Amv Capital Corporation to Acquire Key Lake South Uranium Project Pursuant to a Reverse Takeover
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AMV CAPITAL CORPORATION
Suite 200, 551 Howe Street
Vancouver, B.C. V6C 2C2
NEWS RELEASE
FOR IMMEDIATE RELEASE
AMV CAPITAL CORPORATION TO ACQUIRE KEY LAKE SOUTH
URANIUM PROJECT PURSUANT TO A REVERSE TAKEOVER
Vancouver, BC., September 14, 2022 – AMV Capital Corporation (AMV: TSX-V) (“ AMV” or the
“Company”) announces that it has entered into an arm’s length non-binding letter of intent on
September 13, 2022 (the “ LOI”) with a private Saskatchewan corporation (“ SaskCo”) controlled by
Dawn Zhou pursuant to which SaskCo is to sell to AMV a 100% right, title and interest in and to the
mineral claims (the “ Claims”) which comprise the Key Lake South Uranium Project located in the
southeastern Athabasca Basin Region in Saskatchewan (the “KLS Project”) for and in consideration of
25,639,288 common shares of AMV, representing 66.7% of the issued and outstanding shares of AMV
post-closing and pre-financing (the “Transaction”). The Transaction is to constitute a “reverse takeover”
pursuant to the policies of the TSX Venture Exchange (the “ Exchange”) and is subject to receipt of
Exchange acceptance.
The KLS Project
The KLS Project is located approximately 15 kilometer s from the Key Lake mill which processes ore
from Cameco Corp.’s (TSX: CCO; NYSE: CCJ) McArthur River uranium mine. The KLS Project consists
of 12 contiguous claims (23,977 hectares or approximately 240 sq. km) which were staked in 2012 and
which have been held and explored by SaskCo since t hen. Provincial Highway 914, a north-south all-
weather highway in Saskatchewan, crosses the KLS Project.
Figure 1. Mineral Claim Map of the Key Lake South Uranium Project
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The KLS Project is underlain by the prospective uranium hosting Wollaston-Mudjatik contacting zone
(WMCZ) in the southeastern Athabasca Basin.
Figure 2. Total Magnetics, EM conductors, and Known Uranium Deposits of Key Lake
The world’s largest high-grade uranium deposits are associated with the unconformity between the
Athabasca Basin and the Wollaston-Mudjatik basement. Most of the uranium occurrences and deposits
the Athabasca Basin are located near the boundary between the Mudjatik and Wollaston domains as
either unconformity-type or basement-hosted type. The KLS Project is located in the southern strike
extent of these deposits and in the same regional low-mag structure that hosts them. Uranium
mineralization at the KLS Project shows characteristics of both unconformity-type and basement-hosted
deposits.
Considerable exploration activity by multiple operators has occurred on the KLS Project prior to SaskCo
acquiring ownership of the property. Various compilation reports and interpretations of historical data
were undertaken by SaskCo, both in-house and by independent consultants, in 2011, 2012, and 2013,
resulting in identifying target areas and recommendations for future exploration work. SaskCo carried
out airborne and ground geophysical results, geologica l mapping, soil and lake sediment geochemical
surveys, and overburden and diamond drill programs. Field programs, including geological mapping,
soil geochemical surveys, lake sediment survey s, radon-soil-surveys and airborne and ground gravity
surveys, were conducted by SaskCo in 2014, 2015, and 2016.
SaskCo carried out a diamond drilling program in 2016 to test geological features interpreted by the
previous exploration data, including the 2014 surv eys of HeliFALCON Airborne Gravity Gradiometer
Survey, EM surveys, geochemistry surveys, and geological mapping. Two separate drilling programs
were conducted in the winter and the summer. In 2016, a total of 4,550 metres were drilled comprising
26 NQ holes in two target areas: 15 holes totalling 2,742 metres in the Campbell Creek area and
11 holes totalling 1,809 metres in the Mustang Ridge area where SaskCo discovered intersections of
U3O8 up to 0.25% over 0.2m. In 2022, Condor Consulting Inc. has been engaged in further interpreting
and modelling available geophysical survey data to a ssist with SaskCo in house geologist team for
structural analysis, targeting priorities areas and drillhole detail planning. In August, 2022, SaskCo
submitted a 2023 winter drilling permit application to the Government of Saskatchewan.
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Key Terms of the Transaction and Related Financing
The key terms of the Transaction and related financing are as follows:
(1) SaskCo is to sell to AMV 100% of its right, title and interest in and to the Claims for and in
consideration of 25,639,288 common shares (“Resulting Issuer Shares”) of AMV (which post-
closing will be referred to as the “Resulting Issuer”), representing 66.7% of the Resulting Issuer
Shares before completion of the Financings (as defined below).
(2) A British Columbia company to be initially wholly-owned by Dawn Zhou (“ FinCo”) is to complete
a non-brokered private placement of a minimum of 2,222,222 subscription receipts (the
“Subscription Receipts”) at and for a price of CAD$0.45 per Subscription Receipt to raise a
minimum of CAD$1,000,000 (the “Offering”), with each Subscription Receipt to be automatically
exchanged, for no additional consideration and without any further action, upon satisfaction of
certain escrow release conditions (the “Escrow Release Conditions“) and upon completion of
the Amalgamation (as defined below), into one unit of the Resulting Issuer (a “NFT Unit”), with
each NFT Unit to be comprised one (1) Resulting Issuer Share (an “ Underlying Share”) and
one-half (½) of a share purchase warrant of the Resulting Issuer (each whole warrant, a “ NFT
Warrant”), subject to adjustment. Each NFT Warrant will entitle the holder to acquire one
Resulting Issuer Share (a “NFT Warrant Share”) at a price of CAD$0.60 per share for a period
of two years.
(3) SaskCo will arrange a CAD$2,000,000 flow-through private placement (the “ Flow-Through
Private Placement” and collectively with the Offering, the “Financings”) involving the sale of
4,000,000 units of the Resulting Issuer (the “FT Units”) at a price of CAD$0.50 per FT Unit, with
each FT Unit to be comprised of one (1) Resulting Issuer Share issued on a flow-through basis
(a “FT Share”) and one-half (½) of a NFT Warrant. The Flow-Through Private Placement would
close immediately following the closing of the Transaction.
(4) The gross proceeds of the Offering, less any finder’s fee paid, will be deposited and held in
escrow (the “Escrowed Funds”) and released to the Resulting Issuer upon the satisfaction of
certain conditions including, but not limited to:
(a) receipt of conditional approval of the Exchange to the Transaction;
(b) board and shareholder approvals of the Transaction, as applicable;
(c) no material breach or default by SaskCo;
(d) completion of the Flow-Through Private Placement to raise no less than CAD$2,000,000;
and
(e) all conditions precedent to the completion of the Transaction being satisfied.
In the event that the Escrow Release Conditions are not satisfied on or before December 31,
2022, or such later date as may be agreed between AMV and SaskCo, the Subscription Receipts
will be cancelled and the Escrowed Funds, with accrued interest earned thereon (less any
applicable withholding taxes and finder’s fee paid), will be returned to subscribers.
(5) At closing of the Transaction, all of the issued and outstanding securities of FinCo will be
acquired by AMV by way of a three-cornered amalgamation (the “Amalgamation”) pursuant to
which a British Columbia company to be a wholly-owned subsidiary of AMV (“ MergeCo”) will
amalgamate with FinCo, and the holders of FinCo’ s securities will receive securities of the
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Resulting Issuer on a one-for-one basis pursuan t to the terms of an amalgamation agreement
to be entered into between AMV, FinCo and MergeCo.
(6) Immediately prior to the completion of the Transaction, the Subscription Receipts are to convert
into units of FinCo, and FinCo will then amalgam ate with MergeCo, following which the former
holders of Subscription Receipts will be issued Underlying Shares and NFT Warrants, and all
Subscription Receipts will be cancelled.
The net proceeds of the Financings will be used to fund a 2022/23 winter drilling exploration program
on the KLS Project and for the Resulting Issuer’s working capital and general corporate purposes. A
cash finder’s fee of 8.0% of the gross proceeds raised from the Financings may be paid, and upon
closing of the Transaction, the Resulting Issuer will issue to finders broker warrants (“Broker Warrants”)
in such number equal to 8.0% of the Subscription Receipts or FT Units sold, as the case may be. Each
Broker Warrant will entitle the holder to purchase one Resulting Issuer Share at a price of CAD$0.60
per share for a period of two years.
AMV and SaskCo are to negotiate the te rms of a definitive agreement (the “Formal Agreement”) that
will provide the basis upon which the parties will effect the Transaction, which the parties are to execute
on or before October 17, 2022 or such other later date as agreed to by the parties. Closing of the
Transaction is to occur on or before December 31, 2022.
The Resulting Issuer
Upon completion of the Transaction, AMV intends to be classified and listed as a Tier 2 Mining Issuer
on the Exchange and be involved in the business of exploration and development of the KLS Project in
Saskatchewan. The Company’s name is to be changed to “Abasca Resources Inc.” after the closing of
the Transaction. The board of directors of the Resulting Issuer (the “ Board”) will consist of five (5)
directors, with Dawn Zhou, Qiang Sean Wang and Brett Kagetsu to serve on the Board and the
remaining directors to be nominees of SaskCo. After the closing of the Transaction, the officers of the
Resulting Issuer will be appointed by the Board and are expected to include Dawn Zhou as President
and Chief Executive Officer and Sean Wang as an Executive Director.
Dawn Zhou, who is the founder and controlling shareholder of SaskCo, has a significant track record in
mining and exploration. Ms. Zhou holds a Master of Sciences degree in Geology and a Canadian
Chartered Public Accountant (CPA) designation. Ms. Zhou was the founder and Executive Chair of
Athabasca Potash Inc. (TSX: API) (“ Athabasca Potash ”), which pioneered new potash project
advancement in Saskatchewan in the early 2000’s and brought one of its potash projects from an
exploration permit to a mining lease. Athabasca Potash was acquired by BHP Billiton for $341 million in
2010.
Upon closing of the Transaction, Dawn Zhou and Sean Wang are to be granted incentive stock options
to purchase 850,000 and 600,000 Resulting Issuer Shares, respectively, for a five year term at a price
to be set in the context of the market after closing in accordance with Exchange policies.
Some or all of the Resulting Issuer Shares to be issued to SaskCo may be subject to escrow pursuant
to the requirements of the Exchange. In addition, the Resulting Issuer Shares to be issued pursuant to
the Transaction will be issued pursuant to exempti ons from prospectus requirements of applicable
securities legislation and may be subject to resale restrictions under applicable securities laws.
Trading Halt
As required by the policies of the Exchange, trading of AMV’s common shares has been halted in
connection with the announcement of the Transaction. Trading will remain halted pending the
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satisfaction of the Exchange’s initial filing requirements in respect of the Transaction and the Exchange’s
initial assessment of the transaction and related matters. Shareholders are advised that trading may
remain halted until the Exchange provides its final acceptance to the Transaction.
Prior to the completion of the Transaction, AMV may be required to submit for review to the Exchange
a filing statement (the “Filing Statement”) pursuant to the policies and procedures of the Exchange.
AMV will be required to include in the Filing Statement prospectus-level disclosure on the Resulting
Issuer, including such audited and unaudited financial statements relating to the KLS Project as may be
required by the Exchange.
Qualified Person
The technical information in this news release has been reviewed and approved by Dave Billard, P.Geo,
a Qualified Person as set out in National Instrument 43-101 Standards of Disclosure for Mineral Projects
who is independent of AMV.
About AMV Capital Corporation
AMV is a mineral exploration company that is primarily engaged in the acquisition and evaluation of
mineral exploration properties. The Company owns the Sage Property, an early-stage mineral
exploration property near Kamloops, British Columbia. AMV’s common shares trade under the symbol
“AMV” on the Exchange.
For more information, please contact:
AMV CAPITAL CORPORATION
Qiang Sean Wang
Chief Executive Officer and Director
Tel: (604) 683-8610
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 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 the Company should
be considered highly speculative.
The TSX Venture 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.
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.
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Forward-Looking Information
This news release contains “forward-looking information” (as such term is defined under Canadian
securities laws), which includes a statement regarding the entering into of the Formal Agreement, and
which information reflects the current expectations of management of both AMV and SaskCo. Forward-
looking information involves significant known and unknown risks, uncertainties and assumptions. Many
factors could cause actual results, performance or achievements to be materially different from any
future results, performance or achievements that may be expressed or implied by such forward-looking
information. Should assumptions underlying the forw ard-looking information prove incorrect, actual
results, performance or achievements could vary ma terially from those expressed or implied by the
forward-looking information contained in this release. Although the forward-looking information
contained in this release are based upon what AMV believes to be reasonable assumptions, AMV
cannot assure investors that actual results, performance or achievements will be consistent with the
forward-looking information. The forward-looking information is made as of the date of this release and
AMV assumes no obligation to update or revise them to reflect new events or circumstances, unless
required by applicable law.