Anaconda Announces Intention to Acquire Maritime Resources Corp.

TORONTO, March 19, 2018 /CNW/ - Anaconda Mining Inc. ("Anaconda" or the "Company") – (TSX:ANX) announced today that it intends to make a formal offer (the "Offer") to acquire all of the issued and outstanding common shares ("Maritime Shares") of Maritime Resources Corp. (TSXV:MAE) ("Maritime") for consideration of 0.364 of a common share of Anaconda ("Anaconda Share") in exchange for each Maritime Share (the "Offer Price").

The Offer Price represents $0.14 per Maritime Share and a significant premium of 40% to the closing price of $0.10 per Maritime Share on the TSX Venture Exchange ("TSX-V") as of March 16, 2018. The Offer Price also represents a 44% premium to the volume weighted average trading price of $0.097 per Maritime Share on the TSX-V over the 20 trading days ended March 16, 2018.  All dollar amounts in this news release are in Canadian dollars, unless otherwise specified.

Anaconda initially submitted a proposal to Maritime on January 29, 2018 to acquire all of the issued and outstanding Maritime Shares (the "Proposal") and has repeatedly attempted to engage in constructive discussions with the board of directors of Maritime. To date, the only meaningful response by Maritime to Anaconda's premium Proposal has been the implementation of a shareholders' rights plan. As a result of the lack of engagement, Anaconda has now decided to take the Offer directly to the shareholders of Maritime.   

Benefits of the Offer to holders of Maritime Shares

Anaconda believes that there is a compelling rationale for Anaconda to acquire 100% of the issued and outstanding Maritime Shares (the "Transaction") and some of the significant benefits for Maritime shareholders include:

• Acceleration of development of Maritime's Hammerdown and Orion gold deposits through utilization of Anaconda's proven infrastructure at the Point Rousse Project:
• • The Pine Cove Mill is the closest operating mill to Hammerdown;
  • The mill has available capacity to process additional ore;
  • The Pine Cove in-pit tailings facility is fully permitted and has approximately 15 years of capacity (based on current throughput rates).
• Potential for substantial Hammerdown development capital cost reductions by leveraging Anaconda's existing mill and tailings facilities.
• The pro-forma company would have a significantly larger Mineral Resource portfolio with growth potential in both Newfoundland and Nova Scotia.
• Underpinned by ongoing operations at the Point Rousse Project, a combination provides pro-forma shareholders with exposure to growing gold production.
• Anaconda has an experienced board of directors and management team:
• • Hands-on operational experience including the development of several gold mines;
  • Strong relationships with the Newfoundland and Labrador government;
  • Better corporate governance and operational cost control.
• Anaconda is a leader in the gold sector in Atlantic Canada and has the capacity to leverage strategic opportunities in the region.
• Anaconda brings greater market presence, enhanced liquidity and a broader capital markets profile:
• • In the 65 trading days from December 12, 2017 through March 16, 2018, Anaconda's average daily dollar volume of trading was approximately 20 times that of Maritime's.

"In the past 10 years, Anaconda has built a strong reputation in Newfoundland with all stakeholders and assembled significant operating infrastructure, including a 1,300-tonne per day mill, tailings capacity for approximately 15 years and a port facility. Even more important, Anaconda has an experienced, established operating team at the Point Rousse Project that is more than capable of developing the Hammerdown project. It is because of these characteristics, and others, that Maritime shareholders would benefit tremendously from the Offer. With favourable logistics and existing infrastructure in place, Anaconda expects it will be able to accelerate the development of the Hammerdown and Orion gold deposits at a lower capital cost than if the deposits were a stand-alone project. In doing so, we could deliver exceptional value in an expedited fashion to both Maritime and Anaconda shareholders. Despite the insufficient response to date from the board of Maritime, we remain steadfast in our resolve to bring our two companies together and be the catalyst we believe Maritime shareholders have been searching for."  

~ Dustin Angelo, Chief Executive Officer of Anaconda

Maritime Loan

Anaconda assumed a $500,000 interest bearing secured loan provided to Maritime on April 26, 2017 (the "Loan").  The Loan is repayable, among other things, on the earlier of Maritime raising $2,000,000 or more in equity or debt financing; or upon Maritime committing an event of default.  Pursuant to Maritime's news release dated March 1, 2018, Anaconda is aware that Maritime has raised at least $2,000,000 in equity or debt financing, in aggregate, from April 25, 2017 through February 15, 2018 and it is noted that Maritime has failed to repay the Loan.  Anaconda has provided Maritime with notice that it is in default under its obligations pursuant to the Loan.  Anaconda has demanded immediate payment of the Loan and accrued interest.  If the Loan and accrued interest are not paid in full immediately, Anaconda will take such steps and actions as it considers necessary to collect the Loan, to enforce the security that it holds against Maritime or other parties, or to otherwise protect or enforce its interests.

Additional Details of the Offer

Readers are cautioned that Anaconda may determine not to proceed with the Offer if:(i) it identifies material adverse information concerning the business, affairs, prospects or assets of Maritime not previously disclosed by Maritime; (ii) Maritime implements or attempts to implement defensive tactics (such as, but not limited to, the adoption of a shareholder rights plan, the grant of an option (or similar right) to purchase material assets, the issue of additional Maritime Shares, or the announcement of a significant acquisition by Maritime) in relation to the Offer. There can be no assurance that the Offer will proceed on the terms set out in this news release.

Full details of the Offer will be included in a formal offer and the take-over bid circular to be filed with securities regulatory authorities and mailed to Maritime shareholders. The Offer will be subject to certain conditions, including, but not limited to: (i) there having been validly deposited under the Offer, and not withdrawn, that number of Maritime Shares representing more than 50% of the outstanding Maritime Shares, excluding those Maritime Shares beneficially owned, or over which control or direction is exercised, by Anaconda or by any person acting jointly or in concert with Anaconda, if any; (ii) there having been validly deposited under the Offer and not withdrawn that number of Maritime Shares representing at least 66 2/3% of the outstanding Maritime Shares (calculated on a fully diluted basis), excluding Maritime Shares held by Anaconda, if any; (iii) certain government and regulatory approvals having been obtained and/or waiting periods expired that Anaconda considers necessary or desirable in connection with the Offer; and (iv) there not having occurred, prior to the expiry date of the Offer, any material adverse changes with respect to Maritime.  In addition, Anaconda may require the approval of its shareholders to issue the Anaconda Shares to be distributed by it in connection with the Transaction. If required, Anaconda expects it will call a meeting of its shareholders to consider a resolution to approve the issuance of the Anaconda Shares.  Once the 66 2/3% acceptance level is met, Anaconda intends, but is not required to, take steps to acquire all of the outstanding Maritime Shares and other convertible securities or rights to acquire Maritime Shares.

Advisors

Anaconda's financial advisor is PI Financial and its legal advisors are Cassels Brock & Blackwell LLP in Canada, and Neal, Gerber & Eisenberg LLP in the United States.

CAUTIONARY STATEMENT REGARDING THE PROPOSED OFFER

ANACONDA HAS NOT YET COMMENCED THE OFFER NOTED ABOVE. UPON COMMENCEMENT OF THE OFFER, ANACONDA WILL DELIVER THE TAKEOVER BID CIRCULAR TO HOLDERS OF THE MARITIME SHARES IN ACCORDANCE WITH APPLICABLE CANADIAN SECURITIES LAWS AND, IF APPLICABLE, UNITED STATES SECURITIES LAWS, AND WILL FILE A TAKEOVER BID CIRCULAR WITH THE SECURITIES COMMISSIONS IN EACH OF THE PROVINCES AND TERRITORIES OF CANADA AND, IF APPLICABLE, IN THE UNITED STATES. THE TAKEOVER BID CIRCULAR WILL CONTAIN IMPORTANT INFORMATION ABOUT THE OFFER AND SHOULD BE READ IN ITS ENTIRETY BY MARITIME'S SHAREHOLDERS. AFTER THE OFFER IS COMMENCED, MARITIME'S SHAREHOLDERS WILL BE ABLE TO OBTAIN, AT NO CHARGE, A COPY OF THE TAKEOVER BID CIRCULAR AND VARIOUS ASSOCIATED DOCUMENTS UNDER MARITIME'S PROFILE ON THE SYSTEM FOR ELECTRONIC DOCUMENT ANALYSIS AND RETRIEVAL (SEDAR) AT WWW.SEDAR.COM AND, IF APPLICABLE, FROM THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION WEBSITE AT WWW.SEC.GOV. MARITIME'S SHAREHOLDERS ARE URGED TO READ SUCH MATERIALS WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION THAT MARITIME'S SHAREHOLDERS SHOULD CONSIDER BEFORE MAKING ANY DECISION WITH RESPECT TO THE OFFER.  SUCH DOCUMENTS WILL ALSO BE AVAILABLE FREE OF CHARGE ON ANACONDA'S WEBSITE OR BY CONTACTING ANACONDA.  THIS ANNOUNCEMENT IS FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE OR FORM PART OF ANY OFFER OR INVITATION TO PURCHASE, OTHERWISE ACQUIRE, SUBSCRIBE FOR, SELL, OTHERWISE DISPOSE OF OR ISSUE, OR ANY OTHER SOLICITATION OF ANY OFFER TO SELL, OTHERWISE DISPOSE OF, ISSUE, PURCHASE, OTHERWISE ACQUIRE OR SUBSCRIBE FOR ANY SECURITY. THE OFFER WILL NOT BE MADE IN, NOR WILL DEPOSITS OF SECURITIES BE ACCEPTED FROM A PERSON IN, ANY JURISDICTION IN WHICH THE MAKING OR ACCEPTANCE THEREOF WOULD NOT BE IN COMPLIANCE WITH THE LAWS OF SUCH JURISDICTION. HOWEVER, ANACONDA MAY, IN ITS SOLE DISCRETION, TAKE SUCH ACTION AS IT DEEMS NECESSARY TO EXTEND THE OFFER IN ANY SUCH JURISDICTION.

This news release shall not constitute an offer to sell or the solicitation of an offer to buy securities in the United States, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. The securities have not been registered under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act") or any U.S. state securities laws, and may not be offered or sold in the United States absent registration or any applicable exemption from the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws.

ABOUT ANACONDA MINING INC.

Anaconda is a TSX-listed gold mining, exploration and development company, focused in the prospective Atlantic Canadian jurisdictions of Newfoundland and Nova Scotia. The Company operates the Point Rousse Project located in the Baie Verte Mining District in Newfoundland, comprised of the Pine Cove open pit mine, the fully-permitted Pine Cove Mill and tailings facility, the Stog'er Tight Mine and the Argyle deposit, as well as approximately 5,800 hectares of prospective gold-bearing property. Anaconda is also developing the Goldboro Project in Nova Scotia, a high-grade Mineral Resource.

The Company also has a pipeline of organic growth opportunities, including the Great Northern Project on the Northern Peninsula and the Tilt Cove Property on the Baie Verte Peninsula. 

QUALIFIED PERSON

Gordana Slepcev, P. Eng., Chief Operating Officer, Anaconda, is a "qualified person" as such term is defined in National Instrument 43-101 and has reviewed and approved the technical information and data included in this news release.

FORWARD-LOOKING INFORMATION

This news release contains "forward-looking information" within the meaning of applicable Canadian and United States securities legislation. Forward-looking information includes, but is not limited to, the Offer, the Proposal, the completion of the Transaction, the enforcement of the Loan, the Company's future exploration, development and operational plans, including the development of the Hammerdown and Orion gold deposits. Generally, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "expects", or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or "does not anticipate", or "believes" or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might", or "will be taken", "occur", or "be achieved". Forward-looking information is based on the opinions and estimates of management at the date the information is made, and is based on a number of assumptions 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 Anaconda to be materially different from those expressed or implied by such forward-looking information, including risks associated with the exploration, development and mining such as economic factors as they effect exploration, future commodity prices, changes in foreign exchange and interest rates, actual results of current production, development and exploration activities, government regulation, political or economic developments, environmental risks, permitting timelines, capital expenditures, operating or technical difficulties in connection with development activities, employee relations, the speculative nature of gold exploration and development, including the risks of diminishing quantities of grades of resources, contests over title to properties, and changes in project parameters as plans continue to be refined as well as those risk factors discussed in Anaconda's annual information form for the year ended December 31, 2017, available on www.sedar.com.  Although Anaconda has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information. Anaconda does not undertake to update any forward-looking information, except in accordance with applicable securities laws.

SOURCE Anaconda Mining Inc.