20 November 2017 ASX/TSX Announcement

COPPER MOUNTAIN TO ACQUIRE ALTONA MINING TO FORM A MAJOR NEW COPPER PRODUCER

Copper Mountain Mining Corporation ("Copper Mountain" or "CMMC") [TSX:CMMC] and Altona Mining Limited ("Altona" or "AOH") [ASX:AOH] are pleased to jointly announce that they have agreed to combine the companies by way of a Scheme of Arrangement ("Scheme") under the Australian Corporations Act 2001 pursuant to which CMMC will acquire the entire issued capital of Altona (the "Transaction").

The acquisition will be effected pursuant to a Merger Implementation Deed ("MID") under which Altona has agreed to propose the Scheme that would allow Altona to become a wholly owned subsidiary of CMMC. The MID is attached at Annexure C.

Under the Transaction, each share of Altona ("Altona Share") will be exchanged for 0.0974 ("Exchange Ratio") of either a CHESS Depositary Interest of CMMC ("CMMC CDI"), which will trade on the Australian Securities Exchange ("ASX"), or, if elected, a CMMC common share ("CMMC Share"), which trades on the Toronto Stock Exchange ("TSX"). The total consideration offered for all of the outstanding shares of Altona is valued at approximately A$93 million and represents 17 cents per share, a 41.7% premium to A$0.12, the closing price of Altona shares on the day prior to the execution of the MID1.

Altona's key asset is the 100% owned undeveloped open pit Cloncurry Copper Project ("Cloncurry") in Queensland, Australia, a mining friendly jurisdiction. Cloncurry currently has a measured and indicated mineral resource containing over 2 billion pounds (0.95 million tonnes) of copper and an inferred resource of 1.6 billion pounds (0.72 million tonnes) of copper. There is potential to add resources at depth and along strike in each of the deposits, and through exploration at numerous prospective targets within Altona's approximately 397,000 hectare (3,970 sqkm) land package.

CMMC's principal asset is the 75% owned large open pit Copper Mountain Mine located in southern British Columbia near the town of Princeton. CMMC has a strategic alliance with Mitsubishi Materials Corporation which owns 25% of the Copper Mountain Mine and purchases 100% of the copper concentrate produced a under life of mine offtake agreement. CMMC is on track to achieve production

guidance for 2017 of 75-85 million pounds (34,000-38,500 tonnes) of copper2. The Copper Mountain

mine has a large resource that remains open laterally and at depth.

Directors and senior management of Altona have agreed to vote in favour of the Scheme in the absence of a Superior Proposal3 and subject to the Independent Expert concluding the Scheme is in the best interest of shareholders. Directors and senior management of Altona have provided voting intention statements in favour of the Scheme.

1 Based on the 5 day trailing volume weighted average price ("VWAP") of CMMC and Altona on 17 November 2017.

2 Calculated on a 100% basis. CMMC owns 75% of the Copper Mountain Mine.

3 See the definition of 'Superior Proposal' in the MID.

Highlights of the Proposed Combination
  • A multi-jurisdictional, mid-tier copper producer.
  • Annual potential copper production of approximately 160 million pounds (73,000 tonnes) of copper by 20204.
  • Combined Proven and Probable Reserves of 2.1 billion pounds (0.92 million tonnes) of copper.
  • Combined Measured and Indicated Resources over 4.1 billion pounds (1.8 million tonnes) of copper and an additional 3.6 billion pounds (1.5 million tonnes) of copper in Inferred Resources.
  • One of the leading TSX/ASX listed copper production companies, with significant production growth and exploration potential in two tier one mining jurisdictions.
  • The combined company will have approximately C$78 million in cash.
  • Enhanced trading liquidity in both Canada (TSX) and Australia (ASX).
  • Pro forma market cap of approximately C$300 million, with CMMC shareholders owning 71.5% and Altona shareholders owning 28.5% of the combined entity.
  • The strength and complementary nature of Altona's assets, management team, regional operating experience, and exploration expertise gives CMMC a stronger platform to grow.
  • CMMC's construction and operational experience are well positioned to bring Cloncurry into production.
  • Offer represents a 41.7% premium to Altona's price of A$0.12 per share, being the closing price on the day prior to the execution of the MID.
  • Major Altona shareholder (Matchpoint) has indicated support for the Scheme. Management Commentary

    Mr Jim O'Rourke, President and Chief Executive Officer of CMMC, commented: "Our Copper Mountain Mine is an efficient, stable operation with a long life ahead of it. At current copper prices, it is generating significant cash flow. For some time, CMMC has patiently been evaluating cost competitive opportunities to achieve a step-change in copper production. Cloncurry exemplifies the criteria of low-risk, near-term and high quality for which we have been seeking. We intend to progress Cloncurry into production with the aim of doubling CMMC's copper production profile to the range of 160 million pounds (73,000 tonnes) of copper per annum with significant precious metals credits. This additional copper production is timely to capitalize on the projected strong copper cycle."

    Dr Alistair Cowden, Managing Director of Altona, added: "We are delighted to join CMMC to form a new high growth copper producer. We are excited to bring CMMC's depth of experience in constructing and operating a large scale open pit copper mine to bear upon the Cloncurry Copper Project. Altona's shareholders will receive a premium and will also gain immediate exposure to copper production just as copper prices have recovered and market shortfalls are predicted over the near term. This is a great opportunity for our shareholders to participate in the creation of a leading mid- sized copper producer."

    4 See Altona ASX release dated 2 August 2017. Altona confirms that all the material assumptions underpinning the production target and the forecast financial information derived from the production target referred to in the above-mentioned release continue to apply and have not materially changed.

    Merger Summary

    CMMC and Altona have executed a MID under which Altona has agreed to propose the Scheme that would allow Altona to become a wholly owned subsidiary of CMMC. The consideration being offered to Altona Shareholders is one CMMC share for every 10.2669 Altona shares, which represents 17 cents per share, a premium of 41.7% to Altona's last price of A$0.12 as of the close on 17 November 2017 and based on CMMC's 5 day trailing VWAP from 17 November 2017.

    In conjunction with the Scheme, CMMC will seek a listing on the ASX and apply for quotation of CMMC shares in the form of CHESS Depositary Interests ("CDIs"), which would enable Altona shareholders to elect to receive the Scheme consideration in the form of CMMC CDIs.

    The Scheme is subject to customary conditions for a transaction of this nature, which are set out in full in the MID. Major conditions include:

  • Approval being received from the shareholders of Altona and the court in relation to the Scheme.

  • Approval being received from the shareholders of CMMC and the TSX for the issue of consideration shares.

  • The Independent Expert concluding that the Scheme is in the best interests of Altona shareholders.

  • Approval for and quotation of CMMC CDIs on the ASX.

  • Foreign Investment Review Board approval.

  • Other customary regulatory and court approvals for a transaction of this nature.

    The parties have agreed that unless the MID is terminated, Altona will not solicit any competing proposal or participate in any discussions or negotiations in relation to any competing proposal unless failure to do so would involve a breach of the fiduciary duties of its Directors. Altona and CMMC have agreed to pay a break fee of A$0.9 million in certain circumstances leading to the Scheme not proceeding.

    Benefits to Copper Mountain Shareholders
  • Acquisition of the low risk Cloncurry Copper Project ("Cloncurry"), including significant copper and gold resources and reserves, and a large mineral tenure position. The Cloncurry project is located in one of the world's most prominent base metals production regions in Queensland, Australia, host to leading mines including Mt Isa, Dugald River, Cannington and Ernest Henry.

  • Development of Cloncurry has the potential to double CMMC's production profile, with the anticipated addition of over 80 million pounds (39,000 tonnes) of copper and 17,000 ounces of gold per annum in concentrate based on Altona's updated Definitive Feasibility Study ("DFS") completed in July 20175. The DFS states that the major required permits, including Native Title, Mining Licenses and an Environmental Authority, have been received.

  • Significant increase in overall contained copper in Measured and Indicated Resources (by 104% to 4.1 billion pounds of copper) and Proven and Probable Reserves (by 87% to 2.0 billion pounds (0.92 million tonnes of copper), in addition to regional discovery potential surrounding Cloncurry.

  • Asset and geographical diversification, providing a lower risk profile for the combined entity.

    5 See Altona ASX release dated 2 August 2017. Altona confirms that all the material assumptions underpinning the production target and the forecast financial information derived from the production target referred to in the above-mentioned release continue to apply and have not materially changed.

  • Exposure to Altona's large land package and their exploration success in Australia.

  • Increased market prominence in combination, leading to a potential re-rating as a mid-tier copper producer.

    Benefits to Altona Shareholders
  • CMMC has an experienced management team with proven development and mine operation capabilities, having expertise in financing, building, commissioning and operating the 12-14 million tonnes per annum open pit Copper Mountain Mine ("Copper Mountain Mine") located in southern British Columbia, Canada. CMMC will use this operational expertise to maximise the value of Altona's Cloncurry project.

  • With CMMC's annual production guidance of 75-85 million pounds (34,000-38,500 tonnes) of copper in 20172, combined with 86 million pounds (39,000 tonnes) of potential copper production from Cloncurry, the combined entity has the potential to become a top 4 Australian copper producer.

  • Altona shareholders to receive a significant premium of 41.7% to Altona's closing share price on 17 November 2017, a 36.9% premium to Altona's trailing 10-day VWAP and a 33.2% premium to Altona's 20-day VWAP as of the close on 17 November 2017.

  • Benefit of immediate cash flow from CMMC's production asset, whilst retaining ongoing exposure to Cloncurry as it progresses through development.

  • Creation of a leading copper producing company with a diversified portfolio of production and development assets that will be uniquely positioned on the ASX.

Altona Board and Shareholder Support

The Altona Board are in favour of the Scheme and unanimously recommend that Altona shareholders vote in favour of the Scheme, in the absence of a Superior Proposal and subject to the Independent Expert concluding that the Scheme is in the best interests of Altona shareholders.

Each of Altona's directors and officers has entered into a Support Deed undertaking to vote in favour of the Scheme, in the absence of a Superior Proposal and subject to the Independent Expert concluding that the Scheme is in the best interests of Altona shareholders.

Altona's major shareholder, Matchpoint Asia Fund Limited, has also indicated that it will vote in favour of the Scheme6, in the absence of a Superior Proposal and subject to the Independent Expert concluding that the Scheme is in the best interests of Altona shareholders.

CMMC Shareholder approval

CMMC is required to obtain the approval of the TSX and its shareholders in connection with the issue of common shares under the Scheme. Each of CMMC's directors and officers have agreed to vote in favour of the required CMMC shareholder resolutions.

The CMMC Board unanimously recommends that CMMC shareholders vote in favour of the issue of CMMC common shares contemplated by the Scheme. The CMMC Board intends to vote any CMMC Shares in respect of which they have the power to direct a vote in favour of the necessary resolutions.

6 Subject to no material adverse movements in the CMMC and Altona share prices.

Altona Mining Limited published this content on 20 November 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 19 November 2017 23:25:00 UTC.

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