UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported)
May 19, 2017
LIBERTY
SILVER CORP.
(Exact
name of registrant as specified in its charter)
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Nevada
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333-150028
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32-0196442
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(State
or other jurisdiction
of
incorporation)
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(Commission
File
Number)
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(IRS
Employer
Identification
No.)
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Suite 2702, 401 Bay St.,
Toronto, Ontario
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M5H
2Y4
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(Address
of principal executive offices)
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(Postal
Code)
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Registrant’s
telephone number, including area code:
888-749-4916
390
Bay Street, Suite 806
Toronto,
Ontario, Canada M5H 2Y2
(Former
name or former address, if changed since last report.)
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions (see General Instruction A.2.below):
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[ ]
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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[ ]
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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[ ]
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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[ ]
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item
1.01 Entry into a Material Definitive Agreement.
On
May 19, 2017 Liberty Silver Corp. (“
Liberty
” or the “
Company
”) announced that, in connection
to the listing of its shares on the Canadian Securities Exchange, the management of the Company and its major shareholder have
entered into a series of governance agreements designed to align the interests of the management and the major shareholder with
those of the Company and all of its shareholders.
Option
Agreements
Under
the terms of three option agreements, BG Capital Group Ltd. (“BGCG”), which at the date hereof controls, together
with its affiliates, 13,308,405 Common Shares or approximately 54.45% of the issued and outstanding Common Shares, has granted
to Bruce Reid, John Ryan and Howard Crosby options to purchase an aggregate of 4,000,000 Common Shares currently owned by BGCG.
The options so granted are exercisable at CAD$1.00 per Common Share and expire on the earlier of: May 1, 2024 and the 30th day
following an event that constitutes a change of control of the Company. Until May 1, 2023, the options so granted can only be
exercised if the board of directors or shareholders of the Company, as the case may be, approve a transaction that constitutes
a change of control of the Company. After May 1, 2023, the options can be exercised up to May 1, 2024 without the requirement
of a change of control event. Until the options so granted are either exercised or expire, the Common Shares that are subject
to the options will be held in escrow by an escrow agent.
Voting
Agreement
Under
the terms of a voting agreement, BGCG has granted to an arm’s-length attorney, a role currently being assumed by Bruce Reid,
a power of attorney to vote any Common Shares which BGCG owns over and above 10% of the issued and outstanding Common Shares at
the relevant time. The term of the voting agreement started on May 19, 2017, the date on which the Common Shares of the Company
commenced trading on the Canadian Securities Exchange, and expires two years thereafter, or earlier in the event that the Common
Shares cease to be listed for trading on the Canadian Securities Exchange.
Standstill
Agreement
Under
the terms of a standstill agreement, BGCG has limited ability to dispose of its Common Shares. Until May 1, 2020, BGCG cannot
dispose of any Common Shares without the consent of Bruce Reid and, thereafter, BGCG can only dispose of a maximum of 500,000
Common Shares during any calendar year. Following the expiration of the voting agreement, under the terms of the standstill agreement
Bruce Reid, John Ryan and Howard Crosby have the right, at all meetings of shareholders of the Company, to direct the voting of
the 4,000,000 Common Shares that are subject to the options granted to them by BGCG as described above. In addition, BGCG cannot
vote any of its other Common Shares against any resolutions put before the shareholders of the Company by the board of directors
or recommended by the board of directors for approval by the shareholders of the Company. The standstill agreement expires on
the earlier of completion of a change of control event or May 1, 2024. The standstill agreement has been approved by the board
of directors of the Company and ratified by a majority shareholder resolution signed by BGCG.
A
copy of the press release is attached as Exhibit 99.1 to this Current Report.
Item
5.01 Changes in Control of Registrant
The
disclosure in Item 1.01 of this Current Report is incorporated herein by reference.
Item
5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements
of Certain Officers.
On
May 19, 2017 Howard Crosby stepped aside as Chief Executive of the Company so that Bruce Reid, who already served as a director
of the Company, could assume the role. Mr. Crosby will continue to serve as a director and Executive Vice President of the Company.
In addition, the Company announced the appointment of Julio DiGirolamo to serve as the Company’s Chief Financial Officer.
Bruce
Reid is currently the Executive Chairman of Satori Resources Inc. Most recently, until January 2016 he was the Executive Chairman
of Carlisle Goldfields Limited (“Carlisle Goldfields”), a TSX-listed gold exploration company. He was Chief Executive
Officer and President from January 2010 until January 2014. During his tenure at Carlisle Goldfields, Mr. Reid raised over $30
million and guided Carlisle Goldfields to measured and indicated mineral resources of 2.75 million ounces of gold and inferred
mineral resources of 2.28 million ounces of gold at its Lynn Lake, Manitoba Project. Carlisle Goldfields was acquired in January
2016 by Alamos Gold Inc. which valued Carlisle Goldfields at approximately $75 million. From 2005-2008, Mr. Reid was one of the
founders and served as the President and CEO of U.S. Silver Corp. where he raised over $75 million to modernize and renovate the
Galena Sliver Mine in Idaho and return the asset back to profitability. Prior to that, Mr. Reid worked as both an investment banker
and a mining analyst in the Canadian securities industry for a number of prominent firms such as Nesbitt Thomson, Loewen Ondaatje
McCutcheon and Yorkton Securities. Mr. Reid brings to the Company over 35 years of extensive experience in mining development,
exploration and corporate finance. His background also includes an Honours B.Sc. in Geology from the University of Toronto in
1979 and a Finance degree from the University of Windsor in 1982.
The
Company also announced the appointment of Julio DiGirolamo to serve as the Company’s Chief Financial Officer. Mr. DiGirolamo
is a Chartered Professional Accountant with 22 years of senior-level public company experience including, most-recently, four
and a half years as CFO for Carlisle Goldfields, which was successfully acquired by Alamos Gold Inc. in 2016. Mr. DiGirolamo was
also recently appointed CFO for Satori Resources Inc. He began his public market experience while holding various senior roles
during his five years with Greenstone Resources Ltd., a TSX and NASDAQ-listed gold mining company with activities focused in four
Latin American countries. Mr. DiGirolamo has also been the CFO of Asia Now Resources Corp., a TSX Venture Exchange-listed junior
exploration company, and Chief Financial Officer and Corporate Secretary of Innovium Media Properties Corp., a TSX Venture Exchange-listed
early stage investor. During his time at Innovium he also acted as interim Chief Financial Officer at Seed Media Group LLC and
as Chief Financial Officer, Corporate Secretary and member of the Board of Directors of Atlantis Systems Corp. Over his career,
Mr. DiGirolamo has served on the boards of various public and non-profit organizations.
Grant
of Options
The
Company granted to Bruce Reid options to purchase 500,000 common shares of the Company, and 160,000 options to purchase common
shares to Julio DiGirolamo. All options granted have the exercise price of CAD$1.00 and the expiry date of May 2, 2022.
Item
5.07 Submission of Matters to a Vote of Security Holders.
On
May 18, 2017 BGCG, the holder of a majority in interest of the capital stock of the Company, consented in writing without a shareholder
vote to the terms of the Standstill Agreement. No meeting of shareholders was held and no other shareholders were solicited.
Item
8.01 Other Events.
On
May 23, 2017 the Company announced an amendment to its letter of intent with Placer Mining Corp. with respect to its potential
acquisition of the Bunker Hill Complex. A copy of the press release is attached as Exhibit 99.2 to this Current Report.
Item
9.01 Financial Statements and Exhibits
The
following exhibits are filed with this Form 8-K and are incorporated herein by reference:
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Exhibit
10.1
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●
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Standstill
Agreement between the Company and BGCG
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Exhibit
99.1
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●
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News
Release dated May 19, 2017
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Exhibit
99.2
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●
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News
Release dated May 23, 2017
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
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LIBERTY
SILVER CORP.
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(Registrant)
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Date:
May 25, 2017
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By:
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/s/
Bruce Reid
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Bruce
Reid
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Chief
Executive Officer
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STANDSTILL
AGREEMENT
THIS
AGREEMENT
is made as of May 16
th
, 2017
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BETWEEN:
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LIBERTY
SILVER CORP.,
a corporation governed by the Nevada Corporations Code
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(“
Liberty
”)
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AND:
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BG
CAPITAL GROUP LTD.
, a corporation governed by the laws of Barbados
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(“
BGCG
”)
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AND:
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BRUCE
REID
, an individual resident in the Province of Ontario, Canada
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(“
Reid
”)
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AND:
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HOWARD
CROSBY
, an individual resident in the State of Washington, United States of America
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(“
Crosby
”)
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AND:
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JOHN
RYAN
, an individual resident in the State of New Jersey, United States of America
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(“
Ryan
”).
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RECITALS:
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A.
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BGCG
beneficially owns 12,749,360 shares of common stock in the capital of Liberty (“
Common
Shares
”) representing approximately 52.2% of the 24,469,395 issued and outstanding
Common Shares of Liberty.
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B.
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BGCG
has requested Reid, Crosby and Ryan to serve as directors and officers of Liberty and
each of Reid, Crosby and Ryan has agreed to continue to serve as a director and as an
officer of Liberty.
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C.
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As
a condition of the continuation of the above described roles:
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(i)
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BGCG
has agreed to grant Reid, Crosby and Ryan options on certain Common Shares of Liberty
and
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(ii)
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the parties hereto have agreed to enter into this Agreement.
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D.
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By
a series of option agreements dated the date hereof (collectively, the “
Option
Agreements
”), BGCG has conditionally granted options to Reid, Crosby and Ryan
to purchase 2,000,000, 1,000,000 and 1,000,000 Common Shares, respectively, in the capital
of Liberty for aggregate consideration of Cdn$2,000,000, Cdn$1,000,000 and Cdn$1,000,000,
respectively.
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E.
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BGCG,
Robert Genovese and Reid have, at the request of the Canadian Securities Exchange, entered
into a certain Voting Agreement and Power of Attorney amended and restated as of the
16
th
day of May, 2017 (the “
Voting Agreement
”).
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NOW
THEREFORE THIS AGREEMENT WITNESSES THAT
for good and valuable consideration of, among other things, the mutual promises contained
in the Agreement (the receipt and sufficiency of which is hereby acknowledged by each of the Parties hereto), the Parties agree
as follows:
Article
I –
DEFINITIONS AND INTERPRETATION
Unless
the context otherwise requires, in this Agreement capitalized words, terms and phrases shall have the meanings ascribed to them
within this Agreement including the following:
“
Adjusting
Event
” means:
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(i)
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any
subdivision, consolidation, reclassification or exchange of the Common Shares into a
different number or class of shares or other securities of the Corporation, and
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(ii)
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any
merger, amalgamation, plan of arrangement, corporate reorganization or other transaction
pursuant to which the Common Shares are exchanged for or converted into another security
or securities of the Corporation or the securities of another corporation or entity.
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“
Affiliate
”
means with respect to any Person, any other Person directly or indirectly Controlling or Controlled by, or under direct or indirect
common Control with, such Person.
“
Agreement
”
means this agreement, as the same may be amended, supplemented or otherwise modified from time to time in accordance with the
terms hereof.
“
Associate
”
has the meaning ascribed to such term in the
Securities Act
(Ontario).
“
Board”
,
at any particular time, means the board of directors of the Corporation at the applicable time.
“
Business
Day
” means a day that is not a Saturday, Sunday or statutory holiday in the Province of Ontario.
“
Change
of Control Event
” means any amalgamation, plan of arrangement, take-over bid, share-for-share exchange, merger, corporate
reorganization or other transaction pursuant to which Common Shares are issued or the issued and outstanding Common Shares are
exchanged for or converted into another class of security or securities or the securities of another corporation or entity pursuant
to which the shareholders of the Corporation immediately prior to such transaction hold fewer than fifty percent (50%) of the
issued and outstanding Common Shares (or equivalent securities thereto or the securities derived therefrom as a result of all
Adjusting Events) of the Corporation or the successor corporation or other entity, as the case may be, immediately following such
transaction.
“
Common
Share
” means:
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(i)
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at
the date of this Agreement and at any time prior to an Adjusting Event occurring, one
(1) share of common stock in the capital of Liberty as presently constituted and,
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(ii)
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at
any other time on or after the occurrence of one or more Adjusting Events, such shares
or securities of the Corporation or other corporation or entity resulting from one (1)
share of common stock in the capital of the Corporation as at the date of this Agreement
after all Adjusting Events occurring after the date of this Agreement up to and including
the applicable time have been applied thereto.
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“
Control
”
means the possession, directly or indirectly, of the power to direct the management and policies of a Person whether through the
ownership of voting securities or otherwise, and the terms “
Controlling
” and “
Controlled
”
have meanings correlative to the foregoing.
“
Convertible
Securities
” means any rights, warrants, options, shares, agreements or other securities pursuant to which the holder
thereof may acquire any Common Shares.
“
Corporation
”
means, at any applicable time, Liberty or any successor corporation or entity resulting from any and all Adjusting Events up to
and including the applicable time.
“
Governmental
Agency
” means (i) any multinational, federal, provincial, state, regional, municipal, local or other government, governmental
or public department, central bank, court, tribunal, arbitral body, commission, board, bureau or agency, domestic or foreign,
(ii) any subdivision, agent, commission, board or authority of any of the foregoing, or (iii) any quasi-governmental or private
body, including any tribunal, commission, regulatory agency or self-regulatory organization, exercising any regulatory, expropriation
or taxing authority under or for the account of any of the foregoing.
“
including
”
means including without limitation.
“
Laws
”
means any law, statute, code, act, regulation, by-law, decree and order (including any regulation and order thereunder), policy
and guideline, or decision, ruling and judgment, of any Governmental Agency having jurisdiction and which is binding on the relevant
Person or Persons referred to in the context where such word is used.
“
Lock-Up
Period
” means the period beginning on the date of this Agreement and ending on the earlier of:
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(i)
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a Change of Control Event or
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(ii)
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May 1, 2024.
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“
Parties
”
means BGCG, Liberty, Reid, Crosby and Ryan and
“Party”
means any one of them.
“
Person
”
or “
person
” includes an individual, a partnership, a limited partnership, a corporation, a trust, a Governmental
Agency, an unincorporated organization and any other entity.
“
Securities
Authorities
” means the securities regulatory authorities of the United States of America, each of the states thereof,
the provinces of Canada and any of their successors.
“
Securities
Laws
” means the securities legislation of the United States of America, each of the states thereof and each of the provinces
of Canada, as such legislation may be amended from time to time, and the rules, regulations, orders and rulings having application
to the Parties hereto, and forms made or promulgated under such legislation and the policies and instruments of any one or more
of the Securities Authorities.
“
Term
”
means the period starting on the date hereof and ending on the earlier of:
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(i)
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completion of a Change of Control Event or
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(ii)
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May 1, 2024.
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The
division of this Agreement into Articles, Sections, subsections, clauses and paragraphs and the insertion of headings are for
convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement. Unless the contrary
intention appears, references in this Agreement to an Article, Section, subsection, clause or paragraph by number or letter or
both refer to the Article, Section, subsection, clause or paragraph, respectively, bearing that designation in this Agreement.
In
this Agreement, unless the contrary intention appears, words importing the singular include the plural and
vice versa
,
and words importing gender include all genders.
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1.4
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Date
for Any Notice or Action
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If
the date on which any notice is to be given or any action is required to be taken hereunder by a Party is not a Business Day or
any such notice or action is effected after 4:00 p.m. (local time for the recipient) on a Business Day, such notice shall be deemed
to have been given or such action shall be required to be taken on the next succeeding day which is a Business Day.
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1.5
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Consolidation, Subdivision of Shares
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In
the event of any subdivision, consolidation, reclassification or other change of the securities of the Corporation at any time
while this Agreement is in effect, on the effective date of each and every such event the applicable provisions of this Agreement
shall,
ipso facto
, be deemed to be amended accordingly and the Parties shall take all necessary action so as to comply
with such provisions as so amended.
Article
II –
Lock
up AGREEMENT
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2.1
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Prohibition
on Transfers by BGCG
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BGCG
hereby covenants and agrees in favour of each of Liberty, Reid, Crosby and Ryan that, during the Lock-up Period, except as hereinafter
expressly permitted pursuant to the terms of Section 2.2 hereof, BGCG and its Associates and Affiliates will not, directly or
indirectly, without obtaining the prior written consent of Reid (which consent may be arbitrarily withheld, conditioned or refused),
sell, transfer, mortgage, hypothecate, grant a security interest in or otherwise deal with in any way (each a “
Transfer”
)
any Common Shares or Convertible Securities of the Corporation save and except in accordance with the Option Agreements.
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2.2
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Restricted
Sales and Other Transfers
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At
any time and from time to time after (but not before) May 1, 2020, BGCG and its Associates and Affiliates collectively may Transfer
up to (but not more than) 500,000 Common Shares during any calendar year. In the event that, during 2020 or any calendar year
thereafter during the Term of this Agreement, BGCG and its Associates and Affiliates collectively do not Transfer all 500,000
Common Shares permissible hereunder in respect of such calendar year, the maximum number of Common Shares which BGCG and its Associates
and Affiliates collectively may Transfer hereunder during each subsequent calendar year shall nonetheless be limited to 500,000
Common Shares during each such subsequent calendar year during the Term hereof.
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2.3
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Notice of Intended Transfers
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If
BGCG or any of its Associates and Affiliates intends to Transfer any Common Shares at any time after May 1, 2020 in accordance
with Section 2.2 hereof, BGCG shall give Reid a Notice of such intended Transfer at least seven (7) days (but not more than 60
days) prior to any such Transfer.
Article
III –
voting
restrictions
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3.1
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Restrictions
on Voting Liberty Shares by BGCG
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(a)
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During
the Term, BGCG covenants and agrees on its own behalf and on behalf of each of its Associates
and Affiliates that:
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(i)
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it
shall not, directly or indirectly, sign any shareholder resolutions or consents thereto
or vote or cause to be voted any Common Shares, or encourage anyone else to vote or cause
to be voted any of their Common Shares, at any meeting of shareholders of the Corporation
against any resolutions put before the shareholders of the Corporation by or upon the
recommendation of the then incumbent Board; and
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(ii)
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it
shall not sign any shareholder resolutions or consents thereto or vote or cause to be
voted any Common Shares or encourage anyone else to vote or cause to be voted any of
their Common Shares in favour of (x) the election of nominees to the Board not proposed
by the then incumbent Board, or (y) any shareholder resolution or proposal unless the
then incumbent Board recommends voting in favour of such shareholder resolution or proposal.
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(b)
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Notwithstanding
Section 3.1(a), BGCG shall, at any time and from time to time from the date of this Agreement
until the first anniversary of the date of this Agreement, at the request of Reid, sign
any and all shareholder resolutions and vote, deliver proxies and cause its proxyholders
to vote its Common Shares at any and all meetings of the shareholders of the Corporation:
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(i)
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to
fix the number of directors on the Board for the time being at five (5);
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(ii)
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to
elect each of Reid, Crosby and Ryan as directors of the Corporation; and
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(iii)
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to
elect two other nominees designated by Reid to be nominated to be elected as directors
of the Corporation; and
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for
the purposes hereof.
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(c)
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Notwithstanding
Sections 3.1(a) and (b) hereof, BGCG agrees that, throughout the Term of this Agreement,
for each shareholders meeting of the Corporation BGCG shall, upon expiry of the Voting
Agreement, execute and deliver proxies:
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(i)
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to
Reid designating Reid as the proxyholder for all Common Shares which are the subject
of the Option Agreement between Reid and BGCG to enable Reid to cast votes in respect
thereof as Reid in his discretion may from time to time determine;
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(ii)
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to
Crosby designating Crosby as the proxyholder for all Common Shares which are the subject
of the Option Agreement between Crosby and BGCG to enable Crosby to cast votes in respect
thereof as Crosby in his discretion may from time to time determine; and
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(iii)
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to
Ryan designating Ryan as the proxyholder for all Common Shares which are the subject
of the Option Agreement between Ryan and BGCG to enable Ryan to cast votes in respect
thereof as Ryan in his discretion may from time to time determine.
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(d)
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Notwithstanding
any other provision of this Section 3.1, BGCG covenants and agrees that in the event
of any proposed Change of Control Event, BGCG shall, throughout the Term of this Agreement,
for each shareholders meeting of the Corporation in which a resolution in respect of
a Change of Control Event is presented to the shareholders of the Corporation for approval
and whether the Board (or a special committee of the Board duly constituted to in respect
of such Change of Control Event) recommends voting in favour of or against such Change
of Control Event, BGCG shall execute and deliver proxies to the designee of the Board
(or such special committee) designating such designee as the proxyholder for all Common
Shares owned or Controlled by BGCG (other than those Common Shares which are referred
to in Section 3.1(c) hereof) to enable such designee to cast votes in respect thereof
as the Board (or such special committee) may recommend.
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(e)
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Notwithstanding
any other provisions of this Agreement and, in particular, Section 3.1(c) hereof, the
parties hereto acknowledge the existence of the Voting Agreement and, during the term
thereof, acknowledge, accept and agree to the paramountcy thereof and, during the term
of the Voting Agreement, in the event of any conflict or inconsistency between the terms
of the Voting Agreement and the terms of this Agreement, the terms of the Voting Agreement
shall prevail.
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Article
IV –
the
corporation’S OBLIGATIONS
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(a)
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At
each annual and special meeting of shareholders of the Corporation following the date
of this Agreement and until completion of a Change of Control Event, the Corporation
shall take all commercially reasonable steps, execute all such documents and do all such
acts and things necessary to have the nominees referred to in Section 3.1 hereof elected
as directors on the Board. Without limiting the generality of the foregoing, the Corporation’s
obligations shall include: (i) causing such nominees to be included in the management
slate of nominees for election to the Board, (ii) soliciting proxies on behalf of management
of the Corporation in favour of the election of such nominees, and (iii) causing all
proxies received by management of the Corporation for the election of directors to be
voted, where no contrary intention is expressed, in favour of such nominees.
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(b)
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The
Corporation’s obligations under this Section 4.1 shall remain in effect during
and throughout the Term.
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Article
V –
standstill
agreements
During
the Term, neither BGCG nor any of its Affiliates or Associates shall, directly or indirectly, without the consent of the board
of directors of Liberty:
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(i)
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commence,
assist, commit to tender or act in concert with an offeror in a take-over bid (as such
term is defined under Canadian Securities Laws) for any securities of the Corporation,
or
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(ii)
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solicit
proxies from any shareholders of the Corporation or attempt to influence the voting by
any shareholders of the Corporation other than in support of initiatives recommended
by the then incumbent Board;
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(iii)
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otherwise
seek or propose to influence or control the management of the Corporation, the Board,
or the policies or affairs of the Corporation or
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(iv)
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make
any public or private announcement or disclosure with respect to the foregoing.
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Article
VI –
GENERAL
Each
Party shall pay its own costs and outlays connected with the preparation, negotiation and execution of this Agreement.
Time
shall be of the essence of this Agreement. If the Parties agree to vary a time requirement, the time requirement so varied shall
be of the essence of this Agreement; any such agreement shall be in writing.
All
notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been
duly given: (i) when received, if delivered personally, (ii) when sent by e-mail (provided a receipt confirmation is received
from the recipient’s email server), or (iii) on the date received, if sent by courier service, to the Parties at the following
addresses (or at such other address for a party as shall be specified by like notice):
BG
Capital Group Ltd.
1250
South Pine Island Road,
Suite
500
Plantation,
Florida
United
States of America 33324
Attention: Robert
Genovese
Email: bobbygenovese@yahoo.com
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(b)
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If
to the Corporation, to:
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Liberty
Silver Corp.
Suite
2702, 401 Bay Street,
Toronto,
Ontario, Canada
M5H
2Y4
Attention: Bruce
Reid
Email: br@carlislegold.com
Suite
2702, 401 Bay Street
Toronto,
Ontario, Canada
M5H
2Y4
Email
: br@carlislegold.com
Howard
Crosby
Suite
806, 390 Bay Street,
Toronto,
Ontario, Canada
M5H
2Y2
Email: corkinvest19@gmail.com
John
Ryan
Suite
806, 390 Bay Street,
Toronto,
Ontario, Canada
M5H
2Y2
Email
: silver4262@yahoo.com
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6.4
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Assignment;
Binding Effect
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This
Agreement and the rights hereunder are not assignable unless such assignment is consented to in writing by each of the Parties
hereto. Subject to the foregoing, this Agreement and all the provisions hereof shall be binding upon and shall inure to the benefit
of the Parties and their respective heirs, executors, personal representatives, successors and permitted assigns.
This
Agreement shall be governed by and interpreted and enforced in accordance with the Laws of the Province of Ontario and the Laws
of Canada applicable therein without regard to the conflicts of laws rules thereof.
If
any provision of this Agreement or the application of any such provision to any Person or circumstance shall be held invalid,
illegal or unenforceable in any respect by a mediator or a court of competent jurisdiction, such invalidity, illegality or unenforceability
shall not affect any other provision hereof. The parties shall engage in good faith negotiations to replace any provision which
is declared invalid, illegal or unenforceable with a valid, legal and enforceable provision, the economic effect of which comes
as close as possible to that of the invalid, illegal or unenforceable provision which it replaces.
This
Agreement constitutes the entire agreement and understanding between the Parties on everything connected with the subject matter
of this Agreement, and supersedes any prior agreement or understanding on anything connected to the subject matter thereof.
No
Party will make any public or press announcement or statement concerning the Agreement without the prior approval of the other
Party (such approval not to be unreasonably withheld or delayed), except to the extent required pursuant to any applicable Law,
or to any regulatory body or Governmental Agency, or pursuant to the rules of any applicable stock exchange or stock market. The
Parties shall in good faith agree to the form or forms of press announcement or public statements that they will each make in
respect of this Agreement and the transactions contemplated herein.
This
Agreement may be amended, modified or supplemented only by a written mutual agreement executed and delivered by all of the Parties
hereto.
This
Agreement may be executed in any number of separate counterparts (including by facsimile or other electronic means) and all such
signed counterparts will together constitute one and the same agreement.
[Remainder
of this page intentionally left blank]
IN
WITNESS WHEREOF
, the parties hereto have caused this Agreement to be executed as of the day and year first above written.
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LIBERTY
SILVER CORP.
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Per:
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/s/
Julio DiGirolamo
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Name:
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Julio
DiGirolamo
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Title:
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CFO
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BG
CAPITAL GROUP LTD.
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Per:
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/s/
Robert Genovese
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Name:
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Robert
Genovese
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Title:
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Chairman
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/s/
Bruce Reid
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Bruce
Reid
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/s/
Howard Crosby
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Howard
Crosby
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/s/
John Ryan
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John
Ryan
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Signature
Page to Standstill Agreement - 11
LIBERTY
SILVER ANNOUNCES OPTION, VOTING AND
STANDSTILL
AGREEMENTS
May
19, 2017 - Toronto, Ontario.
Liberty Silver Corp. (“
Liberty
” or the “
Company
”) announced
today that, in connection to the listing of its shares on the Canadian Securities Exchange, the management of the Company and
its major shareholder have entered into a series of governance agreements designed to align the interests of the management and
the major shareholder with those of the Company and all of its shareholders.
Option
Agreements
Under
the terms of three option agreements, BG Capital Group Ltd. (“BGCG”) which at the date hereof controls, together with
its affiliates, 13,308,405 Common Shares or approximately 54.45% of the issued and outstanding Common Shares, has granted to Bruce
Reid, John Ryan and Howard Crosby options to purchase an aggregate of 4,000,000 Common Shares currently owned by BGCG. The options
so granted are exercisable at CAD$1.00 per Common Share and expire on the earlier of: May 1, 2024 and the 30th day following an
event that constitutes a change of control of the Company. Until May 1, 2023, the options so granted can only be exercised if
the board of directors or shareholders of the Company, as the case may be, approve a transaction that constitutes a change of
control of the Company. After May 1, 2023, the options can be exercised up to May 1, 2024 without the requirement of a change
of control event. Until the options so granted are either exercised or expire, the Common Shares that are subject to the options
will be held in escrow by an escrow agent.
Voting
Agreement
Under
the terms of a voting agreement, BGCG has granted to an arm’s-length attorney, a role currently being assumed by Bruce Reid,
a power of attorney to vote any Common Shares which BGCG owns over and above 10% of the issued and outstanding Common Shares at
the relevant time. The term of the voting agreement starts today, the date on which the Common Shares of the Company commence
trading on the Canadian Securities Exchange, and expires two years thereafter, or earlier in the event that the Common Shares
cease to be listed for trading on the Canadian Securities Exchange.
Standstill
Agreement
Under
the terms of a standstill agreement, BGCG has limited ability to dispose of its Common Shares. Until May 1, 2020, BGCG cannot
dispose of any Common Shares without the consent of Bruce Reid and, thereafter, BGCG can only dispose of a maximum of 500,000
Common Shares during any calendar year. Following the expiration of the voting agreement, under the terms of the standstill agreement
Bruce Reid, John Ryan and Howard Crosby have the right, at all meetings of shareholders of the Company, to direct the voting of
the 4,000,000 Common Shares that are subject to the options granted to them by BGCG as described above. In addition, BGCG cannot
vote any of its other Common Shares against any resolutions put before the shareholders of the Company by the board of directors
or recommended by the board of directors for approval by the shareholders of the Company. The standstill agreement expires on
the earlier of completion of a change of control event or May 1, 2024. The standstill agreement has been approved by the board
of directors of the Company and ratified by a majority shareholder resolution signed by BGCG.
About
Liberty Silver Corp.
Liberty
has the right to earn a joint venture interest in the 10,020-acre Trinity Silver Project pursuant to the terms of an earn-in agreement
with Renaissance Exploration Inc. The Trinity Silver Project, located in Pershing County, Nevada, is Liberty’s flagship
project. Liberty has entered into a letter of intent to acquire, subject to due diligence and definitive documentation, the Bunker
Hill Mine Complex located in Kellogg, Idaho subject to due diligence and definitive documentation.
Information
about Liberty is available on its website,
www.libertysilvercorp.com
, or in the SEDAR and EDGAR databases.
For
additional information contact:
Howard
M. Crosby, Executive Director
(509)
526-3491
info@libertysilvercorp.com
Cautionary
Statements
Certain
statements in this news release are forward-looking and involve a number of risks and uncertainties. Such forward-looking statements
are within the meaning of that term in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended, as well as within the meaning of the phrase ‘forward-looking information’ in the
Canadian Securities Administrators’ National Instrument 51-102 – Continuous Disclosure Obligations. The forward looking
statements made herein are based on information currently available to the Company and the Company provides no assurance that
actual results will meet management’s expectations or assumptions with respect to, among other things, the ability of Liberty
to successfully complete due diligence on the Bunker Hill Mine Complex, settle a definitive agreement on the terms as provided
in the Letter of Intent or other satisfactory terms or at all, and fund the initial purchase payment for which Liberty does not
have funds at this time, the ability of Liberty to preserve its interests in the Trinity Silver Project which is dependent on
the completion of a feasibility study, the Company’s present and future financial condition, the Company’s ability
to secure financing, the Company’s ability to secure a public market for its securities, and the state of financial markets.
Forward-looking statements include estimates and statements that describe the Company’s future plans, objectives or goals,
including words to the effect that the Company or management expects a stated condition or result to occur. Forward-looking statements
may be identified by such terms as “believes”, “anticipates”, “expects”, “estimates”,
“may”, “could”, “would”, “will”, or “plan”, and may include statements
regarding, among other things, the terms of the Letter of Intent to acquire the Bunker Hill Mine Complex, completion of the necessary
due diligence and funding of the acquisition. Since forward-looking statements are based on assumptions and address future events
and conditions, by their very nature they involve inherent risks and uncertainties. Actual results relating to, among other things,
results of exploration, project development, and the Company’s financial condition and prospects, could differ materially
from those currently anticipated in such statements for many reasons such as: the inability of Liberty to successfully complete
due diligence on the Bunker Hill Mine Complex, settle a definitive agreement on the terms as provided in the Letter of Intent
or other satisfactory terms or at all, and fund the initial purchase payment for which Liberty does not have funds at this time;
the inability of Liberty to complete a feasibility study pursuant to the terms of the Trinity Silver Project earn-in agreement;
the inability of the Company to budget and manage its liquidity in light of the failure to obtain additional financing; the inability
of the Company to secure a public market for its securities and whether an active public market can be developed or sustained;
development of changes in general economic conditions and conditions in the financial markets; changes in demand and prices for
precious metals; litigation, legislative, environmental and other judicial, regulatory, political and competitive developments;
operational difficulties encountered in connection with the activities of the Company; and other matters discussed in this news
release. This list is not exhaustive of the factors that may affect any of the Company’s forward-looking statements. These
and other factors made in public disclosures and filings by the Company should be considered carefully and readers should not
place undue reliance on the Company’s forward-looking statements. The Company does not undertake to update any forward-looking
statement that may be made from time to time by the Company or on its behalf, except in accordance with applicable securities
laws.
Liberty
Silver Corp. Amends Letter of Intent to
Acquire
Bunker Hill Mine
May
23, 2017 - Toronto, Ontario.
Liberty Silver Corp. (“
Liberty
” or the “
Company
”) (CSE:
LSL) is pleased to announce that, following discussions with Placer Mining Corp. (“Placer” or the “Vendor”),
the current owner of the Bunker Hill Mine, that have occurred over the last several days, Placer and Liberty have elected to undertake
several modifications to the Letter of Intent that exists between the Parties.
Pursuant
to these amendments, the parties have agreed, among other things, that, in consideration of the use of the Russell Tunnel, Liberty
will indemnify the vendor and its officers, agents and employees from any liabilities arising out of Liberty’s repair and
use of the Russell Tunnel, the connected ramp system and access to the Newgard area and other tunnels connected to the Russell
Tunnel that will be accessed by Liberty’s due diligence programs. Liberty also agrees to provide certain evidence of insurance
coverage and workmen’s compensation insurance compliance from its principal contractor, who is currently working at the
Russell Tunnel.
Also,
in consideration of Liberty’s continuing to make public news releases and public filings regarding agreements, progress
and timelines with respect to due diligence and progress toward closing the Bunker Hill Mine purchase, Liberty agrees to indemnify
the Vendor and its officers, agents and employees from any liabilities arising out of the filing or dissemination of news releases,
reports and other market information with respect to the Bunker Hill proposed transaction, including any alleged negligence of
the vendor with respect to dissemination of information. In this regard, Liberty agrees to notify Placer of any future news releases
to enable Placer to provide comments.
The
closing date for the sale is extended to July 28, 2017 to enable the parties to complete necessary agreements and plans with applicable
United States government agencies. Additionally, either party can request a further extension of 30 days if requested. Liberty
agrees to make a partial payment of US$100,000 to be credited toward the purchase price (and an additional US$100,000 if closing
is extended for an additional 30 days) and Placer agrees to provide, within a defined period, certain financial and corporate
information specified by the terms of the Letter of Intent. The Vendor also agrees to provide its comments and proposed changes
to the definitive purchase agreement by June 10, 2017 with both parties acknowledging that further changes to the definitive agreement
may result from due diligence, discovery, and results of upcoming meetings with applicable United States governmental agencies.
Finally, the vendor has retracted certain notices of default that have been addressed by the recent amendments.
On
completion of the sale, the acquisition of the Bunker Hill Mine Complex will include all current and historic data relating to
the Bunker Hill Mine Complex (such as drill logs, reports, maps and similar information located at the mine site or at any other
location); all mining rights and claims, surface rights, easements, existing infrastructure at Milo Gulch; all equipment and infrastructure
located anywhere underground at the Bunker Hill Mine Complex; and the majority of machinery and buildings at the Kellogg Tunnel
portal level excluding the machine shop building and milling equipment located within the building. Also excluded are the historic
Caledonia Mine (East Hanging Wall area), the Crystal Vug Stope, and a group of patented mining claims located east of the Bunker
Hill, all of which will remain the property of Placer Mining Corp.
Initial
discovery and development of the property began in 1885, and from that time until the mine closed in 1981 it produced over 35.8
million tons of ore at an average mined grade of 8.76% lead, 4.52 ounces per ton silver, and 3.67% zinc (Bunker Limited Partnership,1985).
Throughout the long history of the mine, there were over 40 different orebodies discovered and mined, primarily consisting of
Zinc-Lead-Silver mineralization. The Bunker Hill and Sullivan Mining Company had a strong history of regular dividend payments
to shareholders from the time the Company went public in 1905 until it was acquired in a hostile takeover by Gulf Resources in
1968. When the mine first closed in 1981, it was estimated to still contain significant resources (Bunker Limited Partnership,
1985).
The
Mine and Smelter Complex were closed in 1981 when Gulf Resources was not able to continue to comply with new regulatory structures
brought on by the passage of environmental statutes and as then enforced by the Environmental Protection Agency (EPA).
The
Bunker Hill Lead Smelter, Electrolytic Zinc Plant and historic milling facilities were demolished about 25 years ago, and the
area became part of the “National Priority List” for cleanup under EPA regulations, thereby pausing development of
the Bunker Hill Mine. The Company has been in contact with government officials who have expressed strong support and cooperation
for the Company efforts.
The
acquisition price, as described in the Letter of Intent, is a total of US$30,000,000. The initial US$15,000,000 of the total acquisition
price will be paid annually over the course of 5 years from the closing date, of which US$150,000 has been paid to date pursuant
to the Letter of Intent; US$3,350,000 will become due by the closing date; US$3,500,000 is due on the first anniversary of the
closing date; US$3,000,000 on the second anniversary; US$2,000,000 on the third and fourth anniversaries; and US$1,000,000 on
the fifth anniversary.
The
balance of US$15,000,000 will become due in 15 equal installments beginning upon the anniversary of the closing date in 2023 and
on each anniversary of the closing date thereafter. The Letter of Intent provides for conditions under which the fifteen equal
payments may be accelerated and paid partly in shares based on prevailing market prices and share volumes.
In
addition, a net smelter return royalty with an aggregate maximum capped payment of US$60,000,000 will be granted at a rate of
2% for the first US$15,000,000; 1% for the next US$15,000,000; and 0.5% for the remaining US$30,000,000. The Company has, to date,
made payments totalling US$280,000 with respect to certain property carrying costs and which are not counted toward the purchase
price. Additionally, for two years after the closing, the Company will hire three members of Placer’s current staff.
Further
announcements will be made from time to time on the status of the acquisition of the Bunker Hill Mine Complex. Technical information
in this press release was reviewed and approved by James Baughman, P.Geo., a consultant to Liberty, and a Qualified Person under
National Instrument 43-101.
About
Liberty Silver Corp.
Liberty
has the right to earn a joint venture interest in the 10,020-acre Trinity Silver Project pursuant to the terms of an earn-in agreement
with Renaissance Exploration Inc. The Trinity Silver Project, located in Pershing County, Nevada, is Liberty’s flagship
project. Liberty has entered into the Letter of Intent to Acquire the Bunker Hill Mine Complex which is subject to due diligence
and definitive documentation.
Information
about Liberty is available on its website,
www.libertysilvercorp.com
, or in the SEDAR and EDGAR databases.
For
additional information contact:
Bruce
Reid, Chief Executive Officer
(647)
500-4495
info@libertysilvercorp.com
Cautionary
Statements
Certain
statements in this news release are forward-looking and involve a number of risks and uncertainties. Such forward-looking statements
are within the meaning of that term in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended, as well as within the meaning of the phrase ‘forward-looking information’ in the
Canadian Securities Administrators’ National Instrument 51-102 – Continuous Disclosure Obligations. The forward looking
statements made herein are based on information currently available to the Company and the Company provides no assurance that
actual results will meet management’s expectations or assumptions with respect to, among other things, the ability of Liberty
to successfully complete due diligence on the Bunker Hill Mine Complex, settle a definitive agreement on the terms as provided
in the Letter of Intent or other satisfactory terms or at all, and fund the initial purchase payment for which Liberty does not
have funds at this time, the ability of Liberty to preserve its interests in the Trinity Silver Project which is dependent on
the completion of a feasibility study, the Company’s present and future financial condition, the Company’s ability
to secure financing, the Company’s ability to secure a public market for its securities, and the state of financial markets.
Forward-looking statements include estimates and statements that describe the Company’s future plans, objectives or goals,
including words to the effect that the Company or management expects a stated condition or result to occur. Forward-looking statements
may be identified by such terms as “believes”, “anticipates”, “expects”, “estimates”,
“may”, “could”, “would”, “will”, or “plan”, and may include statements
regarding, among other things, the terms of the Letter of Intent to acquire the Bunker Hill Mine Complex, completion of the necessary
due diligence and funding of the acquisition. Since forward-looking statements are based on assumptions and address future events
and conditions, by their very nature they involve inherent risks and uncertainties. Actual results relating to, among other things,
results of exploration, project development, and the Company’s financial condition and prospects, could differ materially
from those currently anticipated in such statements for many reasons such as: the inability of Liberty to successfully complete
due diligence on the Bunker Hill Mine Complex, settle a definitive agreement on the terms as provided in the Letter of Intent
or other satisfactory terms or at all, and fund the initial purchase payment for which Liberty does not have funds at this time;
the inability of Liberty to complete a feasibility study pursuant to the terms of the Trinity Silver Project earn-in agreement;
the inability of the Company to budget and manage its liquidity in light of the failure to obtain additional financing; the inability
of the Company to secure a public market for its securities and whether an active public market can be developed or sustained;
development of changes in general economic conditions and conditions in the financial markets; changes in demand and prices for
precious metals; litigation, legislative, environmental and other judicial, regulatory, political and competitive developments;
operational difficulties encountered in connection with the activities of the Company; and other matters discussed in this news
release. This list is not exhaustive of the factors that may affect any of the Company’s forward-looking statements. These
and other factors made in public disclosures and filings by the Company should be considered carefully and readers should not
place undue reliance on the Company’s forward-looking statements. The Company does not undertake to update any forward-looking
statement that may be made from time to time by the Company or on its behalf, except in accordance with applicable securities
laws.