Benefits of the Transaction
The Transaction is expected to provide meaningful benefits to shareholders of both companies.
For Steppe Gold shareholders:
Adds the Tres Cruces project to the growth pipeline - an attractive and technically straightforward development project in Peru with low capital intensity and the potential to add 68,000 ounces of gold production per year at average all-in sustaining cash costs of US$734 per ounce.
Diversifies the asset portfolio with the addition of another development project and provides entry into one of the world's most prolific gold mining belts in Peru, thereby allowing the potential for Steppe Gold to become a multi asset and multi-jurisdictional gold company.
Further reinforces the value proposition of Steppe Gold, with the Tres Cruces project having an underlying NPV of approximately US$170 million at US$1,700 gold (per the preliminary economic assessment filed in March 2022).
Tres Cruces adds a large and underexplored land package that current hosts indicated resources of approximately 2.5 million ounces at 1.65 g/t and inferred resources of 104 kozs at 1.26 g/t, inclusive of 630 kozs of high grade 1.28 g/t leachable gold.
This adds to the existing asset base at the ATO Gold Mine where it recently reported Proven and Probable Reserves of 1.7m oz Au Eq and Resources of 2.05m oz Au Eq.
For Anacortes shareholders:
Immediate and upfront premium of 36%.
Share exchange provides for meaningful retained ownership in the combined company and ongoing exposure to near-term value catalysts, including the Phase 2 expansion at the ATO Gold Mine and the future advancement and construction of the Tres Cruces project.
Participation in an established, low cost and growing producer with increased access to capital.
Opportune time to transact given the impending Phase 2 expansion at the ATO Gold Mine, which is expected to increase annual production to approximately 100,000 of gold equivalent oz.
Transaction Details
The Transaction will be structured as a plan of arrangement of Anacortes pursuant to the Business Corporations Act (British Columbia).
The Transaction is subject to, among other things, the execution of an arrangement agreement, the receipt of all necessary regulatory, stock exchange and court approvals, and obtaining shareholder approval of the Transaction at a meeting of the Anacortes shareholders, which is expected to be held in Q2 2023. The Binding Agreement includes customary deal protections, including a non-solicitation covenant in favour of Steppe Gold until April 17, 2023 and reciprocal expense reimbursement in certain circumstances.
Execution of the arrangement agreement is expected to occur on or about April 14, 2023 and closing of the Transaction is expected to occur on or about June 5, 2023.
