STRONGBOW COMPLETES AMENDMENT TO SOUTH CROFTY SHARE PURCHASE AGREEMENT
Vancouver, March 28 , 2018
Strongbow Exploration Inc. (TSX-V: SBW) (“Strongbow” or the “Company”) is pleased to announce that, pursuant to the Share Purchase Agreement (“SPA”) announced March 17, 2016, regarding the acquisition of the South Crofty tin project, the Company, Galena Special Situations Master Fund Limited (“Galena”), and Tin Shield Production Inc (“Tin Shield”) have entered into a Side Letter to the SPA, whereby the remaining payments due to Galena and Tin Shield can be amended to allow Strongbow to remove certain share issuances and / or cash payments due on delivery of feasibility and / or a production decision to Galena and Tin Shield, provided that the Company’s shares are listed on AIM before the end of 2018, in return for the following:
- A payment of US$6.0 million, comprising US$3.0 million in cash and $3.0 million in Strongbow shares payable immediately upon completion of an AIM listing.
- A payment of US$6.0 million, payable in cash and / or shares at Strongbow’s election, payable within 5 business days of the Company securing project financing to build a mine at South Crofty.
Richard Williams, Strongbow CEO, stated “We are very pleased to have reached this agreement with our partners on a simple, clear structure that paves the way forward for the South Crofty project. The simplified structure provides clarity to existing and potential investors. Strongbow has progressively achieved its milestones over the past year, and this agreement adds intrinsic value to the company by simplifying the project ownership. Strongbow is one of the only publicly traded tin companies in the world with clear ownership of a rare, high grade, extensively mineralized tin camp in an emerging strategic metals market.”
The new payment structure will replace the original structure set out in the SPA (see news release dated March 17, 2016) set out below:
- C$2.0 million (cash and / or shares at Strongbow’s election) on June 10, 2018;
- The issuance of 2,000,000 common shares of the Company to Galena / Tin Shield upon delivery of a positive feasibility study or commencement of commercial production, whichever occurs first;
- Strongbow to make a cash and / or common share payment to Galena equal to 25% of the NPV of the project upon making a decision to go into production. In the event that Strongbow’s market capitalization was less than the NPV of the project when a production decision was made, Strongbow would pay the equivalent of 25% of its market value to Galena and the balance (between the 25% of market value and 25% of the NPV of the project) would be paid out as a 5% Net Profits Interest from production.
In the event the AIM listing occurs after June 10, 2018, the Company will be required to make the June 10 payment of C$2.0 million (cash or shares at Strongbow’s election) set out in the original SPA with that amount being credited towards the US$6.0 million payable upon the completion of the AIM listing.
If the Company fails to list on AIM by January 1, 2019 the terms from the original SPA will remain in force.
ABOUT SOUTH CROFTY
South Crofty is an iconic former producing copper and tin mine located in the towns of Camborne and Pool, Cornwall, England. The first documented production history from South Crofty dates back to 1592, and it was the last tin mine to close in Cornwall in 1998.
Strongbow published a NI 43-101 Mineral Resource Estimate on the project on April 19, 2016 (see Technical Report here), and published a NI 43-101 Preliminary Economic Assessment on the project on February 16, 2017 (see Technical Report here).
The project received an Underground Permission (mining licence) in 2013, which is valid until 2071, and Planning Permission to construct a new process plant in 2011. In October 2017, Strongbow was successful in securing a Water Discharge Permit allowing for the dewatering of the now flooded mine workings. In January 2018, the Company completed the sale of a 1.5% Net Smelter Returns Royalty to its largest shareholder, Osisko Gold Royalties, for C$7,170,000. These proceeds are being used to construct a water treatment plant, which is expected to be completed by the end of September 2018.
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ON BEHALF OF THE BOARD OF DIRECTORS
“Richard D. Williams”
Richard D. Williams, P.Geo
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.
This news release contains “forward-looking statements” which are based on management’s best estimates and assumptions at the time the forward-looking statements are made. Certain disclosures in this news release relating to management’s plans to list on AIM in 2018, to amend the terms of the SPA as well as our ability to comply with the terms of an amended SPA, in addition to statements related to our ability to complete a feasibility study, make a production decision for South Crofty and secure project financing for mine construction are all forward-looking statements which are subject to numerous risks, uncertainties, and other factors related to Strongbow’s operation as a mineral exploration company that may cause future results to differ materially from those expressed or implied in such forward-looking statements.
Although Strongbow intends to complete a listing in AIM in 2018, no assurances can be given that Strongbow will be successful in those efforts, or that the listing will be sufficient for the Company’s future financial commitments, including the cash and common share payments described above, or sufficient to allow Strongbow to meet its other stated objectives. In addition, there can be no assurance that the Company will be successful in its efforts to construction a water treatment plant, de-water the mine, complete a positive feasibility study for the South Crofty project (thereby enabling Strongbow to make a production decision) or arrange project financing for construction of mine facilities at South Crofty; there are a number of factors which determine project economics, several of which (such as the price of tin and the market for tin) are not within Strongbow’s control. If such estimates are inaccurate or are reduced in the future, this could have a material adverse impact on Strongbow.
Forward-looking statements, while based on management’s best estimates and assumptions, are subject to risks and uncertainties that may cause actual results to be materially different from those expressed or implied by such forward-looking statements, including but not limited to: risks related to receipt of regulatory approvals, the successful integration of acquisitions; risks related to general economic and market conditions; risks related to the availability of financing; the timing and content of upcoming work programs; actual results of proposed exploration activities; possible variations in mineral resources or grade; failure of plant, equipment or processes to operate as anticipated; accidents, labour disputes, title disputes, claims and limitations on insurance coverage and other risks of the mining industry; changes in national and local government regulation of mining operations, tax rules and regulations.
Although Strongbow has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Strongbow undertakes no obligation or responsibility to update forward-looking statements, except as required by law.