Vancouver, B.C. – December 5, 2018 — ValOro Resources Inc. (TSX-V: VRO) provides the following additional disclosure regarding its information circular dated November 22, 2018. The circular was issued in connection with ValOro’s special general meeting of securityholders being held on December 19, 2018 to consider and, if appropriate, approve by a special resolution the friendly merger of ValOro and Defiance Silver Corp. (TSX-V: DEF). 

Merger is a Business Combination under MI 61-101

The proposed merger of ValOro and Defiance is a “business combination” under Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions (“MI 61-101”). As a result, certain valuation and minority approval requirements apply to the merger. 

Exemption from Formal Valuation 

MI 61-101 requires that business combinations shall be the subject of a formal valuation and that the valuation be disclosed to the affected shareholders. MI 61-101 provides an exemption from the valuation requirement which applies to ValOro, namely that it is listed on the TSX Venture Exchange and no other stock exchange. 

Prior Valuations

Pursuant to MI 61-101, any valuations of ValOro made within the preceding 24 months must be disclosed to the affected shareholders. ValOro has not had, nor is it aware of, any such valuations made within the preceding 24 months. 

Prior Offers 

Prior to accepting the offer to merge with Defiance, ValOro received two offers from other companies in the preceding 24 months. 

The first was from a Toronto Stock Exchange listed silver mining company with operations in Mexico which, on June 7, 2018, offered to buy ValOro by way of a triangular merger valuing ValOro at $7 million. The offer was subsequently withdrawn by the offeror without being accepted by ValOro. 

The second was from a Toronto Stock Exchange listed mineral exploration company with various gold properties in North and South America which, on August 16, 2018, offered to buy ValOro’s Tepal Project for $2.76 million payable in three equal cash payments to ValOro over one year. ValOro’s board rejected the offer as, among other things, it did not provide any upside to ValOro’s shareholders when compared to a share exchange.

Review and Approval Process by ValOro’s Board

In connection with settling the general terms of the merger with Defiance, ValOro’s management carried out due diligence examinations of Defiance and its San Acacio Silver Project in Mexico and had several discussions and negotiations with Defiance concerning the exchange ratio as to the number of Defiance shares that would be offered for each ValOro share. Following the terms of the merger being settled by ValOro’s and Defiance’s respective CEOs and the due diligence being completed, ValOro’s board held a conference call during which the merger and the results of the due diligence were discussed. At the end of that call, the board determined to proceed with the Transaction and a Letter of Intent respecting the merger with Defiance was signed. 

In connection with the Board’s formal approval of the merger, ValOro’s CEO, Dunham Craig, abstained from voting due to his interest in the merger, namely, that the payment of the balance of his retirement allowance from ValOro originally agreed to in 2016 will be satisfied by the issuance of shares of Defiance. 

The merger was then announced and the parties’ respective legal counsel negotiated and settled the formal agreement.

Minority Shareholder Approval Required

MI 61-101 requires that business combinations be approved by a majority of shareholders other than the “interested shareholders”. For the purposes of this transaction, the interested shareholders of ValOro are Dunham Craig and Evelyn Abbott, both of whom will receive shares of Defiance in satisfaction of their respective retirement and severance obligations payable by ValOro. 

Dunham Craig owns 383,629 ValOro shares (1.78% of the possible votes) and Evelyn Abbott owns 8,000 ValOro shares (0.04% of the possible votes). Pursuant to MI 61-101, such ValOro shares will be excluded for purposes of determining whether the requisite shareholder approval has been obtained in accordance with MI 61-101.

About ValOro Resources Inc.

ValOro Resources Inc. (VRO | TSX Venture Exchange) is a mineral exploration and development company focused on acquiring, exploring, and developing mineral resource opportunities with the potential to host profitable mining operations. The Company’s primary focus is the 100% owned Tepal Gold/Copper Project in Michoacán state, Mexico.

For Further Information Please Contact:
Dunham Craig 
President and Chief Executive Officer
Tel: 604-694-1742
Email: [email protected]
Website: www.valoro.ca

Neither the TSX Venture Exchange nor the Investment Industry Regulatory Organization of Canada
accepts responsibility for the adequacy or accuracy of this release.