement, pursuant to which American Pacific Mining will acquire all of the issued and outstanding common shares of Constantine in an all-share transaction, providing Constantine shareholders with an immediate upfront premium of 48.6 per cent based on each company’s respective 20-day volume-weighted average price (VWAP).

The combined company will be a premier exploration and development company in the western USA with two projects being aggressively advanced under strategic partnerships with well-respected major metal producers and an expanded portfolio of prospective precious and base metals assets.

Highlights of the Transaction and Strategic Rationale:

Shareholders of the combined company will gain exposure to two advanced exploration projects under strategic partnerships with majors:
- Palmer (Constantine) is an attractive PEA-stage (US$266 million after-tax NPV at 7 per cent discount rate)1 zinc-copper-gold-silver volcanic massive sulfide (VMS) project located in a strategic area of Southeast Alaska, being advanced with world-class joint-venture (“JV”) partner Dowa Metals & Mining Co., Ltd. of Japan (“Dowa”). The JV approved 2022 program and budget is US$18 million, with funds being advanced exclusively by Dowa, as required, during project advancement. Constantine has an option to contribute pro-rata, up to December 31st, 2022, to maintain Constantine’s 44.91 per cent interest.
- Madison ( American Pacific Mining) is a past-producing high-grade copper-gold skarn and porphyry system located in the heart of Montana’s prolific copper-gold belt under an earn-in joint-venture agreement, whereby Kennecott Exploration Company, part of the Rio Tinto Group, may spend US$30 million to earn a 70 per cent interest.
The combined company will be well financed with a pro-forma cash balance exceeding C$10 million allowing American Pacific Mining to aggressively progress projects while leveraging spending commitments of partners.
Improved capital markets profile with increased market capitalization exceeding C$85 million and better positioned to attract additional institutional and high net-worth investors.
The Transaction has strong shareholder support, with Constantine’s two largest shareholders Michael Gentile and John Tognetti and management and directors of Constantine, together representing 27 per cent of the issued and outstanding common shares of Constantine, entering into voting support agreements with American Pacific Mining.
and experienced management team ( American Pacific Mining was recently nominated for five awards at the S&P Global Platts Metals Awards) with demonstrated ability to raise capital and operate in the western USA.
American Pacific Mining and Constantine shareholders will have exposure to expanded portfolio of precious and base metals exploration projects in Idaho, Nevada and Arizona.

CEO of American Pacific Mining, Warwick Smith, stated: “This is a transformational step for American Pacific as the Palmer Project gives us an established PEA-stage asset with a tremendous amount of exploration upside. We are very impressed with the quality of technical work completed by Constantine and Dowa to-date and look forward to collaborating with our new partners and stakeholders to expand resources and realize the full potential of this high-grade VMS system while continuing to deliver exposure to progress and new discoveries across our existing portfolio of highly prospective past-producing exploration projects.”

CEO of Constantine Metal Resources, Garfield MacVeigh, commented: “Constantine is pleased to enter into this agreement and our Board unanimously recommends the transaction to shareholders at a significant market premium. We believe American Pacific’s focus, financing capabilities and breadth of exploration experience in the US will result in Palmer reaching its full potential. We would like to thank our shareholders, the team at Constantine, our Board and our joint venture partner at Palmer, Dowa, for all their support.”

Transaction Details

Constantine shareholders will be entitled to receive 0.881 (the “Exchange Ratio”) of a common share of American Pacific Mining for each share of Constantine held (the “Consideration”). All outstanding stock options of Constantine will be exchanged for options of American Pacific Mining and all warrants of Constantine will become exercisable to acquire common shares of American Pacific Mining, in amounts and at exercise prices adjusted in accordance with the Exchange Ratio. The Consideration values Constantine at approximately C$0.43 per share, representing a premium of approximately 48.6 per cent to Constantine shareholders, based on the 20-day VWAP of each company as of the close of trading on August 12, 2022. Upon completion of the Transaction, Constantine shareholders will hold approximately 31.4 per cent of American Pacific Mining shares on an outstanding basis.

The Definitive Agreement for the Transaction includes customary provisions, including non-solicitation, right to match, and fiduciary out provisions, as well as certain representations, covenants and conditions which are customary for a transaction of this nature. The Definitive Agreement provides for a C$850,000 termination fee payable by Constantine to American Pacific Mining in the event of a superior proposal, and a reduced break fee of $500,000 payable in the event of a no-vote by Constantine securityholders in certain circumstances. The Transaction is expected to be completed by way of a court-approved Plan of Arrangement under the Business Corporations Act (British Columbia) (the “Arrangement”) and will be subject to securityholder approval at a meeting of Constantine securityholders, which is expected to take place in October 2022, with the Transaction expected to close shortly thereafter. Under the Definitive Agreement, American Pacific Mining has also agreed to commit to fund C$5,000,000 for the Palmer Project in 2022 in accordance with the approved project program and budget.

Closing of the Transaction is subject to the receipt of applicable regulatory approvals, Constantine securityholder approval and the satisfaction of certain other closing conditions customary for transactions of this nature.

It is anticipated that any securities to be issued under the Arrangement will be offered and issued in reliance upon the exemption from the registration requirements of the U.S. Securities Act of 1933 provided by Section 3(a)(10) thereof. This press release does not constitute an offer to sell, or the solicitation of an offer to buy, any securities.

Board of Director’s Recommendation and Voting Support

The Arrangement has been unanimously approved by the board of directors of both American Pacific Mining and Constantine. Directors and senior officers of Constantine along with certain Constantine shareholders, being Michael Gentile and John Tognetti, holding in the aggregate approximately 27 per cent of the outstanding Constantine shares, have each entered into customary voting and support agreements to, among other things, vote in favour of the Arrangement at the special meeting of Constantine securityholders to be held to consider the Transaction.

Advisors and Counsel

McMillan LLP is acting as American Pacific’s legal advisor. Agentis Capital Mining Partners is acting as financial advisor to Constantine and Blake, Cassels & Graydon LLP is acting as Constantine’s legal advisor.

Agentis Capital Mining Partners has provided a fairness opinion to the Board of Directors of Constantine stating that, as of the date of the opinion, and based upon and subject to the assumptions, limitations and qualifications stated in the opinion, the consideration to be received by the shareholders of Constantine is fair, from a financial point of view, to the shareholders of Constantine.

About American Pacific Mining Corp.

American Pacific Mining Corp. is a gold explorer focused on precious metal opportunities in the Western United States. The Madison Mine in Montana, under option to joint venture with Kennecott Exploration Company, is the Company’s flagship asset. The Gooseberry Gold-Silver Project and the Tuscarora Gold Project are two high-grade, precious metals projects located in key mining districts of Nevada, USA. The Company’s mission is to grow by the drill bit and by acquisition.

About Constantine Metal Resources Ltd.

Constantine is a mineral exploration company led by an experienced and proven technical team with a focus on the Palmer copper-zinc-silver-gold-barite project (the “Palmer Project”) being advanced as a joint venture between Constantine and Dowa Metals & Mining Co., Ltd. (“Dowa”), with Constantine as operator. The Palmer Project is a high-grade volcanogenic massive sulphide-sulphate (“VMS”) project located in a very accessible part of coastal Southeast Alaska, with road access to the project and within 60 kilometers of the year-round deep-sea port of Haines.

We seek Safe Harbor.

https://www.constantinemetals.com/