Silvermet & Global Atomic Sign Definitive Merger Agreement

TORONTO, ON: Silvermet Inc. (“Silvermet”) (TSX-V:SYI) is pleased to announce that it has entered into a definitive agreement (the “Definitive Agreement”) with Global Atomic Fuels Corporation (“Global Atomic”) pursuant to which Silvermet will acquire all of the outstanding common shares of Global Atomic by way of a “three-cornered amalgamation” and subsequently complete a share consolidation and corporate name change (the “Transaction”) to create a high quality uranium development company, Global Atomic Corporation.

Transaction Structure

In accordance with the terms of the Definitive Agreement, upon completion of the Transaction, shareholders of Global Atomic (other than Silvermet) will receive 2.147 shares of Silvermet for each share of Global Atomic (the “Exchange Ratio”). The shares of Global Atomic currently held by Silvermet will be cancelled as a result of the Transaction. Immediately following completion of the Transaction, Silvermet will complete a 2.75:1 share consolidation, resulting in a combined company with approximately 103 million shares on issue.

Upon completion of the Transaction, the former Global Atomic shareholders (other than Silvermet) will own 50% of the combined company. The board of the combined company will be reduced to 5 directors, comprising 3 nominees of Silvermet and 2 nominees of Global Atomic.

Highlights of the Transaction

  • The creation of a new uranium development story with best in-class fundamentals, including near term production
  • Positive cash flows from zinc operations will support continued project development
  • Provides exposure to both uranium and zinc markets
  • Creates a unique opportunity for new investors
  • Unlocks value for both Global Atomic and Silvermet shareholders as a combined entity
  • Proven development team combined under a single portfolio of assets

Benefits to Silvermet Shareholders

  • Acquisition of a significant uranium asset at currently attractive valuations, with positive market expectations for uranium
  • One of the highest-grade uranium projects positioned to enter production in the near term
  • Global Atomic assets are well understood by Silvermet management
  • Near-term growth story with a pipeline of development opportunities within the Global Atomic portfolio
  • Flexibility to fund development and expansion pipeline for both Global Atomic and Silvermet’s Iskenderun operations with existing cash flows
  • Access to a wider investor base following the merger, including the current, significant institutional shareholders of Global Atomic
  • Provides added liquidity for the Silvermet shareholders

Benefits to Global Atomic Shareholders

  • Improved balance sheet with the addition of cash flow
  • Opportunity to reset baseline value for Global Atomic’s assets as a public company
  • Public market listing provides mark-to-market reference valuation and liquidity for Global Atomic shareholders
  • Cash flow provides working capital for development of Global Atomic’s high-grade DASA uranium project in the Republic of Niger and reduces the dependency on raising external public capital
  • Production timing coincides with expected rise in uranium prices

Stephen G. Roman, Chairman, President and CEO of Silvermet, stated: “The proposed merger will be transformative for both companies, creating a uniquely positioned base metals and uranium producer with a diversified asset base. We see tremendous value potential in the assets of both Silvermet and Global Atomic, and the combination should allow us to realize this potential in an accelerated timeframe.

Board of Directors’ Recommendations

The board of directors of Silvermet (with the exclusion of certain directors that also serve as directors or officers of Global Atomic), and with the abstention of one director, have determined that the Transaction is in the best interests of Silvermet based on, among other factors, a fairness opinion delivered by Evans & Evans Inc., financial adviser to Silvermet, and the benefits set forth above, and have consequently approved the Transaction. Certain directors and senior officers of Global Atomic have entered into voting support agreements pursuant to which they have agreed to vote their Global Atomic shares in favour of the Transaction. Such directors and senior officers hold Global Atomic shares representing approximately 12.2% of Global Atomic’s issued and outstanding shares as at August 17, 2017.

The board of directors of Global Atomic (with the exclusion of certain directors that also serve as directors or officers of Silvermet not participating) have determined that the Transaction is in the best interests of Global Atomic based on, among other factors, the benefits set forth above, and have approved the Transaction. Certain directors and senior officers of Silvermet have entered into voting support agreements pursuant to which they have agreed to vote their Silvermet shares in favour of the Transaction. Such directors and senior officers hold Silvermet shares representing approximately 12.0% of Silvermet’s issued and outstanding shares as at August 17, 2017.

Further Transaction Details

The Transaction will be carried out by way of a “three-cornered amalgamation” under the provisions of the Business Corporations Act(Ontario). Pursuant to the amalgamation, shareholders of Global Atomic will receive shares in Silvermet based on the Exchange Ratio. Upon completion of the Transaction, the outstanding options, warrants and convertible notes to purchase common shares of Global Atomic will entitle the holders thereof to common shares of Silvermet with the number of common shares and/or exercise price adjusted, as appropriate, to reflect the consideration to be received by shareholders of Global Atomic pursuant to the Transaction.

A special meeting of the shareholders of Global Atomic will be held to consider the Transaction. The Transaction requires the approval of not less than two-thirds of the votes cast by Global Atomic shareholders. The Transaction is also subject to the receipt of customary regulatory approvals, including acceptance by the TSX Venture Exchange of the Transaction and the listing of the Silvermet shares to be issued to Global Atomic shareholders pursuant to the Transaction.

Silvermet will also hold a special meeting of its shareholders to consider the Transaction. The Transaction requires the approval of a simple majority of the votes cast by disinterested Silvermet shareholders. A total of 16.8 million Silvermet shares held by those directors and officers of Silvermet who also hold board positions or offices with Global Atomic will not be counted for the purposes of determining shareholder approval.

Each of Silvermet and Global Atomic has agreed not to solicit alternative proposals. The parties each have the right to consider unsolicited superior proposals subject to other customary rights, including a right to match competing offers.

Full details of the proposed Transaction, a copy of the fairness opinion prepared by Evan & Evans Inc. for the board of directors of Silvermet and other information relevant to the Transaction will be included in an information circular to be prepared in connection with the Silvermet shareholders meeting, which Silvermet expects to mail to shareholders in September 2017.

It is expected that the meetings of shareholders of both Silvermet and Global Atomic to approve the Transaction will be held near the end of September 2017, and, if approved at those meetings, the Transaction would close shortly thereafter.

Financing

In connection with the Transaction, Cantor Fitzgerald Canada Corporation (“Cantor Fitzgerald”) has been retained by Global Atomic to lead a “best efforts” marketed private placement equity financing. Securities issued under the financing will be included in the Transaction and exchanged for securities of the combined company. Stikeman Elliott LLP is acting as legal counsel to Cantor Fitzgerald in connection with such financing.

Advisory & Counsel

Evans & Evans Inc. has provided a fairness opinion to the board of directors of Silvermet and is acting as financial advisor to the Silvermet board. Peterson McVicar LLP is acting as legal counsel to Silvermet.

Cantor Fitzgerald has also been engaged by Global Atomic to provide certain financial advisory services. WeirFoulds LLP is acting as legal counsel to Global Atomic.

About Silvermet

Silvermet’s major investment is a 49% interest in the Befesa Silvermet Turkey, S.L. (“BST”) joint venture, which operates a Waelz kiln facility located in Iskenderun, Turkey through its wholly-owned subsidiary, Befesa Silvermet Iskenderun Celik Tozu Geri Donusumu A.S. (“BSI”). BSI acquires electric arc furnace dust (“EAFD”) from steel mills and recycles the EAFD through its Waelz kiln to produce a high-grade zinc oxide concentrate which is sold to zinc smelters throughout the world.

On a 100% basis, BST processed 28,400 tonnes EAFD in the first half (“H1”) 2017 and 52,900 tonnes in the latest 12 months (“LTM”). Revenues were C$19.7 million for H1 2017 and C$36.7 million for LTM. EBITDA was C$10.6 million for H1 2017 and C$18.6 million for LTM.

Silvermet’s joint venture partner, Befesa Zinc S.A.U. (“Befesa”), is the operator of BST. Befesa has facilities throughout Europe and processes between 45% and 50% of European EAFD. It also has facilities in Korea as well as the Turkish operation.

About Global Atomic

Global Atomic is a private Ontario corporation with six exploration permits in the Republic of Niger covering an area of approximately 750 sq km. Uranium mineralization has been identified on each of the permits, with the most significant discovery being the DASA deposit. In a technical report dated July 31, 2017, CSA Global Pty Ltd (“CSA”) estimated the mineral resources for the DASA deposit as of January 1, 2017, using a 1,200 ppm cutoff as follows:

Tonnes
(millions)
eU3O8
(ppm)
eU3O8
(million lbs)
Indicated3.72,60821.4
Inferred7.72,95449.8

CSA estimated the mineral resource based on a cutoff grade of 1,200 ppm

On July 17, 2017, Global Atomic and AREVA Mines S.A. (“AREVA”) signed a Memorandum of Understanding to advance the development of the DASA deposit, including the use of AREVA’s mill facilities in Arlit.

AREVA has been mining uranium in Niger at its mines located in Arlit, 80 km north of the DASA deposit, continuously since 1971. AREVA is one of the world’s largest uranium mining companies, with 11,186 tonnes of uranium produced in 2016, from operations in Canada, Kazahkstan and Niger.

A photo accompanying this announcement is available at http://www.globenewswire.com/NewsRoom/AttachmentNg/6dce4037-5725-46ba-8262-d3a705ac99fc

Since its inception in 2005, Global Atomic has raised $53 million in equity capital and has over 300 registered shareholders, including major international institutions. There are presently 67,425,441 common shares of Global Atomic outstanding. Further information about Global Atomic can be found on its website at www.globalatomicfuels.com.

There are currently 142,104,716 common shares of Silvermet outstanding. Excluding the impact off any fractional shares, Silvermet will issue 142,078,672 common shares to the Global Atomic shareholders in accordance with the Exchange Ratio. After consolidation of the Silvermet shares, the combined company will have 103,339,414 common shares outstanding.

Stephen G. Roman, Doug Scharf and Derek Rance are directors of both Silvermet and Global Atomic. Rein Lehari is a director of Silvermet and an officer of Global Atomic. Tim Campbell is an officer of both Silvermet and Global Atomic. As a group, these Non-Arms’ Length Parties hold 8.5% of the common shares of Global Atomic and 11.6% of the common shares of Silvermet.

For further information, please contact:

Stephen G. Roman
Chairman, President & CEO
sroman@silvermet.ca

QP Statement

Mr. George A. Flach, BSc., P.Geo., Vice President of Exploration of Global Atomic, has reviewed this press release as the Qualified Person (QP) as defined in National Instrument 43-101.

THIS NEWS RELEASE IS INTENDED FOR DISTRIBUTION IN CANADA ONLY AND IS NOT AUTHORIZED FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Caution concerning forward-looking statements: The information in this release may contain forward-looking information under applicable securities laws. Forward-looking statements in this news release include, but are not limited to, information relating to the timing and completion of a transaction involving Silvermet. This forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those implied by the forward-looking information. Factors that may cause actual results to vary include, but are not limited to, inaccurate assumptions concerning the exploration for and development of mineral deposits, political instability, currency fluctuations, unanticipated operational or technical difficulties, changes in laws or regulations, the risks of obtaining necessary licenses and permits, changes in general economic conditions or conditions in the financial markets and the inability to raise additional financing. In particular, there can be no assurance that a transaction will be completed on terms satisfactory to Silvermet, if at all. Readers are cautioned not to place undue reliance on this forward-looking information. Silvermet does not assume the obligation to revise or update his forward-looking information after the date of this release or to revise such information to reflect the occurrence of future unanticipated events except as may be required under applicable securities laws. The information in this news release includes the following non-IFRS financial measure: EBITDA. These financial measures does not have any standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other issuers.

Silvermet Inc. Announces Private Placement Offering

TORONTO, ON: Silvermet Inc. (“Silvermet”) (TSXV:SYI) is pleased to announce that, pursuant to the previously announced amalgamation of Silvermet and Global Atomic Fuels Corporation (the “Amalgamation”) and subsequent consolidation of share capital approved at each companies’ Annual & Special Meeting of Shareholders held September 29, 2017 (collectively, the “Transaction”), Global Atomic Fuels Corporation (“Global Atomic”) is currently raising up to $3 million through the issuance of up to 12 million Units under a brokered private placement led by Cantor Fitzgerald Canada Corporation (the “Offering”).

Each Unit is priced at $0.25 – which price is equivalent to $0.116 per current Silvermet common share outstanding – and consists of one common share and one-half of one common share purchase warrant, exercisable at $0.50 for 18 months from closing of the Transaction. On completion of the Transaction, the prices of the Units and purchase warrants will be $0.32 and $0.64, respectively. The Offering is expected to close on or about December 8, 2017 and the Transaction is expected to close on or about December 29, 2017.

Silvermet Share Consolidation and Amalgamation

Subject to the approval the TSX Venture Exchange (“TSXV”), Silvermet will, immediately prior to the Amalgamation, effect a consolidation of its issued and outstanding common shares on the basis of one new Silvermet common share for every 2.75 Silvermet common shares outstanding prior to the consolidation (the “Silvermet Share Consolidation”). Assuming completion of the Silvermet Share Consolidation, at the effective time for the Amalgamation, Silvermet will issue to each holder of Global Shares 0.7807 fully paid and non-assessable common shares in its capital (the “Exchange Ratio”) for each Global Share (the “Resulting Issuer Shares”). Following the Amalgamation, the purchase warrants issued pursuant to the Offering will be exercisable for Resulting Issuer Shares, with the number of Resulting Issuer Shares issuable and the exercise price of the purchase warrants adjusted in accordance with the Exchange Ratio.

Completion of the Offering and the Transaction described above are subject to the approval of the TSX Venture Exchange. For further information, please contact:

Stephen G. Roman
Chairman, President & CEO
sroman@silvermet.ca

THIS NEWS RELEASE IS INTENDED FOR DISTRIBUTION IN CANADA ONLY AND IS NOT AUTHORIZED FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.

“Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.”

Silvermet Inc. Announces Merger

TORONTO, ON: Silvermet Inc. (“Silvermet”) (TSXV:SYI) is pleased to announce the completion of its previously announced amalgamation (the “Amalgamation”) with Global Atomic Fuels Corporation (“Global Atomic”) and the subsequent consolidation of share capital (the “Consolidation”) and name change of Silvermet, all as approved at the Annual & Special Meetings of Shareholders of Global Atomic and Silvermet held September 29, 2017 (collectively, the “Transaction”).

Immediately prior to the Amalgamation, Global Atomic completed a concurrent financing of $1.459 million through the issuance and sale of a total of 5,836,000 Global Atomic units under a brokered private placement offering (the “Concurrent Financing”) led by Cantor Fitzgerald Canada Corporation (“Cantor Fitzgerald”). Units were priced at $0.25 and consisted of one common share of Global Atomic (a “Global Share”) and one-half of one common share purchase warrant of Global Atomic exercisable at $0.50 per whole warrant (a “Global Warrant”) for a period of 18 months following closing of the Transaction. Unit pricing is equivalent to $0.116 per Silvermet common share on a pre-Consolidation basis.

In accordance with the terms of the Amalgamation, Global Atomic shareholders (other than Silvermet, whose Global Shares were cancelled pursuant to the Amalgamation) received 2.147 pre-Consolidation common shares of Silvermet for each Global Share held (the “Exchange Ratio”). Of the total 154,608,564 Silvermet common shares issued to Global Atomic shareholders in accordance with the terms of the Amalgamation, 142,078,672 Silvermet common shares were issued to former Global Atomic shareholders and 12,529,892 Silvermet common shares were issued to new Global Atomic shareholders who purchased Global Shares in the Concurrent Financing.

Under the Concurrent Financing, 2,918,000 Global Warrants were issued, which, pursuant to the Amalgamation, were exchanged for 6,264,946 Silvermet warrants exercisable at $0.233 per Silvermet common share on a pre-Consolidation basis. The previously outstanding 3,709,337 Global Atomic warrants (“Global Existing Warrants”) were converted to 7,963,947 pre-Consolidation Silvermet warrants based on the Exchange Ratio, exercisable at $0.737 per Silvermet common share on a pre-Consolidation basis for a period of 24 months from the first day of trading following the closing of the Transaction.

Prior to the Amalgamation, there were 142,104,716 Silvermet common shares outstanding. Upon completion of the Amalgamation, including the completion of the Concurrent Financing, there were 296,713,280 Silvermet common shares outstanding on a pre-Consolidation basis.  Immediately following the completion of the Amalgamation, Silvermet effected a name change and is now legally known as “Global Atomic Corporation” and will trade on the TSX Venture Exchange under the stock symbol “GLO”. Immediately following the Amalgamation, Silvermet also completed the Consolidation on a 2.75:1 basis (the “Consolidation Ratio”), resulting in 107,895,738 common shares of Silvermet currently issued and outstanding, of which 51,664,972 are held by former Global Atomic Shareholders, 4,556,324 were issued to investors under the Concurrent Financing, and 51,674,442 are held by former Silvermet shareholders.

Factoring in the Consolidation Ratio, former Global Atomic shareholders (including purchasers in the Concurrent Financing) have ultimately received 0.7807 post-Consolidation common shares of Silvermet for each Global Share held. Global Atomic warrant holders also ultimately received 0.7807 Silvermet warrants for each Global Existing Warrant. The Global Warrants have ultimately been converted into an aggregate of 2,278,162 Silvermet warrants, each exercisable at $0.64 per post-Consolidation Silvermet common share. The Global Existing Warrants have been adjusted in accordance with their terms and are now exercisable for an aggregate of 2,895,981 post-Consolidation Silvermet common shares at an exercise price of $2.028 per post-Consolidation Silvermet common share.

Fees payable to the agent on the Concurrent Financing consisted of a cash payment of $38,930 and 334,331 Silvermet warrants on a pre-Consolidation basis, exercisable at a price of $0.14 per pre-Consolidation Silvermet common share for a period of 18 months from Closing. After effecting the Consolidation, there are an aggregate of 121,575 such Silvermet warrants issued and outstanding, each exercisable at a price of $0.384 per post-Consolidation Silvermet common share. A financial advisory fee is also payable based on the trading price of Silvermet post Transaction, with half payable in cash and half in shares.

As described in Silvermet’s Management Information Circular dated September 1, 2017, two new directors, George Flach and Paul Cronin, were added to the Board upon completion of the Transaction, subject to TSX Venture Exchange approval.

The Company’s transfer agent, TSX Trust Company, is acting as Depositary Agent to facilitate the exchange of securities as described above. Letters of Transmittal were included in mailings to shareholders for the Annual General and Special Meetings referenced above.

The Common Shares are expected to begin trading on a consolidated basis and under the Company’s new name of Global Atomic Corporation on the TSX Venture Exchange at the opening on December 27, 2017. The Company’s new trading symbol is GLO. The new CUSIP number will be 37957M106 and the ISIN number will be CA37957M1068.

For further information, please contact:

Stephen G. Roman
Chairman, President & CEO
sroman@silvermet.ca

THIS NEWS RELEASE IS INTENDED FOR DISTRIBUTION IN CANADA ONLY AND IS NOT AUTHORIZED FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Caution concerning forward-looking statements: The information in this release may contain forward-looking information under applicable securities laws. Forward-looking statements in this news release include, but are not limited to, information relating to the timing and completion of an Offering and a Transaction involving Silvermet. This forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those implied by the forward-looking information. Factors that may cause actual results to vary include, but are not limited to, inaccurate assumptions concerning the exploration for and development of mineral deposits, political instability, currency fluctuations, unanticipated operational or technical difficulties, changes in laws or regulations, the risks of obtaining necessary licenses and permits, changes in general economic conditions or conditions in the financial markets and the inability to raise additional financing. In particular, there can be no assurance that the Offering or the Transaction will be completed on terms satisfactory to Silvermet, if at all. Readers are cautioned not to place undue reliance on this forward-looking information. Silvermet does not assume the obligation to revise or update his forward-looking information after the date of this release or to revise such information to reflect the occurrence of future unanticipated events except as may be required under applicable securities laws. The information in this news release includes the following non-IFRS financial measure: EBITDA. These financial measures does not have any standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other issuers.