TORONTO, ONTARIO--(Marketwired - Dec. 20, 2016) - Morumbi Resources Inc. (TSX VENTURE:MOC) ("Morumbi" or the "Company") is pleased to announce that the Company has today completed its acquisition (the "Acquisition") of all of the outstanding shares of American Pacific Honduras SA de CV ("AMPAC") from affiliates of Nyrstar NV ("Nyrstar") and assumed ownership and control of the producing El Mochito zinc, silver and lead mine in Honduras ("El Mochito").
In tandem with the completion of the Acquisition and following the receipt by Morumbi and Nyrstar of the approval of the Honduran Commission for the Defense and Promotion of Competition for the Acquisition, announced on December 16, 2016, the Company has also satisfied the outstanding conditions for the release of the escrowed funds from the C$19.5 million financing of subscription receipts, which closed on October 13, 2016 (the "Financing").
Commenting on the closing of the Acquisition, Chris Buncic President and CEO, stated: "The Company is extremely pleased by the completion this transformational acquisition. Throughout the negotiation process and during the period since agreeing to purchase El Mochito, our positive working relationship with Nyrstar as well as our partners and stakeholders in Honduras has allowed us to hit the ground running as we take over the mine. We are already hard at work implementing our plan to improve production and cash flow levels at El Mochito and to deliver value to our investors."
Of the funds released from escrow, a total of C$585,000 was paid to Dundee Capital Partners, the agent in connection with the Financing, with the balance released to the Company. A US$500,000 portion of such balance was paid to Nyrstar in satisfaction of the closing payment for the Acquisition, with the remainder expected to be deployed by the Company as outlined in its news release of September 22, 2016 and further described in its preliminary short form prospectus dated December 9, 2016 (the "Preliminary Prospectus") available on SEDAR under the Company's profile at www.sedar.com. Notwithstanding the release of the escrowed funds, the subscription receipts issued pursuant to the Financing will remain issued and outstanding until the Company obtains a receipt from the applicable securities regulatory authorities for a (final) short form prospectus qualifying the common shares underlying such subscription receipts.
In connection with the completion of the Acquisition, and pursuant to the share purchase agreement (the "SPA") dated September 22, 2016 among Morumbi, and Nyrstar affiliates Breakwater Resources Ltd. ("Breakwater") and Nyrstar International B.V. ("Nyrstar International"), the Company also announces that it has entered into offtake agreements (the "Offtake Agreements") with Nyrstar International and its affiliate Nyrstar Sales & Marketing AG with respect to the purchase by Nyrstar from the Company of all of the zinc, lead and precious metal concentrate from El Mochito. Terms of the Offtake Agreements were outlined in the SPA and finalized prior to the closing of the Acquisition. A description of the Offtake Agreements is contained in the Preliminary Prospectus and copies are available on SEDAR under the Company's profile at www.sedar.com. Also pursuant to the SPA, the Company concurrently entered into a transition services agreement with Breakwater pursuant to which Breakwater is expected to provide certain transition services and provide ancillary support for up to four months following completion of the Acquisition.
Separately, the Company also announces today that it has filed Articles of Amendment to give effect to its previously announced name change and consolidation. Effective December 21, 2016, the Company will change its name to Ascendant Resources Inc. and consolidate its issued and outstanding share capital on the basis of one post-consolidation common share for every five pre-consolidation common shares, with any fractional common shares created thereby rounded down and no compensation payable in lieu therefor. The TSX Venture Exchange ("TSXV") has approved the name change and consolidation and, effective at the commencement of trading on December 21, 2016, the Company's issued and outstanding common shares will trade in the name Ascendant Resources Inc. on a post-consolidation basis, under the symbol "ASND".
Mr. Buncic continued: "We are very proud of what we've been able to accomplish as a company in 2016 and are eager to begin our next chapter as Ascendant Resources Inc."
About Morumbi Resources
Morumbi Resources is a mining company focused on its flagship operating asset, the producing 'El Mochito' zinc, silver and lead mine in west-central Honduras in which the Company has a 100% interest. El Mochito has been in continuous production since 1948. More broadly, the Company evaluates producing and advanced development stage mineral resource acquisition opportunities, principally in Latin America, on an ongoing basis. The Company's common shares are listed on the TSX Venture Exchange under the symbol "MOC". Effective December 21, 2016, the Company will change its name to Ascendant Resources Inc. and its common shares will commence trading on the TSX Venture Exchange under the symbol "ASND".
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.
Cautionary Note Regarding Forward-Looking Information
This press release includes certain "forward-looking information" within the meaning of applicable Canadian securities legislation.
Forward-looking information is based on reasonable assumptions that have been made by Morumbi as at the date of such information and is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Morumbi to be materially different from those expressed or implied by such forward-looking information, including but not limited to: the impact of general business and economic conditions; that the escrowed funds released to the Company will be deployed in the manner described; problems inherent to the marketability of base and precious metals; industry conditions, including fluctuations in the price of base and precious metals, fluctuations in interest rates; government entities interpreting existing tax legislation or enacting new tax legislation in a way which adversely affects Morumbi; stock market volatility; competition; risk factors disclosed in Morumbi's most recent Management's Discussion and Analysis available electronically on SEDAR; and such other factors described or referred to elsewhere herein, including unanticipated and/or unusual events. Many such factors are beyond Morumbi's ability to control or predict.
Although Morumbi has attempted to identify important factors that could cause actual outcomes to differ materially, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking information will prove to be accurate as actual outcomes and future events could differ materially from those reliant on forward-looking information.
All of the forward-looking information given in this press release is qualified by these cautionary statements and readers are cautioned not to put undue reliance on forward-looking information due to its inherent uncertainty. Morumbi disclaims any intent or obligation to update any forward-looking information, whether as a result of new information, future events or results or otherwise, except as required by law. This forward-looking information should not be relied upon as representing the Company's views as of any date subsequent to the date of this press release.