Victoria presses ATAC for acquisition

Issues notice of expiry of offer for ATAC Resources by Feb. 17 North of 60 Mining News – February 14, 2023Over a month ago, ATAC Resources Ltd. received a surprise proposal from Yukon neighbor Victoria Gold Corp. to acquire 100% of its shares. Feeling the offer inadequate, the Yukon and British Columbia-focused mineral exploration company declined. Victoria, which believes its offer to be more than fair, brought the deal public on Feb. 13 and declared a notice of expiry for ATAC to reconsider the offer before the week is out.ATAC is best known for its Rackla Gold property, a massive 170,000-hectare (420,000 acres) land package that is divided into two separate projects, Rau and Nadaleen.Nadaleen is home to the first Carlin-style gold discovered in the Yukon, including the Osiris Gold deposit. According to the 2022 mineral resource estimate, Osiris hosts 5.53 million metric tons of indicated resource averaging 4.12 grams per metric ton (732,000 ounces) gold and 9.36 million metric tons of inferred resource averaging 3.47 g/t (1.04 million oz) gold.On the east side of Nadaleen, Rau also accommodates a wealth of deposits, with the most advanced being Tiger, which hosts 4.56 million metric tons of measured and indicated resource averaging 3.19 g/t (464,000 oz) gold.ATAC turns down offerAccording to the public notice of expiry released by Victoria, on Jan. 12 the company submitted a non-binding proposal to acquire 100% of the issued share capital of ATAC at a proposed C12 cents per share, payable in Victoria shares – roughly equivalent to C$26.5 million.Considering ATAC is not only advancing Rackla but also the highly prospective Connaught, PIL, and Catch mineral exploration properties in the Yukon and BC, the company felt it would not be adequate for its holdings.”The Rackla Gold property represents an immense landholding with no underlying royalties. It encompasses two known mineral districts, with significant gold resources and vast precious, base and critical metals potential,” said ATAC Resources President and CEO Graham Downs. “ATAC has been actively exploring in Yukon for over 20 years and has a strong working relationship with Yukon Government and the First Nation of Na-Cho Nyak Dun. With over $4 million in cash in our treasury, a strong resource base at Rackla, and compelling discovery potential across our project portfolio, we believe this offer does not reflect the significant value of ATAC.”Because of these reasons, ATAC declined Victoria’s proposal, twiceVictoria, however, remains steadfast in its belief that the offer it presented is a fair and generous consideration for ATAC shareholders, with the offer implying a premium of 85% to ATAC’s closing share price Feb. 10.”With our demonstrated track record permitting, financing, constructed and operating the Eagle Gold Mine in Yukon, we believe that we can add value to ATAC’s portfolio which would benefit shareholders of both companies,” said Victoria Gold President and CEO John McConnell. “Our offer is more than reasonable given that, although we see opportunities at ATAC’s properties, we are also aware that risks lie ahead, including the uncertainty surrounding the advancement of permits at the Rackla Gold Property. We will not be increasing our offer consideration. We are disappointed our offer has not been taken to ATAC shareholders and we hope that ATAC’s Board of Directors will reconsider not allowing shareholders to decide the outcome for their company.”Appealing to ATAC shareholdersThe die has been cast – in response to the multiple refusals; Victoria lobbied to appeal to ATAC’s shareholders publicly.Operating the largest gold mine in Yukon history, Victoria’s Dublin Gulch property is home to the Eagle Gold Mine. According to a late 2019 calculation, Eagle hosts 148 million metric tons of proven and probable reserves averaging 0.64 g/t (3.06 oz) gold; with the nearby Olive deposit (3,000 meters northeast of Eagle) hosting another 7 million tons of reserves averaging 0.95 g/t (200,000 oz) gold.Factoring in the addition of its second-largest intrusion, Raven – announcing a maiden inferred resource of 19.96 million metric tons averaging 1.67 g/t (1.07 million oz) gold – Victoria is well within its means to procure more resources for its already operating gold mine.Following receipt of the offer, ATAC immediately engaged its legal and financial advisors to evaluate the proposal. After a thorough review, the company responded: “that it did not believe the offer fully captured the significant value of ATAC, including the district-scale precious and critical metals potential of its Rackla Gold Property and ATAC’s other properties in the Yukon and British Columbia.”Victoria Gold Corp.Victoria Gold Corp.’s Eagle Gold Mine produces roughly 150,000 to 200,000 oz of gold per year and continues to improve operations since its first pour in 2019.Furthermore, ATAC states that the offer represented a 36.4% premium toward its closing share price at the time of the offer, though after the offer had reached the attention of old and new investors. In addition, the company asserts that the deal put forward by Victoria is non-binding and contains numerous deal conditions that were not reported.Its response to this, Victoria says the conditions included in its proposal to ATAC are standard and customary for a transaction of this nature. Moreover, the proposal also did not include any financing requirements.Nevertheless, the proposal now stands once again, but this time in the public purview, and Victoria has given ATAC until Feb. 17 for a response. To alleviate possible concerns in acquiring ATAC, the company also says it will not pursue a hostile takeover if ATAC shareholders do not accept its offer by the end of the week.

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