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Northern Superior spins out Ontario assets, Including TPK Project

Jul 10, 2023

Northern Superior Resources Inc. and 1348515 B.C. LTD., a reporting issuer in the Provinces of British Columbia and Alberta, are pleased to announce that they have entered into a binding letter agreement dated July 10. The Letter Agreement outlines the proposed terms and conditions upon which Northern Superior will sell all of its exploration properties located in the Province of Ontario, being the Ti-pa-haa-kaa-ning Project (the "TPK Project"), the October Gold Property ("October Gold"), as well as certain other exploration properties (collectively, the "Spin-Out Assets") to BCCo in consideration for common shares of BCCo (the "Proposed Transaction").

Simon Marcotte, President and Chief Executive Officer of Northern Superior, commented: "This transaction will provide a dedicated company, including capital and a management team, to advance our Ontario assets, particularly the highly prospective district scale TPK Project. The geological potential is certainly world class, evidenced by previous results, the various companies operating in the vicinity, and considerable global attention to the vast mineral potential of this area. Northern Superior has continued to advance targeting efforts through the compilation of the robust exploration database and stands ready to launch a program on completion of the transaction."

He added, "As Northern Superior will remain the largest shareholder of this spin-out company, not only will the shareholders of Northern Superior will reap significant benefits from the exploration success, but it also emphasizes the considerable undervaluation of our rapidly progressing Québec assets."

Rodney Barber, Senior Vice-President Exploration of Northern Superior and proposed President of the new company, commented: "Each of these projects represent district-scale exploration opportunities in areas of significant geological potential. The work completed by the exploration teams at Northern Superior leaves us with first class assets in Ontario, a Tier-1 mining jurisdiction. I look forward to working with the local First Nation communities and all other stakeholders."

Terms of the Proposed Transaction

The Proposed Transaction is anticipated to be carried out as a purchase and sale of the Spin-Out Assets to BCCo. In consideration therefor, BCCo shall issue 35,686,686 common shares of BCCo, with a deemed value of approximately $18.2 million based on the Subscription Receipt offering price of $0.51 per share, to Northern Superior, which shall represent approximately 72.5% of the issued and outstanding common shares of BCCo following completion of the Proposed Transaction and assuming the Concurrent Private Placements (as defined below) are completed for aggregate gross proceeds of $5 million. Completion of the Proposed Transaction is subject to a number of conditions, including, without limitation, the completion of the Concurrent Private Placements, the completion of technical reports in respect of the TPK Project and the October Project in accordance with National Instrument 43-101 - Standards of Disclosure for Mineral Projects, receipt of all necessary third party and regulatory approvals, conditional listing approval to list the common shares of BCCo (as it exists upon completion of the Proposed Transaction, the "Resulting Issuer") on the TSX Venture Exchange or Cboe Canada (such exchange, the "Exchange"), BCCo changing its name to "Superior Minerals Inc." or such other name as may be acceptable to applicable regulatory authorities and if determined necessary according to applicable law or by Northern Superior, and replacing all directors and officers on closing of the Proposed Transaction as directed by Northern Superior at its sole discretion.

The Proposed Transaction is an arm's length transaction pursuant to the policies of the TSX Venture Exchange (the "TSXV").

Concurrent Private Placements

As a condition to the Proposed Transaction, BCCo shall complete a non-brokered private placement of subscription receipts (each a "Subscription Receipt") at a price of $0.51 per Subscription Receipt for minimum gross proceeds of $3,000,000 (the "Subscription Receipt Private Placement"), which have already been committed. Each Subscription Receipt issued would be convertible, for no additional consideration, into one common share of BCCo. The gross proceeds (the "Escrowed Proceeds") from the sale of the Subscription Receipts will be held in escrow pending the satisfaction of the escrow release conditions set out below (the "Escrow Release Conditions") immediately prior to the completion of the Proposed Transaction. The Escrow Release Conditions will provide for the following to occur on or prior to December 31, 2023, unless BCCo or Northern Superior have provided an election notice extending such deadline to March 31, 2024 (the "Escrow Release Deadline"):

a) the satisfaction or waiver of all conditions precedent to the completion of the Proposed Transaction, other than the release of the Escrowed Proceeds, including, without limitation, the conditional approval of the Exchange for the listing of the common shares of the Resulting Issuer;

b) the receipt of all regulatory, shareholder and third-party approvals, if any, required by BCCo and/or Northern Superior in connection with the Proposed Transaction; and

c) BCCo and Northern Superior having delivered a direction to the escrow agent confirming that the conditions set forth above have been met or waived.

If (i) the Escrow Release Conditions are not satisfied on or before the Escrow Release Deadline, or (ii) prior to the Escrow Release Deadline BCCo announces to the public that it does not intend to satisfy the Escrow Release Conditions, then (a) Escrowed Proceeds shall be returned to the holders of the Subscription Receipts on a pro rata basis and the Subscription Receipts will be cancelled without any further action on the part of the holders, and (b) the interest and other income earned on the Escrowed Proceeds shall be paid to Northern Superior.

In connection with the Proposed Transaction, a newly incorporated wholly-owned subsidiary of BCCo ("SubCo") may complete a private placement offering of common shares ("SubCo Shares") at a price per share that is equal to or greater than $0.51 (the "Share Private Placement; together with the Subscription Receipt Private Placement, the "Concurrent Private Placements"). Upon the completion of the Proposed Transaction, each SubCo Share will be exchanged for one common share of BCCo.

The net proceeds from the Concurrent Private Placements will be used by the Resulting Issuer for exploration and development of the Spin-Out Assets as well as general corporate purposes. BCCo and SubCo may pay cash finder's fees in connection with, respectively, the Subscription Receipt Private Placement and the Share Private Placement. 

The Subscription Receipts and SubCo Shares will be offered for sale to purchasers in: (i) all of the provinces and territories of Canada as agreed upon between BCCo and Northern Superior, pursuant to available private placement exemptions; (ii) the United States on a private placement basis pursuant to available exemptions from the registration requirements under the United States Securities Act of 1933, as amended; and (iii) offshore jurisdictions pursuant to available prospectus or registration exemptions in accordance with applicable laws.

The Assets

Ti-pa-haa-kaa-ning (the TPK Project) 

The TPK Project, a gold-silver-copper mineral exploration property, is located in northwestern Ontario and comprised of 2,431 post-conversion cell claims covering an area of 47,796 hectares within a highly favourable geological setting. The project hosts two large independent mineralized systems and is situated in Nibinamik First Nation and Neskantaga First Nation traditional territories. 


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