As previously announced on August 10, 2020, United Hunter Oil &
Gas Corp. (TSXV:UHO) (Frankfurt:18U1) ("
United
Hunter" or the "
Company") has entered
into a non-binding letter of intent dated August 7, 2020, to
complete a reverse takeover transaction (the
“
Transaction”) pursuant to which the Company will,
directly or indirectly, acquire all of the issued and outstanding
securities of Bocana Resources Ltd. ("
Bocana").
In connection with the Transaction, the Company
is pleased to announce a non-brokered private placement offering
(the “Offering”), for up to $2,500,000, with a
lead order from Palisades Goldcorp Ltd.
("Palisades"), an arm's length party. Palisades is
not expected to become an insider in connection with the lead
order. The Offering shall consist of i) $2,000,000 in subscription
receipts of Bocana (each, a “Subscription
Receipt”); and ii) $500,000 in units of Bocana (the
“Units”). The Subscription Receipts and Units
shall each be priced at $0.10 (the “Issue
Price”).
Each Subscription Receipt will entitle the
holder thereof, without payment of any additional consideration and
without further action on the part of the holder, to receive one
Unit, upon the satisfaction of the Escrow Release Conditions (as
defined below) (the “RTO Closing”) prior to the
Termination Time (as defined below). Each Unit shall consist of one
common share of Bocana (each, a “Common Share”)
and one Common Share purchase warrant (each, a
“Warrant”). Each Warrant shall be exercisable at
the option of the holder to purchase one Common Share at an
exercise price equal to $0.25 for a period of 36 months following
the Listing Date (as defined below).
Overview of Bocana
Bocana is a private corporation incorporated
under the CBCA and carrying on business as a mineral exploration
company focused on the acquisition, exploration and development of
mineral properties in Bolivia. Bocana, through its wholly owned
subsidiary, Huiracocha International Service SRL, holds a 100%
working interest in the mineral properties known as the Escala area
concessions (“Escala”) located at the Department
of Potosi, Sud Lipez Province, Bolivia and has pending additional
applications with the Corporación Minera de Bolivia to acquire the
mining rights to two additional concession areas, also in the Sud
Lipez Province of Bolivia.
Transaction Highlights
Potential Gold-Copper Porphyry Zone with
Peripheral Supergene and Shear Hosted Mineralization
-
Focused on exploration of 100% owned Escala concession located in
Bolivia
-
Exploration results indicate gold mineralization on surface and
suggest a potential large, open-pit, gold-copper porphyry deposit.
These results include:
-
Induced polarization chargeability anomaly in Cerro Galapagos area
within intermediate intrusive body indicating extensive
disseminated sulphide mineralization.
-
814.3 m continuous rock chip sample at the Supergene Cerro Blanco
with 0.51 g/t Au average:
- 219
m at 1.08 g/t Au, including 102 m at 2.44 g/t Au
- 171
m at 1.14 g/t Au, including 51 m at 2.32 g/t Au
-
Extensive underground development on polymetallic shear zones at
the Escala Mine Area
Historical Drilling Conducted by
Majors
- Due
to the scale of the known mineralization, the project has attracted
several major mining companies. Historical drilling, 37 diamond
drill holes previously conducted by major mining companies
including Barrick Gold, Normandy Mining and La Source (BRGM)
Valuation & RTO Financing
Terms
-
Transaction announced, with pre-money valuation of $6.5MM including
the value of the shell
- No
statutory hold period for the Common Shares upon completion of the
Transaction, expected April 2021
Exploration Program Planned Following
RTO Closing
-
High impact drilling program anticipated to provide steady news
flow, with potential expansion of surface mineralization and
delineation of higher-grade gold zones
-
Additional drilling opportunities may be available with 2 new
concessions currently pending Bolivian government approval
Management Aligned with
Shareholders
-
Experienced management team with history of operations in Bolivia,
and material insider ownership (~21%)
Additional Information Regarding the
Offering
The gross proceeds of the Subscription Receipts
from the Offering shall be deposited into an interest-bearing
escrow account (the “Escrowed Funds”) with an
escrow agent (the “Escrow Agent”). The Escrowed
Funds will be released from escrow to the Company on the date of
the RTO Closing and upon the Escrow Release Conditions (as defined
herein) having been satisfied or waived (to the extent waiver is
permitted) (the “Escrow Release Time”). This will
be done on the delivery by the Company of a written direction to
the Escrow Agent confirming that the Escrow Release Conditions have
been met and directing the Escrow Agent to release the Escrowed
Funds to the Company, along with any interest accrued thereon.
The combined Bocana and United Hunter entity
will be referred to herein as the resulting issuer (the
“Resulting Issuer”). Upon completion of the
Transaction and satisfaction of the Escrow Release Conditions, the
common shares of the Resulting Issuer (the “RI Common
Shares”) will be listed on the TSX Venture Exchange (the
“Exchange”). Subject to terms in the Transaction
and Exchange approval, United Hunter will acquire 1 RI Common Share
for every 1.6877 shares of United Hunter.
The “Escrow Release Conditions”
shall be set forth in the subscription receipt agreement between
the Company and the Escrow Agent, and shall include:
(i) |
the completion, satisfaction or waiver of all conditions precedent
to the Transaction, other than the release of the Escrowed
Funds; |
|
|
(ii) |
the receipt of all shareholder and regulatory approvals, including
the approval required by the Exchange required in connection with
(a) the Transaction, and (b) the conditional listing approval
(subject only to standard listing conditions) of the RI Common
Shares by the Exchange, including the RI Common Shares issued in
exchange for the Units, or such equivalent securities as may be
issued pursuant to the Transaction; |
|
|
(iii) |
written confirmation from the Company that all conditions of the
Transaction have been satisfied, other than release of the Escrowed
Funds, and that the Transaction will be completed forthwith upon
release of the Escrowed Funds; |
|
|
(iv) |
The distribution of Units underlying the Subscription Receipts and
the RI Common Shares, or such equivalent securities to be issued in
exchange for the securities pursuant to the Transaction, following
the satisfaction of the Escrow Release Conditions being exempt from
applicable prospectus and registration requirements of applicable
securities laws and not subject to any hold or restricted period.
It is anticipated that the securities issuable pursuant to the
Transaction will be issued in reliance of the prospectus exemptions
as set forth in National Instrument 45-106 ("NI
45-106"), and a first trade in the Resulting Issuer
securities received in exchange therefor will not be subject to any
resale restrictions or hold periods provided the conditions set
forth in Section 2.6(3) of National Instrument 45-102 Resale of
Securities (“NI 45-102”) have been satisfied. |
If: (i) the Escrow Release Time does not occur
at or prior to 5:00 p.m. (Toronto time) on the day that is 120 days
following the Closing Date, or as extended, for the Subscription
Receipts; (ii) the Transaction is terminated in accordance with its
terms; or (iii) the Company has advised the public that it does not
intend to proceed with the Transaction (in each case, the earliest
of such times being the “Termination Time”), the
Company shall refund the Escrowed Funds without penalty or
deduction to the subscribers of the Offering, such that it would be
the sole responsibility and liability of Company to return the full
amount of the Issue Price to each holder of a Subscription Receipt,
together with such holder’s pro rata portion of the interest earned
thereon, if any. In any event, no refunds will be made for
subscriptions of Units.
The net cash proceeds of the Subscription
Receipts Offering will be used for working capital and general
corporate purposes and exploration expenditures on the Escala
property. The net cash proceeds of the Unit portion of the
Offering, will be used for corporate purposes in connection with
the Transaction, along with preliminary geological and geophysical
site work.
The securities to be issued under the Offering
will be offered by way of private placement in each of the
provinces of Canada and such other jurisdictions as may be
determined by the Company, in each case, pursuant to applicable
exemptions from the prospectus requirements under applicable
securities laws.
The Offering is expected to close on or about
the week February 8, 2021, or on such date, or dates, as the
Company may determine (the "Closing Date"). Upon
completion of the Transaction, the RI Common Shares (including
those issued in exchange for the Common Shares comprising the Units
issued upon conversion of the Subscription Receipts) will be listed
with no statutory hold period upon closing of the RTO on the
Exchange, (the “Listing Date”).
In connection with the Offering, the Company may
pay finder’s fees (the “Finder’s Fee”) equal to
8.0% of the gross proceeds from the Offering and finder’s warrants
(“Finder’s Warrant”) equal in number to 8.0% of
the number of Subscription Receipts & Units sold under the
Offering. Each Finder’s Warrant shall be exercisable to acquire one
Unit for a period of 36 months following the Listing Date at the
Offering Price. Upon the completion of the Transaction, the
Finder’s Warrants will be exchanged for Finder’s Warrants of the
Resulting Issuer on equivalent terms.
The securities described herein 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 accordingly, may not be offered
or sold within the United States except in compliance with the
registration requirements of the U.S. Securities Act and applicable
state securities requirements or pursuant to exemptions therefrom.
This press release does not constitute an offer to sell or a
solicitation to buy any securities in any jurisdiction.
About Palisades Goldcorp
Palisades Goldcorp is Canada’s resource focused
merchant bank. Palisades’ management team has a demonstrated track
record of making money and is backed by many of the industry’s most
notable financiers. With junior resource equities valued at
generational lows, management believes the sector is on the cusp of
a major bull market move. Palisades is positioning itself with
significant stakes in undervalued companies and assets with the
goal of generating superior returns.
Contact Information
United Hunter Oil & Gas
Corp.Timothy Turner, Chief Executive
OfficerInfo@unitedhunteroil.com +1 (713) 858-3329
Bocana Resources Ltd.Rodney
Stevens, Executive Chairmanrstevens@bocanaresources.com
Cautionary Statement
Completion of the transaction is subject to a
number of conditions, including but not limited to, Exchange
acceptance and if applicable, disinterested 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 [insert name of Issuer] 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 news release.
Qualified Person Statement
The technical information in this news release
related to the Gold-Copper Porphyry Deposit is based on, and fairly
represents, information in the 43-101 report. Mr. Lorne Warner,
P.Geo, a qualified person as defined by NI 43-101, confirms that he
has reviewed this press release and that the scientific and
technical information concerning the deposit is consistent with the
43-101 report.
Forward-Looking Statements
This news release contains "forward-looking
information" within the meaning of applicable securities laws,
regarding United Hunter, Bocana and the Resulting Issuer, which may
include, but is not limited to statements with respect to the
completion of the Transaction and the Offering, the terms and
timing on which the Transaction and the Offering are intended to be
completed, the use of the net proceeds from the Offering, the
ability to obtain regulatory and shareholder approvals, the
proposed business plan of the Resulting Issuer and other factors.
Often, but not always, Forward-looking statements can be identified
by the use of words such as "plans", "is expected", "expects",
"scheduled", "intends", "contemplates", "anticipates", "believes",
"proposes", "estimates" or variations of such words and phrases, or
state that certain actions, events or results "may", "could",
"would", "might" or "will" be taken, occur or be achieved. Such
statements are based on the current expectations of the management
of each entity. The forward-looking events and circumstances
discussed in this release, including completion of the Transaction
and the Offering, may not occur by certain specified dates or at
all and could differ materially as a result of known and unknown
risk factors and uncertainties affecting the companies, including
the risk that Bocana and United Hunter may not obtain all requisite
approvals for the Transaction, including the approval of the
Exchange for the Transaction (which may be conditional upon
amendments to the terms of the Transaction), risks of the resource
industry, failure to obtain regulatory or shareholder approvals,
economic factors, any estimated amounts, timing of the Offering,
the equity markets generally and risks associated with growth,
exploration and development. Although Bocana and United Hunter have
attempted to identify important factors that could cause actual
actions, events or results to differ materially from those
described in forward-looking statements, there may be other factors
that cause actions, events or results to differ from those
anticipated, estimated or intended. No forward-looking statement
can be guaranteed. Except as required by applicable securities
laws, forward-looking statements speak only as of the date on which
they are made and Bocana and United Hunter undertake no obligation
to publicly update or revise any forward looking information,
whether as a result of new information, future events or
otherwise.
Completion of the Transaction is subject to a
number of conditions including, but not limited to, Exchange
acceptance, receipt of required regulatory approvals, the
availability of funds, the results of financing efforts, the
parties' due diligence reviews, general market conditions, and if
applicable pursuant to Exchange requirements, majority of the
minority shareholder approval. Where applicable the Transaction
cannot close until the required shareholder approvals, and any
ancillary matters thereto, are 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 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. Other conditions that could cause actual results to
differ materially from the Company's expectations are disclosed in
the Company's documents filed from time to time on SEDAR (see
www.sedar.com). Readers are cautioned not to place undue reliance
on these forward-looking statements, which are made only as of the
date of this press release. The Company disclaims any intention or
obligation, except to the extent required by law, to update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise.
Neither the 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. The Exchange has in no
way passed upon the merits of the proposed transaction and has
neither approved nor disapproved the contents of this press
release.
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