Abcourt Announces Non-Binding Letter of Intent to Acquire Pershimex

(TheNewswire)

Rouyn-Noranda, Canada – TheNewswire - June 9, 2022 – Abcourt Mines Inc. (“Abcourt” or the “Corporation”) (TSXV:ABI) is pleased to announce that it has entered into a non-binding letter of intent dated June 9, 2022 (the “LOI”) with Pershimex Resources Corporation (“Pershimex”) (TSX Venture: PRO) in respect of a proposed transaction, whereby the Corporation would acquire all of the issued and outstanding securities of Pershimex by way of a three-cornered amalgamation (the “Transaction”). The proposed Transaction will create value for shareholders of both companies and is part of Abcourt’s vision to create a larger and more diversified emerging gold producer and explorer in Québec. The Proposed Transaction provides a compelling investment opportunity for existing and potential new investors that we believe will result in significant share price appreciation for shareholders of both companies.

Transaction Highlights

Highlights of the combined company includes:

• ~510 km of strategic landholdings across major gold districts in central Québec;  

  • We estimate that post-transaction, Abcourt will have the 3rd largest aggregate landholdings amongst gold explorers/developers in the regions surrounding Rouyn-Noranda, Amos, Val-d'Or and Lebel-sur-Quevillon 

• A large and diversified project portfolio in Québec, which includes: 

  • 2 underground gold mines that are currently on care-and-maintenance and awaiting restart (Sleeping Giant and Elder gold mines), 

  • an operating 750 tpd mill at the Sleeping Giant mine site, 

  • 14 early-to-advanced stage gold exploration projects hosting many known deposits, 

  • a feasibility stage zinc-silver project (Abcourt-Barvue) and a nearby satellite deposit (Vendome); 

• Potential for substantial synergies from (i) mining and processing the 5,000-tonne bulk sample at the historical Pershing-Manitou mine; (ii) consolidating and optimizing exploration and development activities in the region; and (iii) corporate overhead costs; and 

• Larger capital markets profile that will better position the combined company to attract new institutional and high net worth retail investors.  

The proposed Transaction will provide significant benefits to Pershimex shareholders, which includes:

• An immediate offer premium of 27.2% over Pershimex’s trailing 5-day VWAP; 

• Transition from a microcap Québec gold explorer to a high-growth, emerging gold producer; 

• Near-term upside from the re-start of the Sleeping Giant gold mine; 

• Utilize Abcourt’s Sleeping Giant mill and operating expertise and experience to maximize the value of the Pershing-Manitou Project; and 

• Upside from the potential monetization of Abcourt’s non-core assets. 

Pascal Hamelin, President and CEO of Abcourt, says: “I am very pleased to see this proposed transaction that will unlock the value of both companies by combining our talented technical teams and project portfolios.  Given that we operate in the same region, this is a logical and synergistic transaction to create a stronger Québec gold company.  I look forward to working with the team at Pershimex to build a significant gold explorer and operator in the Abitibi Greenstone Belt.”

Transaction summary

Pershimex shareholders will receive 0.5714 pre-consolidation common shares of Abcourt (each, an “Abcourt Pre-Consolidation Share”) in exchange for each common share of Pershimex (each, a “Pershimex Share”) (collectively, the “Exchange Ratio”). The Exchange Ratio implies a consideration of C$0.038 per Pershimex Share based on the volume weighted average price (“VWAP”) of Abcourt’s common shares on the TSX Venture Exchange (the “TSXV”) over the five trading days ending June 8, 2022 and results in the following offer premiums:

•  27.2% premium to Pershimex’s 5-day VWAP and a 22.9% premium to its 20-day VWAP over the period ending June 8, 2022; and 

• 33.3% premium over Pershimex’s previous day close based on the implied offer price of C$0.040 per Pershimex share calculated using Abcourt’s closing share price as of June 6, 2022, which is the day prior to the date that the Board of Directors of Pershimex entered into the LOI.  

Pursuant to the proposed Transaction, the combined company will be 81.2% owned by Abcourt shareholders and 18.8% owned by Pershimex shareholders.

As part of the proposed Transaction, all outstanding options of Pershimex will be exchanged for economically equivalent options to purchase Abcourt Shares (subject to an adjustment based on the Exchange Ratio and Share Consolidation described below) and holders of Pershimex warrants will be entitled, in accordance with the terms of such warrants, to receive Abcourt Shares on the exercise of such warrants (subject to adjustment based on the Exchange Ratio and Share Consolidation described below).

The proposed Transaction is expected to be structured as a three-cornered amalgamation under the Canada Business Corporations Act (“CBCA”), pursuant to which a wholly-owned subsidiary to be incorporated by the Corporation under the CBCA (“Subco”) would amalgamate with Pershimex, with the entity resulting from such amalgamation becoming a wholly-owned subsidiary of Abcourt. The proposed Transaction will be subject to Abcourt, Pershimex and Subco (collectively, the “Parties”) entering into an amalgamation agreement (the “Amalgamation Agreement”), which will contain terms and conditions customary for transactions of this nature, including non-solicitation provisions, expense reimbursement provisions, rights to match and mutual termination fees payable in certain circumstances where a Party elects not to proceed with the proposed Transaction.

In connection with the proposed Transaction, Pershimex will have the right to nominate one director to the board of directors of Abcourt.

The Parties will use their best efforts to negotiate and finalize the Amalgamation Agreement and other transaction documents on or before June 30, 2022, or such other date as mutually agreed by Abcourt and Pershimex. To facilitate this expeditious process, Pershimex has entered into an exclusivity agreement with Abcourt, and Abcourt and Pershimex have entered into a mutual confidentiality agreement to facilitate the completion of remaining technical, financial and legal due diligence. Subject to entering into the Amalgamation Agreement, closing of the proposed Transaction will be subject to numerous approvals including, but not limited to:

1. (i)the approval of Pershimex shareholders of the Transaction to take place at a special meeting of Pershimex shareholders to be announced by Pershimex at a later date, including  

   • at least two-thirds of the votes cast by Pershimex shareholders and the Pershimex option holders voting as a single class, and 

   • a simple majority of the votes cast by Pershimex shareholders, excluding for this purpose the votes of “related parties” and “interested parties” and other votes required to be excluded under Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions: and 

2. (ii)customary regulatory and stock exchange approvals.  

No shareholder vote for the approval of the proposed Transaction is required by Abcourt shareholders. The Parties anticipate the completion of the proposed Transaction by September 30, 2022.

The proposed Transaction has the full endorsement of the Board of Directors of both Abcourt and Pershimex. The Board of Directors of Pershimex anticipates issuing its formal recommendation to Pershimex shareholders upon entering into the Amalgamation Agreement. The Amalgamation Agreement is anticipated to include customary support agreements by all directors and executive management of Pershimex to vote their Pershimex Shares in favour of the proposed Transaction.

SHARE CONSOLIDATION & NAME CHANGE

Concurrent and prior to closing the Transaction, Abcourt intends to complete a share consolidation on the basis of 7 existing Abcourt common shares for each post-consolidation common share (the “Share Consolidation”). The proposed Share Consolidation would reduce Abcourt’s current shares outstanding from 328,289,130 to 46,898,447. In addition, the newly created company will be rebranded with a new corporate name to be determined by the management of Abcourt at a later date. The Share Consolidation and name change will be subject to the approval of the majority of shareholders of Abcourt at a special shareholder meeting, which is expected to be held prior to the completion of the proposed Transaction.

Advisors

Red Cloud Securities Inc. is acting as financial advisor to Abcourt in connection with the Transaction, and Lavery de Bill, L.L.P. is acting as the legal advisor to Abcourt in connection with the proposed Transaction.

Qualified person

Pascal Hamelin has reviewed and approved the scientific and technical information contained in this news release. Pascal Hamelin is a qualified person within the meaning of the National Instrument  43-101 - Standards of Disclosure for Mineral Projects, and is also President, CEO of Abcourt.

About Abcourt Mines Inc.

Abcourt Mines Inc. is a gold producer and a Canadian exploration corporation with strategically

located properties in northwestern Québec, Canada. Abcourt owns the Sleeping Giant mill and

mine where it concentrates its activities.

For more information about Abcourt Mines Inc., please visit our web site at www.abcourt.com

and consult our filings under Abcourt's profile on www.sedar.com.

Cautionary Note Regarding Forward-Looking Statements

Certain information contained herein may constitute “forward-looking information” or “forward-looking statements” under Canadian securities legislation. Generally, forward-looking information can be identified by words such as "pro forma", "plans", "expects", "may", "should", "could", "will", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", "believes", or variations including negative variations thereof of such words and phrases that refer to certain actions, events or results that may, occur or be taken or achieved. Such forward-looking statements, including but not limited to statements relating to: the ability of the Parties to satisfy the conditions precedent to the Transaction; the anticipated closing, timing, benefits and effects of the Transaction; and expected development and operations, involve risks, uncertainties and other factors which may cause the actual results to be materially different from those expressed or implied by such forward-looking statements or forward-looking information. Such factors include, among others, the terms of the Amalgamation Agreement including the exercise of any termination rights, the inability of the Parties to satisfy or waive in a timely manner the conditions to the closing of the Transaction, the inability of the Corporation to realize the benefits of the Transaction, the risks related to the exploration, development and mining operations; the impacts of macroeconomic developments as well as the impact of the COVID-19 pandemic; and any material adverse effect on the business, properties and assets of the Corporation. 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 and forward-looking information. The Corporation will not update any forward-looking statements or forward-looking information that are incorporated by reference herein, except as required by applicable securities laws.

The TSX Venture Exchange and its regulatory service provider (as defined in the policies of the TSX Venture Exchange) assume no responsibility for the adequacy or accuracy of this press release.

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