1246768 B.C. Ltd. Announces Proposed Acquisition of Nevada Properties from Waterton and Business Combination to Form Millennial Precious Metals Corp.

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Toronto, Ontario–(Newsfile Corp. – December 11, 2020) – 1246768 B.C. Ltd. (“768“) announced that it has agreed to complete a series of transactions with Millennial Silver Corp. (“Millennial Silver“) and Clover Nevada LLC (“Waterton“) that will result in 768 (to be named “Millennial Precious Metals Corp.” as discussed below) indirectly acquiring the Wildcat Property, the Mountain View Property, the Marr Property, the Ocelot Property, the Eden Property and the Dune Property located in Nevada (the “Nevada Properties“) and a lease and option to purchase the Red Canyon Property also located in Nevada (the “Red Canyon Property“). The proposed transactions will be effected through an asset purchase agreement dated December 11, 2020 (the “Asset Purchase Agreement“) and an amalgamation agreement dated December 11, 2020 (the “Amalgamation Agreement“). The transactions are conditional on Millennial Silver completing the Private Placement (as defined below) and the TSX Venture Exchange (“TSXV“) approving the listing of the post-Consolidation (as described below) common shares of 768 (“Resulting Issuer Shares“) and other customary conditions.

Amalgamation Agreement

The Amalgamation Agreement between 768 and Millennial Silver provides for, among other things, a three-cornered amalgamation (the “Amalgamation“) pursuant to which (i) Millennial Silver will amalgamate with a wholly-owned subsidiary of 768 incorporated pursuant to the provisions of the Canada Business Corporations Act, (ii) all of the outstanding common shares of Millennial Silver (each, a “Millennial Silver Share“) will be cancelled and, in consideration therefor, the holders thereof will receive Resulting Issuer Shares on the basis of one Millennial Silver Share for one Resulting Issuer Share (the “Exchange Ratio“), and (iii) the amalgamated corporation will become a wholly-owned subsidiary of 768. After giving effect to the Amalgamation, the shareholders of Millennial Silver will collectively exercise control over 768. Pursuant to the Amalgamation, all securities of Millennial convertible into Millennial Shares will cease to represent a right to acquire Millennial Shares and will provide for the right to acquire the same number of post-Consolidation Resulting Issuer Shares at the same exercise price per share, reflecting the Exchange Ratio.

Prior to completion of the Amalgamation, it is intended that 768 will effect a consolidation of the outstanding common shares of 768 on the basis of one post-consolidation share for every 1.5 pre-consolidation shares (the “Consolidation“) and change its name to “Millennial Precious Metals Corp.” or such other name as agreed to by 768 and Millennial Silver and accepted by the applicable regulatory authorities (the “Name Change“). Following completion of the Amalgamation, 768 is expected to continue under the Business Corporations Act (Ontario) (the “Continuance“).

Completion of the Amalgamation will be subject to certain conditions, including among others: (i) the requirement for Millennial Silver to obtain approval of at least 66⅔ percent of the votes cast by shareholders of Millennial Silver at a special meeting of shareholders of Millennial Silver; (ii) the requirement for 768 to obtain shareholder and/or director approval, as applicable, of the Consolidation, the Name Change and the Continuance (which will be evidenced by a unanimous written consent resolution); (iii) completion of the Private Placement (defined below); (iv) obtaining conditional approval of the TSXV to the listing of the Resulting Issuer Shares; and (v) other than the completion of the Amalgamation, the satisfaction or waiver of all other conditions precedent to the closing of the Asset Acquisition (defined below).

The Nevada Properties Acquisition

The Asset Purchase Agreement among 768, Millennial Silver and Waterton provides for the acquisition, prior to the completion of the Amalgamation, by an indirectly wholly-owned subsidiary of Millennial Silver of Waterton’s interest in the Nevada Properties (the “Asset Acquisition“, and together with the Amalgamation, the “Transactions“) in exchange for: (i) US$5,000,000 in cash on closing; (ii) that number of Millennial Silver Shares (the “Payment Shares“) at a deemed price of CAD$0.50 per share that is the greater of (x) 19.9% of the Resulting Issuer Shares on a non-diluted basis immediately following the completion of the Amalgamation and the Private Placement, and (y) that number of Millennial Silver Shares that Waterton (or its designee) would have received had it invested CAD$9,000,000 in the Private Placement; (iii) that number of warrants to purchase Millennial Silver Shares, if any, that Waterton would receive if it purchased the Payment Shares in the Private Placement, and (iv) contingent value rights pursuant to which Waterton will be entitled to receive an additional US$2,500,000 upon the earlier of the public announcement of a mineral resource at any of the Nevada Properties and the date that is 12 months following the date on which the first material permit for any of the Nevada Properties has been obtained (the “First Permit Date“), and another US$2,500,000 upon the earlier of the completion of a Preliminary Economic Assessment at any of the Nevada Properties and the date that is 24 months following the First Permit Date. Waterton will reserve to itself (or its designee) a 2.0% net smelter returns royalty on all minerals produced from each of the Marr Property, the Ocelot Property, the Eden Property and the Dune Property (each a “2.0% Royalty“) and a 0.5% net smelter returns royalty on all gold produced from each of the Wildcat Property and the Mountain View Property. Millennial Silver will have the right to buy-down one-half of each 2.0% Royalty for US$1,500,000. The Asset Acquisition is subject to a number of conditions, including conditions being satisfied to implement the Amalgamation, the completion of the Private Placement, and other customary conditions.

The Properties

Wildcat Property

Wildcat Property is located within the Hycroft mining district in Nevada, located 56 km from the town of Lovelock within Pershing County. The property can be accessed by a year-round road from Lovelock via State Route 48. The 9380 acres land package consists of 481 unpatented claims and 4 patented claims. The claims are federally owned lands administered by the U.S. Bureau of Land Management (BLM). The mineralization at Wildcat consists of gold dominated – volcanic and intrusive hosted low sulfidation epithermal veins and disseminated oxide and sulphide mineralization. Wildcat has a historical resource of 1.1 Moz Au, which Millennial Silver considers to be reliable, as included in the August 14, 2006 technical report “Updated Technical Review, Wildcat Project, Pershing County, Nevada” prepared for Vista Gold Corp. and Allied Nevada Gold Corp. A qualified person has not done sufficient work on behalf of Millennial Silver to classify the historical estimate as current mineral resources and Millennial Silver is not treating the historical estimate as current mineral resources. Millennial Silver plans to release a mineral resource pursuant to National Instrument 43-101 in respect of the Wildcat Property in 1Q21.

Mountain View Property

Mountain View Property is located within the Hycroft mining district in Nevada, located 24 km from the town of Gerlach within Washoe County. The property can be accessed by a year-round road via State road 447 followed by 2km of gravel. The 2460 acres land package consists of 127 unpatented claims. The claims are federally owned lands administered by the U.S. Bureau of Land Management (BLM). The gold dominated mineralization at Mountain View consists of volcanic hosted – low sulfidation epithermal veins and disseminated oxide and sulphide mineralization. Mountain View has a historical resource of 0.473 Moz Au, which Millennial Silver considers to be reliable, as included in the July 31, 2006 technical report “Vista Gold Corp.; Allied Nevada Gold Corp. Mountain View, Nevada USA”. A qualified person has not done sufficient work on behalf of Millennial Silver to classify the historical estimate as current mineral resources and Millennial Silver is not treating the historical estimate as current mineral resources. Millennial Silver plans to release a mineral resource pursuant to National Instrument 43-101 in respect of the Mountain View Property in 1Q21.

Ocelot Property

Ocelot Property is located within the Toiyabe Range in Nevada, located 57 km southwest from the Pipeline deposit. The 2920 acres land package consists of 146 unpatented claims. The claims are federally owned lands administered by the U.S. Bureau of Land Management (BLM). The mineralization at Ocelot is considered to be a low sulfidation epithermal Au/Ag system, hosted by the Valmy volcanosedimentary Formation that overlies quartzites of the local basement. The target area displays broad argillic alteration and silicification alteration. The observed mineral textures and the anomalous Au and pathfinders are characteristic of high epithermal systems including some boiling textures. Historical mapping report broad zones of silicification and sinter on the property with assays up to 200 ppb gold. Historical shallow drilling reported intersections up to 0.01 opt gold associated to micro breccia veinlets were present.

Marr Property

Marr Property is located within the Toiyabe Range in Nevada, located 60 km southwest from the Pipeline deposit. The 1860 acres land package consists of 93 unpatented claims. The claims are federally owned lands administered by the U.S. Bureau of Land Management (BLM). The mineralization at Marr is a low sulfidation Au/Ag epithermal system. The target area displays broad area of argillic alteration, and high-level exposure of a low-sulfidation system characterized by chalcedony and opaline veining and sinter terraces anomalous Au and pathfinders in high-level quartz-chalcedony veins with boiling textures.

Eden Property

Eden Property is located northwestern side of the East Range in Western Nevada Rift, located 22 km southwest of the town Winnemucca within the Perishing and Humboldt Counties and along the sleeper – Sandman trend. The 720 acres land package consists of 64 unpatented claims. The claims are federally owned lands administered by the U.S. Bureau of Land Management (BLM). The mineralization at Eden is a low sulfidation Au/Ag epithermal system. The property can be accessed by a frontage road along Interstate 80. The target concept is a low sulfidation gold system hosted by permeable tertiary volcanic and sedimentary rocks, within the east range of the western Nevada rift. The local geology and mineralization consists of a tertiary volcanosedimentary package cuts by basaltic dikes and quartz veins along through-going “plumbing structures”. A large part of the property is covered by quaternary gravels.

Dune Property

Dune Property is located on the northwestern side of the east range in western Nevada rift, located 13 km southwest of the Town of Winnemucca within the Perishing and Humboldt Counties and along the sleeper – Sandman trend. The 720 acres land package consists of 36 unpatented claims. The claims are federally owned lands administered by the U.S. Bureau of Land Management (BLM). The mineralization at Dune is of low sulfidation Au/Ag epithermal affinity, typical of significant economic Au-Ag deposits of this region of Nevada. The property can be accessed via the Jungo Mine road west out of Winnemucca and then by unimproved road approximately 2 miles to the south. The target concept is a structural and stratigraphic controlled low sulfidation gold system hosted by permeable tertiary volcanic and sedimentary rocks, along the east range of the western Nevada rift.

Red Canyon Property

The Red Canyon Property is located within the Cortez/Tonkin Springs mining district in Nevada, located 75 km northwest of Eureka. The property can be accessed from the town of Eureka by following US Highway 50 west for 20 km to the Monitor Valley Road. This road is then followed north for approximately 50 km to the intersection with the Tonkins Spring access road. Local roads and dirt tracks lead south and east to the main areas of interest on the Red Canyon Property. The 5147-acres land package consists of 254 unpatented claims. The claims are federally owned lands administered by the U.S. Bureau of Land Management (BLM). The gold mineralization at the Red Canyon Property has Carlin style sediment hosted affinity, including deep oxide mineralization overlying sulfide mineralization. In 2021 Millennial Silver expects to allocate US$500,000 to follow up known mineralization with drilling with the objective to define gold grade and understand the main controls of mineralization. Upon completion if successful, phase two drilling will address the geometry and potential size of the mineralization. In addition, some drilling holes will be completed to explore various drill test targets within the mineral claims.

Governance and Investor Rights Agreement

768 and Waterton have also agreed to enter into a governance and investor rights agreement on closing of the Transactions which will include, among other things, a 24-month standstill, a right in favour of 768 to place Resulting Issuer Shares if Waterton desires to sell in excess of 2.5% of the outstanding Resulting Issuer Shares over a 90-day period, subject to certain limitations, participation rights in favour of Waterton to maintain its pro rata interest in 768 and registration rights in favour of Waterton. In addition, Waterton has agreed to support recommendations of management of 768 in respect of future shareholder meetings for a period of two years, subject to certain limitations.

On closing of the Transactions, the board of directors of Millennial Precious Metals Corp. will be comprised of the following individuals: Jason Kosec, Terence Harbort, Ruben Padilla and Michael Leskovec. In addition, Waterton will be entitled to designate one nominee on the reconstituted board of Millennial Precious Metals Corp. Biographies of the proposed directors and senior management team of Millennial Precious Metals Corp. are set out below.

Financing Matters

Millennial Silver intends to complete a brokered private placement of subscription receipts (the “Subscription Receipts“) for aggregate gross proceeds of at least CAD$15,000,000 (the “Private Placement“). Immediately prior to the completion of the Asset Acquisition, the Subscription Receipts are expected to convert into Millennial Silver Shares which will subsequently be exchanged pursuant to the Amalgamation for Resulting Issuer Shares. The net proceeds of the Private Placement will be placed into escrow and released to Millennial Silver immediately prior to the completion of the Asset Acquisition, subject to the satisfaction of a number of conditions including that, other than the completion of the Amalgamation, all other conditions precedent to the closing of the Asset Acquisition shall be satisfied or waived.

The net proceeds of the Private Placement will be used by Millennial Silver to fund the acquisition of the Nevada Properties, fund further exploration on the Nevada Properties and the Red Canyon Property and for general corporate purposes following completion of the Transactions.

The securities to be offered in the Private Placement have not been, and will not be, 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 or to, or for the account or benefit of, United States persons absent registration or any applicable exemption from the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws. 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.

Further details in respect of the Private Placement will be announced by 768 in a separate press release.

Stock Exchange Matters

As at the date hereof, neither the common shares of 768 nor the Millennial Silver Shares are listed on any stock exchange. A condition to completion of the Transactions is the conditional approval for the listing of the Resulting Issuer Shares on the TSXV. A listing application in respect of the Resulting Issuer Shares, which will include further details of the Transactions, will be filed on 768’s issuer profile on SEDAR at www.sedar.com provided TSXV’s conditional approval of the listing of the Resulting Issuer Shares has been obtained. There can be no assurance that the TSXV will grant such conditional approval of that the Transactions will be completed as proposed or at all. The Transactions are not “Non-Arm’s Length Qualifying Transactions” (within the meaning of TSXV policies).

768 intends to apply to the TSXV for an exemption from the sponsorship requirements for the Transactions based upon the Private Placement and/or other exemptions available in TSXV policies.

About Millennial Silver Corp.

Millennial Silver is a private corporation incorporated under the Canada Business Corporations Act on October 28, 2020 and is engaged in the acquisition, exploration and evaluation of mineral properties. Millennial Silver and its wholly-owned subsidiary entered into lease and option to purchase agreement with Red Canyon Corporation on October 30, 2020 (the “Red Canyon Agreement“) pursuant to which Millennial Silver has an option to acquire the Red Canyon Property. Pursuant to the Red Canyon Agreement, Millennial Silver (or the resulting issuer thereof) will issue to Red Canyon Corporation: (i) on the closing of the Transactions that number of Millennial Silver Shares equal to 2.0% of the outstanding Resulting Issuer Shares on a non-diluted basis following the completion of the Amalgamation and the Private Placement; (ii) 1,000,000 Resulting Issuer Shares on or prior to October 30, 2021; (iii) 1,000,000 Resulting Issuer Shares on or prior to October 30, 2022; and (iii) 1,000,000 Resulting Issuer Shares on or prior to October 30, 2023.

As of the date hereof, there are 55,701,775 Millennial Silver Shares outstanding and 4,316,667 Millennial Shares issuable upon exercise of options and warrants to purchase Millennial Silver Shares.

Summary of Financial Information

A summary of certain financial information for Millennial Silver is included in the table below:

Millennial Silver Corp. Nine months ended
September 30, 2020
(Unaudited)
Year ended
December 31, 2019
(Audited)
  ($) ($)
Operations    
Exploration and evaluation 79,976  
Consulting 538,290  
Professional Fees 56,426 2,000
Shareholder Information 14,136  
Office & General 208 2,000
Balance Sheet    
Total assets 1,316,619 1
Total liabilities 715,852 2,000
Total equity 600,767 (1,999

 

Further financial information will be included in the listing application to be prepared in connection with the Transactions.

Proposed Directors and Senior Management Team

Upon the closing of the Transactions, in addition to the Waterton nominee, it is anticipated that Jason Kosec, Terence Harbort, Ruben Padilla and Michael Leskovec will constitute the Board of Directors of Millennial Precious Metals Corp. It is also anticipated that the new senior management team of Millennial Precious Metals Corp. will be comprised of Jason Kosec (President and Chief Executive Officer), Andres Tinajero (Chief Financial Officer), J.D. Mizer (Vice President of Exploration) and David Badham (Director Legal & Corporate Affairs and Corporate Secretary).

The following are brief resumes of the currently proposed directors and senior officers of Millennial Precious Metals Corp. following the Transactions:

Jason Kosec, Proposed CEO, President and Director

Jason has nearly ten years of experience in all facets of mineral exploration, mine development, investor relations and finance. Upon completing his undergraduate degree in Geology at Western University and a Masters in Earth and Energy Resources at Queens University, Jason worked as a Project Geologist at Trelawney Mining and Exploration, which was subsequently sold in 2012 to IAMGOLD for C$608M. Jason then moved on to work as an Exploration Geologist at a number of IAMGOLD properties and in early 2015 was recruited to join the Barkerville Gold Mines team as Sr. Geologist where he was appointed Chief Mine Geologist in 2016. In late 2017, Jason took on the role of VP Corporate Development which ultimately led to the sale of Barkerville Gold Mines to Osisko Gold Royalties in 2019 for C$338 million. Jason is currently Vice President of Strategic Development at Sable Resources and is also on the Board of GK Resources.

Ruben Padilla, Proposed Director

PhD from the University of Arizona. Over 30 years experience in the mineral exploration industry, Dr. Padilla has completed important research at the La Escondida deposit. With AngloGold Ashanti Ltd., he acted as exploration country manager in Consulting Geologist Peru and in Colombia and as chief geologist for the Americas exploration group. He was part of the team that discovered the Colosa and Gramalote deposits in Colombia. He is the founder and chief geologist for Talisker Exploration Services Inc. Dr. Padilla is a director of UniGold Inc. and Minera Alamos Inc.

Terry Harbort, Proposed Director

PhD in Structural Geology and Tectonics. Recognised senior member of the discovery team of AngloGold’s Ashanti’s La Colosa and Gramalote deposits. Specialist in mapping and interpretation of ore geometries and ore controls covering various types of geological environments with direct applications to mineral economics from target generation, target definition and evaluation, and project management. Co-founder and VP Exploration of Talisker Exploration Services.

Andres Tinajero, Proposed Chief Financial Officer

Mr. Tinajero is a Chartered Professional Accountant with over 26 years of international finance experience in, compliance, finance strategy, financial reporting, internal control and strategic planning. Mr. Tinajero has previously served as Vice-President, CFO and Corporate Controller for large, multi-national companies including United Nations, State Bank, Lafarge, Trelawney Mining, Osisko Royalties. Mr. Tinajero holds a Bachelor of Business from San Francisco University, a Master of Business Administration (MBA) from ITESM University, he is a Member of the Canadian Institute of Chartered Professional Accountants, the Certified Practicing Accountants of Australia and a Certified member of the Institute of Corporate Directors

Outside of his duties at Millennial, Mr. Tinajero serves as Director for Sable Resources, Talisker Resources and JHI Energy.

Michael G. Leskovec, Proposed Director

Mr. Leskovec is a Chartered Professional Accountant with over sixteen years of financial experience with publicly listed companies and capital markets. He also serves as a Vice-President of Northfield Capital Corporation, where he has gained experience working with publicly listed companies, assisting with investment analysis, financings, corporate structuring and go public transactions in Canada. Prior to this, Mr. Leskovec served as an Officer of Gold Eagle Mines Ltd., which was involved in the development of the Bruce Channel deposit in Red Lake, Ontario, and was sold to Goldcorp Inc. for $1.5 billion in 2008. Mr. Leskovec earned his Chartered Professional Accountant, Chartered Accountant (CPA, CA) designation while working in the audit and assurance practice for Smith Nixon LLP and has his Honours Bachelor of Accounting (BAcc) Degree from Brock University

J.D. Mizer, Prposed Vice President of Exploration

An Arizona native, J.D. received his PhD from The University of Arizona after serving in the U.S. Navy submarine service. His research focused on early Laramide geology and regional geochronology in the Southwest. With over 12 years’ experience in mineral exploration, his contributions include detailed mapping and structural interpretations on greenfields projects including porphyry copper, Carlin gold, and mesothermal precious-base metal vein systems. In addition to exploration and consulting, Dr. Mizer has spent time managing testing facilities in the geomechanical consulting field. Outside of his duties at Millennial, Dr. Mizer serves as Vice President of Exploration and partner for Tri Minerals Holdings Corp., Vice President of Project Acquisitions for Silver Hills Minerals, LLC, and Vice President of Exploration and Project Acquisitions for Professional Minerals Development, LLC.

David Badham, Proposed Director Legal & Corporate Affairs and Corporate Secretary

David holds a B.A. from Rhodes College (Memphis, TN), an M.A. from New York University, and a J.D. from The Schulich School of Law at Dalhousie University. He was called to the Ontario bar in 2014 and has been a member in good standing since that time. Prior to joining Millennial, David practiced law at Blake, Cassels & Graydon LLP and Polley Faith LLP, where he focused on securities regulatory litigation and compliance, as well as general commercial litigation.

Qualified Person

The technical information contained in this news release has been reviewed and approved by Leonardo De Souza, of Talisker Exploration Services, an independent “Qualified Person” within the meaning of National Instrument 43-101.

Cautionary Note Regarding Forward-Looking Statements

This news release includes certain “forward-looking statements” under applicable Canadian securities legislation. Forward-looking statements include, but are not limited to, statements with respect to: the terms and conditions of the proposed Transactions; the terms and conditions of the proposed Private Placement; use of proceeds from the Private Placement; future development plans; and the business and operations of 768 after the proposed Transactions. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: satisfaction or waiver of all applicable conditions to the completion of the Transactions (including receipt of all necessary shareholder, stock exchange and regulatory approvals or consents, and the absence of material changes with respect to the parties and their respective businesses); ability to close the Private Placement on the proposed terms or at all; the synergies expected from the Transactions not being realized; business integration risks; fluctuations in general macroeconomic conditions; fluctuations in securities markets; fluctuations in spot and forward prices of gold, silver, base metals or certain other commodities; fluctuations in currency markets (such as the Canadian dollar to United States dollar exchange rate); change in national and local government, legislation, taxation, controls, regulations and political or economic developments; risks and hazards associated with the business of mineral exploration, development and mining (including environmental hazards, industrial accidents, unusual or unexpected formations pressures, cave-ins and flooding); inability to obtain adequate insurance to cover risks and hazards; the presence of laws and regulations that may impose restrictions on mining; employee relations; relationships with and claims by local communities and indigenous populations; availability of increasing costs associated with mining inputs and labour; the speculative nature of mineral exploration and development (including the risks of obtaining necessary licenses, permits and approvals from government authorities); and title to properties.

There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. 768 disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Completion of the Transactions is subject to a number of conditions, including but not limited to, TSXV acceptance. Where applicable, the Transactions cannot close until the required shareholder approval is obtained. There can be no assurance that the Transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the listing application to be prepared in connection with the Transactions, any information released or received with respect to the Transactions may not be accurate or complete and should not be relied upon.

The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this news release.

For further information, please contact:

1246768 B.C. Ltd.
James Ward, Director
Phone: (416) 416 897-2359
Email: james@wardfinancial.ca

Millennial Silver Corp.

Jason Kosec, President & CEO
Phone: (250) 552-7424
Email: jason.kosec@millennial-silver.com

Neither 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 news release.

Not for distribution to United States news wire services or for dissemination in the United States.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/70097