Sprott Resource Holdings Press Releases


Press Release

Sprott Resource and Adriana Resources Announce Mailing of Meeting Materials in Connection with Proposed Business Combination and Marketed Private Placement of Units for Gross Proceeds of up to $10 million



TORONTO, Jan. 03, 2017 (GLOBE NEWSWIRE) -- Sprott Resource Corp. (“SRC”) (TSX:SCP) and Adriana Resources Inc. (“ADI”) (TSX-V:ADI) announce that the meeting materials in connection with the upcoming special meetings of SRC shareholders and ADI shareholders, respectively (the “Meetings”), to be held on January 25, 2017, including the joint management proxy circular dated December 21, 2016 (the “Circular”), forms of proxy and the letter of transmittal for SRC shareholders, prepared in connection with the previously announced proposed business combination, as described in the companies’ joint news release issued November 29, 2016, have been mailed to SRC and ADI shareholders and filed on SEDAR.

At the Meetings, and as more particularly described in the Circular, shareholders of SRC and ADI will be asked to consider: (i) in the case of SRC, a special resolution to approve the implementation of the proposed business combination with ADI by way of a plan of arrangement (the “Arrangement”) and (ii) in the case of ADI, an ordinary resolution to approve the acquisition by ADI of SRC pursuant to the arrangement agreement between ADI and SRC in connection with the Arrangement and certain related transactions, including the Warrant Distribution (as defined below) and the financing transactions described below, and a special resolution to change the name of ADI to “Sprott Resource Holdings Inc.”.

Under the Arrangement, SRC would become a wholly-owned subsidiary of ADI and holders of common shares of SRC would receive 3.0 ADI common shares per common share of SRC. ADI shareholders of record on the business day immediately prior to the closing date for the Arrangement would receive one-quarter of a warrant in respect of each ADI share held, with each whole warrant (each, an “ADI Warrant”) having a five-year term and an exercise price of $0.333 per share (the “Warrant Distribution”). In addition, Sprott Inc., a fund managed by a subsidiary of Sprott Inc., and Term Oil Inc. (a corporation controlled by A.R. (Rick) Rule IV, President and CEO of Sprott US Holdings Inc. and a director of Sprott Inc.) have agreed to invest, concurrently with the closing of the Arrangement, an aggregate of $15 million in the combined company by purchasing a combination of ADI common shares and ADI Warrants.

In addition, pursuant to the terms of finders agreements to be entered into between ADI and each of Sprott Global Resource Investments Ltd. and Sprott Private Wealth LP, Sprott Global Resource Ltd. and Sprott Private Wealth LP (and other members of a selling group that may be appointed) intend to act as finders in connection with a best efforts marketed private placement offering to accredited investors of up to 40 million ADI units, each ADI unit comprised of one ADI common share and one ADI Warrant, at a price of $0.25 per unit, for gross proceeds of up to $10 million.

The securities described in this press release have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act") or any U.S. state securities laws and may not be offered or sold in the United States absent registration or an available exemption from the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities, in any jurisdiction in which such offer, solicitation or sale would be unlawful.

Shareholders who have any questions or require further information are encouraged to contact Kingsdale Shareholder Services at 1-888-518-6805 or email contactus@kingsdaleshareholder.com.

About Sprott Resource Corp.

SRC is a publicly-listed private equity firm focused on the natural resource sector. The company currently has investments in energy production and services, mining and agriculture. SRC creates value for its investors by applying a disciplined investment process to deploy capital while managing risk within highly cyclical sectors. SRC is a business builder that is committed to being a value-added partner with proven management teams. SRC supports its investments through active management and the provision of long-term capital, as well as strategic, financial and governance oversight. Founded in 2007, the Company is based in Toronto, Canada and is managed by an experienced team of private equity specialists, supported by the technical and investment resources of Sprott Inc. and its subsidiaries and affiliates. Management of SRC is dedicated to generating long-term superior returns on capital for its shareholders, while focusing on risk management and real wealth preservation. To learn more, please visit www.sprottresource.com.

About Adriana Resources Inc.

Adriana Resources Inc. owns 40% of the Lac Otelnuk iron ore project in Northern Quebec. Adriana’s 60% joint venture partner in Lac Otelnuk Mining Ltd. (“LOM JV”) is WISCO International Resources & Investment Limited, a subsidiary of Bao Wu Steel Ltd.  In April 2015, the LOM JV published a NI43-101 compliant Technical Report on the feasibility of the Lac Otelnuk project.  Adriana reported a cash position of $28.6 million as at September 30, 2016.  The LOM JV is currently on care and maintenance, and the JV has a cash position of $7.9 million as of September 30, 2016.  Adriana has a Board of Directors and management team with extensive experience in the resource sector and has been undertaking a strategic review of opportunities to create shareholder value while the LOM JV project is on care and maintenance.

Forward-Looking Information and Statements

Certain statements in this press release contain forward-looking information (collectively referred to herein as the “Forward-Looking Statements”) within the meaning of applicable securities laws including, but not limited to, statements about: the completion of the proposed transactions, including the Arrangement and expected timing; the anticipated benefits of the Arrangement to SRC and its securityholders and to ADI and its securityholders; the timing and anticipated receipt of required stock exchange, court and securityholder approvals for the proposed transactions; the ability of SRC and ADI to satisfy the other conditions to, and to complete, the Arrangement; and similar statements concerning anticipated future events, results, circumstances, performance or expectations, that reflect management’s current expectations and are based on information currently available to management of SRC, ADI and their respective subsidiaries.  Forward-Looking Statements are based on a number of expectations or assumptions which have been used to develop such statements and information but which may prove to be incorrect. Although SRC and ADI believe the expectations and assumptions reflected in such Forward-Looking Statements are reasonable, undue reliance should not be placed on Forward-Looking Statements because SRC can give no assurance that such expectations and assumptions will prove to be correct. The Forward-Looking Statements included in this news release are not guarantees of future performance and should not be unduly relied upon. Such information and statements, including the assumptions made in respect thereof, involve known and unknown risks, uncertainties and other factors, which may cause actual results or events to differ materially from those anticipated in such Forward-Looking Statements, including, but not limited to, a failure to realize the anticipated benefits of the Transaction and to successfully integrate SRC and ADI and the failure of SRC or ADI to obtain necessary securityholder, regulatory, court and other third party approvals, or to otherwise satisfy the conditions to the Transaction, in a timely manner, or at all.  See “Risk Factors” in the Circular for further details.  The foregoing list of factors is not exhaustive. Additional information on other factors that could affect the operations or financial results of SRC, ADI and the combined entity are included in the Circular under the heading “Risk Factors”, and reports on file with applicable securities regulatory authorities, including, but not limited to, those listed under the heading “Risk Factors” in SRC’s annual information form dated March 4, 2016 and those listed under the heading “Risks and Uncertainties” in ADI’s Management’s Discussion and Analysis for the Year Ended December 31, 2015, dated February 26, 2016. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the Forward-Looking Statements prove incorrect, actual results, performance or achievements could vary materially from those expressed or implied by the Forward-Looking Statements contained in this news release.  The Forward-Looking Statements contained in this news release speak only as of the date of this news release, and each of SRC and ADI do not assume any obligation to publicly update or revise any of the included Forward-Looking Statements, whether as a result of new information, future events or otherwise, except as may be expressly required by applicable securities laws.

Neither the Toronto Stock Exchange nor the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.


Glen Williams
Managing Director, Investor Relations
Telephone: 416.943.4394
Email: gwilliams@sprott.com

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