Ztr Enters into Definitive Agreement to Acquire Federal Gold
ZTR ACQUISITION CORP.
Suite 918, 1030 West Georgia Street Vancouver, British Columbia, V6E 2Y3
NEWS RELEASE
ZTR ENTERS INTO DEFINITIVE AGREEMENT TO ACQUIRE FEDERAL GOLD
September 28, 2020 – Vancouver, British Columbia – ZTR Acquisition Corp. (TSXV: ZTR.H) (the “Company”) is pleased to announce that it has entered into a definitive amalgamation agreement, effective September 28, 2020 (the “Definitive Agreement”), with Federal Gold Corp. (“Federal Gold”).
Terms of the Business Combination
In accordance with the terms of the Definitive Agreement, Federal Gold will amalgamate with a wholly-owned subsidiary of the Company (the “Business Combination”), following which the resulting amalgamated entity will continue as a wholly-owned subsidiary of the Company. In consideration for completion of the Business Combination, all common shareholders of Federal Gold will be entitled to receive one (1) common share of the Company in exchange for every one
(1) common share of Federal Gold that they hold. The Company anticipates issuing 35,187,000 common shares (the “Consideration Shares”) to complete the acquisition of all of the currently outstanding securities of Federal Gold. Certain of the Consideration Shares will be subject to escrow pursuant to the policies of the TSX Venture Exchange (the “Exchange”), in addition to pooling restrictions that may be negotiated by the parties. In connection with completion of the Business Combination, it is anticipated that the Company will change its name to “Angold Resources Ltd.” and will change its ticker symbol to “AAU”.
The Company and Federal Gold are at arms-length and the Business Combination will constitute a reverse-takeover for the Company under the policies of the Exchange. Following completion of the Business Combination, it is anticipated that the Company would be listed on the Exchange as a Tier 2 Mining issuer. Closing of the Business Combination is subject to a number of conditions including completion of the Concurrent Financing (as defined below), receipt of all required regulatory and third-party consents, including Exchange approval, and the satisfaction of other customary closing conditions. The Business Combination cannot close until the required approvals are obtained. There can be no assurance that the Business Combination will be completed as proposed or at all. Trading in the common shares of the Company will remain halted pending further filings with the Exchange.
Approval of the shareholders of the Company will not be required in connection with the Business Combination, in accordance with Exchange Policy 5.2 – Changes of Business and Reverse Takeovers, as the Business Combination is not a related party transaction and no other circumstances exist which may compromise the independence of the Company or other interested parties. The Company is listed on the NEX board of the Exchange, and shareholder approval is not required for any aspect of the Business Combination under applicable corporate or securities laws.
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About Federal Gold
Federal Gold is a widely-held private company which controls the rights to the Uchi, Iron Butte, Dorado and Cordillera mineral exploration projects located in the Province of Ontario, the State of Nevada and the Republic of Chile, respectively. Following completion of the Business Combination, it is anticipated that exploration and development of the Uchi and Dorado projects will be the primary focus of the Company. The following selected financial information is taken from the unaudited financial statements of Federal Gold for the three-month period ended July 31, 2020, which are expected to be included in the filing statement being prepared in connection with the Business Combination:
| Total Assets | $232,720 |
| Total Liabilities | $127,277 |
| Net Loss | $5,150 |
For further information on Federal Gold, readers are encouraged to review the Company’s news release of August 19, 2020. Additional information on Federal Gold, including current financial statements, will be filed and posted on SEDAR upon the completion of a filing statement that will be prepared in connection with the Business Combination.
Concurrent Subscription Receipt Financing
As a condition to completing the Business Combination, the parties intend to complete a nonbrokered private placement financing (the “Concurrent Financing”) through the issuance of subscription receipts of Federal Gold at a price of $0.40 per subscription receipt. The Company has elected to increase the size of the Concurrent Financing from the previously announced 18,750,000 subscription receipts for gross proceeds of $7,500,000 to 20,000,000 subscription receipts for gross proceeds of $8,000,000. The proceeds of the Concurrent Financing will be held in escrow, pending the Company receiving all applicable regulatory approvals and completing the Business Combination. Upon satisfaction of the escrow conditions, immediately prior to completion of the Business Combination, each subscription receipt will automatically convert into one common share of Federal Gold for no additional consideration and will be exchanged for Consideration Shares on a one-for-one basis. If the Business Combination is not completed on or before December 31, 2020, the Concurrent Financing proceeds will be returned to the subscribers. Finder’s fees may be payable to arm’s length parties who introduce subscribers to the Concurrent Financing, in accordance with the policies of the Exchange.
Board of Directors and Management Changes
Following completion of the Business Combination, the board of directors of the Company will be reconstituted to consist of Adrian Rothwell, Galen McNamara, Brandon Bonifacio and Rony Zimmerman. Management of the Company will consist of Adrian Rothwell as President and Chief Executive Officer and Gavin Cooper as Chief Financial Officer and Corporate Secretary. The following are brief profiles of the proposed members of management and the board of directors:
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Adrian Rothwell, President, Chief Executive Officer and Director
Mining industry entrepreneur and executive for over 25 years. Executive Chairman and Director of Lucky Minerals Inc. since September 25, 2020 (formerly Director, President and Chief Executive Officer), Director and Chair of the Audit Committee on Fireweed Zinc Ltd. since February 14, 2017 and Director of KORE Mining Ltd. since October 30, 2018 (and founder in February 2016), formerly the President and Chief Executive Officer of KORE Mining Ltd. Adrian is both a British Columbia Chartered Professional Accountant and a member of the Institute of Chartered Accountants of Australia and New Zealand. He holds a Bachelor of Economics from Macquarie University.
Gavin Cooper, Chief Financial Officer and Corporate Secretary
Chartered Accountant with extensive experience in all aspects of corporate and financial management. Chief Financial Officer & Director at Nevaro Capital Corp., Chief Financial Officer & Secretary at Gold Bull Resources Corp., Chief Financial Officer & Secretary of Kutcho Copper Corp. and Chief Financial Officer at District Metals Corp. He is also on the board of Maitri Health Corp. and Principal at Gavin Cooper & Associates, Member of The Chartered Professional Accountants of British Columbia and Member of Canadian Institute of Chartered Professional Accountants. He holds a Bachelors of Accounting (Honors) from the University of South Africa.
Galen McNamara, Director
Entrepreneur and geologist with extensive discovery and capital markets experience over nearly 15 years. Co-winner 2018 PDAC Bill Dennis “Prospector of the Year” Award for the Arrow uranium deposit and 2016 Mines and Money Exploration Award. Chief Executive Officer and Director of Summa Silver Corp. since May 8, 2020. Galen holds MSc and BSc degrees in geology from Laurentian University.
Brandon Bonifacio, Director
Mining executive with expertise in project development, mergers and acquisitions and over 10 years of experience. Formerly finance director of the Norte Abierto Joint Venture (Cerro Casale/Caspiche) in the Maricunga Region, Chile and member of the corporate development team at Newmont Corporation (former Goldcorp Inc.). Brandon holds a MASc – Mining Engineering and MBA from the University of Nevada, Reno and a Bachelor of Commerce from the University of British Columbia.
Rony Zimmerman, Director
Natural Resources Attorney qualified in Chile and Canada, with a focus on mining projects and capital markets. Rony is a 13 year partner at a major Chilean law firm and was ranked in Chambers and Partners, “Who's Who Mining Legal 500 Best Lawyers and Latin Lawyer”. He is the former Co-President of Natural Resources Committee - International Section of American Bar Association.
For further information, contact Martin Bajic, President, Chief Executive Officer and Chief Financial Officer of the Company, at 604.628.5621 or [email protected], or Galen McNamara, Director of Federal Gold, at 604.288.4968 or [email protected].
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On Behalf of the Board of Directors,
ZTR ACQUISITION CORP.
Martin Bajic, President, Chief Executive Officer and Chief Financial Officer Phone: 604.628.5621 Fax: 604.662.7950
Completion of the Business Combination is subject to a number of conditions, including Exchange acceptance. There can be no assurance that the Business Combination will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the filing statement to be prepared in connection with the Business Combination, any information released or received with respect to the Business Combination may not be accurate or complete and should not be relied upon. Trading in the securities of the Company should be considered highly speculative.
The TSX Venture Exchange has in no way passed upon the merits of the Business Combination and has neither approved nor disapproved the contents of this press release. Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
This news release may include forward-looking statements that are subject to risks and uncertainties. All statements within, other than statements of historical fact, are to be considered forward looking. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in forward-looking statements. There can be no assurances that such statements will prove accurate and, therefore, readers are advised to rely on their own evaluation of such uncertainties. We do not assume any obligation to update any forward-looking statements except as required under the applicable laws.