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Home > News > Kerr Mines and Bear Lake...

Kerr Mines and Bear Lake Board of Directors Approve Arrangement Agreement

Precedes Kerr Take Over of Northern Bonanza Mines

Feb 26, 2014

The board of directors of Kerr Mines and Bear Lake announced they have approved an arrangement agreement between the two companies that was first revealed in their January 24, 2014 news release.

The objective of the combination of Kerr Mines and Bear Lake is to consolidate a greater than 20-km strike length of highly prolific land on the Cadillac-Larder Lake break by creating a larger, stronger company that will be better positioned to exploit the tremendous upside potential of their projects, as well as create a higher profile company within the financial community.

The arrangement agreement between Kerr Mines and Bear Lake will precede the acquisition of American Bonanza Mining Corporation by Kerr Mines, which was announced on January 23, 2014.

Terms of the Arrangement Agreement

Under the terms of the arrangement agreement, Kerr Mines will issue 1.4 units of Kerr Mines shares in exchange for every one (1) common share of Bear Lake pursuant to a plan of arrangement under the Ontario Business Corporations Act.

Each Unit will consist of one Kerr Mines share and one-half of one Kerr Mines warrant. Each whole Kerr Mines warrant will entitle the holder to purchase one Kerr Mines share at an exercise price of $0.16 per Kerr Mines share for a period of two years from the closing date of the Arrangement.

Currently, Kerr Mines has 432,267,608 shares issued and outstanding while Bear Lake has 136,381,545 shares issued and outstanding. Each holder of the stock options of Bear Lake outstanding as of the date of completion of the Arrangement will receive such number of replacement stock options of Kerr Mines adjusted in accordance with the exchange ratio of 1.4 to 1.

Shareholder Approval Expected Before May 30, 2014

Shareholders of Bear Lake must accept the arrangement by two-thirds votes cast by those in attendance at the special shareholders meeting. The board of directors of Bear Lake have unanimously recommended that its shareholders vote in favour of the arrangement.

The arrangement also requires the approval of the Ontario Superior Court of Justice, the TSX Venture Exchange, the TSX and all applicable regulatory authorities.

Kerr Mines shareholder also must give their approval and additional conditions set out in the arrangement agreement. Kerr Mines and Bear Lake expect to close the transaction on or before May 30, 2014.

Structure of New Company formed by Kerr Mines and Bear Lake Merger

Following the shareholder approvals of each of Kerr Mines and Bear Lake, the board of directors of the newly formed company will consist of six nominees from Kerr Mines and one nominee from Bear Lake. Kerr Mines shareholders earlier approved on December 19, 2013, the consolidation of shares on a 1 for 15 basis after the merger with Bear Lake and the acquisition of American Bonanza Mines.

The arrangement agreement will be filed on SEDAR and will be available for viewing under the profiles of Kerr Mines and Bear Lake at www.sedar.com.

About Kerr Mines Inc.

Kerr Mines, a Canadian-based exploration and development company, is the owner of the McGarry gold mine in Ontario's Kirkland Lake area. Including the McGarry Mine property, Kerr Mines has established a sizeable footprint of contiguous gold properties in Virginiatown on the prolific Larder Lake-Cadillac Break that extends 200 km east-west straddling the Ontario and Quebec border and that have produced 95 million ounces of gold in past operations. The McGarry Mine consists of 33 contiguous patented mining claims, including three licenses of occupation, totaling 484 hectares. The McGarry Mine is fully permitted and all equipment and systems at the site have been brought up to standards.

Kerr Mines Purchases Mineral Rights of Historic Kerr-Addison Mine

In addition, in December 2010, Kerr Mines signed a definitive five-year option agreement for the purchase of up to 100 percent of the mineral rights on the Kerr-Addison property, which is adjacent to the McGarry Mine. The Kerr-Addison Gold Mine was one of Canada's largest gold producers, producing more than 11 million ounces of gold during a 58-year operating life from 1938 to 1996. In December 2012, Kerr Mines completed the purchase of the mineral rights on 18 mining claims totaling 627 acres (the Barber-Larder Property) located on the western boundary of the McGarry Mine.

About Bear Lake Gold Ltd.

Bear Lake's Larder Lake gold project located on the Cadillac-Larder Lake Break in north-eastern Ontario is being explored under an option and joint venture agreement with Gold Fields Abitibi Exploration Corporation (a subsidiary of Gold Fields Limited) entitling Gold Fields to acquire up to 60% of the Larder Lake gold project by spending up to $40 million over 5 years. Gold Fields has spent over $5 million in exploration on the Larder Lake Project, therefore satisfying the $5 million minimum spending requirement under the agreement.

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