February 22, 2023
Dear Fellow Shareholder,
I am pleased to provide this update on the activities that have been undertaken by the Company to advance its assets and seek a transaction for our shareholders. Our primary assets, the 76.385% owned Pecoy copper deposit and the three newly discovered mineralized porphyries nearby at the 100% owned Tororume project, represent a new long life mining district in the Southern Peru Coastal Porphyry Belt.
After entering into a non-binding term sheet with Mich Resources Ltd. (“Mich”) (CSE: MICH) in July 2021, the Company entered into a definitive agreement with Mich in November 2021 for a reverse takeover transaction whereby Pembrook shareholders would receive Mich shares in exchange for Pembrook shares pursuant to an agreed share exchange calculation. Also in November 2021, Mich entered into definitive agreements to acquire the claims owned by Minera Andina de Exploraciones S.A.A. (“Minandex”), including claims located adjacent and to the south of the Company’s Pecoy project, onto which the Pecoy resource extends. In January 2022, Mich entered into a definitive agreement with the owner of the 23.615% minority interest in the Pecoy project (the “Minority Partner”). All definitive agreements with Mich were subject to closing conditions, including customary regulatory approvals and the requirement that Mich raise CAD$15,000,000 in financing. In August 2022, Mich notified the Company that it was not able to meet its obligation to raise CAD$15,000,000 in financing, thereby terminating the definitive agreements with the Company, Minandex and the Minority Partner.
In August 2022, the Company, Minandex and the Minority Partner commenced discussions with a private equity fund. The discussions were concluded in November 2022 without reaching an agreement.
In February 2023, the Company, Minandex and the Minority Partner entered into an advisory engagement with MPA Morrison Park Advisors Inc. (“MPA”) whereby MPA will provide financial advisory and investment banking services. The process with MPA is expected to continue for a minimum of six months.
On January 3, 2023, a 1,600-metre drilling program commenced at the 100%-owned Tororume project. The drilling program is being completed pursuant to a May 2021 share option agreement with a large mining company (“Mine Co”) whereby Mine Co has the option to earn a 50% interest in Torion Mining S.A.C., a wholly-owned subsidiary of the Company that owns the Tororume project by spending CAD$5,000,000 (of which CAD$2,000,000 is committed and must be spent within the first two years), followed by a second option to earn an additional 26% interest by spending an additional CAD$25,000,000 within the next three years. As part of this arrangement Mine Co also invested CAD$5,000,000 by way of a convertible note in the Company.
In April 2021, the Company entered into a share purchase option agreement with Tier One Silver Inc. (“Tier One”) (TSXV:TSLV) whereby Tier One has an option to acquire a 90% interest in Compa?ia Minera Tororume S.A.C., a wholly-owned subsidiary of the Company that owns the Hurricane East claims, by making option payments totalling USD$4,680,000 and incurring exploration expenses totalling USD$10,750,000 within a five year period commencing on the date that access to the Hurricane East claims is secured. Upon completion of earning the 90% interest, Tier One will have the option to acquire the remaining 10% interest by making an option payment of USD$10,000,000. All option payments may be made in cash or shares of Tier One or a combination thereof, at the option of Tier One. To date, access to the claims, as defined in the share purchase option agreement, has not been achieved. Negotiations with the local communities to gain access to the claims continues.
The Company has raised financing by issuing convertible notes, including CAD$6,790,000 raised in 2020, CAD$500,000 raised in 2022 and CAD$750,000 raised to date in 2023. Additional financing will be required to fund the Company’s activities until the completion of a transaction.
The Company will continue to focus on completing a transaction for our shareholders while advancing our Tororume and Hurricane East projects through option agreements. We believe that a strengthening copper market along with Pecoy’s unique combination of features including low elevation, access to power, water and ports, strong community relations and agreements and clean metallurgy will enable us to realize value for our shareholders through the completion of a transaction for the Company.
Yours truly,
Daniel G. Innes
Chief Executive Officer
June 20, 2019
Dear Fellow Shareholder,
I am pleased to report that a process to sell Pembrook commenced in February 2019 and the response to date has been positive. The process is well underway and continuing as expected with the Bank of Montreal acting as our financial advisor. In order to complete the sales process, we require additional funds to facilitate the completion of a sale transaction and do so from a position of strength.
We are inviting all of our shareholders to participate in a $1.5 million convertible note financing. Each convertible note will bear interest at a rate of 4% per annum, compounded annually, not in advance. The convertible notes together with accrued interest thereon, shall be convertible into common shares of Pembrook at a conversion price of CAD$1.00 per share commensurate with the completion of a sale of Pembrook. Further terms and conditions of the convertible notes are detailed in the subscription agreement, available upon request.
Please contact us at or by telephone at +1-778-373-1541 if you are interested in participating in this opportunity. We propose to close the financing on July 19, 2019.
We believe that our successful exploration results at Pecoy and Tororume in Peru, along with our view of an improvement in the long term copper market, will enable us to realize value for our shareholders through the completion of a sale of the Company in 2019.
Yours truly,
Daniel G. Innes
President & Chief Executive Officer
February 22, 2019
Dear Fellow Shareholder,
We are looking forward to 2019 being a pivotal year for Pembrook's shareholders. All of our efforts in 2018 were concentrated in advancing the Pecoy Cu, Mo, (Au, Ag) porphyry project in which the Company owns a 51% interest and is in the process of earning an additional 29% interest to bring its ownership to 80%.
The Pecoy deposit extends over the southern property boundary to adjacent claims owned by a third party. Pembrook has negotiated an agreement with the third party to jointly sell both portions of the Pecoy project (the "Joint Disposition Agreement"). Combining the two portions of the properties enhances the value of both properties. A technical engineering study has been prepared that combines the portion of the Pecoy deposit held on Pembrook's claims and the portion on the adjacent claims held by the third party. The estimated 43-101 Inferred Resource for the combined project at a 0.25% Cu cut off is 869 million tonnes at a grade of 0.34% Cu, 0.011% Mo, 0.050 g/t Au and 1.33 g/t Ag. Contained metal includes: 6.514mm lbs Cu, 211mm lbs Mo, 1,397k oz Au and 37mm oz Ag. The deposit remains open at depth and to the west and east.
During 2018, the Company completed the appropriate engineering studies and additional optimization analyses for the technical engineering study, including open pit mine scheduling, processing plant design, tailings design, mine infrastructure studies (water, power, road) and Life of Mine project economics. A summary of the results of the highlights from the technical engineering report and project economics is listed in the attached table.
With the completion of all studies, the Joint Disposition Agreement and the benefits of combining Pecoy with our much larger 100% owned Tororume Cu porphyry system, we have commenced a sales process to attract a buyer for the Company in 2019. To oversee the sale, the Company has appointed a Special Committee of the Board who has engaged the Bank of Montreal as our investment banker to advise the Company through the sale process.
In 2018, the Company raised CAD$3,615,000 million at CAD$1.00 per share in order to fund activities required to continue to earn an 80% interest in Pecoy (including a USD$1.5 million scheduled cash payment) and to complete the engineering studies, revised resource estimate and project economics.
On January 15, 2019, I was appointed to replace Brian Booth who resigned as President and CEO, in order to pursue a new opportunity. With the process to sell the Company being driven by the Special Committee and Bank of Montreal, and my involvement with Pembrook from the beginning, this transition in management will not have any impact on the sales process. We are grateful to Brian for all his work to bring the Company successfully to this point.
During this critical time for the Company, we require additional funds to facilitate completion of a sale transaction from a position of strength. These funds would be used to continue to earn an 80% interest in Pecoy and drill targets at the drill-permitted Tororume property. We believe that advancing these projects will best position the Company for the sale process, while having a minimum dilution impact.
We are inviting all our shareholders, who are interested, to participate in a $5 million convertible note financing. Each convertible note will bear interest at a rate of 4% per annum, compounded annually, not in advance. The convertible notes together with accrued interest thereon, shall be convertible into common shares of Pembrook at a conversion price of CAD$1.00 per share commensurate with the completion of a sale of Pembrook. Further terms and conditions of the convertible notes are detailed in the subscription agreement.
Please contact us at info@pembrookmining.com or by telephone at +1-778-373-1541 if you are interested in participating in this opportunity. We propose to close the financing on March 15, 2019.
We believe that our successful exploration results at Pecoy and Tororume in Peru, along with our view of an improvement in the long term copper market, will enable us to realize value for our shareholders in 2019.
Yours truly,
Daniel G. Innes
President and CEO
| File: | http://www.pembrookmining.com/i/pdf/2019-06-20-Presidents-Letter.pdf |
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| File: | http://www.pembrookmining.com/i/pdf/Presidents_ Letter_February_2019.pdf |
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