Spirit Banner Capital Corp. (“
Spirit
Banner” or the “
Corporation”) (TSX-V:
SBCC.P) is pleased to announce that it has entered into a
definitive agreement (the “
Definitive Agreement”)
with Ion Energy Ltd. (“
Ion Energy”) to complete a
business combination (“
Business Combination”) as
previously announced on March 4, 2019. Pursuant to the Definitive
Agreement, Spirit Banner will acquire all of the outstanding and
issued Ion Energy common shares (“
Ion Energy
Shares”).
The Definitive Agreement stipulates that a
wholly owned subsidiary of Spirit Banner, incorporated in the
province of Ontario by Spirit Banner, will amalgamate with Ion
Energy to form a corporation to continue under the name, Ion Energy
Holdings Inc. Immediately following completion of the Business
Combination, Ion Energy Holdings Inc. will be a wholly owned
subsidiary of Spirit Banner and will hold all of Ion Energy’s
assets and conduct the business of Ion Energy, which is classified
as being part of the mining sector. Upon the completion of the
Business Combination, Spirit Banner will change its name to “Ion
Energy Ltd.” (the “Resulting Issuer”).
Pursuant to the Definitive Agreement, Spirit
Banner and Ion Energy have agreed that the Business Combination is
conditional upon certain conditions precedent, including, but not
limited to, the consolidation of the Spirit Banner common shares
(“Spirit Banner Shares”) prior to completion of
the Business Combination on the basis of one post-consolidation
Spirit Banner Share for each two pre-consolidation Spirit Banner
Shares (the “Spirit Banner Consolidation”), as
well as the consolidation of the Ion Energy Shares prior to
completion of the Business Combination on the basis of one
post-consolidation Ion Energy Share for each two pre-consolidation
Ion Energy Shares (the “Ion Energy
Consolidation”).
The Business Combination will result in Spirit
Banner acquiring all of the issued and outstanding Ion Energy
Shares in consideration for the issuance of common shares of the
Resulting Issuer (“Resulting Issuer Shares”) to
holders of Ion Energy Shares on a one-to-one basis. The deemed
issue price per Resulting Issuer Share to be issued to the Ion
Energy shareholders in consideration for the Ion Energy Shares
pursuant to the Definitive Agreement is $0.20 per Resulting Issuer
Share.
Ion Energy Ltd.
Ion Energy is a private company incorporated
under the Business Corporations Act (Ontario) on August 3, 2017,
and has been engaged in the business of seeking and identifying
lithium assets in Asia since incorporation.
Ion Energy LLC, a company incorporated in
Mongolia and a wholly owned subsidiary of Ion Energy, is the owner
of a lithium exploration license (the “License”)
to explore an area approximately 81,758 hectares in size containing
lithium brine targets (the “Baavhai-Uul Project”
or the “Property”). Limited work by the Mongolian
University of Science and Technology has indicated lithium content
in brines of up to 810ppm Li for brine and lake sediment samples on
the Baavhai-Uul Project.
As at August 20, 2019, Ion Energy had
104,484,820 shares outstanding and C$317,300 in cash and cash
equivalents.
Spirit Banner Capital Corp.
Spirit Banner was incorporated under
the Business Corporations Act (Alberta) on June 5, 2017
and is a Capital Pool Company (as defined in the policies of the
TSX Venture Exchange) listed on the TSX Venture Exchange. Spirit
Banner has no commercial operations and no assets other than
cash.
The principal business of Spirit Banner is to
identify and evaluate businesses and assets with a view to
completing a Qualifying Transaction, and, once identified and
evaluated, to negotiate an acquisition or participation in such
assets or businesses. Until the completion of the Business
Combination, Spirit Banner will not carry on business other than
the identification and evaluation of assets or businesses in
connection with a potential Qualifying Transaction. The Business
Combination is intended to be Spirit Banner’s Qualifying
Transaction.
Ion Energy Financing
In order to obtain working capital for the
Business Combination, it is anticipated Ion Energy will conduct a
non-brokered offering of post-consolidation units
(“Units”) offered at $0.30 per Unit for minimum
gross proceeds of $1,000,000 (the “Financing”).
Each Unit will be comprised of one post-consolidation Ion Energy
Share (“Ion Energy Private Placement Shares”) and
one warrant to purchase one post-consolidation Ion Energy Share
(“Ion Energy Private Placement Warrants”) at an
exercise price of $0.50 for a period of twenty-four months from the
date of issuance. The Ion Energy Private Placement Shares and Ion
Energy Private Placement Warrants will be exchanged for equivalent
Resulting Issuer securities on a one-to-one basis.
As of July 31, 2019, there are 19,030,780 Spirit
Banner Shares issued and outstanding and 104,484,820 Ion Energy
Shares issued and outstanding. After completion of the Spirit
Banner Consolidation and Ion Energy Consolidation, there will be
9,515,390 Spirit Banner Shares and 52,242,410 Ion Energy Shares
outstanding immediately prior to the Business Combination. As a
result of the Business Combination, the Resulting Issuer expects to
have approximately 61,757,800 Resulting Issuer Shares issued and
outstanding on an undiluted basis, not accounting for Resulting
Issuer securities to be issued to Ion Energy shareholders pursuant
to the Financing. Without accounting for the issuance of Units
pursuant to the Financing, former shareholders of Spirit Banner
will hold 15.4% of the Resulting Issuer Shares and former
shareholders of Ion Energy will hold 84.6% of the Resulting Issuer
Shares, on an undiluted basis.
For further information regarding the Business
Combination, please refer to the press release of Spirit Banner
dated March 4, 2019, which can be found on the Corporation’s SEDAR
profile at www.sedar.com. The Business Combination and terms of the
Financing remain subject to TSXV approval. Spirit Banner will
provide further details and updates in respect of the Business
Combination and Financing in due course by way of press
release.
Baavhai-Uul Project (81,758.9
ha)
The Baavhai-Uul Project is located in Sukhbaatar
province, southeastern Mongolia, approximately 800 km southeast
from the capital, Ulaanbaatar, 200 km south from the province
centre, Baruun-Urt and 24 km north of the border with China. The
Property belongs to Ongon and Naran sub-provinces administratively,
nearly 30-40 km from its centres and covers an area of
approximately 81,758 hectares in size (Figure 1).
Almost all province centres have been connected
by paved roads to the capital city Ulaanbaatar. Thus, paved roads
(approximately 800 km - 8 hours) are accessible during all seasons
between the capital and Baruun-Urt, Sukhbaatar province centre.
From Baruun-Urt, Sukhbaatar province centre, gravel roads are
utilized to reach the Property (about 200 km - 4 hours), through
Ongon sub-province centre.
A photo accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/3bb8ba9b-8a40-4e7e-82b2-c7a3593e4ac3
There are a number of communities in the region.
The largest town is Baruun-Urt, which is the centre of the
Sukhbaatar province and located 200 km north of the Baavhai-Uul
Project. The closest towns to the property are Ongon and Naran
sub-province centres located about 30 km to north and 40 km to
south, respectively. These local towns could potentially supply the
most basic needs for the early stages of exploration and project
development including food, labour, and other supplies. However,
the majority of mining-related equipment and services for more
advanced projects should be obtained from Ulaanbaatar.
The Baavhai-Uul Project is situated in the
Dariganga platform, at an elevation of approximately 1,100-1,200
meters above sea level. Dry, wide valleys, a series of hills,
volcanic craters with flat-like tops, small lakes, and sand dunes
are widespread throughout the region. The highest mountain is
Jargalant, approximately 1,238m above sea level. Generally, the
region lacks running water sources at surface; however numerous
small lakes are distributed on the property mostly in quaternary
sediments and contain shallow water during the rainy season or
immediately after rainfall. The lakes are mostly saline and
suitable for industrial uses such as drilling.
Recent sampling work done by geoscientists from
the Technical University of Mongolia in dry lake areas of the
Baavhai-Uul Project indicated an average of 463ppm Li. The sampling
consisted of 2 pits drilled by hand auger in the lake bottom and
collected in 20 cm intervals. The team collected 11 samples from
the two dry lakes located spatially in the property as shown in
Figure 2. The lithium samples were sent to and assayed by the
independent certified assay lab Khanlab LLC located in Ulaanbaatar,
Mongolia. Khanlab LLC is a certified assay lab pursuant to the ILAC
Mutual Recognition Arrangement (IILAC MRA).
Photos accompanying this announcement are available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/67d5808d-8377-4262-8ada-f7792bfa9391
https://www.globenewswire.com/NewsRoom/AttachmentNg/10c60ad3-a8cd-4a11-b367-12dc9477b779
Sample coordinates, descriptions, and analytical
results are listed in Table 1. Significant anomalous lithium grades
ranging from 211 ppm to 810 ppm were returned from both locations
and might be indicating the presence of continental lithium
brine.
Table 1. Assay results for clay samples
taken from the Property.
Sample location |
Coordinate UTM-49N |
Sample ID |
Interval, m |
Assay results |
Easting |
Northing |
from |
to |
Na, % |
K, % |
Ca, % |
Mg,% |
Li, ppm |
Li-8 |
682171 |
4986982 |
Li-8-1 |
0.0 |
0.2 |
1.95 |
2.87 |
0.96 |
0.47 |
211 |
Li-8-2 |
0.2 |
0.4 |
2.25 |
2.43 |
2.95 |
2.12 |
605 |
Li-8-3 |
0.4 |
0.6 |
2.28 |
2.42 |
2.93 |
2.13 |
601 |
Li-8-4 |
0.6 |
0.8 |
1.09 |
2.52 |
4.68 |
1.97 |
810 |
Li-8-5 |
0.8 |
1.0 |
1.85 |
2.09 |
3.59 |
1.76 |
618 |
Li-11 |
642374 |
5001157 |
Li-11 |
|
|
1.21 |
3.13 |
0.73 |
1.26 |
433 |
Li-11-1 |
0.0 |
0.2 |
1.04 |
3.01 |
1.30 |
1.14 |
380 |
Li-11-2 |
0.2 |
0.4 |
1.10 |
2.85 |
1.28 |
0.98 |
341 |
Li-11-3 |
0.4 |
0.6 |
0.82 |
2.93 |
0.81 |
0.90 |
352 |
Li-11-4 |
0.6 |
0.8 |
0.73 |
3.13 |
0.34 |
0.87 |
422 |
Li-11-5 |
0.8 |
1.0 |
1.30 |
2.75 |
0.40 |
0.84 |
311 |
A two-stage exploration program is being
designed to evaluate the Baavhai-Uul Project. Phase 1 of the
proposed exploration program will consist of surface and near
surface geochemical sampling of sediments and brines using auger
drill holes, initial geophysical surveys of the basins, drilling to
establish basin stratigraphy and conducting water and lake sediment
analytical works. Regional hydrogeologic water sampling is planned
for at least 50% of the Property. Rock chip sampling of bedrock
intrusion dykes is also planned for Phase 1 to aid in the
determination of source of lithium mineralization on the Property.
Phase 2 is dependent on positive results from the Phase 1 brine and
sediment sampling and characterization of the basin geometry. Phase
2 of the proposed exploration program consists of deeper drilling
for a more extensive characterization of the basin geometry and
brine and lake sediments chemistry at depth, along with pumping
tests in wide diameter holes in order to investigate various
hydrological features.
All technical information in this press release
has been reviewed and approved by Khurelbaatar Lamzav, P.Geo., an
independent consultant to the Corporation and Ion Energy and a
“Qualified Person” under National Instrument 43-101.
Directors and Management of the
Resulting Issuer
Subject to applicable approvals, it is
anticipated that the directors of the Resulting Issuer will be
Mathew Wood, Ali Haji, Aneel Waraich, Bataa Tumur-Ochir and
Enkhtuvshin Khishigsuren. Management of the resulting issuer will
include Ali Haji as Chief Executive Officer and a Chief Financial
Officer to be determined at a later date. Biographies for the
officers and directors of the Resulting Issuer are described
below.
Ali Haji – Chief Executive
Officer and Director
Mr. Haji has extensive knowledge of the
financial services sector after having spent over 11 years in the
asset management industry performing strategic and process
improvement roles. He started his career as a technology analyst at
Invesco Ltd. in 2006 and advanced into various roles including
technology risk, controls, program management, and process
improvement with international assignments involving mergers and
acquisitions in Hong Kong, U.S.A and Australia. Most recently, he
was also a principal contributor to the creation of a Center of
Excellence in London, England for Invesco Ltd.
Mr. Haji currently serves as an advisor to ATMA
Capital Markets Ltd. and ATMACORP Ltd., a merchant bank providing
advisory services to public companies such as Steppe Gold Ltd. and
Five Star Diamonds Ltd., in addition to multiple private companies
in the mining space.
Mr. Haji currently serves on the board of Antler
Hill Mining Ltd. (TSXV: AHM.H) and is the CEO of Spirit Banner II
Capital Corp. (TSXV: SBTC.P)
Mr. Haji attended The University of Western
Ontario and holds a BSc in Computer Science.
Matthew Wood – Chairman of the
Board
Mr. Wood is a mineral resource explorer and
developer with over 25 years of global industry experience in
mining and commodities investments.
Mr. Wood has managed investment deals in
diamonds, coal, energy, ferrous metals, base and precious metals,
and other commodities. His skills in technical and economic
evaluation of resource opportunities have resulted in an
established record of developing resource deals from early stage,
to market listings and exit strategies for his investors.
Mr. Wood is CEO and co-founder of Steppe Gold
Ltd. (TSX: STGO), a listed near-term gold producer in Mongolia. He
was formally the founder and executive Chairman of Mongolian coal
company, Hunnu Coal Limited. Hunnu Coal was IPO of the year for all
sectors on the ASX in 2010, and its sale for approximately A$500M
in 2011 to Banpu PCL was recognized as the Mines and Money 2012
Deal of the Year. Mr. Wood has founded and been involved in many
other resource companies and investments through the years.
Mr. Wood has an Honours Degree in Geology from
the University of New South Wales and a Graduate Certificate in
Mineral Economics from the Western Australian School of Mines.
Aneel Waraich – Director
Mr. Waraich is the President, Chief Executive
Officer and a director of Spirit Banner. Mr. Waraich is also
Executive Vice-President and co-founder of Steppe Gold Ltd., a
listed near-term gold producer in Mongolia, founder of ATMA Capital
Markets Ltd. and ATMACORP Ltd. and a financial services
professional with experience in both the asset management and
corporate finance businesses.
Mr. Waraich focuses primarily on advising public
and private companies in the Natural Resources sector. In previous
roles at Goodman and Company Investment Counsel and Dundee Capital
Markets he worked as an analyst valuing private companies. Most
recently Mr. Waraich worked as an investment banker focusing on
deal origination, going-public transactions and financings for both
public and private companies in the resource and technology
sectors.
Mr. Waraich completed his MBA from the Goodman
Institute of Investment Management at the John Molson School of
Business.
Bataa Tumur-Ochir –
Director
Mr. Tumur-Ochir is a director of Spirit Banner
as well as a director and Vice-President (Mongolia) of Steppe Gold
Ltd. Mr. Tumur-Ochir is a Mongolian citizen and will be responsible
for new business acquisitions, development and government and
community relations. Mr. Tumur-Ochir will be responsible for daily
operations in Mongolia. Mr. Tumur-Ochir is currently executive
director of ASX listed Wolf Petroleum.
Mr. Tumur-Ochir has relationships at all levels
of government in Mongolia and was recently appointed independent
advisor to the Ministry of Mining and Heavy Industry responsible
for foreign investment and promotion.
Mr. Tumur-Ochir holds a bachelor’s degree in
business administration and graduate certificates in international
business and marketing from Australia and Singapore.
Enkhtuvshin Khishigsuren –
Director
Mr. Khishigsuren has over 30 years of Mongolian
mineral exploration experience. He has focused his expertise on the
precious metals exploration sector resulting in successes for
numerous companies. Mr. Khishigsuren spent the first 10-12 years of
his career at Central Geological Expedition doing regional
geological mapping in various areas of Mongolia, followed by 7
years as senior exploration manager on exploration of precious
metal in Mongolia for Harrods Minerals (a privately funded
exploration company). Mr. Khishigsuren is currently the executive
director of Erdenyn Erel, a mining consulting company.
Mr. Khishigsuren has been responsible for
identifying targets and properties based on his knowledge and
experience that have resulted in the discovery of several
prospective gold and copper deposits in Mongolia; such as the
multimillion ounce gold deposit Olon Ovoot, a large molybdenum
porphyry deposit Zuun mod and the Shand copper porphyry deposit
near Erdenet copper mine.
Mr. Khishigsuren holds bachelor’s degree of
Geological exploration from Azerbaijan State University (former
Soviet Union) and a master’s degree of Geological Science from
Shimane University, Japan
For further information,
contact:
Spirit Banner Capital Corp.Aneel Waraich, CEO
+1.647.998.4149Awaraich@atmacapitalmarkets.com
Ion Energy Ltd.Ali Haji, CEO
+1.647.951.6508Ali@IonEnergy.ca
Cautionary Note Regarding
Forward-Looking Information
Information set forth in this news release
contains forward‐looking statements. These statements reflect
management’s current estimates, beliefs, intentions and
expectations; they are not guarantees of future performance. Spirit
Banner cautions that all forward looking statements are inherently
uncertain and that actual performance may be affected by a number
of material factors, many of which are beyond Spirit Banner’s
control. Such factors include, among other things: risks and
uncertainties relating to Spirit Banner’s ability to complete the
proposed Qualifying Transaction, including those described in
Spirit Banner’s Prospectus dated December 12, 2017, available on
the Corporation’s SEDAR profile at www.sedar.com. Accordingly,
actual and future events, conditions and results may differ
materially from the estimates, beliefs, intentions and expectations
expressed or implied in the forward‐looking information. Except as
required under applicable securities legislation, Spirit Banner
undertakes no obligation to publicly update or revise
forward‐looking information.
Completion of the transaction is subject to a
number of conditions, including but not limited to, Exchange
acceptance and if applicable pursuant to Exchange 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 TSX Venture Exchange Inc. has in no way
passed upon the merits of the proposed transaction and has neither
approved nor disapproved the contents of this press release.
A halt in trading shall remain in place until after the Qualifying
Transaction is completed or such time that acceptable documentation
is filed with the TSX Venture Exchange.
The information contained in this press release
relating to Ion Energy and the Baavhai-Uul Project has been
furnished by Ion Energy. Although Spirit Banner has no knowledge
that would indicate that any statements contained herein concerning
Ion Energy and the projects are untrue or incomplete, neither
Spirit Banner nor any of its directors or officers assumes any
responsibility for the accuracy or completeness of such information
or for any failure by Ion Energy to ensure disclosure of events or
facts that may have occurred which may affect the significance or
accuracy of any such information.
NEITHER TSX VENTURE EXCHANGE NOR ITS REGULATION
SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE
TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR
ACCURACY OF THIS RELEASE.
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