Wallbridge Mining Company Limited (WM.TO) (“Wallbridge” or the “Company“) and Balmoral Resources Ltd. (BAR.TO) (“ Balmoral “) announce today that they have entered into a definitive agreement (the “Arrangement 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 (the “Transaction“).

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 (“TSX“) 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”.