Grupo Semper Announces Intention to Acquire Starcore International Mines Ltd.

Monterrey, Mexico--(Newsfile Corp. - May 12, 2022) - Semper Recursos Naturales S.A. de C.V. ("Semper") announces its intention to pursue a privatization transaction in respect of Starcore International Mines Ltd. ("Starcore"), pursuant to which it will offer to acquire all of the outstanding common shares of Starcore (the "Starcore Shares") at a price per Starcore Share of $0.35 in cash (the "Offer").

The Offer represents a premium of 52% to Starcore shareholders (the "Shareholders") based upon today's closing price of the Starcore Shares on the Toronto Stock Exchange. The Offer implies a total equity value for Starcore of approximately $19 million on a fully diluted, in-the-money basis.

Financial and Strategic Benefits of the Offer

Semper firmly believes that its Offer is in the best interests of the Shareholders and that Shareholders should have the opportunity to determine what is best for their investment. Semper believes that the Offer is compelling for the Shareholders and offers significant benefits, including, among other things:

  • Attractive Premium to Starcore's Recent and Long-Term Trading Levels. The Offer represents a 52% premium to Shareholders based on today's closing price of the Starcore Shares and a 62% premium to the 20-day volume-weighted average share prices for the period ended as of today's close. The Offer also represents a premium to long-term trading levels of Starcore Shares, with such shares not trading above the Offer price since September 2017.

  • Fully Financed Offer Providing Liquidity and Certainty of Value. The Offer is not contingent on any financing conditions and provides Shareholders with certainty of value and immediate liquidity.

  • Avoidance of Further Dilution. With average daily value traded over the trailing twelve months of $10,523, Starcore's ability to finance operational improvements is limited. Continued development of the San Martin mine properties and Starcore's other projects will require substantial additional funds; any additional equity financing, joint venture agreement(s) or other transaction(s) that are undertaken could result in material dilution to existing Shareholders.

Daniel Pechir, President of Semper, commented: "We believe the proposed transaction represents a compelling opportunity for Starcore and its Shareholders. Our Offer provides Shareholders an opportunity to receive an immediate and substantial premium for their Starcore Shares. Accordingly, we believe that this transaction is in the best interests of the Shareholders, which is why we intend to take the offer directly to them. Our clear preference remains to engage with Starcore, as we believe strongly in the compelling strategic and financial merits of a friendly transaction. We therefore invite the board and management of Starcore to work with us in constructive discussions to identify additional benefits and advantages for all Shareholders."

The Proposed Offer

Shareholders should note that Semper has not yet commenced the Offer and should carefully review the cautionary statements set out below in this news release respecting the status of the Offer and the factors that may cause Semper to not make the Offer.

Once Semper proceeds with the Offer, full details of the Offer will be included in a take-over bid circular, letter of transmittal and notice of guaranteed delivery (collectively, the "Offer Documents") to be filed with applicable Canadian securities regulatory authorities and mailed to Shareholders. Semper will request a list of Shareholders from Starcore and expects to commence and mail the Offer Documents as soon as reasonably practical upon receipt of this list. The Offer will be open for acceptance for 105 days following commencement thereof. The Offer is premised on there being 53,826,851 Starcore Shares outstanding, on a fully diluted basis.

The Offer will be undertaken in accordance with National Instrument 62-104 - Take-Over Bids and Issuer Bids and will be subject to certain customary conditions of completion, including, among others: there having been validly deposited under the Offer, and not withdrawn, that number of Starcore Shares representing at least 66⅔% of the outstanding Starcore Shares (calculated on a fully diluted basis and in addition to the non-waivable statutory minimum tender condition of 50%); receipt of all necessary regulatory approvals; and the absence of material changes to the business of Starcore. Once the two‐thirds percentage acceptance level is met, Semper intends, but will not be required, to take steps to acquire all remaining Starcore Shares in accordance with applicable law.

Semper will reserve the right to withdraw or extend the Offer and to not take up and pay for any deposited Starcore Shares unless each of the conditions of the Offer is satisfied or waived by Semper at or prior to the expiry time.

Background to the Offer

Semper first approached Starcore in April 2022 to discuss a collaborative strategic transaction and with the objective of working collaboratively with Semper to negotiate a mutually-beneficial, board-supported transaction. Semper submitted an acquisition proposal to Starcore on April 19, 2022 based exclusively on publicly available information and with an offer price representing a significant premium of 42% based on the closing price of the Starcore Shares on April 19, 2022 and a 52% premium to the 20-day volume-weighted average share prices for the period ended April 19, 2022.

While numerous subsequent attempts to correspond with Starcore were made, ultimately Starcore, through its counsel, declined to engage with Semper and rejected Semper's proposal without any discussion. Semper believes Starcore's view fails to recognize the developmental and capital market realities facing Starcore's operations now and in the future.

Despite Starcore's rejection, Semper submitted a further proposal on May 2, 2022 with the increased Offer price. Semper firmly believes it is in the best interest of all Shareholders to be made aware of its efforts in this regard and be given the opportunity to opine directly on the Offer. As such, Semper now intends to take its Offer directly to the Shareholders.

Semper remains open to engaging directly with Starcore on fair and balanced terms. Semper has made prior proposals to Starcore in good faith, with an objective of receiving access to confirmatory due diligence to support a valuation for the company. Semper has made this Offer based exclusively on publicly available information.

Advisors

Semper has engaged Eight Capital to act as its financial advisor in connection with the Offer and has engaged Dentons Canada LLP to act as its legal advisor.

About Semper

Semper is a privately held and fully funded investment firm located in Mexico, focused on evaluating, challenging, and developing established business models within high-impact markets. The company brings a highly reputable management group and strong technical capabilities to engage in diverse areas, including natural resource exploration and mining asset development.

Semper holds mining exploration and exploitation portfolios for value creation within Canada and Mexico. Dynamic asset development is enabled by Canadian, European, and Mexican talent, through technology and intellectual rights developed for the last 20 years. Semper continually examines investment opportunities through strategic alliances with operational partners with extensive industry experience.

No Offer or Solicitation

This news release is for informational purposes only and does not constitute an offer to buy or sell, or a solicitation of an offer to sell or buy, any securities. The offer to acquire Starcore securities will be made solely by, and subject to the terms and conditions set out in the Offer Documents.

Cautionary Statement Regarding Forward-Looking Statements

Certain of the information contained in this news release constitutes 'forward-looking information' and 'forward-looking statements' within the meaning of applicable Canadian securities laws ("forward-looking statements") and involve known and unknown risks, uncertainties and other factors that may cause Semper's actual results, performance and achievements to be materially different from the results, performance or achievements expressed or implied therein. The words "believe", "expect", "will", "propose" and derivatives thereof and other expressions which are predictions of or indicate future events, trends or prospects and which do not relate to historical matters, identify the above mentioned and other forward-looking statements. Such forward-looking statements, including but not limited to statements regarding Semper's intention to pursue the privatization of Starcore, Semper's intention to make the Offer, the proposed terms and conditions of the Offer, including the satisfaction of the conditions thereunder; the anticipated mailing of Offer Documents, the anticipated acceptance period of the Offer, Semper's intention to request a list of Shareholders, Semper's intention to take steps to acquire Starcore Shares not acquired under the Offer, and potential further engagement between Semper and Starcore, including possibly varying the terms or conditions of the Offer.

Although Semper believes that these forward-looking statements and information are based upon reasonable assumptions and expectations, the reader should not place undue reliance on them, or any other forward-looking statements or information in this news release. The actual outcome of future events could differ from the forward-looking statements and information herein, which are subject to a number of known and unknown risks and uncertainties. Factors that could cause actual events to differ materially from those contemplated or implied by the statements in this news release include the ability to obtain regulatory approvals and meet other closing conditions to any possible transaction, general economic conditions in the jurisdictions in which we operate and elsewhere which may impact the markets for our products and services, the impact of market conditions on our business and material adverse effects on the business, properties and assets of the parties. Except as required by law, Semper undertakes no obligation to publicly update or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise.

For further information, please contact:

Semper Recursos Naturales S.A. de C.V., Daniel Pechir, President
Telephone: +52 813 120 6761, Email: contacto@semperrn.com

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/123870

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