Wallbridge Mining Company Limited (TSX:WM) and Balmoral Resources Ltd. (TSX:BAR) announce today that they have entered into a definitive agreement following the signing of a Letter of Intent on February 14, 2020, whereby Wallbridge will, among other things, acquire all of the issued and outstanding shares of Balmoral, in an all-stock transaction, pursuant to a plan of arrangement as further described below.

Under the terms of the Transaction, all of the issued and outstanding shares of Balmoral will be exchanged at a ratio of 0.71 of a Wallbridge common share for each Balmoral common share.  Upon completion of the Transaction, existing Wallbridge and Balmoral shareholders will own approximately 82% and 18% of the Company’s pro forma issued and outstanding shares, respectively.

The exchange ratio implies consideration of C$0.62 per Balmoral common share based on the volume weighted average price of Wallbridge common shares on the Toronto Stock Exchange for the 20 trading days ending February 28, 2020, representing a 46% premium to the volume weighted average price of Balmoral common shares on the TSX over that period and implying an equity value of the Transaction equal to C$110 million.

Transaction Benefits to Wallbridge Shareholders

• Combines complementary, highly prospective properties located in the mining-friendly Nord-du-Québec region of western Québec, creating opportunity for synergies given close proximity of the properties
• Significantly expands Wallbridge’s land holdings in Quebec (from 10.5 km² to 739.0 km²) along the Detour Gold Trend, improving the Company’s potential for further discoveries in the district as well as additional mine development flexibility
• In addition to Fenelon, adds multiple gold-focused properties, including the resource stage Martiniere gold deposit, within the prolific Abitibi Greenstone Belt that have exploration upside, and a resource Ni-Cu-Co-PGE project that has option value
• Support of Wallbridge and Balmoral’s largest shareholder, Eric Sprott, who owns approximately 23% of Wallbridge and 9% of Balmoral
• Increased market capitalization which has the potential to attract greater support from new investors seeking to participate in funding the potential future growth of Wallbridge

Transaction Benefits to Balmoral Shareholders

• An immediate and significant premium of 46% based on the volume weighted average price of the shares of both companies for the 20-trading day period ending February 28, 2020, and 60% to the closing price of the Balmoral common shares on the TSX on February 28, 2020.
• Exposure to Wallbridge’s existing Fenelon property, which hosts the highly prospective Area 51 and Tabasco zones, multiple exploration targets and significant underground infrastructure
• Participation in the potential upside of Wallbridge’s shares from any exploration and development success at Fenelon, as well as the pro forma company’s other properties
• Significantly enhanced trading liquidity
• The combined entity will have an enhanced capital markets profile and a pro forma cash balance of approximately C$67 million, which takes on particular importance given the extreme market volatility experienced over the past trading week, to advance the combined assets and pursue further growth opportunities

“This strategic transaction makes sense for the shareholders of both Wallbridge and Balmoral,” said Marz Kord, President, CEO & Director of Wallbridge. “The combination of our two companies creates an entity with a solid balance sheet; a diverse yet focused project portfolio; a motivated management group experienced in exploration, development and production; and the scale, resource growth potential and discovery upside that gives us the opportunity to build on the strengths of both companies”.

Darin Wagner, President, CEO & Director of Balmoral, stated, “The recent exploration success at Tabasco, Ripley and throughout Area 51 speak to a large gold system which we are just beginning to unlock and which is combined in its entirety through this transaction. Today’s announcement creates one of best funded exploration companies in Canada which has enjoyed tremendous support from Mr. Eric Sprott and a solid shareholder base which includes gold producer Kirkland Lake Gold who operate along the Detour Gold Trend”.

Transaction Details

The Transaction will be affected by way of a court-approved plan of arrangement under the Business Corporations Act (British Columbia) and will be subject to the approval of two thirds of the votes cast at a special meeting of Balmoral shareholders to be held on or about May 7, 2020. The transaction is subject to approvals from the Toronto Stock Exchange, as well as other conditions. The Arrangement Agreement provides for, among other things, customary reciprocal board support and non-solicitation covenants, with “fiduciary out” provisions that allow Balmoral to accept a superior proposal in certain circumstances and “right to match period” in favour of Wallbridge. The Arrangement Agreement also provides for a termination fee of C$2.5 million to be paid by Balmoral to Wallbridge if the Arrangement Agreement is terminated by Balmoral in certain specified circumstances and reimbursement of expenses for either party if the Arrangement Agreement is terminated in certain other specified circumstances.

Eric Sprott, who currently holds approximately 9% of Balmoral’s common shares, has entered into a voting and support agreement pursuant to which, among other things, he has agreed to vote his Balmoral common shares in favour of the transaction.

The directors and senior officers of Balmoral have also entered into customary support and voting agreements to vote their shares in favour of the combination. The Arrangement Agreement will be filed under each of Wallbridge’s and Balmoral’s profiles on SEDAR (www.sedar.com). The terms of the transaction and related matters will also be described in detail in a management information circular of Balmoral to be filed with the regulatory authorities and mailed to Balmoral shareholders in accordance with applicable securities laws.

Board Recommendations and Fairness Opinion

Balmoral’s Board of Directors, based on the recommendation of a committee of independent directors, has determined that the combination is in the best interests of Balmoral and has unanimously recommended that Balmoral shareholders vote in favour of the transaction. The Balmoral Special Committee has obtained an independent opinion from PI Financial Corp. that the consideration to be received by Balmoral shareholders pursuant to the Transaction is fair, from a financial point of view, to Balmoral shareholders. A special committee of the board of directors of Wallbridge obtained an opinion from Canaccord Genuity Corp. that the consideration to be paid by Wallbridge in connection with the Transaction, is fair, from a financial point of view, to Wallbridge.

Advisors and Counsel

Canaccord Genuity Corp. is acting as financial advisor and Irwin Lowy LLP is acting as legal counsel to Wallbridge. INFOR Financial Inc. is acting as financial advisor and Blake, Cassels & Graydon LLP is acting as legal counsel to the Balmoral Special Committee. Gowling WLG (Canada) LLP is acting as legal counsel to Balmoral.

About Wallbridge Mining Company Limited

Wallbridge is establishing a pipeline of projects that will support sustainable 100,000 ounce-plus annual gold production as well as organic growth through exploration and scalability.

The Company is currently developing its 100%-owned Fenelon Gold Property, which is located proximal to the Sunday Lake Deformation Zone, an emerging gold belt in northwestern Quebec with an ongoing 100,000 to 120,000 metre exploration drill program in 2020 and a 33,500-tonne bulk sample and 75,000 metres of drilling completed in 2019. Wallbridge is also pursuing additional advanced-stage projects which would add to the Company’s near-term project pipeline. Wallbridge is also the operator of, and an 18% shareholder in, Loncan Canada Inc., a privately-held company with a large portfolio of nickel, copper, and PGM projects in Ontario’s Sudbury Basin.

About Balmoral Resources Ltd.

Balmoral is a multi-award winning Canadian-focused exploration company actively exploring a portfolio of gold and base metal properties located within the prolific Abitibi greenstone belt. The Company’s flagship, Detour Gold Trend Project hosts the resource-stage Bug and Martiniere West gold deposits and the Grasset nickel-copper-cobalt-PGE deposit. Employing a drill-focused exploration style in one of the world’s preeminent mining jurisdictions, Balmoral is following an established formula with a goal of maximizing shareholder value through the discovery and definition of high-grade, Canadian gold and base metal assets.