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TSXV – MZA.H
VANCOUVER, May 31, 2017 /CNW/ – Miza Enterprises Inc. (MZA.H: TSXV, to be renamed BQ Metals Corp.) announces it has reached an agreement to acquire an operating mine with a development asset, located in Europe (the “Project“). Since early this year, the Company has been working with Traxys Capital Partners (“TCP“) while it was negotiating the terms of a Share Purchase Agreement (the “SPA“) to acquire the company that owns the Project from its current owners. On April 29 a company formed by TCP, 112430 B.C. Ltd. (the “Purchaser“), signed the SPA and pursuant to an agreement dated May 31, 2017 the Company in turn agreed to acquire the Purchaser. The TCP group will join the existing founders and directors of the Company with the goal of building a mid-tier global base metals producer.
TCP is a limited partnership formed to pursue strategic investments in the mining, minerals, specialty materials and chemicals sectors. TCP was formed by the Traxys Group and by a team of highly experienced mining executives and investment bankers, led by Derek White, Lazaros Nikeas and John Brim, all of whom will join the Company’s board of directors. The Traxys Group (“Traxys“), headquartered in Luxembourg, is a physical commodity trader and merchant in the metals and natural resources sectors. Mark Kristoff, Traxys’ CEO and President, along with Steven Scheinman, General Counsel of Traxys, will also join the board of the Company.
Derek White will be appointed as President and Chief Executive Officer of the Company. Prior to forming TCP, he was the President and CEO of KGHM International. As the Executive Vice-President of Corporate Development at Quadra Mining, Mr. White was instrumental in its impressive growth via mergers and acquisitions, including the merger with FNX Mining Ltd., and its subsequent sale to KGHM S.A. for C$ 3.5 billion in 2012. As BQ Metals Corp.’s President and CEO, Mr. White will lead a strong team of experienced financial and technical executives to manage the day-to-day business of the company.
Clive Johnson will remain the Non-Executive Chairman of the Company and will work with Derek White on the Company’s growth and business strategies. Mr. Johnson has over 35 years of experience in the gold exploration and mining industry. Together with an experienced executive, exploration and development team, he built Bema Gold from a junior exploration company into a global mid-tier gold producer that was later merged into a larger gold producer in 2007, for a value of C$ 3.5 billion. In 2007 he, again as President and CEO along with other senior executives of Bema Gold, founded B2Gold Corp., a junior gold exploration company. Over the past 10 years, B2Gold has grown dramatically into an international, intermediate gold producer. By the end of 2017, with a current market capitalization of over C$3 billion, B2Gold is projected to produce approximately 950,000 ounces of gold annually, on a low-cost basis. Tom Garagan, Senior VP of Exploration for B2Gold (and formerly for Bema Gold) and currently a director of the Company, will advise on exploration opportunities and programs. Roger Richer, Executive VP, General Counsel of B2Gold will remain on the Company’s board and Mike Cinnamond, CFO of B2Gold, will also join the board. The experienced B2Gold executives on the board, along with current board member Harry Pokrandt, will assist Mr. White and his team to support the growth of the Company.
Clive Johnson, Chairman of Miza states; “The Miza directors are excited by this opportunity to combine our mining experience and success with the Traxys team as directors and founders of BQ Metals. Derek White, as President and CEO, will lead a strong executive and technical team. Our collective objective is to build BQ Metals into a profitable mid-tier copper/zinc producer through accretive acquisitions and exploration.”
Under the SPA, the purchase price for the project is US$63 million, subject to adjustments, plus certain milestone payments payable post-closing. Approximately US$11 million of the purchase price will be financed through the assumption of an existing debt facility which is currently in place on favourable commercial terms. The milestone payments comprise payments based on certain revenue milestones until the end of calendar 2018, plus certain contingent payments related to development milestones which are intended to be funded by cash flow from operations.
Closing of the purchase of the Project is conditional upon receipt of applicable regulatory approvals, completion of the financing necessary for the transaction and other conditions typical for a transaction of this nature. The Purchaser is a British Columbia company formed by TCP for the purposes of entering into the SPA. Shortly after its incorporation, all of the shares of the Purchaser were distributed to the limited partners of TCP, including the Traxys Group and the principals of the partnership.
The Company, through a newly formed, wholly owned subsidiary (“FinanceCo“), intends to issue, on a private placement basis, C$75 million of subscription receipts, the proceeds from which will be used to subscribe for common shares of the Purchaser, providing the Purchaser with the funds required to pay the initial purchase price (see “Subscription Receipt Financing” below). To facilitate the financing and acquisition transactions, FinanceCo will amalgamate with a second newly formed, wholly owned subsidiary of the Company (“AcquireCo“) to form a single wholly-owned subsidiary of the Company (“Amalco“) which will complete the subscription for shares of the Purchaser. Following completion of the transaction, the Company will own all of the outstanding shares of Amalco, and Amalco will own all the voting shares of the Purchaser.
TCP’s owners will retain non-voting exchangeable common shares of the Purchaser following completion of the transaction, that are exchangeable for a total of 27 million newly-issued common shares of the Company for up to five years after the Project is acquired.
In conjunction with the transaction, TCP will provide the Company with a right of first refusal with respect to future copper and zinc mining exploration, development and production acquisition opportunities, and the Company will provide the Traxys Group with a right of last refusal with respect to any offtake from the copper mine and any related projects acquired by the Company at market terms.
Closing is anticipated to occur by June 30, 2017, subject to satisfaction of all conditions under the SPA as well as stock exchange approvals. Effective as at Closing, the Company’s name will be changed to BQ Metals Corp. and its shares will trade on the TSX Venture Exchange under the symbol “BQ“.
Subscription Receipt Financing
The Company has entered into an agreement with a syndicate including BMO Capital Markets, Canaccord Genuity and GMP Securities (the “Agents“), to sell on a commercially reasonable efforts basis Subscription Receipts (in a wholly owned subsidiary of the Company) at a price of C$0.85 each for aggregate gross proceeds of C$75 million. Each Subscription Receipt shall be deemed to be exchanged, without payment of any additional consideration and subject to adjustment, for one common share of the Company concurrent with Closing of the Project acquisition.
The net proceeds from the sale of the Subscription Receipts will be used to complete the acquisition and for general working capital purposes.
The Subscription Receipts will be offered in each of the provinces of Canada, offshore jurisdictions, and in the United States on a private placement basis to accredited investors. Subject to restrictions in respect of sales from control blocks, the shares issued on conversion of the Subscription Receipts will be free of hold periods in Canada, but may be subject to additional resale restrictions in jurisdictions outside of Canada.
Founder Share Restrictions
It is anticipated that shares to be received by TCP principals will be subject to an 18 month escrow with 25% released on Closing and quarterly releases of 25%. The current directors of the Company have agreed to be bound by the same resale restrictions.
This News Release omits the name of the assets being acquired and the vendor thereof as well as other information that could identify them (the “Omitted Information“). As the transactions contemplated herein are subject to a number of conditions, including a significant financing, the vendor will not permit a waiver of the confidentiality provisions of the SPA to allow the Company to disclose the Omitted Information until closing of the acquisition of the Project.
The Omitted Information will be disclosed in connection with closing the transactions contemplated herein, by way of a Filing Statement filed with the TSX Venture Exchange and a Technical Report filed on SEDAR in compliance with National Instrument 43-101. Trading in the Company’s shares will remain halted until such public disclosures have been made. Prior to such public disclosure, the Company intends to disclose the Omitted Information to the Agent and to potential purchasers of the Subscription Receipts to allow the Agent and potential purchasers to determine whether they wish to participate in the Subscription Receipt financing. It is a condition to the receipt of the Omitted Information by such potential purchasers that they agree to (a) use the Omitted Information solely to evaluate their participation in the Subscription Receipt financing, and (b) not disclose the Omitted Information to any person (except as permitted by applicable securities laws), or trade in any securities of the Company, until the Omitted Information has been generally disclosed by the Company. The shares of the Company will remain halted until Closing.
ON BEHALF OF MIZA ENTERPRISES INC.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE Miza Enterprises Inc.