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American Pacific Mining to Acquire Constantine Metal Resources
Monday 15 August 2022

Canada-based miner American Pacific Mining Corp (CSE: USGD) (FWB: 1QC) (OTCQX: USGDF) has entered into a definitive agreement under which it will acquire all of the issued and outstanding common shares of Constantine Metal Resources Ltd (TSX Venture: CEM) (OTCQX: CNSNF) in an all-share transaction, the company said.

The deal calls for APM to provide Constantine shareholders with an immediate upfront premium of 48.6% based on each company's respective 20-day volume weighted average price.

The combined company will be a premier exploration and development company in the western USA with two projects being aggressively advanced under strategic partnerships with well-respected major metal producers and an expanded portfolio of prospective precious and base metals assets.

Shareholders of the combined company will gain exposure to two advanced exploration projects under strategic partnerships with majors.

One of these, Palmer (Constantine) is a PEA-stage (USD 266m after-tax NPV at 7% discount rate)1 zinc-copper-gold-silver volcanic massive sulfide project located in a strategic area of Southeast Alaska, being advanced with world-class joint-venture partner Dowa Metals and Mining Co., Ltd. of Japan.

The JV approved 2022 program and budget is USD18 m, with funds being advanced exclusively by Dowa, as required, during project advancement. Constantine has an option to contribute pro-rata, up to December 31st, 2022, to maintain Constantine's 44.91% interest.

Madison is a past-producing high-grade copper-gold skarn and porphyry system located in the heart of Montana's prolific copper-gold belt under an earn-in joint-venture agreement, whereby Kennecott Exploration company, part of the Rio Tinto Group, may spend USD 30m to earn a 70% interest.

The combined company will be well financed with a pro-forma cash balance exceeding CDN 10m allowing APM to aggressively progress projects while leveraging spending commitments of partners.

Improved capital markets profile with increased market capitalization exceeding CDN 85m and better positioned to attract additional institutional and high net-worth investors.

The transaction has strong shareholder support, with Constantine's two largest shareholders Michael Gentile and John Tognetti and management and directors of Constantine, together representing 27% of the issued and outstanding common shares of Constantine, entering into voting support agreements with APM.

Strong and experienced management team (APM was recently nominated for five awards at the S and P Global Platts Metals Awards) with demonstrated ability to raise capital and operate in the western USA.

APM and Constantine shareholders will have exposure to expanded portfolio of precious and base metals exploration projects in Idaho, Nevada and Arizona.

Constantine shareholders will be entitled to receive 0.881 of a common share of APM for each share of Constantine held.

All outstanding stock options of Constantine will be exchanged for options of APM and all warrants of Constantine will become exercisable to acquire common shares of APM, in amounts and at exercise prices adjusted in accordance with the Exchange Ratio.

The consideration values Constantine at approximately CDN 0.43 per share, representing a premium of approximately 48.6% to Constantine shareholders, based on the 20-day VWAP of each company as of the close of trading on August 12, 2022.

Upon completion of the Transaction, Constantine shareholders will hold approximately 31.4% of APM shares on an outstanding basis.

McMillan LLP is acting as American Pacific's legal advisor. Agentis Capital Mining Partners is acting as financial advisor to Constantine and Blake, Cassels and Graydon LLP is acting as Constantine's legal advisor.

Agentis Capital Mining Partners has provided a fairness opinion to the board of directors of Constantine stating that, as of the date of the opinion, and based upon and subject to the assumptions, limitations and qualifications said in the opinion, the consideration to be received by the shareholders of Constantine is fair, from a financial point of view, to the shareholders of Constantine.

American Pacific Mining Corp. is a gold explorer focused on precious metal opportunities in the Western United States.

The Madison Mine in Montana, under option to joint venture with Kennecott Exploration company, is the company's flagship asset. The Gooseberry Gold-Silver Project and the Tuscarora Gold Project are two high-grade, precious metals projects located in key mining districts of Nevada, USA.

Constantine is a mineral exploration company led by an experienced and proven technical team with a focus on the Palmer copper-zinc-silver-gold-barite project being advanced as a joint venture between Constantine and Dowa Metals and Mining Co., Ltd., with Constantine as operator.

The Palmer Project is a high-grade volcanogenic massive sulphide-sulphate project located in a very accessible part of coastal Southeast Alaska, with road access to the project and within 60 kilometers of the year-round deep-sea port of Haines.
Date Published: 15/08/2022