Gold79 Announces Merger with Bullet Exploration Creating a Stronger Southwest U.S. Gold Explorer

Rhea-AI Summary

Gold79 Mines (TSXV: AUU) (OTCQB: AUSVF) and Bullet Exploration Inc. (TSXV: AMMO) have entered into a definitive amalgamation agreement, creating a well-funded gold exploration company focused on the southwest United States. Under the terms of the transaction, Bullet shareholders will receive one Gold79 share for every three Bullet shares held. The combined entity will focus on:

1. Delivering a maiden resource at the Gold Chain project in Arizona
2. Exploring the newly acquired Jefferson North Gold-Silver project in Nevada
3. Advancing the Jefferson Canyon project in Nevada with partner Kinross

The transaction includes a planned C$4,000,000 equity financing and is expected to close by November 30, 2024, subject to regulatory approvals and shareholder consent.

Positive

• Creation of a multi-project Southwest US Gold Explorer with four exploration stage projects
• Planned C$4,000,000 equity financing to fund maiden resource at Gold Chain project
• Recent drilling at Gold Chain returned high-grade results: 9.1m of 51.09 g/t Au and 44.2m of 2.01 g/t Au
• Jefferson North project sampling returned high-grade results: 56.7 g/t Au and 29.9 g/t Au
• Partnership with Kinross at Jefferson Canyon project
• Increased market capitalization and improved access to capital
• Operational synergies expected to reduce costs and increase exploration efficiency

Negative

• Transaction completion subject to regulatory approvals and shareholder consent
• Dilution of existing shareholders' ownership
• Integration challenges and costs associated with merging two companies
• Uncertainty in achieving projected synergies and exploration targets

Ottawa, Ontario--(Newsfile Corp. - September 4, 2024) - Gold79 Mines Ltd. (TSXV: AUU) (OTCQB: AUSVF) ("Gold79" or the "Company") and Bullet Exploration Inc. (TSXV: AMMO) ("Bullet") are excited to have entered into a definitive amalgamation agreement (the "Agreement") dated September 3, 2024, whereby Gold79 has agreed to acquire all of the issued and outstanding common shares of Bullet (the "Transaction"). The Transaction will create a well-funded gold exploration company focused on the southwest United States. The Company will be focused on delivering a maiden resource at its Gold Chain project in Arizona; exploring the newly acquired Jefferson North Gold-Silver project in Nevada to define its scale potential; and continue to work with Kinross to get the maiden drill program at Jefferson Canyon in Nevada underway.

Under the terms of the Transaction and subject to Bullet shareholder approval, Bullet shareholders will receive one (1) common share of Gold79 (each whole share, a "Gold79 Share") for every three (3) common shares of Bullet ("Bullet Share") held (the "Exchange Ratio"). In addition, each common share purchase warrant and stock option of Bullet outstanding immediately prior to completion of the Transaction shall be adjusted in accordance with the Exchange Ratio and replaced with common share purchase warrants and stock options of Gold79, respectively. Existing shareholders of Gold79 and Bullet will hold approximately 54% and 46%, respectively, of the outstanding Gold79 Shares on closing of the Transaction, on a fully diluted, in-the-money basis (but prior to the completion of the planned equity financing described below). In connection with the Transaction Gold79 plans to raise C$4,000,000 (or such other amount as may be agreed by the parties).

Derek Macpherson, President and CEO of Gold79 stated, "The Transaction between Gold79 and Bullet is a unique opportunity to consolidate exploration companies in the Southwest U.S. The combined entity is going to have multiple projects at various stages of exploration, be well-funded and have improved access to capital. Importantly for shareholders, the planned equity financing should provide the Company the capital necessary to deliver a maiden resource at Gold Chain. We are excited to bring together the teams of these two companies that have complementary skill sets, which we expect to bear fruit as we move the combined Company forward."

Ehsan Agahi, President and CEO of Bullet stated, "This merger is a transformative step for Bullet shareholders, offering immediate exposure to a diverse portfolio of high-potential gold projects in the Southwest U.S. By joining forces with Gold79, we strengthen our ability to advance these assets and unlock their full value. The combined expertise and resources should accelerate our growth trajectory and create substantial value for all stakeholders."

Strategic Rationale for the Transaction

• Creation of a multi-project SW US Gold Explorer (Figure 1)

  • Gold Chain Project, Arizona

    • Recent drilling returned 9.1m of 51.09 g/t Au (GC23-28) and 44.2m of 2.01 g/t Au (GC23-23).

    • Recently defined a from-surface exploration target of 15.6 to 31.2 million tonnes (Mt) grading 1.5 to 2.5 g/t Au. The potential quantity and grades are conceptual in nature. There has been insufficient exploration drilling to define a mineral resource and it is uncertain if further exploration will result in the exploration target being delineated as a mineral resource.

    • Short path to a maiden resource.

  • Jefferson North Gold-Silver Project, Nevada

    • Recent sampling returned 56.7 g/t Au and 29.9 g/t Au from the East Adit #1 Underground Drive.

    • Maiden drill program scheduled to be completed in the Fall of 2024.

    • Approximately 30 kilometres from Gold79's Jefferson Canyon project providing regional synergies.

  • Jefferson Canyon Gold-Silver Project, Nevada

    • Historical results include 41.2m of 6.4 g/t Au and 402 g/t Ag (drill hole GJ-081, CR Exploration Company (CREC), 1983 to 1985).

    • Partnered with Kinross, operator of the adjacent Round Mountain Mine and a Top Ten Global Gold producer.

    • Permitting advanced for a maiden drill program.

  • Tip Top Gold-Silver Project, Nevada

    • Historical results include 9.14m at 14.42 g/t Au (drill hole T98-14, Dos Amigos 1998, reverse circulation drilling).

• Financial Strength to deliver a Maiden Resource: The planned C$4,000,000 equity financing should provide the necessary funds to deliver a maiden resource at the Gold Chain project, while also allowing the Company to advance its other projects.

• Increased scale: The combined entity is expected to have a larger market capitalization.

• Multiple Exploration Projects: The combined entity will have four exploration stage projects in the southwest United States.

• Operational Synergies: The synergy of the combined exploration and management teams of the combined entity is expected to reduce costs and result in a higher percentage of capital raised being used for exploration.

Figure 1: Southwest US Proforma Project Map

To view an enhanced version of this graphic, please visit:
https://images.newsfilecorp.com/files/5717/222047_8976987e1436b81d_001full.jpg

Benefits to Gold79 Shareholders

• Better Access to Capital: Bullet's management and directors along with its existing shareholders are expected to improve the Company's access to capital as it works to deliver a maiden resource at Gold Chain.

• Adding a Quality Project in a well understood district: Bullet's Jefferson North project is close to Gold79's existing Jefferson Canyon project. Gold79's understanding of the geology of this area is expected to allow the Company to quickly advance this project.

• Increased Scale: The combined entity is expected to have a larger market capitalization.

• Improved Team: Management and directors from Bullet are expected to be selectively added to Gold79's management team and board of directors. These additions are expected to improve the skill set of the combined team.

Benefits to Bullet Shareholders

• Exposure to Gold Chain: Bullet shareholders gain exposure to the Gold Chain project which is expected to have a short path to a maiden resource.

• Gold79 Management Team: Bullet shareholders should benefit from the technical expertise of the Gold79 team, which has had exploration success over the last three years with limited budgets.

• Exposure to Partner Funded Project: Bullet shareholders gain exposure to the Jefferson Canyon project, where the next round of drilling is expected to be funded by Kinross and the potential exists for a US$5 million payment to the Company if Kinross exercises their option.

• Increased Scale: The combined entity is expected to have a larger market capitalization.

Transaction Details

Under the terms of the Transaction and subject to Bullet shareholder approval, Bullet shareholders will receive one (1) Gold79 Share for every three (3) Bullet Shares held. In addition, each common share purchase warrant and stock option of Bullet outstanding immediately prior to completion of the Transaction shall be adjusted in accordance with the Exchange Ratio and replaced with common share purchase warrants and stock options of Gold79, respectively. Existing shareholders of Gold79 and Bullet will hold approximately 54% and 46%, respectively, of the outstanding Gold79 Shares on closing of the Transaction on a fully diluted, in-the-money basis (but prior to the completion of the planned equity financing).

The Transaction will be effected by way of a three-cornered amalgamation whereby Gold79, through its wholly-owned subsidiary, 1492834 B.C. Ltd. ("Subco"), will amalgamate with Bullet forming Amalco. Amalco will become a wholly-owned subsidiary of Gold79. Bullet will cease to be a reporting issuer and the Bullet Shares will be delisted from the TSXV.

On the effective date of the Transaction, the Board of Directors (the "Board") of Gold79 will be reconstituted such that three current directors of Gold79 will remain on the Board, and Gold79 will appoint two additional director nominees provided by Bullet. The Company plans to provide additional details on the composition of the go-forward management team, Board and advisory board at a later date.

In addition to the requisite Bullet shareholder approval, the Transaction is subject to applicable regulatory approvals, including the approvals of the TSX-V and the satisfaction of certain other closing conditions customary in transactions of this nature as well as customary interim period covenants regarding the operation of each of the companies' respective businesses. The Agreement also provides for a mutual condition of the parties that a C$4,000,000 equity financing (or such other amount as may be agreed by the parties) be completed immediately following, and contingent upon, the closing of the Transaction. The Agreement contains customary provisions including fiduciary-out provisions in favour of both Gold79 and Bullet, non-solicitation and the right to match alternate proposals for each party. A C$200,000 termination fee may be payable to Gold79 or Bullet under certain circumstances.

Subject to the satisfaction of these conditions, Gold79 and Bullet expect that the Transaction will be completed on or before November 30, 2024. Details regarding these and other terms of the Transaction are set out in the Agreement, which will be available under the SEDAR+ profiles of Gold79 and Bullet at www.sedarplus.ca.

None of the securities to be issued pursuant to the Transaction have been or will be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or any securities laws of any state of the United States (as defined in Regulation S under the U.S. Securities Act), and any securities issuable in the Transaction are anticipated to be issued in reliance upon available exemption from such registration requirements pursuant to Section 3(a)(10) of the U.S. Securities Act and similar exemptions under applicable securities laws of any state of the United States. This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities.

Additional Information

Further details about the Transaction, including further particulars of the business of Gold79, Bullet and the combined entity, will be provided in in the management information circular of Bullet to be prepared and filed in respect of the annual and special meeting of the Bullet shareholders to be held in Q4 2024. ‎

All information contained in this press release with respect to Gold79 and Bullet was supplied for inclusion herein by the respective parties and each party and its directors and officers have relied on the other party for any information concerning the other party.

Completion of the Transaction is subject to a number of conditions, including but not limited to, TSX-V acceptance and the requisite Bullet shareholder approval. The Transaction cannot close until the required Bullet shareholder approval is obtained. There can be no assurance that the Transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the Agreement or in the management information circular of Bullet to be prepared in connection with the annual and special meeting of the Bullet shareholders, any other information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of Gold79 and Bullet should be considered highly speculative.

The TSX-V has in no way passed upon the merits of the proposed Transaction and has neither approved nor disapproved the contents of this press release.

Qualified Person / Quality Control and Quality Assurance

Robert Johansing, M.Sc. Econ. Geol., P. Geo., the Company's Vice President, Exploration for Gold79 is a qualified person ("QP") as defined by NI 43-101 and has reviewed and approved the technical content of this press release related to the Gold Chain, Jefferson Canyon, and Tip Top projects. The QP has not verified the historical analytical data or the quality control or quality assurance procedures of previous operators related to historical drill hole intercepts at the Jefferson Canyon and Tip Top projects.

Garry Clark, P. Geo., is a qualified person as defined in National Instrument 43-101 and has reviewed and approved the technical content of this press release related to the Jefferson North project. Mr. Clark is a director of Bullet.

About Gold79 Mines Ltd.

Gold79 Mines Ltd. is a TSX Venture listed company focused on building ounces in the Southwest USA. Gold79 holds 100% earn-in option to purchase agreements on three gold projects: the Jefferson Canyon Gold Project and the Tip Top Gold Project both located in Nevada, USA, and, the Gold Chain Project located in Arizona, USA. In addition, Gold79 holds a 32.3% interest in the Greyhound Project, Nunavut, Canada under JV by Agnico Eagle Mines Limited.

About Bullet Exploration Inc.

Bullet Exploration Inc. is a TSX Venture listed company focused on high-potential gold and silver projects in the Southwest United States. The flagship Jefferson North Gold-Silver project in Nevada, near major producers like Kinross's Round Mountain, spans 1,068 hectares and 132 claims, offering significant exploration potential. Bullet also holds the Copper Canyon Property in British Columbia, targeting a copper-gold porphyry deposit. With a tight capital structure and a long-term vision for growth, Bullet is committed to advancing its projects and creating lasting shareholder value.

For further information regarding this press release contact:

Derek Macpherson, President & CEO, Gold79
Phone: 416-294-6713
Email: dm@gold79mines.com
Website: www.gold79mines.com

Or

Ehsan Agahi, President & CEO, Bullet
Phone: 778-358-6172
Email: info@bulletexploration.com
Website: www.bulletexploration.com

Book a 30-minute meeting with Derek Macpherson here.
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LinkedIn: https://www.linkedin.com/company/gold79-mines-ltd/

FORWARD-LOOKING STATEMENTS:

This press release may contain forward looking statements that are made as of the date hereof and are based on current expectations, forecasts and assumptions which involve risks and uncertainties associated with our business including the proposed Transaction and proposed private placement or any future private placements, the uncertainty as to whether further exploration will result in the target(s) being delineated as a mineral resource, capital expenditures, operating costs, mineral resources, recovery rates, grades and prices, estimated goals, expansion and growth of the business and operations, plans and references to the Company's future successes with its business and the economic environment in which the business operates. All such statements are made pursuant to the 'safe harbour' provisions of, and are intended to be forward-looking statements under, applicable Canadian securities legislation. Any statements contained herein that are statements of historical facts may be deemed to be forward-looking statements. By their nature, forward-looking statements require us to make assumptions and are subject to inherent risks and uncertainties. We caution readers of this news release not to place undue reliance on our forward-looking statements as a number of factors could cause actual results or conditions to differ materially from current expectations. Please refer to the risks set forth in the Company's most recent annual MD&A and the Company's continuous disclosure documents that can be found on SEDAR at www.sedar.com. Gold79 does not intend, and disclaims any obligation, except as required by law, to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

Neither 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 release.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/222047

FAQ

What is the exchange ratio for the merger between Gold79 Mines (AUSVF) and Bullet Exploration?

Bullet shareholders will receive one (1) common share of Gold79 for every three (3) common shares of Bullet held.

When is the expected closing date for the Gold79 Mines (AUSVF) and Bullet Exploration merger?

The transaction is expected to close on or before November 30, 2024, subject to regulatory approvals and shareholder consent.

What is the planned equity financing amount for the merged Gold79 Mines (AUSVF) and Bullet Exploration entity?

The merged entity plans to raise C$4,000,000 in equity financing in connection with the transaction.

What are the main projects of the combined Gold79 Mines (AUSVF) and Bullet Exploration company?

The main projects are Gold Chain in Arizona, Jefferson North and Jefferson Canyon in Nevada, and Tip Top in Nevada.

What recent drilling results were reported for Gold79 Mines 's (AUSVF) Gold Chain project?

Recent drilling at Gold Chain returned 9.1m of 51.09 g/t Au (GC23-28) and 44.2m of 2.01 g/t Au (GC23-23).