CORVUS GOLD INC. Item 8.01 Other Events.
This Current Report on Form 8-K discloses certain additional information related
to the anticipated plan of arrangement between
On
Corvus believes that the claims asserted in the Demand Letters are without merit and no supplemental disclosures are required under applicable law. However, in an effort to avoid nuisance and eliminate the potential burden, expense, delay and uncertainties inherent in such threatened litigation, and without admitting any liability or wrongdoing, Corvus is voluntarily making certain supplemental disclosures to the Circular, as set forth below, for the purpose of mooting such allegations and to provide additional information to shareholders and optionholders of Corvus. Nothing in this Current Report on Form 8-K shall be deemed an admission of the legal necessity or materiality under applicable law of any of the disclosures set forth herein. Corvus specifically denies all allegations in the letters, including that any additional disclosure was or is required. Corvus believes that the Circular disclosed all material information required to be disclosed therein, and denies that the supplemental disclosures below are material or are otherwise required to be disclosed.
In accordance with the Interim Order of the
The supplemental disclosures in this Current Report on Form 8-K will not change
the consideration to be paid to shareholders and optionholders of Corvus in
connection with the Arrangement or the timing of the Special Meeting, which is
scheduled to be held at Suite 1750,
SUPPLEMENTAL PROXY DISCLOSURES
This supplemental information should be read in conjunction with the Circular,
which should be read in its entirety, and which is available on the Internet
site maintained by the
The section of the Circular entitled "SPECIAL FACTORS - Projected Financial Information" is amended and supplemented as follows:
The disclosures on pages 57 through 60 are amended and supplemented by adding the following tables and paragraphs immediately after the table entitled "Mother Lode Annual Production Projections":
Consolidated (North Bullfrog +
Year Over-burden Process Contained Au (k (Oz) Payable Au1 Payable Ag1 Operating Capital
Mined (M t) Feed (k Oz) (k Oz) Cost (US Cost (US
Mined (M $M) $M)
t)2
-1 18.4 2.9 34.5 0 0 0 -$167.4
1 23.7 11.2 123.3 73.6 244.5 -$135.8 -$4.4
2 16.8 11.6 190.5 148.2 676.7 -$98.7 $20.5
3 41.1 16.2 265.8 194.6 632.6 -$129.0 -$436.5
4 48.6 26.0 550.6 396.8 466.3 -$365.2 -$34.8
5 44.9 24.2 346.3 336.6 538.5 -$330.2 -$38.9
6 17.3 41.2 632.3 381.12 296.9 -$327.8 -$18.4
7 65.9 24.0 164.9 292.1 277.5 -$354.2 -$28
8 52.1 22.3 137.4 165.3 128.8 -$262.5 -$13.2
9 27.3 31.1 355.4 268.3 86.3 -$298.7 -$32.6
10 24.4 28.0 361.4 281.2 175.9 -$298.9 $3.0
113 15.0 18.0 87.0 154.6 217.0 -$224.8 $0.0
123 13.0 17.0 76.5 65.9 50.6 -$118.4 $0.0
13 7.5 9.8 44.2 38.5 29.0 -$67.4 $0.7
144 0 0 0 10.5 6.4 -$19.7 $0.0
154 0 0 0 3.2 2.0 -$8.2 $0.0
LOM 416 283.7 3,369.9 2,810.5 3,829.2 -$3,039.7 -$750.2 1- Less royalty ounces, includes ounces from NBP sulfides
2- Excludes mill tails rehandle, excludes NBP sulfides
3- Years 11-12 are predominately heap leach draindown/reclamation at Mother Lode
4- Years 14-15 are predominantly heap leach draindown/reclamation at North
Bullfrog
Cash Flow Projections
The following two tables present annual cash flow projection models for the
North Bullfrog and
North Bullfrog Annual Cash Flow Projections (after-Royalty and after-Tax) Base
Case (Gold Price
Year Gold Revenue1 Silver Revenue1 Pre-Tax, Federal Nevada NPT Tax Cash Flow
(US $M) (US $M) After Income Tax (US $M) After Tax,
Royalty (US $M) After Royalty
Cash Flow
(US $M)
-1 0 0 -$167.4 $0.0 $0.0 -$167.4
1 $110.4 $4.6 -$14.7 -$4.0 -$8.7 -$14.7
2 $222.3 $12.7 $175.9 -$23.5 -$9.6 $163.2
3 $291.9 $11.9 $174.6 -$27.0 -$9.3 $141.6
4 $280.9 $8.5 $188.1 -$20.1 -$7.4 $151.8
5 $254.4 $6.4 $96.3 -$10.6 -$4.4 $68.8
6 $200.9 $5.1 $98.1 -$7.8 -$3.3 $83.2
7 $175.7 $3.3 $83.1 -$5.0 -$2.0 $71.9
8 $139.9 $1.4 $56.3 -$4.3 -$1.6 $49.2
9 $136.8 $1.0 $21.2 -$2.2 -$0.7 $15.4
10 $111.6 $1.8 $28.6 -$1.2 -$0.2 $25.7
11 $103.0 $1.8 $17.1 $0.0 $0.0 $15.7
12 $85.1 $0.9 $4.1 $0.0 $0.0 $4.1
13 $57.8 $0.5 $4.4 $0.0 $0.0 $4.4
142 $15.7 $0.1 -$0.5 $0.0 $0.0 -$0.5
152 $4.9 $0.0 -$2.3 $0.0 $0.0 -$2.3
LOM $2,191.3 $60.1 $763.0 -$105.8 -$47.2 $610.1
$574.1 NPV 5% IRR $452.3
55% 47%
1- Less Royalty ounces
2- Year 14-15 are predominately heap leach draindown/reclamation
Mother Lode Annual Cash Flow Projections (after-Royalty and after-Tax) Base Case
(Gold Price
Year Gold Revenue1 Silver Revenue1 Pre-Tax, Federal Nevada NPT Tax Cash Flow
(US $M) (US $M) After Income Tax (US $M) After Tax,
Royalty (US $M) After Royalty
Cash Flow
(US $M)
-1 0 0 -$406.3 $0.0 $0.0 -$406.3
1 $320.7 $0.2 $119.6 -$1.7 -$5.5 $112.5
2 $255.7 $3.8 $144.9 -$1.5 -$6.6 $136.9
3 $378.3 $0.5 $249.4 -$24.4 -$11.8 $213.2
4 $267.8 $1.9 $72.9 -$6.2 -$3.6 $63.0
5 $110.2 $1.0 -$29.1 $0.0 $0.0 -$29.1
6 $271.1 $0.7 $153.8 -$5.1 -$6.5 $142.2
7 $316.6 $1.6 $206.8 -$19.6 -$8.8 $178.4
82 $131.4 $2.3 $51.0 -$3.4 -$1.2 $46.4
92 $14.1 $0.0 $0.5 $0.5
LOM $2,065.9 $12.0 $563.5 -$61.9 -$44.1 $457.6
$388.3 NPV 5% IRR $302.7
27% 23%
1- Less Royalty ounces, includes ounces from NBP sulfides
2- Year 8-9 are predominately heap leach draindown/reclamation
Commodity Pricing and Discount Rate Sensitivities
The cash flow projection models at both properties are sensitive to commodity
pricing. A
Both models are also sensitive to discount rates, with a 2.5% increase in
discount rate resulting in approximately a
The following tables set forth NPV sensitivities over a range of gold prices and discount rates for each property.
North Bullfrog - NPV Sensitivity
Gold Price Total Cash Flow NPV @ 5.0% NPV @ 7.5% NPV @ 10%
($/oz.) (US $M) (US $M) (US $M) (US $M) IRR (%)$1,400 $488.2 $360.1 $309.2 $265.1 41.2%$1,500 $610.1 $452.3 $390.6 $337.5 47.5%$1,600 $731.6 $544.3 $471.7 $409.7 53.5%$1,700 $851.6 $635.2 $552.0 $481.1 59%$1,800 $970.5 $725.3 $631.5 $551.9 64.4%
Gold Price Total Cash Flow NPV @ 5.0% NPV @ 7.5% NPV @ 10%
($/oz.) (US $M) (US $M) (US $M) (US $M) IRR (%)$1,400 $347.2 $211.7 $157.8 $111.1 17.8%$1,500 $457.6 $302.7 $241.2 $187.8 22.9%$1,600 $567.9 $393.7 $324.5 $264.4 27.9%$1,700 $678.3 $484.6 $407.6 $340.8 32.8%$1,800 $787.9 $574.9 $490.2 $416.7 37.0%
Management Model - Operating and Cash Flow Profiles used by
· Assumes Street consensus commodity pricing of US$1,600 per ounce of gold
and US$21 per ounce of silver, North Bullfrog production commences 2024,
Mother Lode production commences in 2027, and US$10 million in annual
corporate general and administrative expenses (tax-effected) and revised
working capital schedule to reflect combined operation.
Production Profile - Payable Gold (koz Au) and AISC (US$/oz)
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Levered Free Cash Flow & Capital Expenses
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Management Model - Operating and Cash Flow Profiles used by
· Assumes Street consensus commodity pricing with a long-term price of
US$1,600 per ounce of gold and US$22.50 per ounce of silver, North
Bullfrog production commences in 2024, Mother Lode production commences in
2027 and US$10 million in annual corporate general and administrative
expenses (tax-effected).
Production and Cost Profile (K oz. Au Eq. / US$/oz Au Eq.)
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Unlevered Free Cash Flow Profile (US$ M)
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Management Model - Net Asset Value Per Share (NAVPS) Buildup
· Based on North Bullfrog and Mother Lode technical models, assuming Street
consensus commodity pricing with a long-term price of US$1,600 per ounce
of gold and US$22.50 per ounce of silver, North Bullfrog production
commences in 2024, Mother Lode production commences in 2027, US$10 million
in annual corporate general and administrative expenses (tax-effected) and
a present value date of May 31, 2021 .
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The section of the Circular entitled "SPECIAL FACTORS - Fort Capital Valuation and Opinion - Valuation Methodologies" is amended and supplemented as follows:
The disclosure on page 35 is amended and supplemented by adding the following table and paragraphs immediately after the table entitled "Mother Lode Financial Model Summary":
The following consolidated detailed financial model summary combines the above financial model summaries and includes estimated corporate general and administrative costs beginning in 2021 and interest payments beginning in 2023 under "Operating Expenses" and debt repayment deductions beginning in 2023.
Consolidated Detailed Financial Model Summary
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The section of the Circular entitled "SPECIAL FACTORS - Fort Capital Valuation and Opinion - Comparable Company Analysis Methodology" is amended and supplemented as follows:
The disclosure on page 38 is amended and supplemented by replacing the table entitled "Comparable Companies Selected" with the following table:
Comparable Companies Multiples and Metrics
[[Image Removed]] Current Trading Multiples
The following chart shows the share price to NAV multiples for select "Junior" and "Intermediate" gold producers.
[[Image Removed]]
The section of the Circular entitled "SPECIAL FACTORS - Fort Capital Valuation and Opinion - Precedent Transaction Methodology" is amended and supplemented as follows:
The disclosure on page 40 is amended and supplemented by replacing the table entitled "Selected Precedents" with the following table:
Precedent Transactions [[Image Removed]]
The section of the Circular entitled "SPECIAL FACTORS - Opinion of Financial
Advisor to Corvus -
The disclosure in the first sentence of the third paragraph on page 48 is amended and supplemented as follows:
The overall low to high estimated net asset value per share multiples and resources multiples observed for the selected companies were 0.15x to 0.96x (with a median of 0.40x) andUS$5 /ounce gold equivalent toUS$128 /ounce gold equivalent (with a median ofUS$40 /ounce gold equivalent), respectively, as indicated below (individual multiples are referenced below for informational purposes): Selected Companies Net Asset Value Per Share Resources · Artemis Gold Inc. 0.47 x$ 45 · Ascot Resources Ltd. 0.60 x$ 93 · Belo Sun Mining Corp. 0.26 x$ 29 · Falco Resources Ltd. 0.15 x $ 9 · First Mining Gold Corp. 0.16 x$ 17 · Gold Standard Ventures Corp. 0.34 x$ 46 · Integra Resources Corp. 0.36 x$ 33 · Liberty Gold Corp. 0.40 x$ 39 · Marathon Gold Corporation 0.96 x$ 128 · Orezone Gold Corporation 0.50 x$ 55 · Orla Mining Ltd. 0.75 x$ 65 · Osisko Mining Inc. 0.51 x$ 91 · Perpetua Resources Corp. 0.35 x$ 35 · Probe Metals Inc. 0.75 x$ 49 · Revival Gold Inc. 0.33 x$ 12 · Sabina Gold & Silver Corp. 0.40 x$ 41 · Seabridge Gold Inc. 0.54 x $ 5 · Treasury Metals Inc. 0.25 x$ 27
The section of the Circular entitled "SPECIAL FACTORS - Opinion of Financial
Advisor to Corvus -
The disclosure in the first sentence of the second paragraph on page 50 is amended and supplemented as follows:
The overall low to high estimated net asset value per share multiples observed
for the selected transactions were 0.18x to 4.45x (with a median of 0.65x and
25th and 75thpercentiles of 0.51x and 0.94x, respectively) and the overall low
to high estimated resources multiples observed for the selected transactions
were
Selected Precedent Transactions - Net Asset Value Per Share
Net Asset
Value Per
Acquiror Target Share
Agnico Eagle Mines Canadian exploration assets of Canadian
Limited Malartic Corporation 0.85x
Agnico Eagle Mines GoGold Resources Inc.'s interest in Santa
Limited Gertrudis gold project 0.56x
IAMGOLD Corporation's and AngloGold Ashanti
Limited's interests in Société
d'Exploitation des Mines d'Or de Sadiola
Allied Gold Corp S.A. 0.65x
Americas Silver Pershing Gold Corporation
Corporation 0.29x
Barsele Minerals Portion of Agnico Eagle Mines Limited's
Corp. interest in Barsele Gold-VMS project 0.63x
Boroo Pte Ltd Barrick Gold Corporation's interest in
(Singapore) Lagunas Norte mine 1.54x
Centerra Gold Inc. AuRico Metals Inc. 0.65x
Coeur Mining, Inc. Northern Empire Resources Corp. 0.93x
Dundee Precious INV Metals Inc.
Metals Inc. 0.18x
Eldorado Gold Integra Gold Corp.
Corporation 0.97x
Endeavour Mining Avnel Gold Mining Limited
Corporation 0.46x
Portion of Orion Mine Finance Group's
Equinox Gold Corp. interest in Greenstone project 0.56x
Evolution Mining Battle North Gold Corporation
Limited 0.75x
G Mining Ventures Eldorado Gold Corporation's Tocantinzinho
Corp. project 1.09x
Portion of Gold Road Resources Limited's
Gold Fields Limited interest in Gruyere gold project 1.01x
Portion of Barrick Gold Corporation's
Goldcorp Inc. interest in Cerro Casale project 1.71x
Goldcorp Inc. Exeter Resource Corporation 0.68X
Portion of Kinross Gold Corporation's
Goldcorp Inc. interest in Cerro Casale project 1.76x
Gran Colombia Gold Gold X Mining Corp.
Corp. 0.30x
Kinross Gold Portion of Royal Gold, Inc.'s and Contango
Corporation ORE, Inc.'s interests in Peak gold project 0.39x
Newmont Corporation GT Gold Corp. 0.55x
Orion Mine Finance Dalradian Resources Inc.
Group 0.51x
Orion Mine Finance Premier Gold Mines Limited's interest in the
Group Greenstone Gold Mines Partnership 0.56x
Osisko Gold Barkerville Gold Mines Ltd.
Royalties Ltd 0.50x
Sandstorm Gold Ltd. Mariana Resources Limited 0.49x
Seabridge Gold Pretium Resources Inc.'s Snowfield property 0.59x
Shandong Gold Mining Cardinal Resources Limited
(Hong Kong ) Co.,
Ltd. 0.50x
Sumitomo Metal Portion of IAMGOLD Corporation's interest in
Mining Co., Ltd. Côté gold project 4.45x
Barrick Gold Corporation's and its joint
Teranga Gold venture partner's interest in Massawa
Corporation project 0.95x
Wallbridge Mining Balmoral Resources Ltd.
Company Limited 0.76x
Yamana Gold Inc. Monarch Gold Corporation 0.74x
Zijin Mining Group Continental Gold Inc.
Co., Ltd. 0.78x
Selected Precedent Transactions - Resources
Acquiror Target Resources
Agnico Eagle Mines Canadian exploration assets of Canadian
Limited Malartic Corporation $ 30
Agnico Eagle Mines GoGold Resources Inc.'s interest in Santa
Limited Gertrudis gold project $ 86
Allied Gold Corp IAMGOLD Corporation's and AngloGold Ashanti
Limited's interests in Société d'Exploitation
des Mines d'Or de Sadiola S.A. $ 10
Americas Silver Pershing Gold Corporation
Corporation $ 85
Artemis Gold Inc. New Gold Inc.'s Blackwater gold project $ 27
Barsele Minerals Corp. Portion of Agnico Eagle Mines Limited's
interest in Barsele Gold-VMS project $ 42
Boroo Pte Ltd Barrick Gold Corporation's interest in
(Singapore) Lagunas Norte mine $ 31
Centerra Gold Inc. AuRico Metals Inc. $ 17
Coeur Mining, Inc. Northern Empire Resources Corp. $ 115
Dacian Gold Limited NTM Gold Ltd $ 92
Dundee Precious Metals INV Metals Inc.
Inc. $ 25
Eldorado Gold Integra Gold Corp.
Corporation $ 128
Eldorado Gold QMX Gold Corporation
Corporation $ 146
Endeavour Mining Avnel Gold Mining Limited
Corporation $ 42
Equinox Gold Corp. Portion of Orion Mine Finance Group's
interest in Greenstone project $ 57
Evolution Mining Battle North Gold Corporation
Limited $ 181
G Mining Ventures Corp. Eldorado Gold Corporation's Tocantinzinho
project $ 45
Gold Fields Limited Portion of Gold Road Resources Limited's
interest in Gruyere gold project $ 82
Goldcorp Inc. Portion of Barrick Gold Corporation's
interest in Cerro Casale project $ 26
Goldcorp Inc. Exeter Resource Corporation $ 4
Goldcorp Inc. Portion of Kinross Gold Corporation's
interest in Cerro Casale project $ 27
Gran Colombia Gold Gold X Mining Corp.
Corp. $ 17
Kinross Gold Portion of Royal Gold, Inc.'s and Contango
Corporation ORE, Inc.'s interests in Peak gold project $ 97
Newmont Corporation GT Gold Corp. $ 17
Orion Mine Finance Dalradian Resources Inc.
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