Serengeti and Sun Metals Announce Interim Order and Update to Merger to Consolidate Copper District in North-Central BC

Serengeti and Sun Metals Announce Interim Order and Update to Merger to Consolidate Copper District in North-Central BC

by ahnationtalk on January 22, 202172 Views

VANCOUVER, BC , Jan. 22, 2021  – Serengeti Resources Inc. (TSXV: SIR) (” Serengeti “) and Sun Metals Corp. (TSXV: SUNM) (” Sun Metals “) are pleased to announce that Sun Metals has obtained an interim order from the Supreme Court of British Columbia with respect to the previously announced proposed plan of arrangement, pursuant to which Serengeti will acquire all of the issued and outstanding shares of Sun Metals, on the basis of 0.215 of a post-Consolidation (as defined below) Serengeti share for each Sun Metals share, which is 0.43 of a pre-Consolidation Serengeti share for each Sun Metals share on a pre-Consolidation basis (the ” Transaction “).  Each company will mail out a joint management information circular in connection with the holding of special meetings of the securityholders of Sun Metals, which will be held in accordance with the interim order, and shareholders of Serengeti to approve the Transaction and related matters. The meetings are scheduled to be held concurrently on February 26, 2021 , with the record date for Serengeti shareholders and Sun Metals securityholders to receive notice of and vote at each of the Serengeti meeting and Sun Metals meeting having been set at January 15 , 2021.  Subject to receipt of all requisite approvals and waiver or satisfaction of all relevant conditions, closing of the Transaction is expected to be on or about March 4, 2021 .

The Transaction will consolidate the contiguous copper-gold exploration and development assets of Kwanika and Stardust, both of which will benefit from operational synergies as the projects advance with a combined development strategy, along with the robust portfolio of British Columbia copper-gold assets held by the companies. The combined company will be well positioned and capitalized as a result of the recently completed $10,350,000 upsized subscription receipt financing of Sun Metals (the ” Financing “) to take advantage of a strengthening copper market.

Upon completion of the Transaction, it is expected that Mark O’Dea will assume the role of Executive Chairman of Serengeti and the Serengeti board of directors will comprise Mark O’Dea , David Moore , Lewis Lawrick , Teodora Dechev , Sean Tetzlaff and Richard Bailes . David Moore will continue as Interim President and Chief Executive Officer until such time as a full time CEO is appointed, and Lauren McDougall will assume the role of Chief Financial Officer and Ian Neill the role of Vice President Exploration.  Following the Transaction, current Sun Metals shareholders, not including holders of Sun Metals shares issued on conversion of the subscription receipts issued from the Financing, will hold approximately 40% of the combined company.

Serengeti Meeting

At the Serengeti special meeting of shareholders, shareholders will be asked to approve the Transaction.  The Transaction resolution must be approved by an affirmative vote of a simple majority of the votes cast by Serengeti shareholders present in person or represented by proxy at the meeting.

In addition to approving the Transaction, Serengeti shareholders will be asked to approve resolutions to consolidate its common shares on a two for one basis (the ” Consolidation “) and amend and restate its stock option plan (the ” Amended Option Plan “) to, among other things, become a rolling 10% plan.  Approval by Serengeti shareholders of these resolutions is a condition to closing the Transaction.  Disinterested Serengeti shareholders will also be asked to approve resolutions adopting a deferred share unit plan (the ” DSU Plan “) and a restricted share unit Plan (the ” RSU Plan “). The Amended Option Plan, the DSU Plan and the RSU Plan are all subject to approval by the TSX Venture Exchange.

The Consolidation is anticipated to be completed immediately prior to closing of the Transaction.  In addition to shareholder approval, the Consolidation is also subject to approval by the TSX Venture Exchange. Following the Consolidation, the 111,003,368 outstanding shares of Serengeti will be consolidated such that there will be approximately 55,501,684 outstanding shares, not including any Serengeti shares to be issued pursuant to the Transaction. Serengeti also intends to proceed with a name change in connection with the Transaction and Consolidation, which name change will be subject to TSX Venture Exchange approval.  Further details with respect to the name change will be provided when available.

Further details with respect to the Transaction, the Consolidation, and the Amended Option Plan as well as the DSU Plan and RSU Plan will be outlined in a joint management information circular to be circulated to Serengeti shareholders in due course.  The joint management information circular will also include instructions on how to vote and participate at the Serengeti meeting scheduled to be held on February 26, 2021 .

Sun Metals Meeting

At the Sun Metals special meeting of securityholders, securityholders will be asked to approve the Transaction.  The Transaction resolution must be approved by an affirmative vote of: (i) 66⅔% of the votes cast on the resolution by Sun Metals shareholders present in person or by proxy at the meeting; (ii) 66⅔% of the votes cast on the resolution by Sun Metals securityholders (voting as a single class) present in person or by proxy at the Sun Metals meeting; and (iii) a majority of the votes cast by Sun Metals shareholders present in person or by proxy at the meeting excluding for this purpose votes attached to Sun Metals shares held by certain persons as required under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions .

Further details with respect to the Transaction will be outlined in a joint management information circular to be circulated to Sun Metals securityholders in due course.  The joint management information circular will also include instructions on how to vote and participate at the Sun Metals meeting scheduled to be held on February 26, 2021 .

Board Recommendations and Voting Support

The Transaction has been unanimously approved by the board of directors of both Serengeti and Sun Metals. Both boards of directors recommend that their respective shareholders and securityholders vote in favour of the Transaction.  The Serengeti board of directors also recommends that Serengeti shareholders vote in favour of the Consolidation, the amendment to the Serengeti stock option plan as well as the DSU Plan and RSU Plan.

All of the directors and officers of Sun Metals, holding in aggregate 14.03% of the issued and outstanding shares of Sun Metals and 15.38% of the outstanding shares, options and warrants of Sun Metals, have entered into customary voting support agreements agreeing to vote in favour of the Transaction. All of the directors and officers and several large shareholders of Serengeti, holding in aggregate 27.32% of the issued and outstanding shares of Serengeti, have similarly entered into customary voting support agreements agreeing to vote in favour of the Transaction.

This announcement is for informational purposes only and does not constitute an offer to purchase, a solicitation of an offer to sell any shares or a solicitation of a proxy.

About Serengeti

Serengeti is a mineral exploration company managed by an experienced team of professionals with a solid track record of exploration success. The Company is currently advancing its majority-owned, advanced Kwanika copper-gold project and exploring its extensive portfolio of properties in north-central British Columbia . Additional information can be found on the Company’s website at www.serengetiresources.com .

About Sun Metals

Sun Metals is advancing its 100% owned flagship, high-grade Stardust Project located in north-central British Columbia, Canada . Stardust is a high-grade polymetallic Carbonate Replacement Deposit with a rich history.  Sun Metals also owns the Lorraine copper-gold project, and the OK copper-molybdenum project.

On Behalf of the Board of Directors of Serengeti Resources Inc.

“David W. Moore”

President, CEO & Director

On Behalf of the Board of Directors of Sun Metals Corp.

“Steve Robertson”

President, CEO & Director

NT4

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