XIB Provides Additional Details Regarding Qualifying Transaction; Lead Agent Appointed for Concurrent Financing of up to $10 Million
Vancouver, British Columbia--(Newsfile Corp. - November 27, 2020) - XIB I Capital Corp. (TSXV: XIB.P) ("XIB") ("XIB") is pleased to provide additional details regarding its previously announced Qualifying Transaction (the "Transaction") with Mayur Resources Limited ("Mayur") and Mayur's wholly-owned subsidiaries, MR Exploration PNG Pte Ltd. ("MRE") and Adyton Resources Finance Company Ltd. ("Adyton Financeco").
As previously announced, as a condition to the Transaction, Adyton Financeco is to undertake a brokered private placement financing (the "Concurrent Financing") for minimum gross proceeds of $5 million. XIB is pleased to announce that Mayur has entered into an agreement with Eight Capital (the "Lead Agent") to act as lead agent for a syndicate of agents (together with the Lead Agent, the "Agents") for the Concurrent Financing, for gross proceeds of up to $10 million.
Under the Concurrent Financing, Adyton Financeco will offer for sale on a private placement basis through the Agents on a "best efforts" agency basis up to 33,333,334 subscription receipts (the "Subscription Receipts") at a price of $0.30 each for gross proceeds of up to $10,000,000. The Agents have been granted an option (the "Agents' Option"), exercisable in whole or in part at any time up until 48 hours prior to the closing of the Concurrent Financing, to increase the size of the Concurrent Financing by up to an additional 5,000,000 Subscription Receipts for additional gross proceeds of up to $1,500,000.
The gross proceeds from the Concurrent Financing (less an amount equal to 50.0% of the Agents' Commission (as defined below) and less all of the reasonable costs and expenses of the Agents in connection with the Concurrent Financing) (the "Escrowed Proceeds") will be held in escrow until the satisfaction of certain escrow release conditions, including all conditions precedent to the Transaction (the "Escrow Release Conditions"), on or before the date which is 60 days following the closing of the Concurrent Financing (the "Escrow Release Deadline").
Each Subscription Receipt shall entitle the holder thereof to receive, upon the satisfaction or waiver (to the extent such waiver is permitted) of the Escrow Release Conditions prior to the Escrow Release Deadline, and without payment of additional consideration therefor, one common share of Adyton Financeco (each, an "Adyton Financeco Share"). Concurrent with the completion of the Transaction, each Adyton Financeco Share underlying the Subscription Receipts will be exchanged for one common share of the issuer resulting from the Transaction (the "Resulting Issuer") in accordance with the terms of the Transaction. It is expected that this share exchange will be effected through a three-cornered amalgamation among XIB, a subsidiary of XIB to be newly formed for purposes of the amalgamation and Adyton Financeco (the "Amalgamation").
In connection with the Concurrent Financing, the Agents will receive from Adyton Financeco a cash fee (the "Agents' Commission") equal to 6.0% of the gross proceeds of the Concurrent Financing, including any gross proceeds raised in connection with the exercise of the Agents' Option (other than in respect of proceeds from sales to persons on a "President's List" of Adyton Financeco, in respect of which no fee will be payable). Fifty percent (50%) of the Agents' Commission shall be paid to the Agents at closing and the balance of the Agents' Commission shall be paid out of the Escrowed Proceeds and released to the Agents upon satisfaction of the Escrow Release Conditions on or before the Escrow Release Deadline. The Lead Agent will also receive from Adyton Financeco a corporate finance fee in an amount of either $200,000 or $300,000 depending on the amount purchased under the Concurrent Financing by purchasers on the "President's List" of Adyton Financeco and the gross proceeds from the Concurrent Financing.
As additional consideration, the Agents will receive compensation warrants (the "Agents' Warrants") equal to 6.0% of the number of Subscription Receipts sold in the Concurrent Financing, including any Subscription Receipts issued in connection with the exercise of the Agents' Option (other than in respect of Subscription Receipts sold to persons on the "President's List", in respect of which no Agents' Warrants shall be issuable). Each Agents' Warrant will be exercisable to acquire one Adyton Financeco Share at an exercise price of $0.30 for a period of 24 months from the satisfaction of the Escrow Release Conditions. In accordance with the terms of the Transaction and the Amalgamation, each of the Agents' Warrants will become exercisable for one common share of the Resulting Issuer on the same economic terms.
Upon completion of the Transaction and the release of the Escrowed Proceeds, the net proceeds of the Financing are expected to be used for the exploration and advancement of the gold and copper exploration projects of the Resulting Issuer and for working capital and general corporate purposes of the Resulting Issuer.
The Financing is anticipated to close on or about December 10, 2020, or such other date as the Lead Agent and Adyton Financeo may agree.
All references to dollar amounts in this press release are to Canadian dollars unless otherwise indicated.
Information About the Target Companies Properties
As previously announced, under the Transaction, XIB will acquire all of the issued and outstanding securities of MRE. Prior to this acquisition, MRE will acquire all of the issued and outstanding securities of Ballygowan Limited ("Ballygowan") and Pacific Arc Aurum (Niugini) Limited ("Pacific Arc"). MRE, through its wholly-owned subsidiary Mayur Exploration PNG Limited ("MRE Subco"), Ballygowan and Pacific Arc all hold exploration licences over certain gold and copper properties located in Papua New Guinea ("PNG").
XIB is pleased to provide additional details regarding the MRE, Ballygowan and Pacific Arc properties. These properties consist of the following:
- In the case of MRE, all rights and interests of MRE in the tenements (exploration licences) held by MRE, being the Feni Project (PNG Exploration Licence 2096) and Konos Project (PNG Exploration Licence 2591) in New Ireland Province, the Basilaki and Sideia Project (PNG Exploration Licence 2095) in Milne Bay Province and the Rambutyo Project ( PNG Exploration Licence 2594) in Manus Province.
- In the case of Ballygowan, all rights and interests of Ballygowan in the tenements (exploration licences) held by Ballygowan, being the Gameta Project (PNG Exploration Licence EL2546) and the Oredi Creek Project (PNG Exploration Licence EL2572) on Fergusson Island, Milne Bay Province, and the Sikut Project (PNG Exploration Licence EL2408) in East New Britain, PNG.
- In the case of Pacific Arc, all rights and interests of Pacific Arc in the tenement (exploration licence) held by Pacific Arc, being the Wapolu Project (PNG Exploration Licence EL2549) on Fergusson Island, Milne Bay Province, PNG.
The properties which the Resulting Issuer will consider to be material to the Resulting Issuer, are MRE's Feni Project, Ballygowan's Gameta Project and Pacific Arc's Wapolu Project. Ballygowan's Gameta Project and Pacific Arc's Wapolu Project are collectively referred to as the "Fergusson Island Project".
The Feni Project
The Feni Project is located in the Feni Island Group, which is part of the New Ireland Province of PNG, located approximately 900 km northeast of the capital of Port Moresby. Tenure covers an area of 192 km2 and is held through an exploration licence (PNG Exploration Licence 2096) by MRE Subco.
The current term of the exploration licence has expired and renewal is pending. An application for renewal has been filed, and the exploration licence continues in force pending the Minister for Mining's decision on the renewal. Provided the holder has met ongoing work and reporting obligations, tenements for which renewal applications have been made are normally renewed within 6-12 months of the expiry date. While a decision to refuse renewal could in some circumstances occur (for example, where work and reporting requirements are outstanding), this would be subject to judicial review in the PNG Courts if there was no rational basis for the refusal to renew.
The Feni Island Group lies at the southeast end of the 250 km long Tabar-Lihir-Tanga-Feni alkalic volcanic island chain, which is largely Pliocene-Pleistocene in age. The chain lies 40 - 60 km off the east coast of New Ireland, PNG.
The Feni Project is located on Ambitle Island, the larger of the two islands comprising the Feni Island Group. It is dominated by Ambitle volcano, which is a collapsed stratovolcano (2 - 8 million years old) built on a basement of early Tertiary sediments. The crater rim is interpreted as a collapse‐structure, of gravity-induced failure of the southwest flanks of the Ambitle crater, as opposed to a large caldera structure. It is composed of alkalic mafic to intermediate volcanics and high-level alkalic intrusives, such as monzonites and syenites. The cone of Ambitle volcano is comprised mainly of vesicular lavas, pyroclastic and epiclastic rocks. The lavas are intermediate in composition and strongly undersaturated, including phonolites, alkali basalts, basanite, trachybasalt and trachyandesite.
The main style of mineralisation on Ambitle Island is low-sulphidation epithermal gold mineralization associated with quartz veining and sulphide mineralisation (e.g. pyrite, chalcopyrite, arsenopyrite). The gold mineralisation is associated with the Matangakaka Intrusive Complex, which lies at the southern margin of the Ambitle volcanic crater. There is also copper porphyry potential below the shallower epithermal gold mineralization.
The first report of modern exploration over the Feni Islands Group was in the mid-1960s, but serious exploration commenced in the 1980s and has continued intermittently to the present. Drilling has been carried out at the Feni Project over a 22-year period from 1985 to 2007 by several previous tenement owners. Data from a total of 212 historical drillholes have been captured by Mayur, which amounts to a total of 18,893.3 m of drilling. This includes a mix of shallow aircore, reverse circulation ("RC") and diamond drilling (largely HQ core size). There has been no development or mining/processing operations to date over the Feni Project. Detailed exploration began with work completed by Esso PNG Inc. in the early 1980s. This included RC drilling, diamond drilling and aircore drilling over a range of prospects, including the discovery of the Kabang Prospect at the Feni Project. More drilling, mainly RC and diamond, was completed by Ingold Holdings Pty Ltd. and City Resources (PNG) Pty Ltd. in the late 1980s and early 1990s. Further drilling was completed by Mac Mining NL in the late 1990s and with joint venture partners New Guinea Gold NL and Pacific Vangold Mines Ltd.
Mayur, through MRE and MRE Subco, acquired the Feni Project in 2014 and completed follow-up site reconnaissance, mapping and a sediment and stream sampling program to refine proposed drill targets. This program confirmed significant anomalous stream sediment samples. Mayur engaged H&S Consultants Pty Ltd. to prepare a new mineral resource estimate for the Kabang Prospect in 2015.
In connection with the Transaction, Mayur has engaged Derisk Geomining Consultants Pty Ltd. ("Derisk") to prepare a technical report prepared in accordance with National Instrument 43-101 for the Feni Project (the "Feni Technical Report"). The Feni Technical Report will be prepared by Mark Berry (MAIG), Simon Tear (MIGI PGeo), Matthew White (MAIG) and Ian Ryan Roy (MAIG) of Derisk (the "Qualified Persons"). The Qualified Persons have reviewed and reassessed the data inputs, estimation parameters and reporting criterion for Kabang and re-reported the mineral resource for the Feni Project using the 2014 CIM Definition Standards and an effective date of September 15, 2020.
The Qualified Persons consider that the Feni Project is prospective for the discovery of new gold and copper-gold mineralisation because there are many targets and anomalies that have been defined by previous tenement holders that have not been adequately followed up. In addition, the Qualified Persons consider that there are opportunities to extend the mineral resource estimate at Kabang because it is open in all directions, and there are opportunities to define zones of higher-grade mineralisation within the broader lower-grade envelope.
The Fergusson Island Project
The Fergusson Island Project, which is comprised of Ballygowan's Gameta Project and Pacific Arc's Wapolu Project, is located in the D'Entrecasteaux Island Group, which is part of the Milne Bay Province of PNG, located approximately 900 km northeast of the capital of Port Moresby. Tenure covers an area of 148 km2 and is held by through two exploration licences (PNG Exploration Licence 2546 for the Gameta Project and PNG Exploration Licence 2549 for the Wapolu Project) by Ballygowan and Pacific Arc.
The current terms of the exploration licences have expired and renewals are pending. Applications for renewal have been filed, and the exploration licences continue in force pending the Minister for Mining's decisions on the renewals. Provided the holder has met ongoing work and reporting obligations, tenements for which renewal applications have been made are normally renewed within 6-12 months of the expiry date. While a decision to refuse renewal could in some circumstances occur (for example, where work and reporting requirements are outstanding), this would be subject to judicial review in the PNG Courts if there was no rational basis for the refusal to renew.
Fergusson Island is one of the D'Entrecasteaux Islands, which are in the western end of the Woodlark extension (Woodlark Basin). The geological setting is dominated by Miocene-Recent crustal thinning created by extension (stretching) of the crust. The D'Entrecasteaux Islands are the continuation of the Owen Stanley Metamorphic Belt and comprise several metamorphic core complexes that form prominent tectonic domes of probable Cretaceous age. The domes consist of a core of high-grade crystalline rocks surrounded by a layered outer zone composed of amphibolite facies gneisses. This layered zone is separated from over-thrusted sub-seafloor oceanic mantle by a decollement (Detachment Fault Zone or "DFZ"), overlaying ultramafic rocks of the obducted block. Thick colluvial deposits of landslide and slump debris drape the margins of the domes and are prominent at Wapolu.
Gold mineralisation is hosted in the DFZ and within the footwall dioritic gneiss and appears to be both fracture- and dyke-related, plus sulphide-hosted. The overlying ultramafic plate, though strongly dyked, altered, and fractured, carries only patchy and sporadic low-grade gold mineralisation. The mineralisation model for Gameta and Wapolu suggests that gold is associated with hydrothermal fluids and is concentrated in shallow-dipping deposits within or immediately adjacent to the DFZ, which bounds he metamorphic core complexes. This general setting is analogous to such deposits as Misima in PNG and Mesquite and Picacho in California. The gold occurs in association with fine sulphides as disseminations and in epithermal quartz veins in lensoid zones parallel to the DFZ.
Exploration over the Fergusson Island Project began with work completed by Esso PNG Inc. in the 1980s, comprising stream, soil and rock chip sampling, trenching, mapping, and ground geophysics prior to drilling. Wapolu was discovered during this program, plus other prospects. A joint venture between Union Mining NL and Mac Mining NL in the early-mid 1990s explored the Fergusson Island Project comprising geochemistry, mapping, ground geophysics and drilling. Gameta was discovered during this program. Further exploration and technical studies led to a limited mining and processing operation at Wapolu, but operations were stopped due to poor performance. A subsequent joint venture between Union and Yamana Resources Inc. in the late-1990s completed further exploration, mostly at Gameta. From 2003 through to 2017, the Fergusson Island Project was held by a series of related companies - Gold Aura Limited, then Gold Anomaly Limited, and then Crater Gold Mining Limited. Work included a limited drilling program and further technical studies.
Ballygowan was granted tenure over Gameta in 2018 and completed geochemical sampling and geological mapping in its initial exploration program in 2019. Pacific Arc was granted tenure over Wapolu in 2018 and completed a desktop review and a geochemical sampling program in 2019.
In connection with the Transaction, Mayur has engaged Derisk to prepare a technical report prepared in accordance with National Instrument 43-101 for the Fergusson Island Project (the "Fergusson Island Technical Report"). The Fergusson Island Technical Report will be prepared by the Qualified Persons. The Qualified Persons have reviewed and reassessed the data inputs, estimation parameters and reporting criterion for Gameta and Wapolu, and re-reported the mineral resource for the Fergusson Island Project using the 2014 CIM Definition Standards at an effective date of September 15, 2020.
The Qualified Persons consider that the Fergusson Island Project is prospective for the discovery of new gold mineralisation because there are many targets and anomalies that have been defined by previous tenement holders that have not been adequately followed up. In addition, the Qualified Persons consider that there are opportunities to extend the mineral resource estimates at Gameta and Wapolu because they are open in many directions, and there are opportunities to define zones of higher-grade mineralisation within the broader lower-grade envelope.
Mark Berry (MAIG) of Derisk, an independent Qualified Person under National Instrument 43-101, has reviewed and approved the technical information contained in this news release.
Selected Financial Information
The following tables set forth selected historical annual financial information for each of MRE, Ballygowan and Pacific Arc for the periods indicated.
12 months ended June 30, 2020 (audited)
12 months ended June 30, 2019 (audited)
|Income from continuing operations||-||-|
|Net income or loss, in total||AUD$(179,480)||AUD$(282,915)|
|Total long term financial liabilities||-||-|
|Cash dividends declared||-||-|
Note: AUD$1.00 = approximately CDN$0.96 as of the date of this press release.
12 months ended Dec. 31, 2019 (audited)
12 months ended Dec. 31, 2018 (audited)
|Income from continuing operations||-||-|
|Net income or loss, in total||PGK$(218,915)||PGK$(21,016)|
|Total long term financial liabilities||PGK$1,157,083||PGK$694,419|
|Cash dividends declared||-||-|
Notes: PGK$1.00 = approximately CDN$0.37 as of the date of this press release. Total long term financial liabilities represent shareholder loans which will be assigned to MRE as part of the transaction.
12 months ended Dec. 31,2019 (audited)
12 months ended Dec. 31, 2018 (audited)
|Income from continuing operations||-||-|
|Net income or loss, in total||PGK$(9,280)||PGK$13,173|
|Total long term financial liabilities||PGK$455,762||PGK$200,310|
|Cash dividends declared||-||-|
Note: PGK$1.00 = approximately CDN$0.37 as of the date of this press release. Total long term financial liabilities represent shareholder loans which will be assigned to MRE as part of the transaction.
Additional information concerning the Transaction, MRE, Ballygowan and Pacific Arc and the Resulting Issuer is provided in XIB's press releases dated September 14, 2020 and November 12, 2020 and will be provided in XIB's Filing Statement to be filed in connection with the Transaction, which will be available under XIB's profile on SEDAR at www.sedar.com.
This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.
Completion of the Transaction is subject to a number of conditions, including but not limited to, TSX Venture Exchange ("TSXV") acceptance and, if applicable pursuant to TSXV requirements, majority of the minority shareholder approval. Where applicable, the Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Transaction will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the Transaction, any information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.
The TSXV has in no way passed upon the merits of the proposed Transaction and has neither approved nor disapproved the contents of this press release. Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.
For further information please contact Ted Browne, CEO of XIB, by email at email@example.com or by telephone at 647-943-0736.
Notice on Forward-Looking Information
Information set forth in this news release contains forward-looking statements within the meaning of applicable Canadian securities laws. Often, these forward-looking statements can be identified by the use of words such as "plans", "expects", "is expected", "budget", "continue", "projected", "scheduled", "estimates", "forecasts", "intends", "anticipates", or "believes" or the negatives thereof or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. These statements reflect management's current estimates, beliefs, intentions and expectations regarding the future, including, but not limited to, the completion of the Transaction and all related transactions, including the Amalgamation, the acquisition of Ballygowan and Pacific Arc and the Concurrent Financing, and the satisfaction of the conditions required for the completion of these transactions, including the satisfaction of the Escrow Release Conditions on or before the Escrow Release Deadline. Such statements are not guarantees of future performance. They are subject to assumptions, known and unknown risks and uncertainties and other factors that may cause actual results, performance or developments to differ materially from those contained in the statements, including risks related to factors beyond the control of XIB. Such factors include, among other things: the Concurrent Financing may not be completed on the terms contemplated or at all; the TSXV may not approve the Transaction; and other risks that are customary to transactions of this nature. No assurance can be given that any of the events anticipated by the forward-looking statements will occur or, if they do occur, what benefits XIB will obtain from them. Furthermore, should one or more of the risks, uncertainties or other factors materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in forward-looking statements. Except as required under applicable securities legislation, XIB undertakes no obligation to publicly update or revise forward-looking information.
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