Barrick to invest US$38 million to purchase 19.9% interest at C$1.06 per share
*** Not for distribution to United States newswire services or for dissemination in the United States***
VANCOUVER, BRITISH COLUMBIA – Midas Gold Corp. (MAX:TSX / MDRPF:OTCQX) (“Midas Gold” or the “Company”) today announced that it has entered into an agreement with Barrick Gold Corporation (NYSE:ABX / TSX:ABX) (“Barrick”) whereby Barrick will purchase 46,551,731 common shares of Midas Gold in a non-brokered private placement (the “Placement”) at a price of C$1.06 per share for gross proceeds of US$38,065,907. The Placement will result in Barrick owning 19.9% of the issued and outstanding shares in Midas Gold on a post-transaction basis. Barrick’s investment supports Midas Gold’s continued efforts to permit the Stibnite Gold Project, so that we can build and operate a world class mining operation that addresses legacy environmental impacts and generate economic benefits to the local community.
“Midas Gold is in the midst of advancing the Stibnite Gold Project through completion of a feasibility study and permitting for site restoration and redevelopment,” said Stephen Quin, President & CEO of Midas Gold. “With our detailed plan for site restoration and protection of the environment, a large, long-life and low-cost operation, and a comprehensive proposal for the closure and reclamation of the site, Midas Gold is positioned to complete the critical milestones of feasibility study and permitting. Barrick shares Midas Gold’s vision for the restoration of the site and focus on community engagement. We believe Barrick’s extensive expertise and its core values, focused on environmental sustainability, make us natural partners.”
“Midas Gold’s Stibnite Gold Project in Idaho offers a compelling investment proposition, with low geopolitical risk, potential for production of over 300,000 ounces of gold per year at competitive operating costs, and exploration upside,” said Barrick President Kelvin Dushnisky. “We are also impressed with the emphasis that Midas Gold has placed on building partnerships with local communities and share their strong commitment to environmental stewardship. We look forward to working with the Midas Gold team to explore opportunities to enhance the value of the project for all partners.”
Use of Proceeds
Midas Gold will use the proceeds from the Placement to advance its Stibnite Gold Project (the “Project”) through to completion of a feasibility study and permitting of the Project for redevelopment and restoration.
During the past five years, Midas Gold has conducted extensive, multi-year environmental baseline programs to determine and define existing environmental conditions at this brownfields site, while reaching out to communities of interest for their views and perspectives regarding a future for the Stibnite Gold Project site and the local area. Midas Gold has focused on the remediation and repair of the historical disturbance at the site during the construction and operating periods, incorporating concurrent reclamation and minimizing new disturbance. Midas Gold’s goal is to protect the environment and provide stable and secure features that will serve as the foundation for a long‐term productive and naturally sustainable ecosystem that incorporates permanent fish passage through the area for the first time since the 1930s. The ultimate objective is the permanent restoration of the site, funded by a long-life, financially rewarding operation that generates significant economic benefits to the local communities of Valley County, the State of Idaho and the U.S.
In December 2014, Midas Gold completed a preliminary feasibility study which identified an environmentally sound and economically feasible Project that could also finance the restoration of what is an extensively disturbed brownfields site. Midas Gold has since: (i) extensively engaged with local communities and other stakeholders in respect of the redevelopment and site restoration concepts for the Project; (ii) completed a number of optimization and risk reduction technical studies that would be required to support a feasibility study and/or the permit application; (iii) in September 2016, filed a Plan of Restoration and Operations for the redevelopment of the Project: (iv) commenced work towards completion of a feasibility study for the Project: and, (v) worked extensively with regulators to advance the permitting process for the Project.
In connection with the Strategic Investment, Midas Gold and Barrick will enter into an investor rights agreement on closing of the offering, whereby, so long as Barrick maintains a minimum of 10% ownership in Midas Gold, Barrick will be granted:
- The right to appoint one director to Midas Gold’s Board of Directors;
- A right to participate in future Midas Gold equity issuances to maintain its then current pro rata interest in Midas Gold;
- Certain top-up rights in connection with Midas Gold’s outstanding convertible notes, to maintain its then current pro rata interest in Midas Gold by undertaking additional funding; and
- A right of first refusal in respect of gold concentrates.
In addition, Midas Gold will be increasing the number of directors on its board from seven to eight and will be appointing an independent director to fill that position.
Paulson & Co. and Teck Resources Limited have both provided notice to Midas Gold that they do not intend to exercise their anti-dilution rights in respect of this transaction.
Haywood Securities Inc. is acting as financial advisor to Midas Gold. DuMoulin Black LLP is acting as Canadian legal counsel to Midas Gold and Davies Ward, Phillips & Vineberg LLP is acting as Canadian legal counsel to Barrick.
This news release does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities, in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or any state securities laws, and may not be offered or sold within the United States unless an exemption from such registration is available.
For further information about Midas Gold Corp., please contact:
Liz Monger – Manager, Investor Relations
About Midas Gold and the Stibnite Gold Project
Midas Gold Corp., through its wholly owned subsidiaries, is focused on the exploration and, if warranted, site restoration and development of gold-antimony-silver deposits in the Stibnite-Yellow Pine district of central Idaho that are encompassed by its Stibnite Gold Project. As operator of the Project, Midas Gold’s subsidiary, Midas Gold Idaho, Inc. is a modern mining company that believes that industry and the environment can work together. Commencing in 2009, Midas Gold defined a world-class deposit of gold and antimony in an area in need of serious environmental repair. The Stibnite Gold Project, as proposed in the Plan of Restoration and Operations currently being reviewed by regulators, would restore the site, create economic opportunity and benefit the surrounding communities.
About Barrick Gold
Barrick aims to be the leading mining company focused on gold, creating value by developing and operating high-quality assets in an environmentally responsible way that demonstrates commitment to the local communities. Through strategic investment in good projects and operational excellence, Barrick’s vision is to use responsible mining to build wealth for its owners, its people, and the countries and communities with which they partner. Barrick has mining operations in Argentina, Australia, Canada, Chile, Dominican Republic, Papua New Guinea, Peru, Saudi Arabia, the United States, and Zambia. Barrick was founded in 1983 and is headquartered in Toronto. Barrick’s shares trade on the New York Stock Exchange and the Toronto Stock Exchange under the symbol ABX.
Statements contained in this news release that are not historical facts are “forward-looking information” or “forward-looking statements” (collectively, “Forward-Looking Information”) within the meaning of applicable Canadian securities legislation and the United States Private Securities Litigation Reform Act of 1995. Forward-Looking Information includes, but is not limited to, disclosure regarding possible events, conditions or financial performance that is based on assumptions about future economic conditions and courses of action; and the plans for completion of the Placement, expected use of proceeds and business objectives. In certain cases, Forward-Looking Information can be identified by the use of words and phrases such as “anticipates”, “expects”, “understanding”, “has agreed to” or variations of such words and phrases or statements that certain actions, events or results “would”, “occur” or “be achieved”. Although Midas Gold has attempted to identify important factors that could affect Midas Gold and may cause actual actions, events or results to differ materially from those described in Forward-Looking Information, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended, including, without limitation, the risks and uncertainties related to the Placement not being completed in the event that the conditions precedent thereto are not satisfied; uncertainties related to raising sufficient financing in a timely manner and on acceptable terms. In making the forward-looking statements in this news release, Midas Gold has applied several material assumptions, including the assumptions that (1) the conditions precedent to completion of the Placement will be fulfilled so as to permit the Placement to be completed on or about May 15, 2018; (2) all necessary approvals and consents in respect of the Placement will be obtained in a timely manner and on acceptable terms; and (3) general business and economic conditions will not change in a materially adverse manner. There can be no assurance that Forward-Looking Information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on Forward-Looking Information. Except as required by law, Midas Gold does not assume any obligation to release publicly any revisions to Forward-Looking Information contained in this news release to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.