Miata Metals Corp. (CSE: MMET) (“Miata”) and 79North Inc. (CSE: JQ) (“79North”) are pleased to announce that they have entered into a definitive agreement (the “Agreement”) whereby Miata will acquire all of the issued and outstanding shares of 79North, an arm’s length party, in an all-share transaction (the “Transaction”). Miata and 79North had previously announced the signing of a letter of intent in respect of the Transaction on June 5, 2024.
79North currently holds an interest in the 21,929 ha. Sela Creek gold project (“Sela Creek”) and the 19,916 ha. Nassau gold project (“Nassau”), both located in Suriname, South America. Sela Creek and Nassau are both situated along Marowijne Greenstone Belt, part of the Guiana Shield. Suriname contains a highly prolific gold endowment associated with greenstone belts in the Guiana Shield. It is home to multiple producing gold mines and mature development projects, despite being relatively under-explored compared to other South American and West African countries in the Guiana/West African Shield. Other companies operating in Suriname include Founders Metals Inc. (TSXV: FDR, OTCQX: FDMIF, FSE: 9DL0) (the Antino gold project*), Newmont Corporation (NYSE:NEM, ASX:NEM, TSX:NGT, PNGX:NEM) (the Merian gold mine*), and Zijin Mining Group Co. Ltd. (HKEX: 02899, SHH 601899) (the Rosebel gold mine*).
Upon closing, the Transaction will mark a significant milestone for Miata and broadens its asset portfolio by adding two prospective gold properties. Under the terms of the Transaction, Miata will acquire 100% of the issued and outstanding shares of 79North by way of a three-cornered amalgamation under the Business Corporations Act (Ontario).
Transaction Highlights and Strategic Rationale
- Miata will issue 9,000,000 common shares (“Miata Shares”) to 79North shareholders in exchange for 100% of the issued and outstanding shares of 79North at closing.
- Following the closing of the Transaction, there will be 42,368,609 Miata Shares issued and outstanding, with former 79North shareholders owning approximately 21.2% of the combined entity.
- Assuming a share price of $0.45 per Miata Share, the total 79North equity value is approximately $4 million.
- Strategically positions Miata as a multi-asset explorer in Suriname, with two projects that cover over 40,000 ha. located within the prolific Marowijne Greenstone Belt, part of the Guiana Shield.
- Both 79North assets contain extensive surficial mining activity and prospective historical workings including channel and auger samples, as well as diamond drilling.
- Sela Creek has yielded historical channel samples as high as 13.6g/t Au over 9 m, and Nassau has yielded diamond drill results as high as 383.2 g/t Au over 1.5m.
- Favourable permitting environment, year-round access, in-country analytical laboratory, and availability of labour in Suriname results in a positive mineral exploration environment.
“The proposed transaction with 79North is a unique opportunity to provide Miata’s shareholders exposure to an underexplored, but highly-prolific jurisdiction in South America,” stated Miata’s CEO, Dr. Jacob Verbaas. “We have been assessing opportunities in Suriname and have spent considerable time evaluating the region and are very excited by the exploration opportunities and potential of the 79North assets. We believe that we will be able to continue to build on the exploration success of the 79North team, and unlock significant shareholder value through the systematic exploration of Sela Creek and Nassau. In particular, Sela Creek has extensive surficial mining exposure supporting our belief that the property serves as an excellent analog to other successful discoveries within Suriname. Moreover, Nassau has shown exciting intercepts in historic work and is located in close proximity to Newmont’s Merian Mine*. We believe that Suriname offers the opportunity for bottom-quartile exploration and drilling costs, as well as the potential for significant gold endowments in a region that is still under-explored.”
Transaction Terms
Under the terms of the Transaction, Miata will issue 9,000,000 Miata Shares to 79North shareholders. The exchange ratio per share (the “Exchange Ratio”) will be calculated based on the 9,000,000 Miata Shares issuable under the Transaction divided by the number of common shares of 79North (“79North Shares”) issued and outstanding at the closing of the Transaction. On completion of the Transaction, all of 79North’s outstanding stock options and share purchase warrants will be exercisable into Miata Shares using the Exchange Ratio. Assuming no further issuances of Miata Shares prior to closing, following the completion of the Transaction, 79North Shareholders will own approximately 21.2% of the issued and outstanding Miata Shares.
The Transaction will be carried out by way of a three-cornered amalgamation under the Business Corporations Act (Ontario) between Miata, 79North, and a wholly-owned subsidiary of Miata. The Transaction requires approval by 66 2/3% of the votes cast by 79North shareholders at a special meeting (the “Meeting”) expected to be held in September 2024. Directors and officers of 79North, representing an aggregate of approximately 10% of the issued and outstanding 79North Shares on a partially-diluted basis, have entered into voting support agreements pursuant to which, among other things, each director and/or officer has agreed to vote in favour of the Transaction at the Meeting.
As part of the Transaction, Miata has provided a secured bridge loan to 79North for $200,000 which will be used by 79North to cover its Transaction costs and settle its outstanding liabilities prior to closing.
Miata will also issue 1,000,000 Miata Shares to an arm’s length party as a finder’s fee in connection with closing of the Transaction. Under securities legislation, these shares will carry a minimum resale restriction of four months and one day from the date of issuance.
Closing of the Transaction is subject to approval of 79North’s shareholders, stock exchange approval, as applicable, standard closing deliverables and other customary conditions typical for a transaction of this nature. Following completion of the Transaction, Miata will continue to be managed by the current executive team and board of directors.
