Scottie Resources Corp.
(“
Scottie” or the "
Company") and
AUX Resources Limited (formerly AUX Resources
Corporation) (“
AUX”) are pleased to announce that
they have completed their previously announced amalgamation (the
“
Transaction”) pursuant to an amalgamation
agreement dated May 4, 2021 (the “
Amalgamation
Agreement”) among Scottie, 1302668 B.C. Ltd.
(“
Subco”), a wholly-owned subsidiary of Scottie,
and AUX Resources Corporation.
Highlights
- Merger combines two sizeable and complementary land
packages in the Stewart Mining Camp – over 52,000 ha
combined
- Reduces overhead costs and permits numerous operational
efficiencies
- Management and Board of Scottie Resources remains
intact and able to advance the company and its assets
- Strong working capital with approximately $11 million
in cash on closing
CEO and President, Bradley Rourke commented: “We
are thrilled to complete this amalgamation with AUX, which
significantly increases our land package in the Stewart area from
just over 25,000 ha to now more than 50,000 ha. Bringing in the
Georgia River Mine project along with the Scottie Gold Mine means
we are now simultaneously pushing forward two high-grade gold
past-producing mines that have been chronically underexplored. Our
seasoned exploration team will use their experience advancing the
Scottie Gold Mine to efficiently explore the potential expansion of
what is already an incredibly gold-rich system. At Scottie,
drilling on the Blueberry Zone has commenced, and additional drills
will arrive onsite in the coming days to begin drilling at Georgia
River and the Scottie Gold Mine.”
2021 Exploration Program
Update
With the newly merged property portfolio, over
16,000 m of drilling is planned for the 2021 season. The majority
of the drilling is allocated for the Scottie Gold Mine Project
(Blueberry, Domino, ‘O’ and ‘M’ zones), while a smaller campaign
will test targets in the Georgia River Project, and within the
Cambria Project.
Drilling has commenced at the Blueberry zone,
testing the downward extension of the high-grade ore shoot
identified during 2020. Two additional drills are expected to begin
turning on the Scottie Gold Mine and Georgia River Projects over
the next week. In additional to drilling, multiple geophysical
surveys are planned for the season, including 2D and 3D induced
polarization (“IP”), downhole electromagnetic
(“DHEM”), and horizontal loop electromagnetic
(“HLEM”) surveys.
A map accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/b56d2a95-e1a9-48e3-8e8e-b1fa8a037128
The Transaction
The Transaction was completed by way of a
three-cornered amalgamation whereby AUX and Subco amalgamated under
the Business Corporations Act (British Columbia) to form AUX
Resources Limited, a wholly-owned subsidiary of Scottie. All of the
issued and outstanding common shares of AUX (“AUX
Shares”) were exchanged for common shares in the capital
of Scottie (“Scottie Shares”) on a one-for-one
basis. All of AUX’s issued and outstanding warrants (“AUX
Warrants”) and options (“AUX Options”)
were exchanged for equivalent warrants (“Scottie
Warrants”) and options (“Scottie
Options”) of Scottie, respectively, on a one-for-one
basis, and immediately cancelled. Pursuant to the Transaction,
Scottie issued:
- a total of
54,499,642 Scottie Shares to the former holders of AUX Shares;
- a total of
18,433,817 Scottie Warrants to the former holders of AUX Warrants,
with each Scottie Warrant exercisable to purchase one Scottie Share
at a price of $0.40 until expiry dates ranging from July 6, 2022 to
February 19, 2023; and
- a total of
2,432,000 Scottie Options to the former holders of AUX Options,
with each Scottie Options exercisable to purchase one Scottie
Share, at exercise prices ranging from $0.25 to $0.42 and expiry
dates ranging from July 7, 2024 to February 8, 2027, subject to the
stock option plan of Scottie.
Upon completion of the Transaction, Scottie has
202,433,537 Scottie Shares, 33,531,274 Scottie Warrants and
14,307,000 Scottie Options issued and outstanding.
Upon closing of the Transaction, all directors
and officers of AUX resigned. Bradley Rourke, the President, CEO
and a Director of Scottie, and Thomas Mumford, the VP Exploration
of Scottie, will serve as directors of AUX, which will continue as
a wholly-owned subsidiary of Scottie.
AUX also wishes to clarify its news release
dated July 12, 2021. AUX Resources Corporation previously announced
that the AUX Shares would be delisted from the TSX Venture Exchange
(the “TSXV”) effective as of close of markets on
Wednesday July 14, 2021. However, Scottie and AUX now expect
delisting from the TSXV to occur on or about the close of market on
Monday, July 19, 2021. The trading of the AUX Shares was halted on
Wednesday, July 14, 2021 in connection with closing of the
Amalgamation.
The Scottie Shares will continue to trade on the
TSX Venture Exchange under the symbol “SCOT”.
For more information regarding the Transaction,
please refer to news release of Scottie and AUX dated May 6, 2021,
available on Scottie’s profile at www.sedar.com, and the management
information circular of AUX filed June 10, 2021 (the
“Circular”), available on AUX’s profile at
www.sedar.com.
Early Warning Disclosure Pursuant to
National Instrument 62-103
Immediately prior to the closing of the
Transaction, Scottie held no AUX Shares. Upon closing of the
Transaction, Scottie acquired one AUX Share, representing 100% of
the issued and outstanding AUX Shares upon completion of the
Transaction. As a result of the Transaction, AUX intends to apply
to cease to be a reporting issuer in the Provinces of British
Columbia and Alberta, and to delist from the TSXV. Scottie will
continue to conduct its business as described in the Circular.
Immediately prior to closing of the Transaction,
2176423 Ontario Ltd. (“2176423”), a company
controlled by Eric Sprott, held 10,000,000 Scottie Shares and
10,000,000 Scottie Warrants, representing approximately 6.76% of
the issued and outstanding Scottie Shares on a non-diluted basis
and 12.66% of the issued and outstanding Scottie Shares on a
partially diluted basis assuming exercise of the Scottie Warrants.
Upon closing of the Transaction, Mr. Sprott holds 18,888,889
Scottie Shares and 18,888,889 Scottie Warrants representing
approximately 9.33% of the issued and outstanding Scottie Shares on
a non-diluted basis and 17.07% of the issued and outstanding
Scottie Shares on a partially diluted basis assuming exercise of
the Scottie Warrants.
The Scottie Shares and Scottie Warrants were
acquired by Mr. Sprott for investment purposes and with a long-term
view of the investment. Mr. Sprott may acquire additional
securities of Scottie either on the open market or through private
acquisitions or sell securities of Scottie either on the open
market or through private dispositions in the future, depending on
market conditions, reformulation of plans and/or other relevant
factors.
A copy of the Early Warning Reports prepared in
connection with the acquisition of the AUX Shares by Scottie and
the Scottie Shares and Scottie Warrants held by Mr. Sprott,
respectively, can be obtained on Scottie’s SEDAR profile or, with
respect to Scottie’s Early Warning Report, by
contacting Bradley Rourke, President and CEO of Scottie at
(250) 877-9902 (905-1111 West Hastings Street, Suite 905,
Vancouver, BC V6E 2J3) or, with respect to Mr. Sprott’s Early
Warning Report, or by contacting Mr. Sprott’s office at (416)
945-3294 (200 Bay Street, Suite 2600, Royal Bank Plaza, South
Tower, Toronto, Ontario M5J 2J1).
About Scottie Resources
Corp.
Scottie owns a 100% interest in the high-grade,
past-producing Scottie Gold Mine and Bow properties and has the
option to purchase a 100% interest in Summit Lake claims which are
contiguous with the Scottie Gold Mine property. Scottie also owns
100% interest in the Georgia Project which contains the high-grade
past-producing Georgia River Mine, as well as the Cambria Project
properties and the Sulu property. Altogether, Scottie holds more
than 52,000 ha of mineral claims in the Golden Triangle.
Scottie’s focus is on expanding the known
mineralization around the past-producing mine while advancing near
mine high-grade gold targets, with the purpose of delivering a
potential resource.
All of Scottie’s properties are located in the
area known as the Golden Triangle of British Columbia which is
among the world’s most prolific mineralized districts.
Additional Information
Brad
Rourke |
Gordon
Robb |
President and CEO |
Business Development |
+1 250 877 9902 |
+1 250 217 2321 |
brad@scottieresources.com |
gordon@scottieresources.com |
Reader Advisory
Certain information set forth in this news
release contains forward-looking statements or information
("forward-looking statements"), including
Scottie’s proposed exploration and drilling activities, details
about the Transaction, receipt of all required regulatory and TSXV
approvals, the application of AUX to cease to be a reporting issuer
and the delisting of the AUX Shares on the TSXV. By their nature,
forward-looking statements are subject to numerous risks and
uncertainties, some of which are beyond the control of Scottie and
AUX, including those set out in the Circular available on AUX’s
SEDAR profile at www.sedar.com. Although Scottie and AUX believe
that the expectations in its forward-looking statements are
reasonable, these forward-looking statements have been based on
factors and assumptions concerning future events which may prove to
be inaccurate. Those factors and assumptions are based upon
currently available information. Such statements are subject to
known and unknown risks, uncertainties and other factors that
could influence actual results or events and cause actual results
or events to differ materially from those stated, anticipated or
implied in the forward-looking statements. Accordingly, readers are
cautioned not to place undue reliance on the forward-looking
statements, as no assurance can be provided as to future results,
levels of activity or achievements. Risks, uncertainties, material
assumptions and other factors that could affect actual results are
discussed in the Circular available on AUX’s SEDAR profile at
www.sedar.com. Furthermore, the forward-looking statements
contained in this document are made as of the date of this
document and, except as required by applicable law, Neither Scottie
nor AUX undertakes any obligation to publicly update or to revise
any of the included forward-looking statements, whether as a result
of new information, future events or otherwise. The
forward-looking statements contained in this document are expressly
qualified by this cautionary statement.
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 release.
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