Vancouver, British Columbia–(Newsfile Corp. – July 13, 2023) – Thesis Gold Inc. (TSXV: TAU) (WKN: A2QQ0Y) (OTCQX: THSGF) (“Thesis” or the “Company“) is pleased to announce that it has filed and mailed materials to the securityholders of Thesis (the “Securityholders“), including the management information circular dated July 6, 2023 (the “Circular“) and related documents for the special meeting of Securityholders to be held on August 9, 2023 (the “Meeting“). The Meeting is being held in connection with the proposed acquisition by Benchmark Metals Inc. (“Benchmark“) of all of the issued and outstanding common shares of Thesis (the “Thesis Shares“) by way of a court-approved plan of arrangement under the Business Corporations Act (British Columbia) (the “Arrangement“) previously announced on June 5, 2023.
If the Arrangement becomes effective, Thesis shareholders (other than dissenting Thesis shareholders, if any) will receive 2.5584 common shares of Benchmark (each whole share, a “Benchmark Share“) for each Thesis Share held (the “Exchange Ratio“).
Further details with respect to the Arrangement are included in the Circular, which can be found under Thesis’ profile on SEDAR at www.sedar.com.
Benefits of the Arrangement
Increased Scale: The Arrangement creates one of the largest precious metals development and exploration companies in the prolific Toodoggone Mining District of British Columbia and consolidates two significant exploration projects, as the ongoing development of Benchmark’s Lawyers Project is nearby to high quality exploration targets on Thesis’ Ranch Project. The combined company resulting from the Arrangement (the “Combined Company“) has the potential to enhance Benchmark’s current 3.14 million ounces (Moz) of gold equivalent (AuEq)1 measured and indicated (M&I) mineral resources and 0.415 Moz AuEq1 inferred mineral resources at Lawyers with high-grade, near-surface mineralization at Ranch.2
Growth and Catalysts: Focused on resource growth, exploration, and discovery through 50,000m of drilling in 2023 with the goal of defining new mineral resource estimates for the Lawyers & Ranch projects (Q1/Q2 2024). Following that, an updated preliminary economic assessment (“PEA“) is expected to include high-grade underground ounces at Lawyers and Ranch’s maiden resource estimate (Q3, 2024).
Strong Management Team: Securityholders will benefit from the combination of two precious metals exploration and development teams with a proven track record of success across exploration, construction, capital markets and mergers and acquisitions. The combined team has a demonstrated track record of success in various stages of mining operations from the exploration stage through to production.
Operational and Financial Synergies: Efficient capital resource management benefiting from anticipated operational and financial synergies.
Access to Capital: The Combined Company will have increased access to capital that will fuel growth and development plans to further enhance shareholder value.
Improved Capital Markets Presence: The Combined Company will have increased size and trading liquidity in Canada, enhancing the company’s institutional investor following along with equity research.
1 AuEq calculated on a 1:80 gold-to-silver ratio.
2 See NI 43-101 technical report titled: Preliminary Economic Assessment lawyers gold-silver project Stikine Terrane, BC. Dated December 22, 2022, with an effective date of September 9, 2022 available under Benchmark Metals SEDAR profile at www.sedar.com, filed on January 12, 2023.
Approvals and Conditions to Closing
Completion of the Arrangement is subject to the approvals of the Securityholders and the Supreme Court of British Columbia (the “Court“), and the satisfaction or waiver of other customary closing conditions. The TSX Venture Exchange (the “TSXV“) has conditionally approved both the Arrangement and the listing of the Benchmark shares to be issued in connection with the Arrangement. It is currently expected that the effective date of the Arrangement will occur in the third quarter of 2023.
The Meeting will be held at the offices of Boughton Law Corporation, 595 Burrard Street, Suite 700, Vancouver, British Columbia, V7Z 1S8, at 10:00 a.m. (Vancouver time) on August 9, 2023, for the purposes set forth in the Thesis notice of meeting accompanying the Circular. Securityholders are encouraged to vote in advance of the Meeting, in accordance with the instructions set out in the form of proxy or voting instruction form, as applicable, mailed to Securityholders together with the Circular. The deadline for Securityholders to return their completed proxies or voting instructions forms is Monday, August 7, 2023 at 10:00 a.m. (Vancouver time). Further details can be found in the Circular in the section entitled “General Proxy Information.”
Receipt of Interim Order
Thesis is also pleased to announce that on June 27, 2023, it was granted an interim order (the “Interim Order“) by the Court regarding the Arrangement. The Interim Order authorizes Thesis to proceed with various matters relating to the Arrangement, including the Meeting, and provides notice to the Securityholders of the date and time of the hearing of the petition to approve the Arrangement. Completion of the Arrangement is conditional upon receipt of a final order by the Court. The Court hearing in respect of the final order is expected to take place at 9:45 a.m. (Vancouver time) on August 18, 2023 (or as soon thereafter as legal counsel can be heard).
Minority Approval under MI 61-101
Thesis is subject to Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions (“MI 61-101“). MI 61-101 provides that, in certain circumstances, where a “related party” (as defined in MI 61-101) of an issuer is entitled to receive a “collateral benefit” (as defined in MI 61-101) in connection with an arrangement transaction such as the Arrangement, such transaction may be considered a “business combination” for the purposes of MI 61-101 and subject to minority shareholder approval requirements.
A “collateral benefit” includes any benefit that a related party of the subject company (which includes the directors and executive officers of the subject company) is entitled to receive as a consequence of the transaction including such benefits as an increase in salary or a lump sum payment on a change of control.
Under MI 61-101, a benefit received by a related party is not considered to be a “collateral benefit” if, among other things, at the time the transaction was agreed to, the related party beneficially owned or exercised control or direction over less than 1% of the outstanding equity securities of the subject company at the relevant time.
If a “related party” receives a “collateral benefit” in connection with the Arrangement, the resolution approving the Arrangement (the “Arrangement Resolution“) will require “minority approval” in accordance with MI 61-101. This means the Arrangement Resolution must be approved by a majority of the votes cast, excluding those votes beneficially owned, or over which control or direction is exercised, by the “related parties” of the Company who receive a “collateral benefit”. This approval is in addition to the requirement that the Arrangement Resolution be approved by not less than two-thirds of the votes cast by Securityholders at the Meeting.
If the Arrangement is completed, the vesting of Thesis’ outstanding restricted share units (the “RSUs“) is to be accelerated, and certain “change of control” compensation may be payable pursuant to consulting and employment agreements with certain directors and executive officers of Thesis. Pursuant to MI 61-101, these benefits are considered to be “collateral benefits” accruing to “related parties”, unless they are excluded as a result of such party beneficially owning or exercising control or direction over less than 1% of the outstanding securities of each class of equity securities of Thesis at the relevant time, or the benefit is less than 5% of the amount of consideration that the related party expects it will be entitled to receive under the terms of the Arrangement, net of any offsetting costs to the related party, as determined by the Thesis Special Committee (as that term is defined in the Circular) and such determination is disclosed in the Circular (see pgs. 75-76 and pg. 85 of the Circular).
Following disclosure by each such director and senior officer of the number of securities of Thesis held by them and the benefits or payments that they expect to receive pursuant to the Arrangement, the Company has determined that two directors, Nicholas Stajduhar and Roy Bonnell, are the only related parties to Thesis who are receiving a “collateral benefit” in connection with the Arrangement and beneficially own or exercise control or direction over more than 1% of Thesis equity securities, respectively. Mr. Stajduhar beneficially owns or exercises direction or control over 2,875,225 Thesis Shares, Mr. Bonnell beneficially owns or exercises direction or control over 1,846,475 Thesis Shares (in both cases, including the deemed exercise of certain vested options and RSUs held by each of them and the accelerated vesting of RSUs pursuant to the arrangement agreement with Benchmark (the “Arrangement Agreement“), calculated in accordance with the provisions of MI 61-101). This represents approximately 4.42% and 2.84%, respectively, of the outstanding Thesis Shares as of the date of the Arrangement Agreement.
Consequently, the Thesis securities beneficially owned, directly or indirectly, by both Mr. Stajduhar and Mr. Bonnell, or over which each of them has control or direction will be excluded for the purposes of determining if minority approval of the Arrangement is obtained. In order to ensure complete compliance with the requirements under MI 61-101, the requisite Securityholder approval for the Arrangement Resolution will require a majority of holders of Thesis Shares, options, and RSUs to be voted at the meeting in favour of the Arrangement Resolution, excluding the votes which may be cast by Mr. Stajduhar and Mr. Bonnell.
The Company is not required to obtain a formal valuation under MI 61-101 as (i) no “interested party” (as defined in MI 61-101) is, as a consequence of the Arrangement, directly or indirectly acquiring the Company and (ii) an “interested party” is not a party to any “connected transaction” (as defined in MI 61-101) to the Arrangement that is a “related party transaction” (as defined in MI 61-101) for which Thesis would be required to obtain a formal valuation. No prior valuations of Thesis have been made in the past 24 months and no bona fide prior offers that relate to the subject matter of, or are relevant to, the Arrangement, have been received by the Company in the past 24 months.
About Benchmark Metals
Benchmark Metals Inc. is a Canadian based gold and silver company advancing its 100% owned Lawyer’s Gold-Silver Project located in the prolific Golden Horseshoe of northern British Columbia, Canada. The Project consists of three mineralized deposits that remain open for expansion, in addition to +20 new target areas along the 20-kilometer trend. Benchmark trades on the TSXV in Canada, the OTCQX Best Market in the United States, and the Tradegate Exchange in Europe. Benchmark is managed by proven resource sector professionals, who have a track record of advancing exploration projects from grassroots scenarios through to production.
Further details are available on Benchmark’s website at: https://benchmarkmetals.com/.
Thesis is a Vancouver-based mineral exploration company focused on proving and developing the resource potential of the 180km2 Ranch Gold Project located in the prolific Toodoggone Mining Camp of northern British Columbia, approximately 300 km north of Smithers, British Columbia.
The scientific and technical content of this news release has been reviewed and approved by Michael Dufresne, M.Sc, P.Geol., P.Geo., a qualified person as defined by National Instrument 43-101-Standards for Disclosure of Mineral Projects.
Further details are available on Thesis’ website at: https://www.thesisgold.com/.
For further information or investor relations inquiries, please contact:
Vice President Corporate Development
Toll Free: 1-888-221-0915
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 news release. No securities regulatory authority has either approved or disapproved of the contents of this news release.
None of the securities to be issued pursuant to the Arrangement have been or will be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act“), or any state securities laws, and any securities issuable in the Arrangement are anticipated to be issued in reliance upon available exemptions from such registration requirements pursuant to Section 3(a)(10) of the U.S. Securities Act and applicable exemptions under state securities laws. This press release does not constitute an offer to sell, or the solicitation of an offer to buy, any securities.
Cautionary Statement Regarding Forward-Looking Information
This press release contains “forward-looking information” within the meaning of applicable Canadian securities legislation. Generally, forward-looking information can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved”. These forward-looking statements or information may relate to the Arrangement, including statements with respect to the expected benefits of the Arrangement to the Thesis Securityholders, Benchmark shareholders, and the Combined Company following the Arrangement, the date and time of the Thesis Meeting, the timing for closing of the Arrangement, the timing and receipt of the required regulatory, Securityholder and court approvals, stock exchange (including the TSXV) and other approvals, if at all, the ability of Thesis and Benchmark to successfully close the Arrangement on the timing and terms described herein, or at all, the filing of materials on SEDAR, the successful integration of Thesis into the business of Benchmark, the prospects of the Lawyers Gold-Silver Project and Ranch Gold Project, including mineral resources estimates and mineralization of each project, and any expectations with respect to defining mineral resources or mineral reserves on any of Benchmark’s or Thesis’ projects, the timing of, and successful completion, of the items set out under the heading “Growth and Catalysts”, all statements relating to anticipated benefits to be contained in the new PEA, the anticipated makeup of the combined company, board of directors, and management, and any expectation with respect to any permitting, development or other work that may be required to bring any of the projects into development or production.
Forward-looking statements are necessarily based upon a number of assumptions that, while considered reasonable by management at the time, are inherently subject to business, market and economic risks, uncertainties and contingencies that may cause actual results, performance or achievements to be materially different from those expressed or implied by forward-looking statements. Such assumptions include, but are not limited to, assumptions regarding the combined company following completion of the Arrangement, that the anticipated benefits of the Arrangement will be realized, completion of the Arrangement, including receipt of required shareholder, regulatory, court and stock exchange approvals, the ability of Thesis and Benchmark to satisfy, in a timely manner, the other conditions to the closing of the Arrangement, other expectations and assumptions concerning the Arrangement, and that general business and economic conditions will not change in a material adverse manner. Although each of Benchmark and Thesis have attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information 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 information. Other factors which could materially affect such forward-looking information are described in the risk factors in the Circular and in each of Benchmark’s and Thesis’ most recent annual management’s discussion and analyses which have been filed with the Canadian securities regulators and are available, respectively, on each Company’s profile on SEDAR at www.sedar.com. Benchmark and Thesis do not undertake to update any forward-looking information, except in accordance with applicable securities laws.
Such statements represent the current views of Benchmark and Thesis with respect to future events and are necessarily based upon a number of assumptions and estimates that, while considered reasonable by Benchmark and Thesis, are inherently subject to significant business, economic, competitive, political and social risks, contingencies and uncertainties. Risks and uncertainties include, but are not limited to the following: inability of Benchmark and Thesis to complete the Arrangement, a material adverse change in the timing of any completion and the terms and conditions upon which the Arrangement is completed; inability to satisfy or waive all conditions to closing the Arrangement as set out in the Arrangement Agreement; Thesis Securityholders not approving the Arrangement; the TSXV not providing approval to the Arrangement and all required matters related thereto; the inability of the consolidated entity to realize the benefits anticipated from the Arrangement and the timing to realize such benefits, including the exploration and drilling targets described herein and the completion of a resource estimate and updated PEA; the updated PEA described herein not having the anticipated positive results; unanticipated changes in market price for Thesis Shares and/or Benchmark Shares; changes to Benchmark’s and/or Thesis’ current and future business plans and the strategic alternatives available thereto; growth prospects and outlook of Benchmark’s business, including commencing commercial production at the Lawyer’s Project; treatment of the Arrangement under applicable competition laws and the Investment Canada Act; regulatory determinations and delays; any impacts of COVID-19 on the business of the Combined Company and the ability to advance the Combined Company’s projects; stock market conditions generally; demand, supply and pricing for gold and silver; and general economic and political conditions in Canada and other jurisdictions where the applicable party conducts business.