News

Moon River Capital Ltd. Announces Definitive Agreement for Proposed Qualifying Transaction

Toronto, Ontario–(Newsfile Corp. – September 13, 2023) – Moon River Capital Ltd. (TSXV: MOO.P) (“Moon River” or the “Company“), a capital pool company (“CPC“) pursuant to Policy 2.4 – Capital Pool Companies (“Policy 2.4“) of the TSX Venture Exchange (the “TSXV“), is pleased to announce it has entered into an asset purchase agreement dated September 13, 2023 (the “Agreement“) with Generation Mining Ltd. (“GM“), pursuant to which Moon River will acquire all of GM’s right, title and interest in the Davidson Property (as defined below), subject to the terms and conditions outlined below (the “Proposed Transaction“). Following the completion of the Proposed Transaction, Moon River will engage in development activities at the Davidson Property. Moon River intends that the Proposed Transaction will constitute its Qualifying Transaction, as such term is defined in Policy 2.4.

About the Davidson Property

GM is the holder of the right to prospect, develop and mine six (6) mineral leases covering approximately 1,631.8 hectares located near the town of Smithers, British Columbia, which host a large molybdenum-tungsten deposit (the “Davidson Property“).

The Davidson Property is located in the Bulkley Valley of west central British Columbia, approximately 9 kilometres northwest of the town of Smithers on the southwest flank of Hudson Bay Mountain. The high cirque valley on the east side of Hudson Bay Mountain is occupied by the retreating Kathlyn Glacier. Molybdenum tungsten (scheelite) mineralization on the Davidson Property is associated with a main granodiorite sill of the Bulkley Plutonic Suite that has intruded the Hazelton Group volcanics towards the end of the Cretaceous Period.

Molybdenum was first reported in outcrop on Hudson Bay Mountain by the Geological Survey of Canada in 1944. The first claims were staked by William Yorke-Hardy in 1957. The mineral leases comprising the Davidson Property are contiguous, date back to the 1960s and are currently registered to the name of Mr. Don Davidson. All mineral leases have been legally surveyed by a B.C. land surveyor and the survey has been approved by the Surveyor General.

A feasibility study was prepared in respect of the Davidson Property in 2008 and an updated technical report and resource estimate was completed on September 1, 2016, which identified a mineralization roughly 2.5 km across and extending up to 2 km in depth consisting of moderately to steeply dipping stock-work veins ranging from hairline to 5 mm in width. The results of these technical reports have not been verified by a “Qualified Person”, as defined by National Instrument 43-101 – Standards of Disclosure for Mineral Projects, and should not be relied upon. Moon River is not treating this feasibility study or previous mineral resource estimates as being current and are superseded by the updated mineral resource estimate presented below.

Moon River has since commissioned an updated technical report, compliant with National Instrument 43-101 – Standards of Disclosure for Mineral Projects, on the Davidson Property. The Technical Report was completed effective August 11, 2023 (the “Technical Report“), and will be filed on SEDAR+ in due course, within 45 days of this press release. The Technical Report reaffirmed the findings of the technical report completed in 2016 and identified the following resource estimates at a 0.3% MoS₂ cut-off:

The Technical Report recommended the following:

1. Complete a Preliminary Economic Assessment for the Davidson Property, immediately upon acquisition by Moon River.
2. Re-establish road access to the Davidson Property (currently only by helicopter) through clearance of vegetation and trees from and upgrading of the roadway, to facilitate site visit access required for completion of the Preliminary Economic Assessment.

Qualified Person

The scientific and technical content of this news release was reviewed, verified, and approved by Mr. Finley Bakker, P. Geo. of A-Z Mining Professionals Ltd., and a “Qualified Person” as defined by National Instrument 43-101 – Standards of Disclosure for Mineral Projects.

The Davidson Agreement

GM is currently the holder of the right to prospect, develop and mine the Davidson Property pursuant to a vending agreement dated April 1, 2016 (the “Davidson Agreement“) initially entered into between Darnley Bay Resources Limited (which later changed its name to Pine Point Mining Limited (“Pine Point“)) and Roda Holdings Inc. (“Roda“). Roda is a corporation controlled by Mr. Donald Davidson, the registered owner of the Davidson Property. Both Roda and Mr. Davidson are arm’s length parties to GM and Moon River.

Pursuant to a plan of arrangement approved on February 21, 2018, Pine Point spun out GM and transferred its rights, title and interests under the Davidson Agreement to GM by way of a contribution and transfer agreement dated February 23, 2018.

GM currently holds, pursuant to the Davidson Agreement, the exclusive right to access to and from, and to enter upon and take possession of and prospect, develop and mine the Davidson Property, and holds the right to remove and ship therefrom all ore, bullion, concentrates and minerals recovered in any manner from the Davidson Property (collectively, the “Rights“). While Mr. Donald Davidson maintains registered title to the Davidson Property until certain conditions (set out below) are satisfied, GM holds a 100% beneficial interest in the Davidson Property pursuant to the Rights. In consideration of the Rights, GM currently pays Roda $100,000 per fiscal year and reimburses Roda for the annual lease and property maintenance payments in connection with the mining leases.

Pursuant to the Davidson Agreement, registered title will pass to GM (the “Option“), upon either: (i) obtaining funding commitments to construct a mine capable of mining at least 500,000 tons of ore per year where registration of title documents is required by the parties providing funding; or (ii), on notice to Roda of commencement of commercial production at levels sufficient to result in the mining of at least 500,000 tons of ore within one year from commencement of commercial production.

Upon commencement of commercial production (as described above), GM shall pay Roda a 3% net smelter returns royalty (“NSR“). If the NSR payments to Roda in a fiscal year are less than $100,000, GM must make a payment to Roda equivalent to the difference between the NSR payments for the fiscal period and $100,000.

Summary of the Qualifying Transaction

Pursuant to the Agreement, and as a result of the Proposed Transaction, GM will assign the Davidson Agreement, and accordingly the Rights to Moon River, and Moon River will consequently acquire a 100% beneficial interest in the Davidson Property. The Agreement and the assignment of the Davidson Agreement to Moon River will be registered on title to the Davidson Property.

In consideration for the assignment of the Davidson Agreement, GM will receive from Moon River: (i) $630,000 in cash; (ii) 9,000,000 common shares in the capital of Moon River; and (iii) to the extent GM remains a 10% holder of Moon River, (a) the right to nominate one director to the board of directors of Moon River, and (b) the pre-emptive right to retain its pro rata equity interest in Moon River in the event of future equity financings.

The Proposed Transaction does not constitute a Non-Arm’s Length Qualifying Transaction (as such term is defined in Policy 2.4). The Proposed Transaction will not be subject to shareholder approval.

Conditions to Closing

The completion of the Proposed Transaction is subject to the satisfaction of various conditions as are standard for a transaction of this nature, including but not limited to (i) receipt of conditional approval from the TSXV to the Proposed Transaction; (ii) receipt of all requisite corporate, and shareholder consents and approvals; (iii) receipt of third-party consents and approvals by GM; (iv) the absence of any material adverse effect, or action suit or proceeding that would result in a material adverse effect, with respect to the Davidson Property or the Davidson Agreement; and (v) the completion of the Offering (as defined below) for minimum gross proceeds of $2,000,000.

There can be no assurance that the Proposed Transaction will be completed on the terms proposed above or at all.

Concurrent Financing

In connection with the Proposed Transaction, Moon River will seek to complete a non-brokered private placement of subscription receipts (“Subscription Receipts“) at a price of $0.25 per Subscription Receipt for a minimum of 8,000,000 Subscription Receipts up to a maximum of 10,000,000 Subscription Receipts for gross proceeds of a minimum of $2,000,000 and up to $2,500,000 (the “Offering“).

Upon satisfaction or waiver of all conditions precedent to the Proposed Transaction and the receipt of all required board and regulatory approvals in connection with the Offering and the Proposed Transaction, (the “Escrow Release Conditions“), immediately prior to effecting the Proposed Transaction, each Subscription Receipt of Moon River will automatically convert into one common share in the capital of Moon River without any further consideration on the part of the purchaser.

Moon River intends to use the gross proceeds from the Offering: (i) to pay GM the cash consideration of $630,000 pursuant to the Agreement; (ii) for the development of the Davidson Property; and (iii) for general and working capital purposes.

The Offering will be conducted under available exemptions from prospectus requirements and will be available to existing shareholders of the Company in all jurisdictions in Canada in accordance with applicable blanket orders and rules implementing CSA Notice 45-313 – Prospectus Exemption for Distributions to Existing Security Holders (collectively, the “Existing Security Holder Exemption“).

The aggregate acquisition cost to a subscriber under the Existing Security Holder Exemption cannot exceed $15,000 per twelve-month period unless that subscriber has obtained advice from a registered investment dealer regarding the suitability of the investment.

The Company has set September 1, 2023, as the record date for the purposes of determining shareholders entitled to participate in the Offering in reliance on the Existing Security Holder Exemption. Qualifying shareholders who wish to participate in the Offering should contact the Company at the contact information set forth below. If the Offering is oversubscribed, unless the Company determines to increase the maximum gross proceeds of the Offering and receives approval from the TSXV for such increase, the Company will allocate the Subscription Receipts issued under the Offering to those subscribers in the order that those subscriptions were received by the Company.

Completion of the Offering is subject to the satisfaction of the Escrow Release Conditions as described above. All securities issued in connection with the Offering will be subject to applicable resale rules in accordance with applicable securities legislation.

In connection with the Offering, Moon River may pay certain eligible persons (the “Finders“) a cash commission equal to 7% of the gross proceeds of the Offering raised from subscribers introduced to Moon River by such Finder.

The securities referred to in this news release have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons absent U.S. registration or an applicable exemption from the U.S. registration requirements. This release does not constitute an offer for sale of, nor a solicitation for offers to buy, any securities in the United States. Any public offering of securities in the United States must be made by means of a prospectus containing detailed information about the issuer and its management, as well as financial statements.

Principals and Insiders

Following the completion of the Proposed Transaction, it is anticipated that Ian McDonald, Paul Parisotto, Jamie Levy and Gordon Reid will be the directors of Moon River. These directors shall hold office until the first annual meeting of shareholders of Moon River following closing, or until their successors are duly appointed or elected. The officers of Moon River are anticipated to be: Paul Parisotto, President and Chief Executive Officer, Tong Yin, Chief Financial Officer and Lorna MacGillivray, Corporate Secretary. Biographies of the proposed directors and officers of Moon River are included below:

Paul Parisotto – Director, President and Chief Executive Officer

Paul is a seasoned executive with over 40 years of mining public company and capital markets experience. Over the past two decades he was either Chairman or the CEO of Noront Resources Ltd., Arizona Star Resource Corp., Chantrell Ventures Corp., and Calico Resources Corp. Prior to this time, Paul worked in mining investment banking at two Canadian-based investment dealers as well as in the new listings department of the Toronto Stock Exchange.

Ian McDonald – Director

Ian co-founded Wheaton River Minerals Ltd. which built Canada’s only successful gold heap leach mine. He was chief executive officer from 1990 to 2002 and a board member from 2002 to 2005. Subsequently, Ian co-founded Blue Pearl Mining Limited and acted as chief executive officer from 2004 to 2007 and chairman from 2007 to 2010. Blue Pearl Mining Limited acquired Thompson Creek Metals Company Inc. and became one of the largest publicly traded primary molybdenum producers.

Jamie Levy – Director

Jamie has over 25 years of experience in financing and managing Canadian mining companies. Jamie was the chief executive officer of Pine Point and is the former president of Pinetree Capital Ltd. He is currently president, chief executive officer and director of GM.

Gordon Reid – Director

Gordon is a seasoned mining executive with decades of development and operations experience. During his career, Gordon has been involved in mining projects at all phases of project life from exploration through to mine closure. In the 15 years prior to his retirement, Gordon was at Centerra Gold Inc. where he was employed in various positions, including VP of Business Development, President of Kumtor Operating Company, and, from January 1, 2013, through December 31, 2019, Chief Operating Officer of Centerra Gold Inc. He graduated from Michigan Technological University in 1981 with a BS in Mining Engineering degree and obtained an MBA (accounting/finance) in 1994 at the University of Manitoba.

Tong Yin – Chief Financial Officer

Tong is a financial executive with over 25 years of accounting, finance and management experience in the mining and manufacturing sectors. Tong has been a senior management advisor to the operator of the Aguas Blancas iodine project in Chile since 2017. Tong has held Chief Financial Officer and/or other senior financial executive positions for a number of Toronto Stock Exchange-listed mining companies including Conquest Resources Limited, Generation Mining Limited, Canada Lithium Corp. and Torex Gold Resources Inc. Prior to that, Tong was Audit Manager at KPMG’s Toronto office where she gained a decade of experience in the energy, distribution and automotive industries. She is a Chartered Professional Accountant (CPA, CA), and a member of the Institute of Chartered Professional Accountants of Ontario. Tong holds a Master of Management & Professional Accounting degree from the Rotman School of Management at the University of Toronto.

Lorna MacGillivray, LL.B. – Corporate Secretary

Lorna is a lawyer with over 35 years of in-house legal and corporate secretarial experience. She currently also serves as Corporate Secretary of Maritime Resources Corp. and Secretary of Aurelius Minerals Inc. Lorna has served in the senior legal and corporate secretarial positions with a number of public mining companies including Stonegate Agricom Ltd., Thompson Creek Metals Company Inc., Glencairn Gold Corporation, Campbell Resources Inc., Zemex Corporation and Northgate Exploration Limited. Her experience includes public and private financings, debt financing, regulatory compliance and corporate governance. Lorna received undergraduate degrees from Mount Allison University and Queens University and earned her LL.B. from the University of New Brunswick before being called to the bar by the Law Society of Ontario in 1983.

Sponsorship

Sponsorship of a Qualifying Transaction of a CPC is required by the TSXV unless exempt in accordance with TSXV policies. Moon River intends to apply for an exemption from the sponsorship requirements.

Appointment of Interim Chief Executive Officer, Interim Chief Financial Officer, Interim Treasurer and Interim Secretary

Moon River further announces the appointment of Ian McDonald, current director of Moon River, as Interim Chief Executive Officer, Interim Chief Financial Officer, Interim Treasurer and Interim Secretary effective immediately. Mr. Jamie Levy, the former Chief Executive Officer, Chief Financial Officer and Treasurer, and Mr. Kerry Knoll, the former Secretary of the Company will continue their work as directors of the Company.

Non-Arm’s Length Parties

Mr. Jamie Levy is a director of Moon River and currently holds a 17.54% equity interest in Moon River. Mr. Levy is also President, Chief Executive Officer and director of GM and holds a 4.00% equity interest in GM.

Mr. Kerry Knoll is a director of Moon River and currently holds a 17.54% equity interest in Moon River. Mr. Knoll is also Chairman of the board and director of GM and holds a 2.28% equity interest in GM.

Mr. Ian McDonald is a director, Interim Chief Executive Officer, Interim Chief Financial Officer, Interim Treasurer and Interim Secretary of Moon River and currently holds a 17.54% equity interest in Moon River. Mr. McDonald also holds a 0.64% equity interest in GM.

About Moon River

Moon River is a CPC within the meaning of the policies of the TSXV that has not commenced commercial operations and has no assets other than cash. Except as specifically contemplated in the CPC policies of the TSXV, until the completion of a Qualifying Transaction, the Company will not carry on business, other than the identification and evaluation of companies, businesses, or assets with a view to completing a proposed Qualifying Transaction. Investors are cautioned that trading in the securities of a CPC is considered highly speculative.

For further information please contact:

Ian McDonald, Interim Chief Executive Officer and Director, at (416) 716-9700 or ianmcdonald1954@gmail.com.

Cautionary Note:

Completion of the Proposed Transaction is subject to a number of conditions, including but not limited to, TSXV acceptance and if applicable pursuant to TSXV requirements, majority of the minority shareholder approval. Where applicable, the Proposed Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Proposed Transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the Proposed Transaction, any information released or received with respect to the transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.

The TSXV has in no way passed upon the merits of the Proposed Transaction and has neither approved nor disapproved the contents of this press release.

Trading in the common shares of Moon River is presently halted and is expected to remain halted pending receipt and review of acceptable documentations regarding the Proposed Transaction pursuant to Policy 2.4. While halted, the common shares of Moon River may only trade upon TSXV approval and the filing of required materials with the TSXV as contemplated by TSXV policies.

Forward-looking Statements:

This press release contains forward-looking statements and forward-looking information (collectively, “forward-looking statements“) within the meaning of applicable securities laws. Any statements that are contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are often identified by terms such as “may”, “should”, “anticipate”, “will”, “estimates”, “believes”, “intends”, “expects” and similar expressions, which are intended to identify forward-looking statements. More particularly and without limitation, this press release contains forward-looking statements concerning the Company’s evaluation and review of acquisition opportunities with a view to completing its Qualifying Transaction and, in particular, the Proposed Transaction and the Company’s ability to complete the Proposed Transaction and the Offering on the terms set out in this press release.

These forward-looking statements are based on certain assumptions that the Company has made in respect thereof as at the date of this press release regarding, among other things the continued evaluation and review of transaction opportunities by the Company and, in particular, the Proposed Transaction and the Company’s ability to complete the Proposed Transaction.

Although the Company believes the expectations and material factors and assumptions reflected in these forward-looking statements are reasonable as of the date hereof, there can be no assurance that these expectations, factors and assumptions will prove to be correct. These forward-looking statements are not guarantees of future performance and are subject to a number of known and unknown risks and uncertainties including, but not limited to regulatory approvals, changes in general economic, competitive, business, political and social conditions, including changes in the financial markets; the impact of competitive entities and pricing; the ability to access various sources of debt and equity capital on favourable terms; changes in applicable laws and regulations and costs associated therewith; actions by governmental or regulatory authorities and costs associated therewith; technology and cyber security risks; natural catastrophes; and certain other risks detailed in the Company’s continuous disclosure, a copy of which is available on SEDAR+ at www.sedarplus.ca. Accordingly, readers should not place undue reliance on the forward-looking statements contained in this press release.

This list of risk factors should not be construed as exhaustive. Readers are cautioned that events or circumstances could cause results to differ materially from those predicted, forecasted or projected. The forward-looking statements contained in this document speak only as of the date of this document. The Company does not undertake any obligation to publicly update or revise any forward-looking statements or information contained herein, except as required by applicable laws. The forward-looking statements contained in this document are expressly qualified by this cautionary statement.

Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.