Under a deal announced on Aug. 15, American Pacific Mining Corp. will gain 44.9% ownership of the Palmer zinc-copper-silver-gold-barite mine project in Southeast Alaska through the acquisition of Constantine Metal Resources Ltd.

Being advanced under a joint venture between Constantine and Dowa Metals & Mining Alaska Ltd., Palmer hosts 4.68 million metric tons of indicated resource averaging 5.23% (539 million pounds) zinc, 1.49% (154 million lb) copper, 30.8 grams per metric ton (4.6 million ounces) silver, 0.3 g/t (451,000 oz) gold, and 23.9% (1.12 million metric tons) barite; plus 9.59 million metric tons of inferred resource averaging 4.95% (1.05 billion lb) zinc, 0.59% (124 million lb) copper, 69.3 g/t (120.6 million oz) silver, 0.39 g/t (21.4 million oz) gold, and 27.7% (2.65 million metric tons) barite.

A 2019 preliminary economic assessment that was updated earlier this year outlines plans for a 3,500-metric-ton-per-day mill at Palmer that would produce 1.07 billion lb of zinc, 196 million lb of copper, 18 million oz of silver, 91,000 oz of gold, and 2.89 million metric tons of barite over an initial 11-year mine life.

American Pacific, a well-funded exploration company advancing copper, gold, and silver project in Montana and Nevada, has entered into a definitive agreement to acquire all the issued and outstanding common shares of Constantine in an all-shares transaction that represents an immediate upfront premium of 48.6% based on each company's respective 20-day volume weighted average price.

The combined company is expected to have more than C$10 million in cash, which would provide American Pacific with plenty to fund its share of joint venture mine projects in Alaska and Montana, while continuing to explore its other western United States gold, silver, and copper projects.

"This is a transformational step for American Pacific as the Palmer Project gives us an established PEA-stage asset with a tremendous amount of exploration upside," said American Pacific Mining CEO Warwick Smith. "We are very impressed with the quality of technical work completed by Constantine and Dowa to-date and look forward to collaborating with our new partners and stakeholders to expand resources and realize the full potential of this high-grade VMS system while continuing to deliver exposure to progress and new discoveries across our existing portfolio of highly prospective past-producing exploration projects."

Premier American Pacific assets, team

By combining Constantine's Palmer project with American Pacific's assets, the merged company is expected to be a premier exploration and development company with two exploration projects being aggressively advanced under strategic partnerships with well-respected major mining companies and an expanded portfolio of prospective precious and base metals assets.

American Pacific's portfolio includes Madison, a past-producing high-grade copper-gold skarn and porphyry system in Montana. Kennecott Exploration Company, part of the Rio Tinto Group, is currently investing US$30 million to earn a 70% joint venture interest in this project.

In 2021, Kennecott Exploration completed an initial US$2.7 million program, which included 3,598 meters of drilling that identified new zones of skarn-hosted massive sulfides highlighting the potential for bonanza-style gold mineralization.

"We are very pleased with the Kennecott partnership on Madison and look forward to further collaboration in 2022," said Smith.

The Broadway Mine on the Madison property produced 144,000 oz of gold from 1880 to 1950. More recently, the Madison Mine produced 7,570 oz of gold and 3 million lb of copper from 19,803 tons of bulk sample material averaging 0.52 oz/ton gold and 25% copper extracted between 2005 and 2011.

In addition to Madison, American Pacific is exploring the high-grade Gooseberry gold-silver, Tuscarora gold, and South Lida copper-gold projects in Nevada.

American Pacific also brings a strong management team to the merged company.

A team that was recently nominated for five categories in the upcoming 2022 S&P Global's Platts Global Metals Awards:

• Deal of the Year for the JV agreement with Rio Tinto at Madison.

• Rising Star Company Award.

• Industry Leadership Award: Precious Metals.

• Industry Leadership Award: Base & Specialty Metals.

• Warwick Smith was nominated for CEO or Chairperson of the Year.

A premium deal for Constantine

To acquire Constantine and its interest in the Palmer project in Alaska, American Pacific has agreed to issue Constantine shareholders 0.881 American Pacific shares for each Constantine share held.

All outstanding stock options of Constantine will be exchanged for options of American and all warrants of Constantine will become exercisable to acquire common shares of American Pacific, in amounts and at exercise prices adjusted in accordance with the agreed-upon share exchange ratio.

For Constantine shareholders, this represents a roughly 48.6% premium based on the 20-day average price of the shares of both companies.

Upon completion of the transaction, Constantine shareholders will hold approximately 31.4% of American Pacific shares on an outstanding basis.

Under the arrangement, American Pacific has also agreed to fund C$5 million for the 2022 program at Palmer, which is expected to include surface exploration drilling, ongoing baseline environmental work, and preparation for the development of the underground ramp for future exploration and definition drilling.

More information on the 2022 Palmer program can be read at Prepping for underground at Palmer VMS in the April 15, 2022 edition of North of 60 Mining News.

The proposed acquisition has been unanimously approved by the board of directors of both American Pacific and Constantine.

Constantine directors, senior officers, and shareholders Michael Gentile and John Tognetti – holding approximately 27% of the company's outstanding shares – have agreed to vote in favor of the American Pacific acquisition.

"Constantine is pleased to enter into this agreement and our board unanimously recommends the transaction to shareholders at a significant market premium," said Constantine Metal Resources CEO Garfield MacVeigh. "We believe American Pacific's focus, financing capabilities and breadth of exploration experience in the US will result in Palmer reaching its full potential."

American Pacific Mining Corp.

American Pacific Mining CEO Warwick Smith has been nominated for CEO of the Year in the upcoming 2022 S&P Global's Platts Global Metals Awards.

The special meeting of Constantine shareholders to vote on the American Pacific acquisition is slated to take place in October, and the transaction is expected to close shortly thereafter.

Author Bio

Shane Lasley, Publisher

Over his more than 16 years of covering mining and mineral exploration, Shane has become renowned for his ability to report on the sector in a way that is technically sound enough to inform industry insiders while being easy to understand by a wider audience.

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