Canada Strategic Metals Inc. (TSX-V: CJC), Matamec Explorations Inc. (TSX-V: MAT) and Sphinx Resources Ltd. (TSX-V: SFX) are pleased to announce that Canada Strategic and Matamec have closed the business combination by way of the plan of arrangement approved by an order of Superior Court of Canada, announced on April 26, 2018, to create a new gold exploration company whose activities will be focused on the James Bay region. The company will be called Quebec Precious Metals Corporation. Canada Strategic has also acquired Sphinx’s three gold projects by way of an asset purchase, including Sphinx’s 50% interest in the Cheechoo-Éléonore Trend project, as well as the remaining 50% interest in that project held by Sirios Resources Inc. (TSX-V: SOI).
Pursuant to the Arrangement, each shareholder of Matamec received 0.267697315 common shares of Canada Strategic (post consolidation) in exchange for each common share of Matamec (post-consolidation, in accordance with the terms of the Arrangement). As announced previously, Goldcorp Inc. invested $3,701,960, which was converted into units of QPM (the “Units”) at a price of $0.61 per unit. Each Unit consists of one common share of QPM and half a common share purchase warrant, with each whole warrant entitling its holder to purchase one additional common share of QPM, post-consolidation, for $0.85, for a period of two years following the closing of the transaction. If Goldcorp exercises all its warrants on closing of the transaction, it will hold 8,560,183 common shares, representing approximately 19.2% of the issued and outstanding common shares (after partial dilution).
Within the scope of the transaction, the Caisse de dépôt et placement du Québec invested $1,400,000, which was converted into Units on the same terms as the Goldcorp Investment. If la Caisse exercises all its warrants on closing of the transaction, it will hold 4,410,571 common shares, representing approximately 9.6% of the issued and outstanding common shares (after partial dilution).
Other participants in the transaction include P.E. Partners, a corporation whose shareholders include a member of QPM’s management, who along with his partners invested $301,340, and two members of QPM’s management and board of directors, who invested a total of $20,004.
The Goldcorp Investment was subject to a number of conditions that are customary for this type of transaction, including: the execution of an investor rights agreement between Canada Strategic and Goldcorp; the completion of the Arrangement; the raising by QPM of gross proceeds of at least $5,000,000 under the subscription receipt offering (which includes the Goldcorp Investment); the acquisition by Canada Strategic of a 100% interest in the Cheechoo-Éléonore Trend project; the execution of a subscription receipt agreement with Computershare Trust Company of Canada governing the issuance of the subscription receipts; and the issuance of common shares of QPM in settlement of any amounts owing to insiders of Canada Strategic and the directors and other creditors of Matamec by the two companies (being a total of 888,930 common shares of QPM). These conditions have been met.
The Company expects the name change and the consolidation to be effective sometime over the course of next week.
“We are very pleased to have closed this transaction with Matamec and Sphinx,” said Normand Champigny, Chief Executive Officer of QPM. “This gives QPM the funds we need to accelerate drilling and confirm what we estimated to be a potential of several million ounces at Sakami, as well as to continue exploring other projects in Eeyou Istchee James Bay territory. We wish to thank Matamec’s board of directors, management and shareholders for their hard work, and Goldcorp and la Caisse for supporting this transaction.”
Now that the Arrangement has closed, MPQ plans to have Matamec’s shares delisted from the TSX Venture Exchange, and Matamec plans to request the appropriate securities regulatory authorities to revoke its reporting issuer status and terminate its reporting obligations.
All the details of the Arrangement (including the consolidation of Matamec shares thereunder), the Goldcorp Investment, the name change, the consolidation of Canada Strategic, the purchase of Sphinx’s assets, the purchase of Sirios’ assets and the shares issued for debt settlement are contained in the joint Canada Strategic and Matamec proxy circular, which can be found in the SEDAR issuer profiles for Canada Strategic and Matamec, at www.sedar.com.
QPM plans to use the proceeds of the offering to carry out exploration work and finance certain expenses incurred in connection with the Arrangement and for working capital and general corporate purposes. All securities issued under the offering are subject to a hold period that will expire on October 28, 2018, being four months and one day following the closing date of the transaction, in accordance with applicable Canadian securities laws.
About Canada Strategic Metals Inc.
Canada Strategic Metals is an emerging company focused on the exploration and development of a number of projects covering over 57,084 hectares in Quebec. With broad management experience in green technology and junior resource exploration and development, Canada Strategic Metals is well positioned to aggressively advance this promising property portfolio for its shareholders.
About Matamec Explorations Inc.
Located in Montreal (Québec), Matamec Explorations Inc. is a junior mining exploration company whose primary activities are focused on the development of its gold assets. Matamec’s main focus is on the Sakami gold property (50%), in proximity to the Éléonore Mine (in James Bay, QC); Opinaca Gold West (100%), located in the Quebec Plan Nord region in similar geological settings as established gold-producing mines; and the Casa-Detour property (100%), located east of the Burntbush property of Detour Gold Corp. Matamec has two other gold projects in Ontario, Matheson JV (50%) and Pelangio (100%) located near the Hoyle Pond Mine in Timmins. Matamec’s other mining projects include key elements for technologies related to energy containing, among others, lithium (Tansim – under option), cobalt (Fabre – 100% owned), nickel (Vulcain – 100% owned) and rare earths (Kipawa – 72% owned by Matamec). The Kipawa rare earths project is a joint venture owned by Matamec (72%) and Ressources Québec (28%) (acting as an agent of the Government of Québec). Toyota Tsusho Corp. of Nagoya, Japan, holds a 10% net profits interest in the deposit.
About Québec and Sphinx Resources Ltd.
Quebec has established itself as one of the world’s most attractive mining jurisdictions, ranking 6th globally (Fraser Institute press release, February 22, 2018). The Quebec government has gained market confidence by following a proactive approach to mining policy. Quebec’s mining sector has also been encouraged by the clarity and certainty of the legal and regulatory framework adopted by its government. Sphinx is a company engaged in the generation and acquisition of exploration projects in Québec.
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We acknowledge the [financial] support of the Government of Canada.