JUNIOR MINING | Anaconda Mining Rescinds Proposal to Increase its Bid to Maritime Shareholders

TORONTO , July 10, 2018 /CNW/ – Anaconda Mining Inc. (“Anaconda” or the “Company“) – (ANX.TO)(ANXGF) announces today that it has rescinded its July 4, 2018 proposal to increase, by approximately 28%, the consideration payable under its premium take-over bid (the “Offer“) to acquire all the issued and outstanding shares of Maritime Resources Corp. (MAE.V) (“Maritime“), together with the associated rights (the “SRP Rights“) issued under the shareholder rights plan of Maritime dated March 15, 2018 .

The revised offer was conditional on Maritime management not completing its previously announced private placement financing. Maritime completed the private placement on July 6, 2018 , resulting in dilution to current Maritime shareholders by over 23%. Now that the private placement has been completed, Anaconda will proceed with its original premium Offer of 0.39 for each common share of Maritime held.

“It is unfortunate that Maritime’s management continues to entrench themselves while leading shareholders down a path of chronic ownership dilution. As a result, Maritime management and the board of directors have denied Maritime shareholders the opportunity to tender into Anaconda’s proposal to increase its bid.  Now, unless Maritime shareholders tender to the Offer, they will be subject to further dilution in four months, as outlined by Maritime’s Circular. The time to act is now. By combining our companies, we will create an emerging Atlantic Canada gold mining company with a significant growth profile and the potential to generate more value together as opposed to a stand-alone Maritime.”

~ Dustin Angelo , President and CEO of Anaconda

Further to the Company’s June 14, 2018 news release announcing that it had received shareholder approval by written consent for the issuance of common shares of the Company (the “Anaconda Shares“) in connection with the Offer, the Company is pleased to announce that the shareholder consent allowed for the additional dilution that would be caused by Maritime’s private placement and that the Company has approval by written consent for the issuance of up to 57,623,000 Anaconda Shares, which represents 48.5% of the number of Anaconda Shares currently issued and outstanding (calculated on a non-diluted basis).

The Company has applied to list the Anaconda Shares issuable under the Offer on the TSX.  Such listing is subject to the Company fulfilling all of the listing requirements of the TSX, including obtaining approval of the shareholders of Anaconda (the “Shareholders“), which is required under Subsection 611(c) of the TSX Company Manual since the aggregate number of Anaconda Shares issuable under the Offer is greater than 25% of the outstanding Anaconda Shares.  In accordance with Subsection 604(d) of the TSX Company Manual, the Company is permitted to effect the Offer without obtaining the approval of its Shareholders at a meeting of Shareholders if the Company provides the TSX with evidence that Shareholders holding more than 50% of the Anaconda Shares are familiar with the terms of the Offer and are in favour of proceeding with the Offer and the issuance of the Anaconda Shares required thereunder.  Consent for the issuance of the Anaconda Shares was obtained from Shareholders representing approximately 50.9% of the issued and outstanding Anaconda Shares.  Pursuant to Subsection 604(d) of the TSX Company Manual, no Anaconda Shares may be issued in connection with the Offer for a period of five business dates following the date of this news release.

There are currently 118,691,635 Anaconda Shares issued and outstanding and, to the knowledge of Anaconda, 99,373,116 Maritime Shares are issued and outstanding. The Company does not own any Maritime Shares and, to the knowledge of the Company, no directors or officers of the Company own any Maritime Shares.  As at the date hereof, it is expected that the Company will, subject to any future issuance of Maritime Shares or the exercise of any securities of Maritime that are exercisable for, convertible into or exchangeable for Maritime Shares (“Convertible Securities”), issue approximately 38,755,515 Anaconda Shares under the Offer, which represents approximately 32.7% of the number of Anaconda Shares currently issued and outstanding (calculated on a non-diluted basis). To the knowledge of Anaconda, Maritime has Convertible Securities exercisable for an aggregate of 42,667,557 Maritime Shares. An aggregate of approximately 16,640,347 Anaconda Shares will be required to be reserved for issuance upon the exercise of Convertible Securities, which represents approximately 14.0% of the number of Anaconda Shares currently issued and outstanding (calculated on a non-diluted basis).  In aggregate, based on the issued and outstanding Maritime Shares and Convertible Securities, 55,395,862 Anaconda Shares have been reserved for issuance, which represents 46.7% of the number of Anaconda Shares currently issued and outstanding (calculated on a non-diluted basis). However, if the Offer is successful, Maritime Shareholders will own approximately 24.6% of the pro forma Company (calculated on a non-diluted basis).

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