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Bonterra expecting PEA by Q3 of 2021 for NW Quebec properties

Nov 12, 2020

Bonterra Resources Inc. intends to pursue a financing of up to $10 million. The company is in discussions with certain of its shareholders over the terms of the proposed financing.

The proceeds of the financing would be used to fund drilling at Bonterra's Moroy, Gladiator and Barry projects in support of a resource estimate update and Preliminary Economic Assessment ("PEA") on these three properties and for general working capital purposes. The PEA is expected to be completed in the fall of 2021. Along with 124,000 m drilled since the 2019 resource estimates on the Moroy, Gladiator and Barry projects as well as the bulk sample at Moroy, the Company expects these initiatives to help demonstrate the value of the Company's assets. 

Bonterra also wishes to announce that on November 6, 2020, the Company received an opportunistic non-binding letter of intent from a large third party regarding an all-share acquisition of the Company. This unsolicited approach, which has since expired, valued the Company at approximately $1.60 per share based on the parties' relative trading prices on November 6, 2020 and would have required that the Company effectively cease its financing activities, which are necessary to fund its operations, for the rest of the year. Consistent with its fiduciary duties, the Bonterra board of directors ("Bonterra Board") carefully reviewed the unsolicited approach together with legal and financial advisors. The Bonterra Board made an initial determination that the unsolicited approach significantly undervalued the Company and its long-term prospects.

The Bonterra Board has created a special committee of Normand Champigny, Peter O'Malley and Jean Rainville, each of whom is an independent director, to assist the Company in finalizing the terms of the proposed financing and to evaluate strategic alternative transactions that maximize value for shareholders. RBC Capital Markets is serving as financial advisor and Osler, Hoskin & Harcourt LLP is serving as legal advisor to the special committee. The Company intends to provide updates if and when necessary in accordance with applicable securities laws.


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