Xib Provides Additional Details Regarding Qualifying Transaction; Lead Agent Appointed FOR Concurrent Financing of up to $10 Million TSX Venture Exchange: Xib.p
XIB I CAPITAL CORP.
XIB PROVIDES ADDITIONAL DETAILS REGARDING QUALIFYING TRANSACTION;
LEAD AGENT APPOINTED FOR CONCURRENT FINANCING OF UP TO $10 MILLION
TSX VENTURE EXCHANGE: XIB.P FOR IMMEDIATE RELEASE
Vancouver, British Columbia – November 27, 2020 – XIB I Capital Corp. (“ XIB”) (TSXV: XIB.P)
(“XIB”) is pleased to provide additional details regarding its previously announced Qualifying
Transaction (the “ Transaction”) with Mayur Res ources Limited (“Mayur”) and Mayur's wholly -owned
subsidiaries, MR Exploration PNG Pte Ltd. (“ MRE”) and Adyton Resources Finance Company Ltd.
(“Adyton Financeco”).
Concurrent Financing
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 Esc rowed 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 a nd 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 EL 2546) and the Oredi Creek Project (PNG Exploration Licence EL 2572) 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 f orce 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 re newal 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 loca ted 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 inter preted 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 monzonit es 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 associate d 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 I slands 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 min eral 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 re newal 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 fo rm 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 h osted 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 othe r 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 explora tion 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 res ource 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.
Qualified Person
Mark Berry (MAIG) of Derisk, an independent Qualified Perso n 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.
MRE 12 months
ended
June 30, 2020
(audited)
12 months
ended
June 30, 2019
(audited)
Total revenue - -
Income from continuing operations - -
Net income or loss, in total AUD$(179,480) AUD$(282,915)
Total assets AUD$4,119,437 AUD$4,059,017
Total long term financial liabilities - -
Cash dividends declared - -
Note: AUD$1.00 = approximately CDN$0.96 as of the date of this press release.
Ballygowan 12 months
ended
Dec. 31, 2019
(audited)
12 months
ended
Dec. 31, 2018
(audited)
Total revenue - -
Income from continuing operations - -
Net income or loss, in total PGK$(218,915) PGK$(21,016)
Total assets PGK$865,653 PGK$621,904
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.
Pacific Arc 12 months
ended
Dec. 31, 2019
(audited)
12 months
ended
Dec. 31, 2018
(audited)
Total revenue PGK$1,777 PGK$30,361
Income from continuing operations - -
Net income or loss, in total PGK$(9,280) PGK$13,173
Total assets PGK$455,147 PGK$208,975
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 amen ded (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 managemen t 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 protected] 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 th e 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 ri sks 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 anticip ated 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, act ual 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.
NOT FOR DISSEMINATION IN THE UNITED STATES OR THROUGH US NEWSWIRE
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