Kootenay Silver Inc (KOOYD)

[basserdan]

Kootenay and Northair Announce Transaction to Create Leading Mexican Silver Consolidator

VANCOUVER, Jan. 13, 2016 /CNW/ - Kootenay Silver Inc. (TSX-V:KTN.V; OTC: KOOYF - News) ("Kootenay") and Northair Silver Corp. (TSX-V:INM.V - News) ("Northair") are pleased to announce the execution of a Binding Letter Agreement (the "Binding Letter Agreement") pursuant to which Kootenay will acquire all of the issued and outstanding common shares of Northair (the "Transaction"). The combination of Kootenay and Northair will create a leading Mexican silver exploration and development company and consolidator with a portfolio of assets headlined by Kootenay's Promontorio and La Negra projects and Northair's La Cigarra project, all of which are based in Mexico. In addition, the combined company will have exposure to a continuum of grass-roots pipeline exploration projects, royalty interests and joint ventures, plus a strong balance sheet providing the combined company with a stable platform for future consolidation in the sector.

Under the terms of the Binding Letter Agreement, Northair shareholders will receive, for each common share of Northair held, 0.35 common shares of Kootenay, plus 0.15 of a warrant to purchase Kootenay common shares at an exercise price of $0.55 for a period of five years from closing (the "Warrants"). Kootenay will apply to list the Warrants on the TSX Venture Exchange. Including the Warrants(1), the total consideration represents an implied value of $0.076 per Northair common share and a premium of 58% to Northair's shareholders based on both companies' trailing 20-day volume-weighted average price, respectively, as of the close on January 12, 2016, and an implied value of $0.071 per Northair common share and a premium of 45% to Northair's shareholders based on both companies' closing share prices, respectively, as of the same date. Upon completion of the Transaction, Northair will become a wholly-owned subsidiary of Kootenay, and former shareholders of Northair will hold approximately 40% of the shares of Kootenay on an outstanding shares basis.

Kootenay President and CEO James McDonald commented: "The strategic acquisition of Northair and its La Cigarra silver project is a milestone development for both companies that immediately positions Kootenay as a leading consolidator of emerging silver and precious metals assets in Mexico. The transaction provides Northair shareholders with an attractive premium on its capital stock, while Kootenay will enjoy the benefits of a substantially increased silver asset base and corporate balance sheet, setting the stage for the future development of its assets, additional potential revenue streams, and further consolidation in the sector."

Andrea Zaradic, President, CEO & Director of Northair, stated: "La Negra and La Cigarra represent two of the highest profile new silver discoveries amongst non-majors in Mexico. The continued exploration successes at our flagship projects put the combined company in a strong position, distinguishing us from our peers. We are confident that our shareholders will benefit from the value creation opportunities that will be realized through an expanded and more diversified silver consolidation company."

Kootenay and Northair will host a conference call and live audio webcast on Thursday January 14, 2015 at 8:00 am Pacific Time (11:00 am Eastern Time) to provide a short overview on the significance of this Transaction. Conference call and live audio webcast details are located at the end of this release and on the Kootenay and Northair websites at http://www.kootenaysilver.com and http://www.northairsilver.com.

A copy of the investor presentation is currently available at: Kootenay-Presentation ( http://tinyurl.com/jdx57st ) and Northair-Presentation

Transaction Highlights

* Consolidation of High Profile Silver Resources in Mexico: A unique portfolio of high-quality resource-development staged assets in Mexico headlined by Kootenay's Promontorio and La Negra projects and Northair's La Cigarra project. Promontorio has a NI 43-101 pit-constrained resource consisting of 92.0M oz AgEq Measured and Indicated (44.5M tonnes at a grade of 64.3 g/t AgEq) plus an additional 24.3M oz AgEq categorized as Inferred (14.6M tonnes at a grade of 52.0 g/t AgEq) (see Table 1). La Cigarra has a pit-constrained NI 43-101 resource consisting of 51.5M oz Ag Measured and Indicated (18.5M tonnes at 86.3 g/t Ag) plus an additional 11.5M oz Ag (4.5M tonnes at 80.0 g/t Ag) categorized as Inferred resources (see Table 2).*

* Continued Exploration Potential and Resource Upside: Promontorio/La Negra and La Cigarra have all demonstrated continued exploration success since release of their NI 43-101 resource statements. The combined company will continue its focus on resource growth into 2016, with an exploration drilling program planned at La Negra in H1/2016, leading to a maiden NI 43-101 resource estimate, plus plans to drill test high profile targets identified during the 2015 air mag survey at La Cigarra (including the RAM Zone) and to further evaluate regional prospectivity within the 100% owned Promontorio Mineral Belt.

* Prospect Generator Portfolio: In addition to resource development-stage assets, the combined company will maintain an active portfolio of generative properties within Mexico and Canada. Kootenay currently has four joint ventures partners in place and will continue to pursue further monetization opportunities which will provide the combined company with additional, non-dilutive asset exposure and diversification.

* Platform for Further Consolidation: Northair and Kootenay both believe that investors in today's market are increasingly attracted by larger, more liquid exploration and development companies. The combined company, with rationalized G&A and a stronger balance sheet, will be positioned for growth and mandated to pursue further consolidations within the depressed junior silver sector.

Click on the link at the bottom of the page to view the respective Resource Tables and the rest of this PR.

Conference Call and Webcast Information

Kootenay and Northair will host a joint conference call and webcast on Thursday January 14, 2016 at 8:00 a.m. Pacific Time for members of the investment community to discuss the business combination. A copy of the investor presentation that will be used during the conference call is currently available at: Kootenay-Presentation and Northair-Presentation.

The conference call may be accessed by dialing 1-416-340-2218 / 1-800-355-4959 in Canada and the United States. Callers outside of North America may refer to: https://www.confsolutions.ca/ILT?oss=1P29R8003554959

The conference call will be archived for later playback until January 28, 2016 and may be accessed by dialing 1-905-694-9451 / 1-800-408-3053 and entering the pass code 7750990. Callers outside of North America may refer to: https://www.confsolutions.ca/ILT?oss=4P29R8004083053

Audio Webcast:

A live webcast of the conference call can be accessed via the following link: http://www.gowebcasting.com/7229 or via http://www.kootenaysilver.com and http://www.northairsilver.com

An archived version of the webcast will be available via the following link: http://www.gowebcasting.com/7229 and via http://www.kootenaysilver.com and http://www.northairsilver.com

https://ca.finance.yahoo.com/news/kootenay-northair-announce-transaction-create-135500710.html