Anfield to Acquire Magellan to Develop the Coringa Gold Project, Brazil
VANCOUVER, Feb 16, 2016 - Anfield Nickel Corp. ("Anfield") (TSX VENTURE:ANF) and Magellan Minerals Ltd. ("Magellan") (TSX VENTURE:MNM) are pleased to announce that Anfield and Magellan have entered into a definitive arrangement agreement (the "Arrangement Agreement") dated February 16, 2016 whereby Anfield will acquire Magellan. The resulting entity will be an emerging gold producer with a post-deal market capitalization of approximately $48 million (based on the closing price of Anfield's shares on February 12, 2016).Pursuant to the Arrangement Agreement, Anfield has agreed to acquire Magellan by way of a court-approved plan of arrangement. Under the terms of the Arrangement Agreement, each Magellan shareholder will receive 0.0863 shares of Anfield for each Magellan share held. The exchange ratio represents a premium to Magellan shareholders of approximately 37.3% over Magellan's 20 day volume weighted average share price on the TSX Venture Exchange utilizing Anfield's 20 day volume weighted average share price on the TSX Venture Exchange, both as at February 11, 2016. At the conclusion of the arrangement there will be approximately 62.5 million shares of Anfield issued and outstanding and 64.2 million shares of Anfield on a fully diluted basis (assuming no Magellan convertible securities are converted prior to the closing of the arrangement). The resulting entity will be owned approximately 69.4% and 30.6% by Anfield and Magellan's existing shareholders, respectively (assuming no Magellan convertible securities are converted prior to the closing of the arrangement).
"This acquisition will create a new gold mining company with a strong technical and financial management team and shareholder base. We look forward to developing and commissioning the Coringa gold project by late 2017 and to acquiring other gold projects that will allow us to build a mid-tier gold mining company" said Marshall Koval, Anfield's Chief Executive Officer.
In addition, Magellan has previously entered into a purchase agreement with Troy Resources Ltd. ("Troy") relating to the purchase of Troy's gold processing plant, associated equipment and mining fleet ("Andorinhas Assets") at its Andorinhas mine located in eastern Para state, Brazil (see Magellan's news release dated August 26, 2015). The arrangement is conditional on that transaction proceeding.
Alan Carter, Magellan's Chief Executive Officer commented "We believe that this arrangement will deliver significant value to Magellan's shareholders over the medium to long term. Anfield's management team and key shareholders have a proven track record of delivering significant shareholder value. In addition, and of critical importance in the current market, Anfield has access to the necessary capital required for the successful commissioning of the Coringa mine."
The Board of Directors of Anfield post-closing will include: David Strang, Aziz Shariff, Marshall Koval, Lyle Braaten, Anish Sunderji and a representative to be appointed by Magellan. Ross Beaty will remain as Anfield's largest shareholder.
Transaction Summary
The proposed acquisition will be effected by way of a plan of arrangement under the Business Corporations Act (British Columbia). Each Magellan shareholder will receive 0.0863 shares of Anfield for each Magellan share held. Each option or warrant to acquire Magellan shares that is not converted into a Magellan share prior to closing of the arrangement will be terminated. Completion of the arrangement is conditional on approval of Magellan's shareholders at a special meeting of Magellan's shareholders expected to be held in April 2016, and satisfaction of other customary approvals, including regulatory, stock exchange and court approvals.
Certain directors, officers and shareholders of Magellan representing an aggregate of 35.08% of the issued and outstanding shares of Magellan have entered into voting and support agreements to vote in support of the proposed acquisition.
The Arrangement Agreement contains standard deal protections, including a commitment by Magellan not to solicit alternative transactions, a five business day right for Anfield to match any superior proposal received by Magellan, and payment by Magellan of a termination fee of $600,000 if the transaction is not completed in specified circumstances.
In addition, Anfield will subscribe for a $500,000 secured convertible debenture from Magellan. These proceeds will be used by Magellan to fund working capital. The convertible debenture bears interest at the rate of 8% per annum, will mature 30 days following closing and will be convertible into Magellan shares at any time at the option of Anfield at a conversion price of $0.0564 per Magellan share.
The Arrangement Agreement was negotiated at arm's length between Magellan and Anfield. No finder's fees are payable in connection with the arrangement. The parties had originally entered into a non-binding expression of interest regarding the arrangement on December 23, 2015, which has been replaced by the Arrangement Agreement.
A full copy of the Arrangement Agreement will be filed by each of Anfield and Magellan with Canadian securities regulatory authorities and will be available at www.sedar.com. In addition, a detailed description of the Arrangement Agreement will be included in Magellan's management information circular which will be mailed to Magellan's shareholders by mid-March, 2016.
Cautionary Note Regarding Forward-Looking Information
Certain statements and information herein, including all statements that are not historical facts, contain forward-looking statements and forward-looking information within the meaning of applicable securities laws. Such forward-looking statements or information include but are not limited to statements or information with respect to the completion of the arrangement, the anticipated benefits from the arrangement, the timing for completion of the arrangement, Anfield becoming a mid-tier gold company, Anfield acquiring other projects in the future, the anticipated timing to develop and commission the Coringa gold project, the post-deal market capitalization of Anfield, the number of shares (diluted and non-diluted) of Anfield following the arrangement, the arrangement delivering significant value to Magellan shareholders in the medium to long term, Anfield having access to the necessary capital to successfully commission the Coringa project, the timing for the special meeting of Magellan shareholders, and the timing for the mailing of the information circular for the special meeting of Magellan shareholders. Often, but not always, forward-looking statements or information can be identified by the use of words 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 statements that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved.
With respect to forward-looking statements and information contained herein, Anfield and Magellan have made numerous assumptions including among other things, assumptions about general business and economic conditions, the price of gold, interest rates, anticipated costs and expenditures, production and productivity levels, market competition, receipt of necessary permits and approvals, the availability of suitable future targets and Anfield's and Magellan's ability to achieve their goals. The foregoing list of assumptions is not exhaustive. Although management of Anfield and Magellan believe that the assumptions made and the expectations represented by such statements or information are reasonable, there can be no assurance that a forward-looking statement or information herein will prove to be accurate. Forward-looking statements and information by their nature are based on assumptions and involve known and unknown risks, uncertainties and other factors which may cause Anfield's and/or Magellan's actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements or information. These factors include, but are not limited to: risks and costs to Anfield and Magellan if the arrangement is not completed; Magellan's obligation to pay a break fee if the arrangement is terminated under certain circumstances, which might deter other parties from making a competing offer to acquire Magellan; the investment of executive management time to the arrangement, which may delay or prevent Anfield and/or Magellan from exploiting business opportunities that may arise pending completion of the arrangement; the restrictions on the conduct of Magellan's business prior to completion of the arrangement; the interests of management and other related parties in the arrangement, which may differ from those of Magellan shareholders in certain respects; risks associated with the business of Anfield; risks related to the approval of applicable governmental authorities and the satisfaction or waiver of certain other conditions contemplated by the definitive agreement in respect of the arrangement; risks related to reliance on technical information provided by Magellan as related to the Coringa project; risks relating to exploration and potential development of Magellan's projects; risks related to obtaining the permits and approvals necessary to develop and commission the Coringa gold project on terms that are acceptable to Anfield; risks related to Anfield identifying suitable acquisition targets; business and economic conditions in the mining industry generally; the supply and demand for labour and other project inputs; prices for commodities to be produced and changes in commodity prices; changes in interest and currency exchange rates; risks relating to inaccurate geological and engineering assumptions (including with respect to the tonnage, grade and recoverability of reserves and resources); risks relating to unanticipated operational difficulties (including failure of plant, equipment or processes to operate in accordance with specifications or expectations, cost escalation, unavailability of materials and equipment, government action or delays in the receipt of government approvals, industrial disturbances or other job action, and unanticipated events related to health, safety and environmental matters); risks relating to adverse weather conditions; political risk and social unrest; changes in general economic conditions or conditions in the financial markets; and other risk factors as detailed from time to time in Anfield's and Magellan's continuous disclosure documents filed with Canadian securities administrators.
See Anfield's and Magellan's public filings with the Canadian securities administrators for additional information on risks, uncertainties and other factors relating to the forward-looking statements and information. Although Anfield and Magellan have attempted to identify factors that would cause actual actions, events or results to differ materially from those disclosed in the forward-looking statements or information, there may be other factors that cause actual results, performances, achievements or events not to be anticipated, estimated or intended. Also, many of the factors are beyond Anfield's and Magellan's control. Accordingly, readers should not place undue reliance on forward-looking statements or information. Neither Anfield nor Magellan undertakes any obligation to reissue or update forward-looking statements or information as a result of new information or events after the date hereof except as may be required by law. All forward-looking statements and information made herein, are qualified by this cautionary statement.
Anfield Nickel Corp.
Marshall Koval, President & CEO
Magellan Minerals Ltd.
Alan Carter, President & CEO
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 news release.
Contact
Anfield Nickel Corp.
Martin Rip
+ 604 646-1884
+ 604 687-7041
Magellan Minerals Limited
Alan Carter, President & CEO
+ 604 676 5660
