|October 27, 2016|
Northcliff Announces Private Placement
|October 27, 2016, Vancouver, BC - Northcliff Resources Ltd. ("Northcliff" or the "Company") (TSX: NCF) is pleased to announce that it has entered into a Subscription Agreement (the "Agreement") with a subsidiary of Todd Corporation ("Todd"), pursuant to which Todd has agreed to complete a non-brokered private placement (the "Private Placement") under which it will purchase 27.2 million common shares in the capital of the Company ("Common Shares") at a price of $0.11 per Common Share for gross proceeds to the Company at $3 million.|
Todd currently owns 21,268,889 Common Shares, representing 19.99% of the Company's outstanding Common Shares. Upon completion of the Private Placement, Todd will own a total of 48,541,616 Common Shares in the capital of Northcliff, representing 36.3% of the Company's outstanding Common Shares.
The Private Placement requires shareholder approval under the rules and policies of the Toronto Stock Exchange ("TSX"). The Company intends to obtain shareholder approval for the Private Placement at a special meeting of shareholders that is scheduled to occur in December 2016 in Vancouver (the "Meeting"). Assuming shareholder approval is obtained and if other conditions precedent to the Private Placement are met, the Private Placement is scheduled to close shortly after the Meeting.
The Common Shares to be issued to Todd will be subject to applicable resale restrictions, including a four month hold period under Canadian securities rules.
Pursuant to Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"), the Private Placement constitutes a "related party transaction" as Todd is a related party of the Company. The Company is relying on exemptions from the formal valuation and minority approval requirements of MI 61-101, on the basis that the fair market value of the Private Placement at the time the transaction was agreed to did not exceed 25% of the Company's market capitalization pursuant to Sections 5.5 (a) and 5.7 (a) of MI 61-101.
The Common Shares issuable to Todd will be acquired pursuant to an exemption from the prospectus requirements under section 2.10 of National Instrument 45-106.
Under the terms of the Agreement, upon the closing of the Private Placement Todd will have the right to appoint an additional nominee to the Company's Board of Directors (for a total of two nominees), and Todd will continue to have its pre-emptive right to maintain its percentage shareholding in Northcliff by participating pro rata in future common share offerings of Northcliff.
The net proceeds of the Private Placement will be used to fund at least $1.5 million of the Company's share of expenditures related to the Sisson Project and for working capital and general corporate purposes, including repayment by the Company of the loan made by one of its directors.
The Private Placement is subject to a number of conditions, including without limitation, the approval of the TSX and the receipt of shareholder approval, including shareholder approval of the waiver and amendment of the Company's Amended and Restated Shareholder Rights Plan Agreement dated effective April 21, 2016, the day on which it was approved by the Company's shareholders.
A management information circular containing the terms and conditions of the Private Placement in detail will be mailed to the Company's shareholders in connection with the Meeting.
Northcliff and a subsidiary of Todd entered into a limited partnership agreement on October 16, 2013 to advance and operate the Sisson Project under the Sisson Project Limited Partnership. Todd acquired the right to an initial 11.5% interest in the Sisson Project Limited Partnership by investing $14 million on a staged basis. This earn-in was completed in 2014 and Todd now holds a fully vested 11.5% interest in the Sisson Project Limited Partnership and a 19.99% shareholding in the Company. Todd also holds an option to acquire an additional 10% interest in the Sisson Project Limited Partnership (for a total potential interest of 21.5% in the Sisson Project Limited Partnership) by investing $20 million in the Sisson Project Limited Partnership upon a final investment decision to commence construction of the Sisson Project.
About Northcliff Resources Ltd.
Northcliff, associated with Hunter Dickinson Inc. (HDI), is a mineral resource company focused on advancing the feasibility-stage Sisson Tungsten-Molybdenum Project located in New Brunswick, Canada, to production. The results of the Feasibility Study, completed in January 2013, confirm that the Sisson Project is technically and economically feasible and can move on to the next stage of development.
As part of the environmental review process applicable to the Sisson Project, the Sisson Environmental Impact Assessment Report (the "EIA Report") was submitted to both the federal Canadian Environmental Assessment Agency ("CEAA") and the New Brunswick Department of Environment and Local Government in July 2013. The Company received provincial EIA Report approval on December 3, 2015. A federal decision from CEAA is pending. Permit applications for construction and operation will be finalized and submitted following a positive federal decision.
Additional information on Northcliff is available on the website at www.northcliffresources.com. Investor services can be reached at (604) 684-6365 or within North America at 1-800-667-2114.
President & CEO
This release includes certain statements that may be deemed "forward-looking statements". All statements in this release, other than statements of historical facts, that address the in-progress financing, permitting, exploration drilling, exploitation activities and events or developments that the Company expects, are forward-looking statements. Although the Company 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 or developments may differ materially from those in the forward-looking statements. Assumptions used by the Company to develop forward-looking statements include the following: the proposed financing will be completed, the Sisson Project will obtain all required environmental and other permits for construction of the mine, the Sisson Project will achieve targeted production levels; the Company's study and development of the Sisson Project will continue to be positive; contracted parties provide goods and/or services on the agreed timeframes; equipment necessary for construction and development is available and does not incur unforeseen breakdowns; no material labour slowdowns or strikes are incurred; plant and equipment functions as specified; geological or financial parameters do not necessitate future mine plan changes; and no geological or technical problems occur. Factors that could cause actual results to differ materially from those in forward-looking statements include uncertainty of shareholder support, the need for judicial and regulatory approvals, fluctuations in market prices, exploitation and exploration successes, continuity of mineralization, potential environmental issues and liabilities associated with exploration, development and mining activities, uncertainties related to the ability to obtain necessary environmental, land use and other permits, approvals, licenses and title on a timely basis and delays due to third party opposition, and development of properties located within First Nations treaty and asserted territories may affect or be perceived to affect treaty and asserted aboriginal rights and title, which may cause permitting delays or opposition by First Nations communities, changes in government policies regarding mining and natural resource exploration and exploitation, continued availability of capital and financing, and general economic, market or business conditions. 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. For more information on the Company, investors should review the Company's continuous disclosure filings that are available at www.sedar.com.
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