Northern Star Resources Ltd.

February 22, 2017 21:13 ET

Northern Star Resources Ltd. Ownership in Superior Gold Inc.

TORONTO, ONTARIO--(Marketwired - Feb. 22, 2017) - Northern Star Resources Ltd. ("Northern Star") announced today, in connection with the filing by Superior Gold Inc. ("Superior Gold") of a final prospectus (the "Prospectus") for its initial public offering (the "IPO"), its ownership of securities in Superior Gold.

On completion of the IPO, based on the information in Superior Gold's final prospectus and assuming that the full amount of common shares ("Common Shares") offered under the Prospectus is sold, Northern Star shall receive 18,859,041 Common Shares and 14,429,521 share purchase warrants to purchase common shares (the "Warrants" and, together with the said Common Shares, the "Securities")) of Superior Gold. The Warrants shall be exercisable at a price of the U.S. equivalent at closing of the IPO of $2.00 (assuming completion of the IPO at $1.00 per offered share) for a period of five years from the date of closing of the IPO. The numbers of Securities issuable may be adjusted if the size of the offering is reduced.

The Securities represent some of the deferred consideration issuable to Northern Star pursuant to the terms of a sale and purchase agreement between Superior Gold, Billabong Gold Pty Ltd (a wholly-owned subsidiary of Superior Gold), Northern Star and an affiliate of Northern Star, relating to the sale by Northern Star of the Plutonic Gold Operations in Western Australia dated 12 August, 2016 which completed on 11 October 2016 (the "SPA"). The value of the deferred consideration component of the purchase price under the SPA is the greater value of A$25 million payable in securities or 33% of the securities of Superior Gold if Superior Gold lists within 6 months of the completion date of the SPA or payable in cash if Superior Gold lists after 12 April 2017. By an amendment (the "Amendment") to the SPA dated February 9, 2017, the parties to the SPA agreed that the deferred consideration component could comprise (a) securities comprising no less than 20% of the fully paid shares in Superior Gold at IPO, at Superior Gold's election, and (b) an amount in cash equal to the market value, and the IPO price, of the difference in the number of Common Shares issuable as a result of the Amendment. Accordingly, assuming that the full amount of the IPO offering is raised, in addition to the issue of the Securities to Northern Star, a cash payment of $10 million ("Cash Payment") will be paid by Superior Gold to Northern Star on completion of the IPO. In that case, the Securities (assuming the Warrants have a nominal value) would have a total value of A$18.86 million (equivalent to $18.86 million) for an effective acquisition price for the Common Shares of $1.00 per share.

Northern Star has no other securities in Superior. The Securities are being held for investment purposes only and not for the purpose of exercising control or direction over Superior Gold. Northern Star has no current plan or proposal which relates to, or would result in acquiring additional ownership or control over securities of Superior Gold (other than the exercise of the Warrants). Northern Star may or may not purchase or sell securities of Superior Gold in the future on the open market or in private transactions, depending on market conditions and other factors material to Northern Star's investment decision.

If on closing the Securities are issuable in the numbers aforesaid, the Common Shares held by Northern Star will represent approximately 20.63% of the issued and outstanding Common Shares on a non-diluted basis. On a partially-diluted basis, assuming exercise of the Warrants, Northern Star would own and control 33,288,562 Common Shares representing approximately 31.45% of the issued and outstanding Common Shares.

A copy of the early warning report required to be filed by Northern Star with applicable securities commissions will be filed under Superior Gold's profile on SEDAR at www.sedar.com and a copy of the early warning report may also be obtained by contacting Liza Carpene, Company Secretary of Northern Star, at Level 1, 388 Hay Street, Subiaco WA 6008 Australia, telephone +61 8 6188 2151.

Contact Information

  • Northern Star Resources Ltd.
    Liza Carpene
    Company Secretary
    +61 8 6188 2151