Superior Gold Inc.  (TSX-V: SGI) (OTCQX: SUPGF) announces that it has entered into a definitive agreement pursuant to which Catalyst Metals Limited (ASX: CYL) will acquire all of the issued and outstanding common shares of Superior pursuant to a court-approved plan of arrangement.

The Transaction will result in Catalyst acquiring 100% of Superior’s Plutonic Gold Operations, located in central Western Australia. The Plutonic Gold Operations include the Plutonic underground gold mine and central mill, numerous open-pit projects, and an interest in the Bryah Basin joint venture.

Under the terms of the Transaction, common shareholders of Superior will receive 0.3571 of one ordinary share of Catalyst  for each Superior common share held. The Exchange Ratio represents the equivalent of C$0.44 per Superior Share and a total equity value for Superior of approximately C$54 million on a fully-diluted basis based on the closing price of Catalyst on the Australian Securities Exchange as of February 22, 2023. The consideration implies a premium of 62% to the closing price of Superior on the TSX Venture Exchange as of February 22, 2023 and a premium of 52% to the 20-day volume weighted average prices of each of Catalyst and Superior on the ASX and TSXV respectively, as of February 22, 2023.

Upon completion of the proposed Transaction, existing Catalyst shareholders and former Superior shareholders will own approximately 78% and 22% of the combined company, respectively, including the impact of the previously-announced acquisition of Vango Mining Limited by Catalyst but excluding the impact of the planned Catalyst financing, as further described below.

Chris Jordaan, President and Chief Executive Officer of Superior said: “We are very pleased to offer shareholders the opportunity we have always proposed, the consolidation of the Plutonic-Marymia gold belt, with a meaningful immediate premium, diversification of assets and cash flow and logically, a listing on the ASX. We believe the Transaction will create a strong platform from which to advance the development of the Plutonic underground mine and surrounding open pit projects. Shareholders will also benefit from Catalyst’s strong Australian shareholder register, financial strength and portfolio of exploration projects. We would like to thank our indigenous partners, the Jidi Jidi Aboriginal Corporation and the Marputu Aboriginal Corporation, for all of their support. I am confident that, when completed, this Transaction will mean an even stronger future for Plutonic. Catalyst will bring to Plutonic a team with international mining experience, a proven track record of exploration success and the financial resources to develop the district.”

Benefits to Superior Shareholders

• Immediate upfront premium of 62% to the closing price of Superior on the TSXV as of February 22, 2023 and a premium of 52% to the 20-day VWAP of each of Catalyst and Superior on the ASX and TSXV, respectively, as of February 22, 2023;
• Ownership in a well-funded, diversified, ASX-listed producer with proven operating and exploration capabilities, significantly improving the scale and access to capital compared to a single asset company;
• Ongoing exposure to future value-creating growth projects at Plutonic plus exploration upside across the Plutonic-Marymia gold belt;
• Provides access to a strong balance sheet and diversified cash flow generation to fund and optimize Plutonic project development;
• Established Australian institutional investors and improved trading liquidity.

Transaction Summary

The Transaction will be implemented by way of a court-approved plan of arrangement under the Business Corporations Act (Ontario) and will require the approval of at least 66 2/3% of the votes cast by the shareholders of Superior at special meeting of Superior expected to be held in the second quarter of 2023.

Under the terms of the Transaction, Catalyst will acquire all the issued and outstanding Superior Shares and Superior shareholders will receive 0.3571 of a Catalyst Share for each Superior Share.

Each of the directors and senior officers of Superior have entered into voting and support agreements with Catalyst pursuant to which they have agreed to vote all Superior Shares they own or control in favour of the proposed Transaction.

In addition to Superior shareholder approval, the Transaction is also subject to the receipt of applicable court approval and the satisfaction of certain other closing conditions, including Catalyst’s completion of a financing of at least A$20 million and up to A$50 million, Superior receiving a fairness opinion as well as other customary closing conditions. Under ASX listing rules, Catalyst will file a prospectus in connection with the issuance of the Catalyst Shares pursuant to the Transaction or obtain a waiver or relief granted by the Australian Securities and Investment Commission, or otherwise seek shareholder approval to the extent required under the ASX. Subject to the satisfaction of these conditions, Catalyst and Superior expect that the Transaction will be completed in the second quarter of 2023.

Catalyst and Superior have provided representations and warranties customary for a transaction of this nature as well as customary interim period covenants regarding the operation of their respective businesses in the ordinary course. The Agreement also provides for customary deal protection measures, including non-solicitation covenants on the part of Superior and a right to match in favour of Catalyst. Superior may, under certain circumstances, terminate the Agreement in favour of an unsolicited superior proposal, subject to a termination payment of C$2 million by Superior to Catalyst.

None of the securities to be issued pursuant to the Agreement 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 issued in the Transaction 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 news release does not constitute an offer to sell or the solicitation of an offer to buy any securities.

Further information regarding the Transaction will be contained in an information circular that Superior will prepare, file and mail in due course to its shareholders. Details regarding these and other terms of the Transaction are set out in the Agreement, which will be available under Superior’s profile on SEDAR at www.sedar.com.

Superior Board of Directors and Special Committee Recommendations

A special committee comprised entirely of independent directors of Superior unanimously recommended the Transaction to the Board of Directors of Superior. The Board has evaluated the Agreement with the Company’s management and legal and financial advisors, and following the receipt and review of a unanimous recommendation from the Special Committee, the Board has unanimously determined that the Transaction is in the best interests of the Company and recommends that shareholders of Superior vote in favour of the Transaction.

Advisors and Counsel

Superior’s financial advisor is National Bank Financial Inc., its Canadian legal counsel is Bennett Jones LLP, and its Australian counsel is Grondal Bruining Pty Ltd. National Bank Financial Inc. has also been retained to provide a fairness opinion to the Board that the consideration offered under the Transaction is fair, from a financial point of view, to the shareholders of Superior.

Catalyst’s financial advisor is Argonaut Securities Pty Ltd, its Canadian legal counsel is Cassels Brock & Blackwell LLP, its Australian legal counsel is Gilbert + Tobin, its tax advisor is PwC (in both Canada and Australia), and Entech is a technical consultant to Catalyst.

Qualified Person

The scientific and technical information in this press release has been reviewed and approved by Ettienne Du Plessis, who is a “qualified person” as defined by National Instrument 43-101 – Standards of Disclosure for Mineral Projects. Mr. Du Plessis is not independent of the Company within the meaning of NI 43-101.

About Superior

Superior is a Canadian-based gold producer that owns 100% of the Plutonic Gold Operations located in Western Australia. The Plutonic Gold Operations include the Plutonic underground gold mine and central mill, numerous open-pit projects, and an interest in the Bryah Basin joint venture.