Kenadyr Signs Non-Binding Letter of Intent to Acquire Karus Gold Corp.
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Kenadyr Signs Non-Binding Letter of Intent to
Acquire Karus Gold Corp.
Not for distribution to United States newswire services or for release publication, distribution,
or dissemination directly, or indirectly, in whole or in part, in or into the United States.
VANCOUVER, BC – November 15, 2022 - Kenadyr Metals Corp. (TSX-V: KEN; OTC-MKTS: KNDYF;
FRA: KM0) (the “Corporation” or “Kenadyr”) announces it has signed a non-binding arm’s length
Letter of Intent (“LOI”) dated November 14, 2022 to acquire 100% of Karus Gold Corp. (“Karus”)
by way of a business combination transaction. Karus controls a dominant 1,054 square kilometers
claim block (the “South Cariboo Claims”) in the prolific Cariboo Gold District of British Columbia,
Canada. The claims cover 110km of structural trend that is highly prospective for gold deposits.
The flagship asset of Karus is the FG Gold Project ( “FG Gold”), a large -scale, sediment hosted
orogenic gold deposit. In addition, the South Cariboo Gold Project remains significantly under -
explored with potential for additional discoveries. The Cariboo Gold District is highly accessible,
with local power, a well -developed road network, skilled local l abour and it hosts several
operating mines.
As per the terms of the LOI, it is proposed that Kenadyr will acquire 100% of the issued and
outstanding common shares of Karus (the “ Karus Common Shares ”), a British Columbia
incorporated company and a reporting issuer in British Columbia and Alberta , via a Kenadyr
issuance of common shares (the “ Proposed Transaction”) resulting in a reverse takeover by
Karus. The resulting issuer will be Kenadyr Metals Corp., a Tier 2 TSXV -listed company in the
mining sector. The Proposed Transaction is subject to the parties entering into a binding
definitive agreement, which will include customary closing conditions including approval of the
Karus and Kenadyr shareholders (as applicable), court approval, and the TSX Venture Exchange
(the “TSXV”). Further information about Karus can be found at www.karusgold.com.
South Cariboo Property Geology
The South Cariboo Property lies along the tectonic boundary between the Quesnel terrane and
the ancestral margin of North America. This deformed suture zone hosts several orogenic-type
gold deposits that collectively form the Cariboo Gold District, with deposits including Karus’ F G
Gold deposit, the nearby Spanish Mountain deposit, and the Wells -Barkerville Camp, owned by
Osisko Development Corp. , which is 90km to the north . The South Cariboo Property is also
underlain by significant tracts of Quesnel terrane and is therefore prospective for Cu -Au alkalic
porphyry deposits like the nearby Mount Polley mine.
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The FG Gold deposit is formed by a series of sub-parallel, sub-horizontal, rod-shaped mineralized
zones (>0.1 g/t Au) that trend northwest to southeast. Individual rods have diameters of ~200 -
250m and strike length of up to 3.4km, though anomalous gold occurs for up to 10km of strike
length based on historical rock and soil sampling. Gold occurs mostly within a distinctive, ankerite
porphyroblastic, lower siltstone unit (“ knotted phyllite ”) with higher grades associated with
increased silicification and quartz vein density. Veins were emplaced as a conjugate set during a
deformation D1 event, then overprinted by D2 and D3.
FG Gold Exploration History
The FG Gold deposit and surrounding area has been tested with 453 holes for 65,058 metres ,
most of which were drilled in 1990 -91 (20,479m), 2007-2008 (14,029m), and by KORE/Karus in
2020-21 (14,758m). Several metallurgical test work programs have also been carried out, with
work from 1990 showing 87% to 92% gold recovery on a 113 kg bulk sampl e with an average
grade of 2.33 g/t Au. Approximately 298m of underground workings were developed between
1987 and 1991. Karus published a NI 43-101 report on the South Cariboo Claims on June 6, 2022,
which is available on SEDAR (www.sedar.com)
The technical content of this news release has been reviewed and approved by Michael Tucker,
P.Geo., a qualified person as defined by National Instrument 43-101.
Karus Background
Karus, a past wholly owned subsidiary of KORE Mining Ltd. (“ KORE”) incorporated under the
Business Corporations Act (British Columbia) on November 20, 2020, was formed through a spin
out of KORE’s Canadian assets that was completed January 25, 2021.
Karus was founded, and has operated, to conduct geological exploration on the South Cariboo
Property to find commercially viable gold deposits. Karus is a Canadian reporting issuer and news
releases, as well as quarterly and annual audited financial reports, can be found under Karus’
SEDAR profile at www.sedar.com.
Major shareholders of Karus include Yamana Gold Inc. and Mr. Eric Sprott (via 2176423 Ontario
Ltd.).
Karus Gold Corp. latest summary financial information (Unaudited – Prepared by Management)
is below:
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SUMMARY FINANCIALS
Interim Statement of Financial Position
as at 6/30/2022 as at 12/31/2021
ASSETS
Current Assets
Cash 1,267,285 632,961
Accounts receivable 15,332 25,975
Other 35,134 64,872
Non-Current Assets
Mineral properties 10,910,243 10,902,017
Other 134,641 137,330
TOTAL ASSETS 12,362,635 11,763,155
LIABILITIES
Current Liabilities
Accounts payable 467,072 785,395
Total Shareholder Equity 11,895,563 10,977,760
TOTAL LIABILITIES and EQUITY 12,362,635 11,763,155
for the six months ended June
30, 2022
for the six months ended June
30, 2021
Interim Statement of Loss
Expenses 3,598 1,700
Depreciation 493,297 878,879
General and administrative 147,634 110,943
Management fees and wages 197,045 192,617
Marketing, advisory and investor relations 61,747 262,252
Professional fees 231,376 111,827
Share-based payments 242,811 294,403
LOSS FOR THE PERIOD 1,377,508 1,852,621
The Proposed Transaction
Pursuant to the Proposed Transaction, Kenadyr will acquire all the issued and outstanding Karus
Common Shares in exchange for common shares of Kenadyr (“Kenadyr Common Shares”)
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resulting in a reverse takeover of Kenadyr by Karus. Prior to the closing of the Proposed
Transaction, Kenadyr will complete a consolidation of Kenadyr Common Shares on the basis of
one (1) post-consolidation Kenadyr Common Share for every ten (10) pre-consolidation Kenadyr
Common Shares (the “Consolidation”). It is intended that the current shareholders of Karus will
receive an aggregate of approximately 39,091,346 Kenadyr Common Shares on a post -
Consolidation basis. It is anticipated that the Proposed Transaction will be completed as a plan
of arrangement under the laws of British Columbia.
The Proposed Transaction values Karus at CDN$19.7 million (including certain payables settled in
Kenadyr Common Shares) and Kenadyr at CDN$1.1 million (including Kenadyr Debt Settlements
(as defined below)) pre-Concurrent Financing (as defined below) using a CDN$0.50 per common
share price, post-Consolidation (as defined below), of Kenadyr. The Proposed Transaction is an
arm’s length transaction.
Upon completion of the Proposed Transaction, certain members of Kenadyr management will
settle accrued salary payments and loans in Kenadyr Common Shares. Also, certain outstanding
payables to third parties will be settled in Kenadyr Common Shares . T o settle approximately
CDN$500,000 of debt, accrued salary payments and third -party payables (“Kenadyr Debt
Settlements”) a total of 1,000,000 post-Consolidation Kenadyr Common Shares would be issued,
subject to TSXV approval.
In connection with the Proposed Transaction, Kenadyr will complete a private placement (the
“Concurrent Financing”) for gross proceeds of a minimum CDN$2,000,000 at an effective price
of CDN$0.50 per Kenadyr Common Share post-Consolidation, or such other price as determined
by Kenadyr and Karus in the context of the market. The Concurrent Financing may be undertaken
as an offering of subscription receipts or Kenadyr Common Shares. In addition, Kenadyr intends
to complete a private placement of flow -through common shares at a market premium to the
$0.50 price per Kenadyr Common Share (the “Concurrent Flow-Through Financing ”). The LOI
specifies that gross proceeds of a maximum of CDN$5,000,000 may be rais ed under the
Concurrent Financing and Concurrent Flow-Through Financing.
It is currently anticipated that the Proposed Transaction will close on or before the end of Q1
2023. Further updates and particulars of the Proposed Transaction will be provided by K enadyr
and Karus upon entering into a binding agreement for the Proposed Transaction.
None of the securities to be issued pursuant to the Proposed Transaction have been or will be
registered under the United States Securities Act of 1933, as amended, or an y state securities
laws, and any securities issued pursuant to the Proposed Transaction are anticipated to be issued
in reliance upon available exemptions from such registration requirements. This press release
does not constitute an offer to sell or the solicitation of an offer to buy any securities.
The Kenadyr Common Shares were halted effective November 15, 2022 and may remain halted
until the completion of the Proposed Transaction.
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No loans or advances have been made between Karus and Kenadyr. There is no finder’s fee
connected with the Proposed Transaction.
Biographies of New Kenadyr Board and Management
Stuart “Tookie” Angus , proposed Chairman and director – Mr. Angus is a current director of
Kenadyr. Mr. Angus is an independent business adviser to the mining industry. For more than 35
years, Mr. Angus has focused on structuring and financing significant international exploration,
development and mining ventures. Mr. Angus is the former chairman of the board of B.C. Sugar
Refinery Ltd.; he was a director of First Quantum Minerals until June, 2005, a director of Canico
Resources Corp. until its takeover by CVRD in 2005 and a director of Bema Gold until its takeover
by Kinross Gold in 2007. More recently, he was managing director of mergers and acquisitions
for Endeavour Financial, a director of Ventana Gold until its takeover by AUX Canada Acquisition
in 2011 and a director of Plutonic Power until its merger with Magma Energy i n 2011. He was
Chairman of Nevsun Resources. He is presently chairman of K92 Mining Inc., which operates the
Kainantu Gold Project located in the Eastern Highlands province of Papua New Guinea.
Tim McCutcheon, proposed CEO and director - Mr. McCutcheon is a current director and CEO of
Kenadyr. He is a capital markets professional and corporate manager with over 25 years business
experience. He was a Thompson Extel and Institutional Investor ranked metals and mining analyst
for one of Europe’s largest brokerage firms. Founder of DBM Capital Partners, a boutique mining
resource merchant bank with AUM of $130M, financing and M&A value of +$100M. Corporate
turnaround of Ovoca Gold PLC, Abzu Gold Ltd., Global Minerals Ltd. Founded, managed and sold
Ashanti Gold C orp. Mr. McCutcheon has led several public natural resource companies with
assets in Canada, Russia, Kyrgyzstan, Slovakia, Mali, Chile and Ghana. Columbia University, BA
and MBA.
Scott Trebilcock, proposed director - Mr. Trebilcock has over 25 years of experience as a process
engineer, management consultant, and mining executive. He was Chief Development Officer of
Nevsun Resources, leading the company’s 2016 acquisition of Reservoir Minerals and 2018 sale
of Nevsun to Zijin Mining for $1.9 billion after a year-long contested defense process. Mr.
Trebilcock holds a B.Sc. in Chemical Engineering, an MBA from Queen’s University and is a
Chartered Director.
David Whittle, proposed director - Mr. Whittle is a Chartered Professional Accountant with 30
years of se nior executive experience in the mining industry. Mr. Whittle was CFO of Alexco
Resource Corp. for seven years and CFO of Hillsborough Resources Limited. Mr. Whittle has
extensive experience on audit, compensation and special committees. Mr. Whittle hol ds a
B.Com. in Finance from the University of British Columbia.
Yulia Chekunaeva, proposed director - Ms. Chekunaeva is the former head of Capital Markets for
En+, a major multinational energy and metals conglomerate with over $10B in revenue and
90,000 employees. She was a director of Nordgold and was Executive Director at Goldman Sachs.
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She is based in London, UK. Ms. Chekunaeva holds a B.Sc. in Banking and Finance from The
London School of Economics, and a M.A. in Finance from University of Warwick - Warwick
Business School.
Michael Tucker, proposed COO and Head Geologist - Mr. Tucker, P.Geo., in good standing, has
over 10 years of mineral exploration experience. Most recently he was Vice President,
Exploration of KORE Mining Ltd, Exploration Manager for Balmoral Resources Ltd (until
acquisition by Wallbridge Mining) and has previously worked for Goldcorp, QuadraFNX and
Archer, Cathro & Associates. Mr. Tucker is currently a director of Regency Silver Corp. Mr. Tucker
holds a B.Sc. from Laurentian University and a M.Sc. from the University of British Columbia.
Kevin Ma, propose d CFO - Mr. Ma is the current CFO of Kenadyr. He is a senior financial
professional specializing in corporate finance, public company reporting and regulatory
compliance in Canada and United States, for the past 10 years. Mr. Ma was a core member of the
senior management team at Alexco Resource Corp. that put the Bellekeno mine into commercial
operations in 2011 in the historic Keno Hill silver district, Yukon, Canada. Mr. Ma is a chartered
accountant certified by the Institute of Chartered Professional Acc ountants of British Columbia
and holds a diploma in accounting and a Bachelor of Arts degree from the University of British
Columbia.
Yee Lun “Emmery” Wang, proposed Corporate Secretary – Ms. Wang has over 20 years of
professional accounting and record-keeping experience at various corporations, including both
private and public companies listed in Canada and USA. She is a Chartered Accountant and a
graduate of the University of British Columbia with a B.Sc. and Diploma in Accounting.
Sponsorship
Sponsorship of a reverse takeover is required by the TSXV unless exempt in accordance with TSXV
policies. Kenadyr will be applying for an exemption from the sponsorship requirements pursuant
to the policies of the TSXV, however, there is no assurance that an exemption is available or that
Kenadyr will ultimately obtain an exemption if one is available.
ON BEHALF OF KENADYR METALS CORP.
“Tim McCutcheon”
Tim McCutcheon
Chief Executive Officer and Director
For more information, please contact:
Tim McCutcheon or Kevin Ma
E-mail: [email protected]
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Phone: +1-604-569-2963 Ext 105
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.
Completion of the Proposed Transaction is subject to a number of conditions, including but not
limited to, TSXV acceptance and if applicable, disinterested shareholder approval. Where
applicable, the Proposed Transaction cannot close until the required shareholder approval is
obtained. There can be no assurance that the Proposed 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 Proposed Transaction, any information
released or received with respect to the Proposed 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.
All information contained in this news release with respect to Kenadyr and Karus was supplied by
the parties, respectively, for inclusion herein.
Cautionary Statement on Forward-Looking Information
This press release contains forward-looking statements and forward-looking information
(collectively, "forward-looking statements") within the meaning of applicable Canadian securities
legislation. All statements, other than statements of historical fact, included herein including,
without limitation, statements regarding the anticipated timing and closing of the Proposed
Transaction, the receipt and approval of the Kenadyr shareholders and Karus shareholders and
the TSXV, anticipated benefits to the shareholders as a result of the Proposed Transaction and the
anticipated business plans and timing of future activities of the post-closing Corporation, are
forward-looking statements. Although the Corporation believes that such statements are
reasonable, it can give no assurance that such expectations will prove to be correct. Forward-
looking statements are typically identified by words such as: believe, expect, anticipate, intend,
estimate, postulate and similar expressions, or are those, which, by their nature, refer to future
events. The Corporation cautions investors that any forward-looking statements by the
Corporation are not guarantees of future results or performance, and that actual results may
differ materially from those in forward looking statements as a result of various factors, including,
but not limited to, the state of the financial markets for the Corporation's equity securities, the
state of the commodity markets generally, variations in the nature, quality and quantity of any
mineral deposits that may be located, variations in the market price of any mineral products the
Corporation may produce or plan to produce, the inability of the Corporation to obtain any
necessary permits, consents or authorizations required, including TSXV acceptance, for its
planned activities, the inability of the Corporation to produce minerals from its properties
successfully or profitably, to continue its projected growth, to raise the necessary capital or to be
fully able to implement its business strategies, and other risks and uncertainties disclosed in the
Corporation's latest interim Management Discussion and Analysis and filed with certain securities
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commissions in Canada. All of the Corporation's Canadian public disclosure filings may be
accessed via www.sedar.com and readers are urged to review these materials, including the
technical reports filed with respect to the Corporation's mineral properties.