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ANACONDA MINING AND OREX EXPLORATION EXECUTE
ARRANGEMENT AGREEMENT
March 3, 2017 - Toronto, ON and Rouyn-Noranda, QC – Anaconda Mining Inc. (“Anaconda”)
(ANX: TSX) and Orex Exploration Inc. (“Orex”) (OX: TSXV) are pleased to announce that they
have entered into a definitive arrangement agreement (the “Agreement”), pursuant to which
Anaconda has agreed to acquire all of the issued and outstanding common shares of Orex, by
way of a court-approved plan of Arrangement (the “Arrangement”). Pursuant to the
Agreement, the consideration to be received by the shareholders of Orex consists of 0.85 of a
common share of Anaconda (each, an “Anaconda Share”) for each common share of Orex
(each an “Orex Share”) held. Outstanding options of Orex (“Orex Options”) that have not
been duly exercised prior to the effective date on the Arrangement, will be exchanged for a fully
vested option of Anaconda to purchase from Anaconda the number of Anaconda Shares
(rounded down to the nearest whole share) equal to: (i) the exchange ratio, being 0.85,
multiplied by (ii) the number of Orex Shares subject to such Orex Option immediately prior to
the effective date of the Arrangement. Outstanding warrants of Orex (“Orex Warrants”) that
do not already contain adjustment provisions triggered by the Arrangement, will be amended to
include such an adjustment feature, such that upon completion of the Arrangement, the holders
of Orex Warrants will be entitled to receive, upon exercise of their securities, the number of
Anaconda Shares which the holders would have been entitled to receive as a result of the
Arrangement, if immediately prior to the effective date the holders had exercised their
securities.
Following completion of the Arrangement, Orex will be a wholly owned subsidiary of
Anaconda. Existing Anaconda and Orex shareholders will own approximately 54.9% and 45.1%
of the combined company, respectively, on a non-diluted basis.
Arrangement Benefits
The Arrangement is intended to provide significant benefits for securityholders of both
companies, including:




Acceleration of development of Orex’s Goldboro Project (“Goldboro Project”) by
combining Orex’s mineral resources with Anaconda’s proven operating infrastructure at
the Point Rousse Project (“Point Rousse Project”) and experienced management team;
Potential for substantial capital cost reductions at the Goldboro Project through
leveraging Anaconda’s existing port, mill and tailings facilities;
Potential for gold producing operations in two mining friendly jurisdictions in Atlantic
Canada - Newfoundland & Labrador and Nova Scotia;
Establishment of a strong position from which to participate in any future consolidation

in the mining industry in Atlantic Canada; and
Greater market presence, enhanced liquidity and a broader capital markets profile.
Anaconda’s Point Rousse Project has been producing gold for nearly seven years and, in that
time, Anaconda has incrementally improved its operating infrastructure, which includes a 1,300 tonne per day mill, tailings capacity for approximately 15 years (based on the current mill
throughput rate) and a port facility. Both the Point Rousse Project and Goldboro Project are
located on tidewater. With favourable logistics and existing infrastructure in place, Anaconda
expects it will be able to accelerate the development of the Goldboro Project at a lower capital
cost than if it were a stand-alone project.
Combining the two companies will create a single enterprise with expanded mineral resources,
most of which are high grade. On a pro-forma basis, the mineral resource portfolio will include
457,400 Measured and Indicated ounces of gold and 372,900 Inferred ounces at the Goldboro
Project in Nova Scotia (see Orex’s news release dated March 1, 2017); 107,230 Indicated
ounces of gold and 37,030 Inferred ounces at the Point Rousse Project; and 83,000 Indicated
ounces of gold and 31,000 Inferred ounces at the Viking Project (“Viking Project”) in
Newfoundland and Labrador (Table 1). Detailed resource tables (Table 2) prepared in
accordance with National Instrument 43-101 (“NI 43-101”) are presented below.
Table 1. A summary of Mineral Resources at Goldboro, Point Rousse and Viking Projects
Category
M+I
Inferred
Goldboro, NS
Point Rousse, NL
Viking, NL
Tonnes Grade^ (g/t) Ounces Tonnes Grade^ (g/t) Ounces Tonnes Grade (g/t) Ounces
2,556,000
5.57 457,400 1,764,100
1.89 107,230 1,817,000
1.42
83,000
2,669,000
4.35 372,900 460,700
2.50
37,030 847,000
1.15
31,000
^ tonnage weighted average grade:
NOTE: Goldboro includes all three zones described in the Technical Reports and Point Rousse includes the Pine
Cove and Stog’er Tight deposits. M+I refers to Measured and Indicated resource categories
Dustin Angelo, President and CEO of Anaconda, said, “We believe that the Arrangement with
Orex is a great opportunity for our shareholders and we are acquiring mineral resources at an
attractive price. Over the last nearly seven years, we have built a scalable platform for growth
with an ever improving mill facility, plenty of tailings capacity and a new port facility. We have
a track record of success, developing and operating gold mining projects. The Goldboro Project
provides the mineral resources to extend the longevity of Anaconda and potentially increase
annual production to much higher levels. We are excited to leverage our people, talents and
Point Rousse infrastructure to meet our goal of bringing the Goldboro Project into production as
soon as reasonably possible.”
“The Orex board of directors is committed to building a profitable junior gold production
company and has assessed a variety of financial and strategic options. The board believes the
proposed business combination with Anaconda represents the best option. We have undertaken a
thorough due diligence review of Anaconda’s Pine Cove Mine and Mill facilities and
exploration properties in Newfoundland and, equally importantly, we have had the opportunity
to engage directly with Anaconda’s management and operations team. We believe the combined
business will (i) be capital efficient; (ii) reduce the time required to bring the Goldboro Project
into production; (iii) be supported by an experienced operations team and (iv) redefine and
revalue our business in the capital markets. The Orex board of directors unanimously
recommends the proposed business combination and believes that this bold strategic undertaking
is in the best long-term interest of our valued shareholders.” said Jonathan Fitzgerald, CEO of
Orex.
Board of Directors’ Recommendations
The Anaconda and Orex board of directors have determined that the Arrangement is in the best
interest of their respective shareholders and securityholders, as applicable, taking into account
advice from their financial advisors, and have unanimously approved the Arrangement. The
Anaconda and Orex board of directors recommend that their respective shareholders and
securityholders, as applicable, vote in favor of the transactions.
Red Cloud Klondike Strike Inc. has provided a verbal fairness opinion to the board of directors
of Anaconda to the effect that, as of the date of the fairness opinion and based upon and subject
to the limitations and qualifications therein, the consideration payable by Anaconda pursuant to
the Arrangement for the Orex Shares is fair, from a financial point of view, to Anaconda.
M Partners Inc. has provided a verbal fairness opinion to the special committee of the board of
directors and to the board of directors of Orex to the effect that, as of the date of the fairness
opinion and based upon and subject to the limitation and qualifications therein, the Arrangement
is fair, from a financial point of view, to Orex.
Transaction Summary
Immediately prior to the Arrangement, Orex will be continued from the Province of Québec into
the Province of Ontario (the “Continuance”). The Arrangement will be carried out by way of a
court-approved plan of arrangement pursuant to the Business Corporations Act (Ontario) and
must be approved by the affirmative vote of two-thirds of the votes cast by Orex shareholders
and certain warrantholders at a special meeting that is expected to be held in May 2017.
Pursuant to the Agreement, the consideration to be received by the shareholders of Orex consists
of 0.85 of an Anaconda Share for each Orex Share held. Following completion of the
Arrangement, Orex will be a wholly owned subsidiary of Anaconda.
Outstanding Orex Options that have not been duly exercised prior to the effective date on the
Arrangement, will be exchanged for a fully vested option of Anaconda to purchase fr om
Anaconda the number of Anaconda Shares (rounded down to the nearest whole share) equal to:
(i) the exchange ratio, being 0.85, multiplied by (ii) the number of Orex Shares subject to such
Orex Option immediately prior to the effective date of the Arrangement. Outstanding Orex
Warrants that do not already contain adjustment provisions triggered by the Arrangement, will
be amended to include such an adjustment feature, such that upon completion of the
Arrangement, the holders of Orex Warrants will be entitled to receive, upon exercise of their
securities, the number of Anaconda Shares which the holders would have been entitled to
receive as a result of the Arrangement, if immediately prior to the effective date the holders had
exercised their securities.
In addition to applicable securityholder and court approvals, the Arrangement is subject to
applicable regulatory approvals including Toronto Stock Exchange and TSX Venture Exchange
approval and the satisfaction of certain other customary closing conditions customary in
transactions of this nature.
The Arrangement is expected to be completed in May 2017. Following completion of the
Arrangement, the number of directors on Anaconda’s board will be seven and be comprised of
five current members of the Anaconda board of directors and two directors who are current
members of the Orex board of directors. In addition, Anaconda may consolidate the Anaconda
Shares on terms to be determined by Anaconda (the “Consolidation”). The Arrangement is not
conditional on the Consolidation.
For Orex, the Arrangement and Continuance will require approval by two-thirds of the votes
cast by its shareholders and, in respect of the Arrangement, certain warrantholders at a special
securityholders meeting. The issuance of the Anaconda Shares will require the approval of a
simple majority of the shareholders of Anaconda at a special shareholders meeting. The
Consolidation will require approval by two-thirds of the votes cast by Anaconda shareholders.
Officers and directors and certain principal shareholders of Anaconda, who together control
approximately 20.64% of the outstanding Anaconda Shares, have entered into voting support
agreements pursuant to which they have agreed to vote their Anaconda Shares in favor of the
issuance of the Anaconda Shares pursuant to the Arrangement. Officers, directors and certain
principal shareholders of Orex, who together control approximately 25.38% of the outstanding
Orex Shares, have entered into voting support agreements pursuant to which they have agreed to
vote their Orex Shares and other securities, as applicable, in favor of the Arrangement and
Continuance.
Copies of the Agreement and certain related agreements are available through Anaconda and
Orex’s filings with the securities regulatory authorities in Canada on SEDAR at
www.sedar.com.
None of the securities to be issued pursuant to the Arrangement Agreement have been or will be
registered under the United State Securities Act of 1933, as amended (the “U.S. Securities Act”), or
any state securities laws, and any securities issued in the Arrangement are anticipated to be issued in
reliance upon available exemptions from such registration requirements pursuant to Section 3(a)(10)
of the U.S. Securities Act and applicable exemptions under state securities laws. This press release
does not constitute an offer to sell or the solicitation of an offer to buy any securities
Advisor and Counsel
Red Cloud Klondike Strike Inc. is acting as financial advisor to Anaconda with Cassels Brock &
Blackwell LLP acting as its Canadian legal advisor and Neal, Gerber & Eisenberg LLP acting as
Anaconda’s US legal counsel.
M Partners Inc. is acting as financial advisor to Orex with Fasken Martineau DuMoulin LLP acting
as Orex’s Canadian legal advisor and Troutman Saunders LLP acting as Orex’s US legal counsel.
NI 43-101 Resource Summary
Following completion of the Arrangement Anaconda’s mineral resource portfolio will include three
mineral projects with current NI 43-101 mineral resources including the Goldboro Project, the Point
Rousse Project and the Viking Project. Mineral resources for each of these projects are summarized
in Table 2.
Table 2: A summary of NI 43-101 Mineral Resourcese,f
Goldboro, Nova Scotia
a
Category
Measured
Indicated
Inferred
a
a
Boston Richardson zone
West Goldbrook zone
East Goldbrook zone
Tonnes
Grade (g/t) Ounces Tonnes
Grade (g/t) Ounces Tonnes
Grade (g/t) Ounces
171,000
5.39
29,600
1,507,000
5.27 255,400 464,000
5.39
80,400 414,000
6.91
92,000
1,083,000
4.56 158,800 459,000
4.42
65,200 1,127,000
4.11 148,900
Point Rousse (PR)/Viking (VK), Newfoundland and Labrador
Category
Indicated
Inferred
Probable Reservesb
Pine Coveb deposit (PR)
Stog'er Tightc deposit (PR)
Thord deposit (VK)
Tonnes
Grade (g/t) Ounces Tonnes
Grade (g/t) Ounces Tonnes
Grade (g/t) Ounces
1,560,000
1.67
83,690 204,100
3.59
23,540 1,817,000
1.42
83,000
208,700
1.57
10,570 252,000
3.27
26,460 847,000
1.15
31,000
858,800
1.46
40,400
a. Resource stated using a 2.0 g/t cutoff as per Orex’s news release of March 1, 2017. Any additional
information regarding the current estimate will be available upon filing of a Technical Report.
b. Resource is stated using a 0.7 g/t cutoff as per “NI43-101 Technical Report, Mineral Resource and
Mineral Reserve Update on the Pine Cove Mine and Mineral Resource Estimate on the Stog’er
Tight Deposit, Point Rousse Project, Baie Verte, Newfoundland and Labrador, Canada” with an
effective date of October 22, 2015 and authored by independent qualified persons David Copeland,
P. Geo. (an independent consultant) and Catherine Pitman, P.Geo. (AMC Mining Consultants
(Canada) Ltd.) and qualified persons David Evans, P.Geo. (Silvertip Exploration Consultants Inc.),
Paul McNeill, P. Geo. (Anaconda Mining Inc.) and Gordana Slepcev, P. Eng. (Anaconda Mining
Inc.).
c. Resource is stated using a 0.8 g/t cutoff as per “NI43-101 Technical Report, Mineral Resource and
Mineral Reserve Update on the Pine Cove Mine and Mineral Resource Estimate on the Stog’er
Tight Deposit, Point Rousse Project, Baie Verte, Newfoundland and Labrador, Canada” with an
effective date of October 22, 2015 and independent qualified persons David Copeland, P. Geo. (an
independent consultant) and Catherine Pitman, P.Geo. (AMC Mining Consultants (Canada) Ltd.)
and qualified persons David Evans, P.Geo. (Silvertip Exploration Consultants Inc.), Paul McNeill,
P. Geo. (Anaconda Mining Inc.) and Gordana Slepcev, P. Eng. (Anaconda Mining Inc.).
d. Resource is stated using a 0.5 g/t cutoff as per “NI 43-101 Technical Report and Mineral Resource
Estimate on the Thor Deposit, Viking Project, White Bay Area, Newfoundland and Labrador,
Canada” with an effective date of August 29, 2016 and authored by independent qualified persons
David A. Copeland, M.Sc., P.Geo., (an independent consultant), Shane Ebert, Ph.D., P.Geo. (an
independent consultant) and Gary Giroux, MASc, P.Eng. (Giroux Consultants Ltd.).
e. Mineral resources that are not mineral reserves do not have demonstrated economic viability. This
estimate of mineral resources may be materially affected by environmental permitting, legal, title,
taxation, sociopolitical, marketing, or other relevant issues.
f. Mineral Resource Estimate were prepared in accordance with NI 43-101 and the CIM Standards.
ABOUT ANACONDA MINING INC.
Anaconda is a growth-oriented, gold mining and exploration company with a producing project
called the Point Rousse Project and three exploration/development projects called the Viking and
Great Northern Projects and the Tilt Cove Property in Newfoundland.
The Point Rousse Project is approximately 6,300 hectares of property on the Ming’s Bight Peninsula
located in the Baie Verte Mining District in Newfoundland, Canada. Since 2012, Anaconda has
increased its property control by ten-fold on the peninsula and gold production to nearly 16,000
ounces per year. In an effort to expand production, it is currently exploring three primary,
prospective gold trends, which have approximately 20 km of cumulative strike length and include
five deposits and numerous prospects and showings, all within 8 km of the Pine Cove Mill. A
second project called the Tilt Cove Property, consisting of 350 hectares, is located approximately 60
kilometres by road from the Pine Cove Mill but is also within the Baie Verte Mining District and
underlain by similar geology to the Point Rousse Project.
Anaconda also controls the Viking and Great Northern Projects, which have approximately 6,225
and 6,375 hectares of property, respectively, in White Bay, Newfoundland, approximately 100
kilometres by water (180 kilometres via road) from the Pine Cove Mill. The Viking Project contains
the Thor Deposit and other gold prospects and showings and the Great Northern Project includes
numerous prospects and showings within a similar geological setting as the Viking Project.
Anaconda’s plan is to discover and develop more resources within these project areas and
substantially increase annual production at the Pine Cove Mill from its current rate of nearly 16,000
ounces.
As the only pure play gold producer in Atlantic Canada, Anaconda Mining is turning the rock we
live on into a growing and profitable resource. With a young and motivated workforce, innovative
technology and the support of local suppliers, Anaconda is investing in the people of Newfoundland
& Labrador and giving back to the communities in which we operate – building a better future for
all our stakeholders, from the ground up.
Paul McNeill, Anaconda’s VP of Exploration and a qualified person pursuant to NI 43-101, has
reviewed and approved the scientific and technical data of Anaconda contained in this press
release.
ABOUT OREX EXPLORATION INC.
Orex is a mineral exploration company based in the Province of Quebec, Canada. Orex’s principal
asset is the Goldboro Project in Nova Scotia in which it holds a 100% interest. The Goldboro
Project is located approximately 180 kilometres northwest of Halifax, on the eastern shore of Nova
Scotia. The property comprises 37 contiguous claims, covering 600 hectares.
Mineral resources occur in three spatially contiguous zones along the Upper Seal Harbour
anticline. These comprise the total “Goldboro Deposit” and consist of the Boston Richardson Zone,
the East Goldbrook Zone and the West Goldbrook Zone.
Jean-Pierre Landry, P. Eng., director and consultant of Orex, is a qualified person pursuant to NI
43-101, has reviewed and approved the technical information relating to Orex contained in this
press release.
For further details on Orex and the Goldboro Project, please visit Orex’s website at
www.orexexploration.ca or Canadian public filings at Orex’s profile at www.sedar.com.
FORWARD-LOOKING INFORMATION
This document contains or refers to forward-looking information. Such forward-looking information
includes, among other things, the Arrangement, statements regarding the combined company,
estimates and/or assumptions in respect of future production, mine development costs, unit costs,
capital costs, timing of commencement of operations and future economic, market and other
conditions, and is based on current expectations that involve a number of business risks and
uncertainties. Factors that could cause actual results to differ materially from any forward-looking
statement include, but are not limited to: the approval of the Arrangement by the Toronto Stock
Exchange and the TSX Venture Exchange; the approval of the Arrangement by the Ontario Superior
Court of Justice; capital and operating costs varying significantly from estimates; inflation; changes
in exchange rates; fluctuations in commodity prices; delays in the development of the any projects
caused by unavailability of equipment, labour or supplies, climatic conditions or otherwise;
termination or revision of any debt financing; failure to raise additional funds required to finance
the completion of a project; the realization of the expected benefits resulting from the combination
of the two entities (or the strategies or future actions of the companies); and other factors.
Additionally, forward-looking statements look into the future and provide an opinion as to the effect
of certain events and trends on the business. Forward-looking statements may include words such
as "plans," "may," "estimates," "expects," “intends,” "indicates," "targeting," "potential" and
similar expressions. These forward-looking statements, including statements regarding Anaconda
and Orex's beliefs in the potential mineralization, are based on current expectations and entail
various risks and uncertainties. Forward-looking statements are subject to significant risks and
uncertainties and other factors that could cause actual results to differ materially from expected
results. Readers should not place undue reliance on forward-looking statements. These forwardlooking statements are made as of the date hereof and we assume no responsibility to update them
or revise them to reflect new events or circumstances, except as required by law.
CAUTIONARY NOTE TO U.S. INVESTORS REGARDING MINERAL REPORTING
The parties prepare their disclosure in accordance with the requirements of the securities laws in
effect in Canada, which differ from the requirements of United States securities laws. Terms
relating to mineral resources in this press release are defined in accordance with NI 43-101 and
the Canadian Institute of Mining, Metallurgy and Petroleum (the “CIM”) — CIM Definition
Standards on Mineral Resources and Mineral Reserves, adopted by the CIM Council, as amended,
which standards differ significantly from the disclosures permitted by the United States Securities
and Exchange Commission requirements and terminology set forth in SEC Industry Guide 7.
Accordingly, information contained in this press release and the public filings of the parties
containing descriptions of mineral deposits may not be comparable to similar information made
public by U.S. companies subject to the reporting and disclosure requirements under the United
States federal securities laws and the rules and regulations thereunder.
FOR ADDITIONAL INFORMATION CONTACT:
Anaconda Mining Inc.
Dustin Angelo
President and CEO
(647) 260-1248
[email protected]
www.AnacondaMining.com
Orex Exploration Inc.
Jonathan Fitzgerald
CEO
(208) 720-9676 Tel.
[email protected]
www.orexexploration.ca
Neither the TSX Venture Exchange nor its regulation service 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.