TORONTO, Feb. 22, 2019 (GLOBE NEWSWIRE) -- Norvista Capital Corporation (“Norvista”) (TSX-V:
NVV) is very pleased to announce the sale of its three Manitoba assets to Rockcliff Metals Corporation
(“Rockcliff”) (TSX-V: RCLF). The aggregate purchase price is $13,258,000 and as consideration Norvista and its 80%
owned subsidiary, Akuna Minerals Inc. (“Akuna”), will receive a total of 88,386,667 shares of Rockcliff at a
deemed value of $0.15 per share. Concurrent with the asset sale Rockcliff will also complete an equity financing of up to
$30,000,000 with a cornerstone investment from London based private equity firm Greenstone Resources II LLP
(“Greenstone”) in the amount of US $15,000,000. Upon completion of the asset sale and the concurrent financing
(the “Transaction”) Norvista and its affiliates will own approximately 30% of the Rockcliff shares outstanding and
Greenstone will own approximately 42%.
This transformative event will reorganize Rockcliff into a well capitalized, vertically integrated resource
company with a portfolio of pre-development and exploration properties as well as access to a concentrate production facility. With
a strong shareholder base Rockcliff will now be well positioned to undertake major mineral exploration and mine development
programs over the next several years in the prolific Flin Flon – Snow Lake base metals mining camp in Manitoba. The Transaction is
a reverse take-over for the purposes of the policies of the TSX Venture Exchange (“TSX-V”). The Board of Directors
of each of Norvista and Rockcliff unanimously support the Transaction. As at the date of this announcement 53% of Norvista
shareholders and 36.8% of Rockcliff shareholders have provided irrevocable undertakings and consents to vote in support of the
Transaction. The Transaction is expected to close in April, 2019.
Don Christie, the President and CEO of Norvista, commented, “Norvista has spent a considerable amount of time
and effort over the last several years assembling its Manitoba asset portfolio and working with a number of groups to find the
optimal mix of both operating and financial partners. We are convinced that Rockcliff and Greenstone have the vision and the
resources to unlock significant value in our key assets and in Rockcliff’s extensive portfolio of more advanced and early stage
exploration properties. Investors can now track the increase in the value of these assets through our significant holding of
Rockcliff shares. Manitoba is a top-tier global mining jurisdiction and we are very enthusiastic about the prospects of Rockcliff
becoming a base metals producer. The Transaction unquestionably provides the right combination of organization, stewardship,
financial support and expertise to make this a successful venture.”
Mark Sawyer, a Senior Partner and a co-founder of Greenstone, commented, “Greenstone is delighted to be a
cornerstone investor in Rockcliff. We have confidence in the potential of Rockcliff and the ability of management to undertake
mineral development in the Province of Manitoba. Our goal is to make Rockcliff a significant base metal development and production
company.”
Ken Lapierre, President and CEO of Rockcliff, commented, “This is a transformational moment in Rockcliff’s 13
year history. Gaining the confidence of private equity firm Greenstone, as well as purchasing a leased mill complex and the
advanced stage Talbot and Tower copper assets from Norvista is a testament to both companies’ vision of growth and confidence in
Rockcliff’s ability to succeed in this well-endowed mineral belt. With the support of our new partners and the continued support of
our existing shareholders we now have the ability to unlock the full potential of our extensive property portfolio. We look forward
to completing this transaction and commencing exploration and development.”
Transaction Overview
The Transaction will transform Rockcliff into a well capitalized base metals focused mine developer and explorer
with high-grade deposits, access to a concentrate production facility and a significant land package of highly prospective
exploration properties all located in Manitoba.
Manitoba is one of the most permitting friendly jurisdictions in Canada. Should the economic viability and
technical feasibility of the projects be established the Transaction will allow Rockcliff to execute a “Hub and Spoke” development
strategy from a centralized milling facility and transition into a copper-focused producer with low capital costs to production.
Upon completion of the Transaction, the assets comprising the Hub and Spoke strategy are as follows:
Talbot Option Agreement: Rockcliff will be assigned the option agreement between Norvista
and Hudbay Minerals Inc. and will receive an earn-in option to acquire a minimum 51% ownership interest in the Talbot Property.
The Property hosts the Talbot copper deposit, a high-grade 4.2 million tonne National Instrument 43-101 Standards of
Disclosure for Mineral Projects (“NI 43-101”) Inferred mineral resource grading 1.61% Cu, 1.4% Zn, 1.77 g/t Au and 27.96 g/t
Ag as disclosed in the Rockcliff press release dated January 19, 2018. Mineral resources are not mineral reserves and do not have
demonstrated economic viability.
Tower Deposit: After acquiring Norvista’s interest in the Tower Property Rockcliff will have
a 100% ownership interest in the Tower Property, including the Tower deposit, a high-grade 1.08 million tonne NI 43-101 Indicated
mineral resource grading 3.73% Cu, 1.05% Zn, 0.55 g/t Au and 17.28 g/t Ag plus a 1.25 million tonne NI 43-101 Inferred mineral
resource grading 2.0% Cu, 1.02% Zn, 0.27 g/t Au and 9.78 g/t Ag as disclosed in the Rockcliff press release dated March 30, 2015.
Mineral resources are not mineral reserves and do not have demonstrated economic viability. The Tower Deposit is located
approximately 40 kilometres east of the Talbot Deposit.
Bucko Mill Lease: Norvista, as Lessee, will be assigning its rights in the Buckco Mill Lease to Rockcliff.
The initial term of the lease is for a period of 7 years and will give Rockcliff full access to the Bucko Lake mill
and tailings storage facilities located approximately 115 kilometres north east of the Tower Deposit near Wabowden, Manitoba.
Property Holdings: Rockcliff currently holds approximately 4,000 square kilometres of exploration
property in the prolific Flin Flon – Snow Lake greenstone belt, home to the largest Paleoproterozoic Volcanogenic Massive
Sulphide district in the world. This extensive property portfolio specifically includes:
Rail Property: Rockcliff currently owns a 100% ownership interest in the Rail Property, hosting the Rail
deposit, a high grade 822,000 tonne NI 43-101 Indicated mineral resource grading 3.04% Cu, 0.99% Zn, 0.7 g/t Au and 9.3 g/t Ag as
disclosed in the Rockcliff press release dated July 24, 2018. Mineral resources are not mineral reserves and do not have
demonstrated economic viability.
Historical Deposits: Rockcliff also owns six historical underexplored base metal deposits, all open along
strike and at depth with significant growth potential.
The Talbot Report is currently filed on the SEDAR profile for Rockcliff and the Tower Report is currently filed
on the SEDAR profile for Former Rockcliff (as defined below). The mineral resource estimate relating to the Talbot Property
is viewed as current. The mineral resource estimate relating to the Tower Property is not viewed as current and will be
updated. Norvista did not prepare its own resource estimate for the Tower Property as required by NI 43-101. Norvista
will be relying on the existing technical reports and the updated technical report to support the disclosure of resource estimates
it has made as the existing property owner.
Norvista has sought shareholder approval for the Transaction by way of written consent, and written consents
have been obtained from shareholders holding 53% of the issued and outstanding shares of Norvista. As a result, shareholder
approval has been obtained in satisfaction of regulatory requirements. Rockcliff will be calling an Annual and Special
Meeting of the shareholders of Rockcliff (the “Meeting”) for mid April 2019 to seek shareholder approval for the
Transaction. Full particulars of the Transaction will be included in the management information circular (the “Management
Information Circular”) mailed to shareholders in respect of the Meeting. Further particulars of the timing of the Meeting
will be provided in a subsequent press release.
Red Cloud Klondike Strike Inc. has been engaged by the Board of Directors of Rockcliff, pursuant to an
engagement letter dated February 8, 2019, to prepare an opinion as to the fairness, from a financial point of view, of the
Transaction to the shareholders of Rockcliff (the “Fairness Opinion”). Further particulars of the Fairness Opinion
will be provided in due course. The Fairness Opinion will be disclosed in and included with the Management Information
Circular.
Asset Acquisition
Rockcliff has entered into asset purchase agreements with Norvista and Akuna. Pursuant to the agreement with
Norvista, Rockcliff will be assigned the Talbot Option Agreement and the Bucko Mill Lease Agreement for aggregate share
consideration valued at $9,943,500. Norvista will receive 66,290,000 Rockcliff common shares at a deemed value of $0.15 per share.
Pursuant to the agreement with Akuna, Rockcliff will acquire a 100% interest in certain mining claims located in the Province of
Manitoba, known as the Tower Project for share consideration valued at $3,314,500. Akuna will receive 22,096,667 Rockcliff common
shares at a deemed value of $0.15 per share. Akuna is 80% owned by Norvista.
History of the Tower Property and the Talbot Property
Tower Property: Pursuant to an agreement dated February 21, 2008 between Pure Nickel
Inc. (“Pure Nickel”) and Rockcliff Resources Inc. (“Former Rockcliff”), the predecessor of
Rockcliff, Former Rockcliff acquired an option to earn a 70% interest in the Tower Property in consideration for the expenditure of
$4 million. Former Rockcliff earned a 50% interest in the Tower Property after spending $2,000,000 on the property and Former
Rockcliff and Pure Nickel entered into a joint venture agreement dated March 26, 2012, as amended, with respect to the further
exploration and development of the Tower Property. Former Rockcliff had the option to earn a further 20% interest in the Tower
Property for the expenditure of a further $2,000,000. In January 2013, Former Rockcliff commissioned and received the Tower Report.
In 2014, Former Rockcliff earned its 70% interest in the Tower Property. In June of 2015, Former Rockcliff sold its 70% interest in
the Tower Property to Akuna pursuant to the terms of an agreement dated April 10, 2015 (the “Tower Purchase
Agreement”) that required completion of certain milestones for Akuna to earn its further interest in the Tower Property
from Former Rockcliff. Akuna acquired a 30% interest in the Tower Property from Pure Nickel pursuant to an agreement dated April
10, 2015 in consideration for a cash payment of $1,000,000 and a further payment of $500,000 in the event that the Tower Property
achieves nameplate production. Pursuant to the Tower Purchase Agreement, as amended, Akuna earned a further 14% interest in the
Tower property from Rockcliff. Rockcliff is acquiring an aggregate 44% interest in the Tower Property from Akuna to hold a 100%
interest in the Tower Property pursuant to the terms of the Transaction.
Talbot Property: Pursuant to an agreement dated April 14, 2014 between Former Rockcliff
and a predecessor of Hudbay Minerals Inc. (the “Talbot Agreement”), Former Rockcliff acquired the option to earn a
51% working interest in the Talbot Property by expending an aggregate of $6,120,000 over six years. Rockcliff had incurred
expenditures sufficient to satisfy the first four years of expenditures under the Talbot Agreement plus all but approximately
$205,000 of the 5th years expenditure by the spring of 2018. The expenditures required for the sixth year are $2,270,000
and must be completed by April 14, 2020. Pursuant to an agreement dated May 3, 2018 between Rockcliff and Norvista (the
“Talbot Purchase Agreement”), Rockcliff assigned the rights and obligations under the Talbot Agreement to Norvista
in consideration for the payment of $200,000 in cash, the commitment to spend $205,000 on the Talbot Property prior to April 14,
2019 and with certain other consideration to be paid in respect of the commencement of construction of the Tower Project. Norvista
is assigning all of its rights and obligations in the Talbot Agreement back to Rockcliff and Rockcliff is releasing Norvista from
its remaining obligations under the Talbot Purchase Agreement pursuant to the Transaction.
Rockcliff Board of Directors
The Board of Directors of Rockcliff will initially consist of five members, being Don Christie on behalf of
Norvista, Mark Sawyer on behalf of Greenstone, Ken Lapierre on behalf of Rockcliff and two other independent non-executive
directors to be announced prior to the closing of the Transaction. There will also be further announcements regarding senior
officers of Rockcliff to be appointed upon completion of the Transaction.
Rockcliff Flow Through Financing, Greenstone Investment & Additional Financing
In connection with the Transaction and as part of the reorganization effort, Greenstone will fund US$15,000,000
of a total equity financing package for Rockcliff of up to $30,000,000 comprised of the following tranches:
- Flow-through Financing. Rockcliff will undertake a flow-through equity financing of
approximately $19,862,600 (the “FT Financing”) consisting of approximately 82,760,833 common
shares of Rockcliff that qualify as flow-through shares (the “FT Shares”) for purposes of the Income Tax
Act (Canada) (the “Tax Act”) priced at $0.24 per FT Share. The FT Shares are part of a donation arrangement
structured by PearTree Securities Inc. Greenstone will acquire the 82,760,833 shares indirectly through the donation arrangement
at $0.15 per share for a total cost of approximately $12,414,126 (the “Greenstone Commitment”), with the
flow-through investors retaining the tax benefits of the flow-through share structure.
- Greenstone Investment. Greenstone will complete a hard dollar equity financing of
approximately $7,472,875 consisting of approximately 49,819,167 common shares of Rockcliff priced at $0.15 per
share (the “Greenstone Subscription”).
- Additional Financing. Concurrently with the Greenstone Subscription and the Greenstone
Commitment, Rockcliff intends to complete an additional best efforts financing of up to $2,601,500 (the
“Additional Financing”) from existing shareholders of Rockcliff (see heading “Existing
Shareholder Offering” below) and third party accredited investors. The Additional Financing will comprise a $1,601,500 hard
dollar financing consisting of Rockcliff common shares (“Rockcliff Shares”) priced at $0.15 per share and a
$1,000,000 flow-through financing consisting of common shares of Rockcliff that qualify as flow-through shares for purposes of
the Tax Act (the “Additional FT Shares”) priced at $0.20 per Additional FT Share. Red Cloud Klondike Strike Inc.
will act as a finder in respect of the Additional Financing.
The Greenstone Subscription and the Additional Financing will proceed by way of an offering of subscription
receipts of Rockcliff (each, a “Subscription Receipt”) issued at a price of $0.15 per regular
Subscription Receipt and at a price of $0.20 per flow-through Subscription Receipt. Release of the funds to be held in escrow
pursuant to the Subscription Receipts financings will be conditional upon receipt of Rockcliff shareholder approval to the
Transaction, the closing of the Asset Acquisition (referred to below) and regulatory approval to list the shares issued pursuant to
the Transactions (the “Conditions”). Upon satisfaction of the Conditions, each Subscription Receipt will, for no
additional consideration, be automatically exercised into one Rockcliff Share.
Rockcliff shall use the proceeds of the FT Financing, the Greenstone Subscription and the Additional Financing
to:
- Complete infill drilling and a pre-feasibility study to potentially advance the Talbot project to a construction
decision;
- Complete infill drilling and a pre-feasibility study to potentially advance the Tower project to a construction
decision;
- Complete 95,000 metres of exploration drilling across the Talbot, Tower, Rail, Bur, Freebeth, Lon, Morgan, Pen, Tramping and
Copperman properties and targets identified across the SLS#1 to SLS#5 properties; and
- General working capital in accordance with a work program and budget agreed upon between Rockcliff, Norvista and
Greenstone.
Proceeds from the sale of the FT Shares and the Additional FT Shares will be used by Rockcliff over the period
ending December 31, 2020 for exploration activities that will qualify as “Canadian Exploration Expenses” (within the meaning of the
Tax Act).
Pursuant to an investor rights agreement between Rockcliff and Greenstone dated February 20, 2019, into
which the parties have entered in connection with the Greenstone Commitment and the Greenstone Subscription, Greenstone shall be
granted certain investor rights, including: (i) for as long as Greenstone holds at least 10% of issued and outstanding
Rockcliff Shares, the right to participate in future offerings of securities of Rockcliff (each an “Offering”) so
as to maintain Greenstone’s pre-Offering ownership percentage in Rockcliff; (ii) the right to nominate a representative to
Rockcliff’s project steering committee in respect of Rockcliff mineral exploration properties; (iii) for as long as
Greenstone holds at least 10% of issued and outstanding Rockcliff Shares, the right to nominate one member of the board of
directors of Rockcliff; and (iv) a right to nominate customers in respect of off-take arrangements for production from Rockcliff’s
properties.
Transaction Approval
These transactions including the release of funds pursuant to the Subscription Receipts are conditional on the
completion of the Transaction and the receipt of requisite shareholder and stock exchange approvals, including the approval by
shareholders of Rockcliff of the change of control of Rockcliff resulting from the completion of the Transaction, and the approval
of the shareholders of Norvista of the asset sales. Securities issued pursuant to the FT Financing, the Greenstone Subscription and
the Additional Financing will be subject to a statutory four month and one day hold period from the closing of the Subscription
Receipts financings. Securities issued pursuant to the FT Financing and the Asset Acquisition will be subject to a statutory four
month and one day hold period from the Closing of the Transaction. The Asset Acquisition Shares and the shares acquired by
Greenstone pursuant to the Greenstone Commitment and the Greenstone Subscription shall be subject to escrow in accordance with the
terms of National Policy 46-201 - Escrow for Initial Public Offerings, to be released on the basis that Rockcliff is
deemed to be an emerging issuer as defined therein.
The Transaction which qualifies as a “reverse-take-over” of Rockcliff under the policies of the TSX-V, will be
subject to TSX-V approval. Rockcliff is arm’s length to Greenstone. Rockcliff and Norvista are "non-arm's length parties" as Bruce
Durham and Donald Christie serve on the respective boards of directors of both Rockcliff and Norvista. Rockcliff will require
shareholder approval of the Transaction pursuant to the policies of the TSX-V, as Greenstone and Norvista will both become “control
persons” of Rockcliff on closing. Rockcliff will apply to the TSX-V for a waiver from the requirement to engage a sponsor with
respect to the Transaction; however, there is no assurance that a waiver will be granted. Rockcliff intends to include any
additional information regarding sponsorship in a subsequent press release. The Transaction is also subject to satisfaction of
certain other closing conditions customary in transactions of this nature.
Full details of the Transaction will be included in the management information circular of Rockcliff to be
mailed to its shareholders and posted on www.sedar.com. It is anticipated that the meeting of Rockcliff shareholders and the closing will
take place by the end of April 2019.
Bruce Durham, P.Geo., Chief Operating Officer and a director of Norvista, is a Qualified Persons as defined by
National Instrument 43-101 - Standards of Disclosure for Mineral Projects. Mr. Durahm is responsible for the
scientific and technical data presented herein and has reviewed, prepared and approved this press release.
About Norvista
Norvista is a resource-based merchant bank with an investment portfolio of four core investments located in
Canada, the United States and Mexico. Norvista’s investee companies have projects located in excellent mining jurisdictions and are
involved in both base and precious metals exploration and development. Norvista holds significant equity ownership positions in its
investee companies and is actively involved in the management of these companies through a combination of senior officer positions
and/or board representation. The investee company projects represent a balance between later stage exploration and pre-production
projects and are self-financing. Norvista maintains and increases its ownership positions in its core holdings through
participation in issuer financings as well as share acquisitions in the open market.
About Rockcliff
Rockcliff is a Canadian resource exploration company focused on base metals, gold and royalties in the Snow Lake
area of Manitoba, Canada. Rockcliff is the largest junior landholder in the Flin Flon-Snow Lake greenstone belt which is home to
the largest Paleoproterozoic VMS district (copper, gold, zinc, silver) in the world and also contains gold mines and deposits. Its
extensive portfolio of properties totals over 4,000 square kilometres. It includes 9 of the highest-grade undeveloped VMS deposits
and 5 lode-gold properties including the historic Rex-Laguna gold mine, Manitoba’s first and highest-grade gold mine.
About Greenstone
Greenstone is a private equity fund specializing in the mining and metals sector with approximately US$430
million in committed long-term capital. With more than 100 years collective experience, predominantly fulfilling senior roles
within mining companies, financial institutions and principal investing, Greenstone understands the sector, its value drivers and
inherent risks. As such Greenstone is able to make long term investments which better aligns itself to management decision
making.
Early Warning Reports
Assuming the completion of the Asset Acquisition, Norvista, Akuna and Norvista Capital 1 Limited Partnership
which previously jointly beneficially controlled 4,761,904 Rockcliff Shares, or approximately 1.5% of the issued and outstanding
Rockcliff Shares, will have acquired 88,386,667 Rockcliff Shares or approximately 28.0% of the issued and outstanding common shares
of Rockcliff for an aggregate value of $13,258,000. Assuming the completion of the Greenstone Subscription and the Greenstone
Commitment, Greenstone, which previously owned no Rockcliff Shares, will have acquired 132,580,000 Rockcliff Shares or
approximately 42.0% of the issued and outstanding common shares of Rockcliff for the aggregate value of $US15 million.
Each of Norvista, Akuna and Greenstone will be acquiring the securities of Rockcliff as part of the Transaction
and for investment purposes, the completion of which is subject to, among other things approval of the shareholders of Rockcliff.
Depending on market and other conditions, each of Norvista, Akuna and Greenstone may from time to time in the future increase or
decrease their respective ownership, control or direction over the Rockcliff securities as circumstances warrant. For the purposes
of this notice, the Head Office of each of Norvista and Akuna is 141 Adelaide St. West, Suite 1660, Toronto, Ontario M5H 3L5; and
the Head Office of Greenstone is East Wing, Trafalgar Court Les Banques, St Peter Port, Guernsey.
In satisfaction of the requirements of the National Instrument 62-104 - Take-Over Bids And Issuer Bids
and National Instrument 62-103 - The Early Warning System and Related Take-Over Bid and Insider Reporting Issues, Early
Warning Reports in respect of acquisition of Rockcliff Shares by Norvista and Akuna and by Greenstone will be filed under
Rockcliff’s SEDAR Profile at www.sedar.com.
TSX-V Approvals
Completion of the transactions described herein is subject to a number of conditions, including but not limited
to, TSX-V acceptance and shareholder approval for both Rockcliff and Norvista. Where applicable, the transactions described herein
cannot close until the required shareholder approval is obtained. There can be no assurance that the transactions described herein
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 transactions described herein, any information released or received with respect to the
transactions described herein may not be accurate or complete and should not be relied upon. Trading in the securities of Rockcliff
should be considered highly speculative.
The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed transaction and has
neither approved nor disapproved the contents of this news release.
For further information, please contact:
Norvista Capital
Corporation
Don Christie
Off: (416) 504-4171
dchristie@norvistacapital.com
Cautionary Note Regarding Forward-Looking Statements: This press release contains
“forward-looking information” within the meaning of applicable Canadian securities laws. Any statements that express or involve
discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or
performance (often, but not always, identified by words or phrases such as “believes”, “anticipates”, “expects”, “is expected”,
“scheduled”, “estimates”, “pending”, “intends”, “plans”, “forecasts”, “targets”, or “hopes”, or variations of such words and
phrases or statements that certain actions, events or results “may”, “could”, “would”, “will”, “should” “might”, “will be taken”,
or “occur” and similar expressions) are not statements of historical fact and may be forward-looking statements. Forward-looking
information in this news release includes, but is not limited to, the closing of the Transaction, anticipated exploration and
development of Rockcliff’s Manitoba properties, satisfaction of closing conditions for the Transaction and Additional Financing
approval of the TSX-V, approval by the shareholders of Rockcliff and the potential for exploration.
This news release includes forward-looking statements that are subject to risks and uncertainties.
Forward-looking statements involve known and unknown risks, uncertainties, and other factors that could cause the actual results of
Rockcliff to be materially different from the historical results or from any future results expressed or implied by such
forward-looking statements. All statements contained in this news release, other than statements of historical fact, are to be
considered forward-looking. Although Rockcliff believes the expectations expressed in such forward-looking statements are based on
reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ
materially from those in the forward-looking statements. Accordingly, readers should not place undue reliance on forward-looking
information. Rockcliff does not undertake to update any forward-looking information except in accordance with applicable securities
laws.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies
of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.