NOTICE OF ROLLOVER – Marquest Mining 2021-II Super Flow-Through Limited Partnership October 7, 2022
TORONTO, October 7, 2022 – Marquest Mining 2021-II Super Flow-Through Limited Partnership (MAV2111- Class A and MAV2112-Class F) (the Partnership) will be proceeding with a transaction (the Liquidity Transaction) pursuant to which the assets of the Partnership (the Assets) will be transferred on a tax-deferred basis to Marquest Mutual Funds Inc., an open-end mutual fund corporation (MMFI), in exchange for Explorer Series Fund shares (Series A/Rollover -MAV7001 and Series F -MAV7011) (Explorer Series), a class of shares of MMFI. Explorer Series is a publicly offered mutual fund, as are the other share classes of MMFI. MMFI is managed by Marquest Asset Management Inc. (Marquest), which is also the portfolio adviser to the Partnership. Information about Explorer Series and MMFI, such as the simplified prospectus, Fund Facts, annual information form and financial statements, is available at the Marquest website (www.marquest.ca) and at www.sedar.com.
The effective date of the Liquidity Transaction (the Effective Date) is expected to be on or about October 14, 2022. As soon as reasonably possible following the Effective Date, the Series A/Rollover-MAV7001 and Series F -MAV7011 shares of Explorer Series that the Partnership will receive as consideration for the transfer of its assets will be distributed to the Limited Partners of the Partnership on a pro rata basis and thereafter the Partnership will be dissolved. There will be no fees or costs charged to Limited Partners as a result of the Liquidity Transaction. No costs associated with the Liquidity Transaction will be charged to MMFI. The Liquidity Transaction is being conducted in compliance with applicable securities regulations that govern such transactions and in accordance with the Limited Partnership Agreement governing the Partnership, as described in the Offering Memorandum of the Partnership dated August 30, 2021. The liquidity Transaction has been approved by the General Partner of the Partnership and the Board of Directors of MMFI.
The Liquidity Transaction has also been approved by the Independent Review Committee of the Partnership and MMFI as a transaction that achieves a fair and reasonable result for each of the Partnership and Explorer Series. Following the Liquidity Transaction, Limited Partners will become shareholders in Explorer Series and the Partnership will be dissolved.
How the Rollover Will Work
Limited Partners will receive, on a pro rata basis, Series A/Rollover and Series F shares of Explorer Series with a value equal to the value of the Limited Partnership Units of the Partnership (the Units) held at the Effective Date. The number of Series A/Rollover or Series F shares of Explorer Series that Limited Partners will receive will be equal to the number of Units they hold multiplied by the conversion ratio. The conversion ratio will be equivalent to the Net Asset Value of Units of the Partnership (less any performance bonus paid or payable to Marquest) divided by the Net Asset Value of the Series A/Rollover and Series F shares of Explorer Series determined at the close of business on the Effective Date. The ACB (adjusted cost base) for each Unit of the Partnership and each Series A/Rollover or Series F share of Explorer Series will be determined by the General Partner upon the wind-up of the Partnership. Once the Liquidity Transaction is completed, Limited Partners may indefinitely defer the capital gains tax liability that occurs at disposition of the investment by continuing to hold the Series A/Rollover or Series F shares of Explorer Series. Alternatively, Limited Partners can initiate a taxable switch to another mutual fund class within the multi-class structure of MMFI.
Following the Liquidity Transaction, Marquest will provide additional information, as it becomes available, on the rollover net asset value, exchange ratio, and adjusted cost base (ACB) of the Units.
Completion of the Liquidity Transaction is subject to typical closing conditions. Investors should consult with their investment advisor and/or tax advisor for all tax-related matters. Your account with your dealer will be credited with the Series A/Rollover or Series F shares of Explorer Series that will be issued to you after the Effective Date. This may take some days to complete; transactions such as switches or redemptions may not be processed until the Series A/Rollover or Series F shares of Explorer Series have been credited to your account with your dealer. None of the Partnership, Explorer Series, or MMFI will accept any liability for transactions in your Series A/Rollover or Series F shares of Explorer Series executed prior to your records with your dealer being updated.
Information about MMFI, including information about Explorer Series, is available in the fund’s Fund Facts documents, simplified prospectus, annual information form, management reports of fund performance and financial statements. You can obtain a copy of these documents at your request and at no cost by contacting Marquest Client Services, by download from www.marquest.ca or www.sedar.com or from your financial advisor.
Explorer Series was initially established to enable flow-through limited partnerships formed or acquired by Marquest to complete tax-deferred rollover transactions. The fundamental investment objective of the Explorer Series is to seek long-term capital growth by investing in a diversified portfolio of primarily equity securities of attractive Canadian mineral exploration and mining companies. The Series A/Rollover management fee is 2.0%, plus operating expenses, and the Series F management fee is 1.0%, plus operating expenses. Your dealer will receive a trailing commission from the Manager equal to 0.50% of the value (annually) of the Series A/Rollover Shares and no trailing commission for the Series F Shares of Explorer Series you receive as a result of the Liquidity Transaction for so long as you hold those shares.
Special Information for Unitholders requesting redemption cheques during COVID-19 measures
As we remain committed to supporting unitholders of the Partnership, please note that at this time we will only be processing unit redemptions by Electronic File Transfer (EFT) in order to ensure that there are no delays.
We encourage Dealers to settle via Fundserv / Electronic File Transfer (EFT), as cheques will not be issued for redemptions. Please include a void cheque if the redemption is not settling through Fundserv.
For further information or assistance, please contact Marquest Asset Management Inc. Client Services at 1.888.964.3533 or 416.365.4077, or firstname.lastname@example.org or speak to your financial advisor.