MONTRÉAL, QUÉBEC and TORONTO, ONTARIO–(Marketwired – Dec. 18, 2017) –
NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
Osisko Metals Incorporated (“Osisko Metals”) (TSX VENTURE:OM)(FRANKFURT:0B5) and Pine Point Mining Limited (“Pine Point”) (TSX VENTURE:ZINC) are pleased to announce that they have entered into a definitive arrangement agreement dated December 15, 2017 (the “Agreement”) pursuant to which, among other things, (i) Osisko Metals has agreed to acquire all of the issued and outstanding common shares of Pine Point, and (ii) a newly formed company (“Spinco”) will be created to hold all of the assets and liabilities of Pine Point, with the exception of the Pine Point project located in the Northwest Territories (the “Pine Point Project”), all of which is to be completed by way of a statutory plan of arrangement under the Business Corporations Act (Ontario) (the “Arrangement”).
The Arrangement will result in Osisko Metals acquiring the Pine Point Project in furtherance of Osisko Metals’ stated strategy of consolidating and developing base metal assets at the mining district scale.
Under the terms of the Agreement, holders of common shares of Pine Point (each, a “Pine Point Share”) will be entitled to receive, for each Pine Point Share held immediately prior to the effective time of the Arrangement:
i.271 (the “Exchange Ratio”) of a common share of Osisko Metals (each whole common share, an “Osisko Metals Share”);
ii.0677 of a common share purchase warrant of Osisko Metals (each whole common share purchase warrant, an “Osisko Metals Consideration Warrant”), with each Osisko Metals Consideration Warrant entitling the holder thereof to acquire one Osisko Metals Share at an exercise price of C$1.50 per Osisko Metals Share for a period of 12 months from the closing of the Arrangement, and
iii.one (1) common share of Spinco (a “Spinco Share”), which will be consolidated on a 10:1 basis under the Arrangement.
The Exchange Ratio implies consideration of approximately C$0.21 per Pine Point Share, based on the closing price of the common shares of Osisko Metals on the TSX Venture Exchange (“TSX-V”) on December 15, 2017 (which, for greater certainty, attributes no value to the Osisko Metals Consideration Warrants or Spinco Shares).
Further, the Exchange Ratio represents a premium of (i) approximately 23% based on the respective closing prices, and (ii) approximately 27% based on the respective 30-day volume-weighted average prices, in each case, of Osisko Metals Shares and Pine Point Shares on the TSX-V as of the close of business on December 15, 2017.
This implies a total equity value of approximately C$34 million on a fully diluted in-the-money basis. Shareholders of Pine Point will also benefit from the equity interest in Spinco and the optionality inherent in the Osisko Metals Consideration Warrants that they are entitled to received under the Arrangement. Upon completion of the Arrangement, existing shareholders of Osisko Metals and Pine Point will own approximately 62% and 38%, respectively, of pro-forma Osisko Metals (on a fully diluted in-the-money basis).
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