The non-binding Letter of Intent between Alpha Copper Corp. and CAVU Energy Metals Corp., dated August 18th, 2022, states that Alpha will buy all of CAVU’s outstanding and issued shares. According to each company’s respective 20-day volume-weighted average cost, the proposed deal, which is an arm’s length transaction, offers CAVU shareholders a premium of 60%.
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With an increased portfolio of potential base and precious metals properties in British Columbia and the Yukon, the combined business of Alpha and CAVU will become a leading copper exploration firm following the proposed transaction.
Highlights of the Transaction and Strategic Rationale
The united company’s shareholders will have access to four potential exploration assets in well-established mining jurisdictions, including:
- Star Project (CAVU): In the Golden Triangle, the Star Project (CAVU) is a multi-target copper-gold porphyry project with a preserved supergene zone that contains 106.98 m at 0.77% copper (Hole S045) and is mineralized to a depth of 700 m. It is also open for further exploration. Modern drilling of more than 13,000 m has been performed on the property, which has 200 drill sites and full exploration permission through 2026. The Tahltan and Taku River Tlingit First Nations’ ancestral lands are where the Star is situated.
- Hopper Project (CAVU): In the Yukon, the 74 km2 Hopper Project (CAVU) is a multi-target porphyry copper-molybdenum project with considerable peripheral copper-gold-silver potential. Drill testing of the porphyry target produced 116 m at 0.209% Cu from the surface and the best intercept of 22.28 m at 1.405% Cu from the skarn deposit. The project is situated on the Champagne Aishihik First Nations’ ancestral land.
- Project Okeover (Alpha): The Okeover Property, with 12 mineral claims totaling 4,613 hectares (11,399 acres), is located on the south coast of British Columbia, 25 km away from Powell River’s deep-water port facilities and 145 km far from Vancouver. Exploration is completely allowed and scheduled to begin in the fall of 2022.
- Project Indata (Alpha): The Indata Property, which spans 16 mineral claims covering 3,189 hectares, is located in north-central British Columbia on the east side of Albert Lake, two hours’ drive from the settlement of Fort St. James. At Indata, four zones of copper mineralization have been found, and past drilling has yielded 148 m with a copper grade of 0.20%, including 24.1 m with a 0.37% copper grade in hole 98-I-4. On the Indata project, Alpha is presently engaged in a drilling exploratory program worth $1,000,000 that should be finished in the fourth quarter of 2022.
- Thanks to the combined company’s strong senior management team and board of directors, its effective project portfolio will be well-capitalized to enhance its value.
We believe the addition of CAVU and its Star and Hopper assets to Alpha’s significant project portfolio of properties in British Columbia will be highly accretive for the shareholders of both Alpha and CAVU. With the current interest in copper assets, both for traditional uses and to support the expanding demand for battery metals, Alpha will be aggressively pursuing all four assets.
Darryl Jones, CEO, Alpha Copper
“We look forward to working with the excellent team at CAVU throughout this transaction, and look forward to maximizing the potential of a robust portfolio of high-value assets on completion.”
Dr. Jacob Verbaas, CEO of CAVU, stated, “CAVU is pleased to enter into this proposed transaction, which is at a significant premium to CAVU’s market price. We believe Alpha’s regional focus, financing capabilities, and exploration capacity, combined with CAVU’s strong project portfolio of mature exploration assets and technical expertise, create a scenario that mutually benefits CAVU and Alpha.”
“In addition, we believe that this proposed arrangement will allow our highly prospective Star and Hopper properties to reach their full potential,” he said.
Proposed Transaction Details
For every CAVU share, Alpha intends to issue 0.7 Alpha shares. Depending on the 20-day VWAP of each firm as of the conclusion of trading on August 17th, 2022, the Consideration values CAVU at roughly $0.33 per share, representing a premium of almost 60.67% to CAVU shareholders. After the Transaction is finished, CAVU shareholders will own about 30% of the existing Alpha shares.
Additionally, it is anticipated that CAVU will name a candidate to Alpha’s Board of Directors and that Dr. Luke Bickerton, VP of Exploration, and Dr. Jaap Verbaas, CEO of CAVU, will take on operational responsibilities inside Alpha.
The standard clauses in the LOI for the proposed transaction include an exclusivity term that ends on October 31st, 2022. According to tax, securities, and corporation law concerns, the parties will choose the Proposed Transaction’s ultimate structure, which will be controlled by the terms of a final, legally-binding agreement.
Among other things, the proposed transaction must be completed satisfactorily, and voting support from significant shareholders, shareholder approval, and conditional approval from the Canadian Securities Exchange are all requirements. By September 30th, 2022, both Alpha and CAVU hope to have a binding agreement in place.
Any securities that are issued under the Arrangement are anticipated to be offered and issued in reliance on the exemption from the U.S. Securities Act of 1933’s registration requirements granted by Section 3(a)(10) thereof. There is no solicitation of a request to purchase or a solicitation of an offer to sell securities in this news release.
Roger Hulstein, P. Geo, a qualified person for CAVU in accordance with National Instrument 43-101, has given his approval for the technical material about results generated by CAVU in this press release.
Mr J.W. Morton, P. Geo., who is the Qualified Person in the context of National Instrument 43-101 and assumes responsibility for its technical content, has assessed and approved the technical information connected to Alpha and its projects in this document.