First Mining’s Definitive Agreement with Treasury Metals to Combine the Goldlund & Goliath Gold Projects
The following FAQs contain forward-looking statements and information that relate to future events, particularly the questions and responses relating to the distribution of shares and warrants of Treasury Metals to First Mining shareholders. Readers are encouraged to review First Mining’s full disclaimer regarding forward-looking statements and forward-looking information that is set out in the Company’s corporate presentation. When relying on forward-looking statements to make decisions with respect to First Mining, investors and others should carefully consider the risk factors and other uncertainties and potential events set out in such disclaimer. First Mining does not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by the Company or on our behalf, except as required by law.
How does the transaction with Treasury Metals benefit shareholders of First Mining?
The transaction unlocks and crystallizes the value of Goldlund for shareholders by providing an accelerated development path forward in a separate and dedicated public vehicle. It will also allow First Mining to return capital to its shareholders via the distribution of a significant number of shares and warrants of Treasury Metals. In addition, First Mining will retain a substantial number of shares of Treasury Metals that can be used to fund the continued advancement of its flagship Springpole Gold Project and thereby minimize further dilution that would arise through raising additional equity. Lastly, with First Mining retaining a 1.5% net smelter returns royalty on all Goldlund claims, First Mining’s shareholders will retain exposure to the Goldlund asset and the potential upside that may be realized by future exploration, development, and ultimately, production, at Goldlund.
When will the transaction be completed?
The transaction is subject to the approval of Treasury Metals’ shareholders. Treasury Metals expects to hold their shareholder meeting to approve the transaction by mid-August 2020. If the shareholders of Treasury Metals approve the transaction, it will close by the end of August 2020 (the deadline date for completing the transaction is September 4, 2020).
How many shares of Treasury Metals will First Mining receive under the transaction?
On closing, 130 million shares of Treasury Metals will be issued to First Mining. These shares will be subject to the standard statutory four months plus one day hold period.
Upon closing the transaction, it is anticipated that Treasury Metals will consolidate its common shares on a 3 for 1 basis. In the event such a share consolidation takes place, First Mining will hold 43,333,333 shares of Treasury Metals post-consolidation.
How many warrants to purchase shares of Treasury Metals will First Mining receive under the transaction?
On closing, Treasury Metals will issue 35 million warrants to First Mining. Each warrant will entitle the holder to purchase one common share of Treasury Metals. The exercise price of the warrants will be $0.50, with 3-year term.
Upon closing the transaction, it is anticipated that Treasury Metals will consolidate its common shares on a 3 for 1 basis. In the event such a share consolidation takes place, First Mining will hold 11,666,666 warrants of Treasury Metals post-consolidation, and the exercise price of the warrants will be $1.50 (no change to the 3-year term).
What does First Mining plan to do with shares and warrants it receives from Treasury Metals?
As it is expected that Treasury Metals will complete a 3 for 1 share consolidation upon closing the transaction, First Mining will hold 43,333,333 shares of Treasury Metals and 11,666,666 warrants of Treasury Metals once the transaction has been completed.
Within 6 to 12 months of completing the transaction, First Mining plans to distribute up to 23,333,333 shares of Treasury Metals, and all 11,666,666 warrants, to the shareholders of First Mining.
This transaction delivers on the promise Keith Neumeyer, the Founder of First Mining had made to shareholders when he established the Company in 2015 to return value to the shareholders and create new district-scale opportunities.
Following the distribution, First Mining will hold approximately 19.9% of the outstanding shares of Treasury Metals. First Mining expects to use the remaining 20 million shares of Treasury Metals that it will retain to fund the continued advancement of its flagship Springpole Gold Project.
Why will First Mining wait 6 to 12 months to distribute Treasury Metals shares and warrants to the First Mining shareholders? Why not complete the distribution immediately after completing the transaction with Treasury Metals?
Due to certain US securities laws, First Mining needs to wait until at least six months have passed from the date the transaction closes in order to distribute the shares and warrants of Treasury Metals to US shareholders of First Mining.
How will the distribution work?
The distribution by First Mining will be conducted by way of a plan of arrangement and will require the approval of First Mining’s shareholders.
Will there be any tax consequences to First Mining shareholders as a result of the distribution?
First Mining shareholders who are resident in Canada will not incur any tax consequences. Shareholders who are not residents of Canada should consult with their tax advisors to assess whether the distribution will have tax implications for them.
The information circular for the First Mining shareholder meeting to approve the distribution will contain fulsome details with respect to tax considerations for First Mining’s shareholders.
When will First Mining hold the shareholder meeting to approve the distribution of the shares and warrants of Treasury Metals?
Due to the need for 6 months to pass after closing the transaction, and for cost-efficiency purposes, First Mining anticipates seeking shareholder approval of the distribution at its next annual meeting, which it expects to hold in May or June 2021.
As a shareholder, what will I need to do in connection with the shareholder meeting to approve the distribution of the shares and warrants of Treasury Metals?
In or around April 2021, First Mining will set the date of the annual general and special meeting of its shareholders to approve annual matters (elect directors, appoint the auditor and approve the auditor’s remuneration) and likely to approve the distribution.
As a First Mining shareholder, you will just need to vote your shares by the proxy deadline date, which is typically 48 hours prior to the meeting date.
Other than vote my shares at the First Mining shareholder meeting, will I need to do anything else in connection with the meeting?
Detailed information regarding any action required by shareholders will be contained in the information circular for the First Mining shareholder meeting.
How will I know if I will be entitled to receive shares and warrants of Treasury Metals?
A record date for the distribution will be established, which will be set out in the information circular for the First Mining shareholder meeting. In addition, First Mining will issue a news release which will clearly set out the record date and details for shareholders.
If you hold First Mining shares as of the record date that is established for the distribution, you will be entitled to receive shares and warrants of Treasury Metals.
Can I buy more shares of First Mining in the market before the record date? If so, how will that impact the number of shares and warrants of Treasury Metals that will be distributed to me?
Yes. The number of First Mining shares that you own as of the record date for the distribution will be the basis for calculating how many shares and warrants of Treasury Metals that you will receive under the distribution.
How will I know how many shares and warrants of Treasury Metals will be distributed to me?
An exchange ratio will be established, and this will determine how many shares and warrants of Treasury Metals will be distributed to each First Mining shareholder.
At this time, we cannot state what the exact exchange ratio will be (as it will be dependent on the number of shares issued and outstanding of First Mining at the record date for distribution), but the following example should provide a helpful guide (the following is an example only, and the numbers set out below should not be interpreted, in any way, to reflect the final numbers that will be used for the distribution):
Shareholder A owns 200,000 shares of First Mining as of the record date for the distribution. Assuming that (i) Treasury Metals completes its 3 for 1 share consolidation on closing of the transaction, (ii) the number of issued and outstanding shares of First Mining matches the number currently outstanding (633,151,453 shares of First Mining as at June 11, 2020) and (iii) First Mining distributes 23,333,333 shares of Treasury Metals to First Mining shareholders:
The exchange ratio for the shares would be:
23,333,333 shares of Treasury Metals to be distributed by First Mining / 633,151,453 shares of First Mining = 0.0368526881
And the exchange ratio for the warrants would be:
11,666,666 warrants of Treasury Metals to be distributes by First Mining / 633,151,453 shares of First Mining = 0.0184263432
So, based on the above two exchange ratios, Shareholder A would receive 7,370 shares of Treasury Metals (200,000 x 0.0368526881), and 3,685 warrants of Treasury Metals (200,000 x 0.0184263432).
If Shareholder A owns 200,000 shares of First Mining as of today (June 11, 2020) but he/she buys more First Mining shares on the market after the transaction closes, and as a result, owns 500,000 shares of First Mining as of the record date for the distribution, Shareholder A would receive 18,426 shares of Treasury Metals (500,000 x 0.0368526881), and 9,213 warrants of Treasury Metals (500,000 x 0.0184263432).
If the number of First Mining’s outstanding shares increased after June 11, 2020, the denominator in the above exchange ratio calculations for the shares and warrants would increase, so the exchange ratio for each of the shares and warrants would decrease, which would result in you receiving a lower number of shares and warrants of Treasury Metals than is reflected by the above examples.
Will the warrants of Treasury Metals be listed on a stock exchange? If yes, which exchange?
Treasury Metals has agreed to use commercially reasonable efforts to list the warrants on the Toronto Stock Exchange (in Canada) and on the OTCQX (in the United States) following the distribution to First Mining’s shareholders.
What will listing the warrants of Treasury Metals mean for me?
Once the warrants of Treasury Metals are listed on the TSX and OTCQX, shareholders in both Canada and the United States will have the ability to freely trade the warrants on the TSX and OTCQX.
If I hold First Mining shares in a brokerage account, how will the shares and warrants of Treasury Metals be deposited into my account?
Provided First Mining’s shareholders approve of the distribution, the shares and warrants of Treasury Metals will be released to First Mining’s shareholders in accordance with the exchange ratios, and once the distribution has been completed, such shares and warrants of Treasury Metals will appear in the brokerage account(s) in which you have First Mining shares (they may take a number of days to appear in your account after the distribution has been completed).
Is drilling being conducted on Goldlund?
First Mining has recommenced its 2020 drill program and plans to complete a further 1,500 metres of drilling targeting the northeast extensions of Zones 2 and 3 at the Goldlund Main Zone. Both Treasury and First Mining believe it is important to continue to advance exploration of Goldlund.
How much work has First Mining conducted on Goldlund in 2019 -2020?
Approximately 7,300 metres of drilling has been completed on the Goldlund Main Zone during the 2019 - 2020 drill program.
How does Goliath having its Federal Environmental Assessment permit help advance Goldlund?
Treasury Metals’ management is advancing the Provincial permitting process at Goliath. The management of Treasury will be able to leverage their expertise and permitting success at Goliath when advancing the Goldlund property, and there may be potential for synergies with the environmental baseline work completed at Goliath for Goldlund given the proximity of the two projects. Given the probability of trucking ore from Goldlund to Goliath in an operating scenario, Goldlund may benefit from a reduced permitting requirement due to the fact it will more likely be an ore mining and trucking operation rather than hosting significant mining infrastructure. This will be evaluated as Treasury advances the development of Goliath and Goldlund.
Who should I contact for more information about the transaction or the distribution?
For further information, please contact Spiros Cacos, Vice President, Investor Relations at
+1 604 639 8827 | Toll Free: 1 844 306 8827 or via Email at email@example.com