Abacus Mining and Exploration

Published : July 31st, 2014

Abacus Arranges CAD$3 Million Loan and Signs Agreement for the Acquisition of Burnstone Ventures

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Keywords :   Copper | Creditors | Debt | Gold | Growth | Market | Molybdenum | Rhenium |

Abacus Arranges CAD$3 Million Loan and Signs Agreement for the Acquisition of Burnstone Ventures

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Jul 31, 2014) -

Abacus Mining & Exploration Corporation ("Abacus") (TSX VENTURE:AME) is pleased to announce that it has entered into a binding letter agreement (the "Letter Agreement") with Burnstone Ventures Inc. ("Burnstone") (TSX VENTURE:BVE) pursuant to which Abacus will acquire, in consideration of Abacus common shares (the "Abacus Shares"), all of the outstanding securities of Burnstone by way of a statutory court-approved plan of arrangement (the "Arrangement").

Upon closing of the Arrangement, Burnstone will become a wholly-owned subsidiary of Abacus. Burnstone's principal asset is the Tomichi copper-molybdenum porphyry project located in the Colorado Mineral Belt in Gunnison County, south-central Colorado (the "Tomichi Project").

Terms of the Arrangement

Under the terms of the Arrangement:

  • Burnstone shareholders will receive 0.43 of an Abacus Share for each one Burnstone common share (a "Burnstone Share").
  • All outstanding Burnstone share purchase warrants will be assumed by Abacus and adjusted based on the 0.43 exchange ratio.
  • Burnstone has agreed to complete a debt settlement with certain of its creditors for Burnstone Shares (the "Debt Settlement"), which will be exchanged for Abacus Shares under the Arrangement.
  • A total of approximately 23 million Abacus Shares are expected to be issued in connection with the Arrangement, representing approximately 10% of the outstanding Abacus Shares on completion of the Arrangement.
  • On closing of the Arrangement, Gordon Keevil, a current director of Burnstone, will be appointed to the board of Abacus.
  • Each of the directors and officers of Burnstone will execute lock up agreements agreeing to vote any Burnstone Shares they hold in favour of the Arrangement.

The Arrangement is subject to a number of closing conditions including, but not limited to, a confirmatory due diligence review of Burnstone and its assets by Abacus to be completed on or before August 14th, approval by the shareholders of each of Abacus and Burnstone, receipt of all court and regulatory approvals, including that of the Ontario Superior Court and the TSX Venture Exchange, completion of the Debt Settlement, and all outstanding Burnstone stock options being cancelled.

Abacus and Burnstone have agreed to enter into a definitive arrangement agreement (the "Arrangement Agreement") incorporating the terms of the Letter Agreement and other terms and conditions customary for transactions of this nature, on or before August 22nd.

Information Regarding Burnstone

Burnstone is a TSX Venture Exchange listed company whose main asset is the Tomichi Project in which Burnstone has an option to earn a 100% interest. The Tomichi Project has an initial inferred mineral resource estimate of 2.5 billion lbs Copper, 552 million lbs Molybdenum, 30 million oz Silver, 320,000 oz Gold and 124,362 kg Rhenium, or 5.6 billion lbs Copper Equivalent (see NI 43-101 technical report "Technical and Resource Estimate for the Tomichi Copper-Molybdenum Project, Gunnison County, Colorado" on Burnstone's Sedar filings July 10, 2013). Other details on the Tomichi Project are available on Burnstone's website at www.burnstoneventures.com.

Additional Information Regarding the Arrangement

The terms of the Arrangement will be described in further detail in the management information circular of Abacus to be filed with the regulatory authorities and mailed to the Abacus shareholders. A copy of the Abacus information circular and other materials related to the Arrangement will be available for review as they become available at www.sedar.com under Abacus' profile.

Abacus/Burnstone Loan

Abacus and Burnstone have entered into a loan and security agreement pursuant to which Abacus advanced CAD$250,000 to Burnstone (the "Burnstone Loan"). The Burnstone Loan is secured by a first priority security interest over the Tomichi Project. Interest on the Burnstone Loan accrues at 8% per annum. The Burnstone Loan proceeds are to be used by Burnstone in relation to the Tomichi Project.

Joint Venture Loan

To facilitate the Arrangement, Abacus also signed a loan and security agreement for a term loan facility of CAD$3 million drawn from the approximate CAD$16 million of funds held in Abacus' escrow account under the provisions of the 2010 Joint Venture Agreement with respect to the Ajax copper-gold project near Kamloops, B.C. The loan has been fully drawn, bears interest at the rate of 8% per annum and is collateralized by CAD$3,360,000 of Abacus' escrowed funds.

As a condition of the loan, Abacus has agreed to continue to contribute its 20% share of the 2014 and 2015 programs and budget towards development of the Ajax copper-gold project near Kamloops, B.C. (the "Ajax project"), which will be funded from the balance of the escrowed funds as and when cash calls are made.

Michael McInnis, Abacus' Chairman, President & CEO, stated: "The new agreement achieves a dual purpose that is particularly advantageous for Abacus shareholders. It enables Abacus to borrow funds from the escrow account on favourable terms that would otherwise not be allowable under the terms of the original Joint Venture Agreement, and provides the Company with near term growth opportunity by expanding our mineral asset interests with a highly prospective large copper/moly porphyry deposit in Colorado. We intend to create significant value by making use of this funding to continue with the advancement of the Tomichi project while maintaining our 20% interest in the Ajax project."

On Behalf of the Board,


Michael McInnis, Chairman, President & CEO

About Abacus

Abacus is a mineral exploration and mine development company with a 20% interest in the Ajax copper-gold project located at the historic Ajax-Afton site southwest of Kamloops, B.C. Through a joint venture between Abacus and KGHM Polska Miedz S.A. through KGHM Ajax, the Ajax project is a proposed open-pit mine with an estimated approximate 20-year mine life expected to yield approximately 109 million pounds of copper and 99,000 ounces of gold annually. [see Report titled "Ajax Copper/Gold Project -- Kamloops, British Columbia Feasibility Study Technical Report" by Wardrop (a Tetra Tech Company) dated January 6, 2012 ("FS")].

Neither 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 release.

Mr. James Chapman, P.Geo, is the Qualified Person responsible for the design of the program with respect to the Tomichi Project, and all exploration work on the Tomichi Project will be done under his supervision. Mr. Chapman has read and approved the technical content of this news release as it relates to the Tomichi Project.

Forward-Looking Statements

This document may contain "forward-looking information" within the meaning of Canadian securities legislation and "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 (collectively, "forward-looking statements"). These forward-looking statements are made as of the date of this release.

All statements in this release, other than statements of historical facts, that address events or developments that Abacus expects to occur, are forward-looking statements. Such forward-looking statements include, but are not limited to, statements with respect to the timing and implementation of the Arrangement, the integration of Abacus and Burnstone following the Arrangement, estimation of mineral resources, and the success of mining and development operations.

Although Abacus believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results may differ materially from those in the forward-looking statements. Assumptions upon which such forward-looking statements are based include that Abacus and Burnstone will be able to satisfy the conditions in the Letter Agreement and Arrangement Agreement, that the required approvals will be obtained from the shareholders of each of Abacus and Burnstone, that all third party, court, regulatory and governmental approvals to the Arrangement will be obtained, and that all other conditions to completion of the Arrangement will be satisfied or waived. Many of these assumptions are based on factors and events that are not within the control of Abacus or Burnstone and there is no assurance they will prove to be correct.

In certain cases, forward-looking statements can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "budget", "potential", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved" or the negative of these terms or comparable terminology. By their very nature forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Abacus to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include, among others, market prices; exploration and development successes; continued availability of capital and financing; and general economic, market or business conditions. Please see our public filings on SEDAR at www.sedar.com. Although Abacus has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. Abacus provides no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Investors are cautioned that any such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements. Forward-looking statements are based on the beliefs, estimates and opinions of Abacus' management on the date the statements are made. Except as required by applicable securities laws, Abacus undertakes no obligation to update these forward-looking statements in the event that management's beliefs, estimates or opinions, or other factors, should change. Accordingly, readers should not place undue reliance on forward-looking statements.

Read the rest of the article at finance.yahoo.com

Abacus Mining and Exploration

ISIN : CA0025552096
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Abacus Mining is a copper and gold producing company based in Canada.

Abacus Mining produces copper, gold, palladium and silver in Canada, and holds various exploration projects in Canada.

Its main asset in production is AFTON in Canada and its main exploration properties are THE MONTE CARLO ZONE, DM AUDRA DEPOSIT, AFTON - AJAX CAMP and RAINBOW in Canada.

Abacus Mining is listed in Canada. Its market capitalisation is CA$ 1.4 millions as of today (US$ 1.1 millions, € 959 244).

Its stock quote reached its highest recent level on June 07, 1996 at CA$ 1.66, and its lowest recent point on April 20, 2001 at CA$ 0.01.

Abacus Mining has 39 130 000 shares outstanding.

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Annual reports of Abacus Mining and Exploration
2007 Annual report
Annual Report 2006
Option Grants of Abacus Mining and Exploration
10/10/2013Compensation Reductions and Stock Option Grants
Nominations of Abacus Mining and Exploration
5/4/2012announces resignation of Andrew Pooler
4/17/2012appoints Stifel Nicolaus Canada as financial advisor
Project news of Abacus Mining and Exploration
9/15/2015Poland's KGHM says applied for mine permit in Canada
3/19/2013provides update on Ajax Copper-Gold Project in B.C.
8/23/2012KGHM aligned on Ajax Project development KGHM International ...
4/2/2012KGHM exercises option to increase interest in Ajax project t...
1/10/2012Files Ajax Copper-Gold Project Feasibility Study Technical R...
12/21/2011announces robust Feasibility Study results for Ajax Copper-G...
6/23/2011KGHM Ajax participates in open house for Ajax Project Commun...
6/2/2011(Afton - Ajax Camp)KGHM Ajax appoints BNP Paribas as exclusive financial adviso...
1/24/2011(Afton - Ajax Camp)completes major definition and infill drill program at Ajax ...
12/1/2010(Afton - Ajax Camp)Feasibility Study Underway on Ajax Copper-Gold Project, B.C.
6/23/2008(Afton - Ajax Camp)Ajax Joint Venture Area Drilling Continues To Expands The Re...
4/28/2008Intersects 318 metres (1043.3 feet) of 0.43% copper and 0.26...
4/9/2008(Afton - Ajax Camp)Releases Drill Results From Monte Carlo, an Eastern Extensio...
3/25/2008(Afton - Ajax Camp)Sign Definitive Agreements
Corporate news of Abacus Mining and Exploration
4/19/2016Abacus Stock Option Grant
4/1/2016Abacus Board Appointment
2/24/2016Abacus Announces Filing of Updated Feasibility Study for Aja...
1/13/2016Abacus announces positive feasibility study update on Ajax C...
12/29/2015Abacus announces grant of stock options
10/19/2015Abacus Announces Ajax Copper-Gold Project Update
9/14/2015Abacus Announces Submission of Environmental Assessment Appl...
3/24/2015Provides Overview of 2015 Program at Ajax Copper-Gold Projec...
3/24/2015Abacus Provides Overview of 2015 Program at Ajax Copper-Gold...
2/20/2015Abacus Announces Grant of Stock Options
2/12/2015Abacus Provides Review of 2014 Program at Ajax Copper-Gold P...
7/31/2014IIROC Trading Resumption - AME
7/31/2014Abacus Arranges CAD$3 Million Loan and Signs Agreement for t...
7/31/2014IIROC Trading Halt - AME
6/4/2014Abacus Mining Completes Shares for Debt Transaction
5/29/2014KGHM aims to start producing copper at Canadian site at end-...
5/29/2014Abacus Mining Announces New Ajax Project Site Plan
4/25/2014Abacus Mining Announces Issuance of Shares for Debt
8/2/2013& Exploration Corporation: Ajax Project Update
5/17/2013Adopts New Shareholder Rights Plan
3/13/2013Extension of Warrants Approved
4/2/2012initiates strategic review to maximize shareholder value
3/15/2012closes unit offering of C$3.18 million
3/2/2012to close $3.0 million unit offering
2/16/2012announces up to $2.5 million unit offering
9/22/2011' Ajax JV and New Gold sign Asset Exchange Agreement
4/9/2011Completes Asset Purchase Agreement with Teck
9/22/2009Details on the company
4/30/2008 Releases First Drill Results From Ajax Joint Venture Area
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