Announce Letter of Intent for a Proposed Qualifying Transaction to form Arizona Metals Corp.
Croesus Gold Corp. and Ring the Bell Capital Corp.
Announce Letter of Intent for a Proposed Qualifying
Transaction to form Arizona Metals Corp.
April 4, 2019 – Toronto – Croesus Gold Corp. (“Croesus”) and Ring the Bell Capital Corp.
(“RTB” or the “ Company”) (TSXV:RTB.P) are pleased to announce the entering into of a
binding Letter of Intent (the “ LOI”), which sets forth the genera l terms and conditions pursuant
to which Croesus and RTB have agreed to complete a transaction (the “ Transaction”) that will
result in a reverse take-over of RTB by the share holders of Croesus. It is intended that the
Transaction will constitute the “Qualifying Trans action” of RTB as such term is defined in
Policy 2.4 of the Corporat e Finance Manual (the “ Policy”) of the TSX Venture Exchange (the
“TSXV”).
Marc Pais, President and CEO, Croesus Gold Corp: “We are very excited to introduce the high-
grade Kay Mine VMS deposit to the market af ter a long period of dormancy. The patented
claims have been privately held for 35 years, and no exploration work has been performed since
1984. In 1982, Exxon Minerals (a subsidiary of E xxonMobil) estimated a historic resource of
significant tonnage and grade. Only one quarter of the mineralized strike length traced at surface
has been tested, and the deposit was not drilled below a depth of 900m. Importantly, none of the
351 acres of claims recently acquired are subject to any royalties. Last month Croesus also
staked an additional 1,000 acres of adjacent claims, and completed a helicopter VTEM survey.
Preliminary results of the survey have already highlighted a significant new target that is
untested by drilling. We look forwar d to initiating a pr eliminary drill program in order expand
and bring the historic resource into NI 43-101 compliance, while also testing new targets.
The technical information contained in this news release was reviewed and approved by David S.
Smith, CPG, who is a Qualified Person (“QP”) under National Instrument 43-101 - Standards of
Disclosure for Mineral Projects.
Croesus Gold Corp.
Croesus is a private mineral exploration comp any based in Toronto, Ontario. Croesus recently
completed the acquisition of 100% ownership of approximately 351 acres of patented and
unpatented claims covering and surroundi ng the past-producing Kay mine (“ Kay Mine ”),
located in Yavapai County, Arizona, approximate ly 50 miles north of Phoenix. The Kay Mine
claims are not subject to any royalties. The Kay Mine property hosts an historic resource
estimate, defined by Exxon Minerals (Fellows, 1982) of 6.4 million short tons at a grade of 2.2%
copper, 2.8g/t gold, 3.03% zinc, and 55g/t silver. E xxon used a copper equivalent cut-off grade
of 2%. The historic estimate was defined from a depth of a pproximately 100m to 900m, and
based on approximately 103 underg round drill holes on 12 levels , thousands of underground
samples, and approximately 7,500m in surface dr illing. Croesus has pla nned an initial drill
program of approximately 10,000m. The 1982 es timate by Exxon did not use CIM categories.
Croesus’ QP has not done sufficient work to classi fy the historic estimate as a current resource,
and Croesus is not treating the historic estimat e as a current resource. In March 2019, Croesus
staked an additional 1,000 acres of BLM claims contiguous with the recently acquired Kay Mine
claims. Croesus also completed a helicopter VTEM survey totaling 102 line kilometres covering
the acquired and staked claims.
Croesus also owns 100% of the Sugarloaf Peak Gold Project, which is composed of 219 BLM
claims with dimensions of approximately 4km x 6km, and hosts an historic resource “containing
about 1.5 million ounces gold and 25 million ounces of silver in a volume of about 100 million
tons” (Dausinger, 1983). This estimate was based on work by Westworld Resources (1981-1983)
which totaled 2,500 feet of drilling in 10 holes to a maximum depth of onl y 76m. The historic
estimate was not defined using CIM categorie s. Additional drilling totaling 4,400m was
completed by Riverside Resources and Choi ce Gold between 2009 and 2012, and a Titan-24
geophysical survey was also undertaken during th is period. The average drill hole spacing at
Sugarloaf is 150m and Croesus estimates an initi al drill program of at least 10,000m will be
required. Croesus’ QP has not done sufficient work to classify the historic estimate as a current
resource, and the Company is not treating the historic estimate as a current resource.
The Proposed Transaction
Pre-Closing Capitalization of RTB
As of the date hereof, RTB has 12,700,020 issued and outstanding common shares (each a “RTB
Share”) and securities exercisable or exchangeable for, or conver tible into, or other rights to
acquire, an aggregate of 1,800,000 RTB Shares at an exercise price of $0.10 per RTB Share
(collectively with the RTB Shares, the “RTB Securities”).
The RTB Shares are currently listed on the TSXV under the symbol “ RTB.P”. The RTB Shares
are currently halted from trading and are expe cted to remain halted pending the completion of
the Transaction.
Pre-Closing Capitalization of Croesus
Croesus is incorporated under the Canada Business Corporations Act and, as of the date hereof,
has (a) 35,708,400 common shares issued and outstanding (the “ Croesus Shares ”), and (b)
7,100,000 stock options exercisable to acq uire 7,100,000 Croesus Shares (the “ Croesus
Options” and collectively, the “ Croesus Securities ”). The holders of Croesus Options will
receive options of RTB on the same economic terms as the Croesus Options which they replace.
Terms of the Transaction
Under the terms of the LOI, it is intended th at Croesus and RTB will enter into a business
combination agreement (the “Definitive Agreement”), pursuant to which the Transaction will be
completed by way of a share exchange, merger , amalgamation, arrangement or other similar
form of transaction, the final structure of whic h will be subject to r eceipt by the parties of
relevant tax, corporate and securities law advice. The corporation resulting from the Transaction
(the “Resulting Issuer ”) will continue under the name “Arizona Metals Corp.” or such other
name as Croesus and the Company may determine.
Prior to the completion of the Tr ansaction, the RTB Shares shall be consolidated at a ratio (the
“Consolidation Ratio ”) of 2.5 pre-consolidation RTB Shar es for every 1 post-consolidation
RTB Share (each a “ Post-Consolidation RTB Share ”), or such other cons olidation ratio as to
account for a market capitalization of an aggregate of $1,500,000 for the RTB Shares. Assuming
no change to the Consolidation Ratio, upon co mpletion of the Transaction there will be
5,120,008 RTB Securities outstanding which will be held by current securityholders of RTB.
It is anticipated that the Croesus Shares will be attributed an aggregate value of approximately
$10,712,520 (pre-money and non-diluted) and that the Croesus Shares will be acquired by RTB
in exchange for the issuan ce of 35,708,400 Post-Consolidation RTB Shares. Prior to the
completion of the Transaction, the total number of shares issuable by RTB and the aggregate
value of the Croesus Shares shall be adjusted to take into account the Concurrent Financing and
any issuances or exercises of Croesus Options that occur prior to the Transaction.
The Company will hold a special meeting of its shareholders (the “Meeting”) to approve, among
other things: (i) the board of di rectors of the Resulting Issuer following the completion of the
Transaction, (ii) the appointment of BDO Canada LLP as auditors of the Resulting Issuer, (iii)
the approval of the Resulting Issuer’s equity incen tive plan, (iv) the change of its name to
Arizona Metals Corp., and (v) a consolidation of its shares. Further details regarding the Meeting
will be contained in a management information circular which will be sent to shareholders of the
Company.
Closing of the Transaction is expected to occur on or before June 21, 2019. The LOI may be
terminated by either party if a definitive agreement is not entered into by May 31, 2019.
The Transaction is not a “Non-Arm’s Length Qua lifying Transaction” within the meaning of
Policy 2.4 of the TSXV.
Conditions of the Transaction
Completion of the proposed transaction is subjec t to a number of conditi ons including, but not
limited to: (i) completion of mutually satisfactory due diligence reviews; (ii) execution of the
Definitive Agreement; (iii) requisite board and sh areholder approvals; and (iv) receipt of all
requisite regulatory appr ovals relating to the Transaction, including, without limitation, the
TSXV.
Concurrent Financing
In connection with the Transacti on, Croesus will complete a “best efforts” private placement of
up to 12,500,000 subscrip tion receipts (“ Subscription Receipts ”) at a price of $0.40 per
Subscription Receipt for aggregate gross proceeds of up to $5,000,000 (the “ Concurrent
Financing”). Canaccord Genuity Corporation (the “ Agent”) has been engaged to act as lead
agent in connection with the Concurrent Financing.
The gross proceeds of the Concurrent Financing, less certain fees and expenses of the Agent, will
be placed in escrow on behalf of the purchasers of Subscription Receipts, and will be released to
Croesus upon satisfaction of certain escrow release conditions, including completion of the
Transaction. If the escrow release conditions are not satisfied, the Subscrip tion Receipts will be
cancelled and all proceeds from the sale of Subscription Receipts will be returned to purchasers.
Immediately prior to closing of the Transaction, each Subscription Receipt will, without payment
of any additional consideration or taking of any action, be converted into one (1) unit of Croesus
(the “Unit”). Each Unit is comprised of one Croesus Share (the “ Underlying Shares”) and one-
half of one common share purchas e warrant of Croesus (the “ Underlying Warrants ”). Each
Underlying Warrant will entitle the holder thereof to purchase one Croesus Share at a price of
$0.55 for a period of 24 months following the date in which the common shares of the Resulting
Issuer commence trading on the TSX Venture Exchange (the “ Reference Date”). On closing of
the Transaction, each Croesus Share will then, w ithout payment of any additional consideration
or taking of any action, subsequently be exchanged for one (1) common share of the Resulting
Issuer (a “Resulting Issuer Share”) and each Underlying Warrant will be exchanged for (1) one
common share purchase warrant of the Resulting Issuer in accordance with the terms of the
Definitive Agreement.
Croesus will pay the Agent a cash commission (the “Agent’s Commission”) equal to 6% of the
aggregate gross proceeds of the Concurrent Financing, half of which will be paid upon closing of
the Concurrent Financing, and half of which w ill be paid upon conversion of the Subscription
Receipts. Croesus will also issu e warrants to the Agent (the “ Compensation Warrants”) to
purchase such number of Croesus Shares as is e qual to 8% of the total number of Subscription
Receipts issued pursuant to the Concurrent Fi nancing. The Compensation Warrant will be
exercisable into one Croesus Share at an ex ercise price of $0.40 for a period of 24 months
following the Reference Date. The Compensation Warrants will be exchanged for warrants of the
Resulting Issuer in connection with the Trans action. The net proceeds from the Concurrent
Financing will be used to advance exploration and development of Croesus’ Kay Mine and
Sugarloaf projects and for general working capital purposes.
Sponsorship
The Transaction is subject to the sponsorship requirements of the TSXV, unless an exemption
from the sponsorship requirement is available or a waiver is granted. The Company intends to
apply for an exemption to the s ponsorship requirement. There is no assurance that an exemption
from this requirement will be obtained.
Management and Insiders of the Resulting Issuer
Upon completion of the Transac tion, the current directors and officers of the Company will
resign and the proposed board of directors of th e Resulting Issuer will include Marc Pais, Paul
Reid, Rick Vernon and Colin Suth erland. Marc Pais will be a ppointed Chief Executive Officer
and Sung Min (Eric) Myung, Chief Financial Offi cer and Corporate Secretary of the Resulting
Issuer. Additional details with respect to the directors and officers of the Resulting Issuer will be
announced in a subsequent press release once available.
The parties do not expect any persons will hold more than 10% or more of the issued and
outstanding Resulting Issuer Shares upon completion of the Transaction. Ke vin Reid, a director
of RTB, currently owns an aggregate of 2,800,000 Croesus Shares representing 7.9% of the
issued and outstanding Croesus Shares. Blair Schultz, a director of RTB owns 1,000,000 Croesus
Shares representing 2.8% of the outstanding Cr oesus Shares, and Chri stopher Tate, CEO and a
director of RTB, owns 250,000 Croesus Shares representing 0.7% of the outstanding Croesus
Shares. No director or officer of the Company owns or controls, di rectly or indirectly, more than
10% of the Croesus Shares.
The relevant professional experience of the pr oposed directors and officers of the Resulting
Issuer is set out below:
Paul Reid
Chairman
Mr. Reid has fifteen years of experience in financing mineral exploration, development and
production assets. Mr. Reid is the Founder and former Chairman of Telegraph Gold (now
Equinox Gold, a TSX-V listed exploration co mpany) and was an investment banking
professional with extensive experi ence in raising capital, going-publ ic transactions and advisory
services. Paul holds an MBA fr om Wilfrid Laurier University and a Bachelor of Honours in
Economics from Queen's University.
Marc Pais
Chief Executive Officer and Director
Mr. Pais has 8 years’ experience as a mining anal yst in the investment banking industry, with a
focus on precious metals development companies. Mr. Pais is a founder and the former President
of Telegraph Gold (now Equinox Gold, a TSXV- listed exploration company). Mr. Pais has a
Bachelor of Science in Geological Engineering (Mineral Exploration) from Queen's University.
Colin Sutherland
Director
Mr. Sutherland is a Certified Professional Accountant with more than 20 years of operational and
financial experience with exploration and develo pment stage mining companies. Mr. Sutherland
is a director of MQ Minerals LPC (ISDX:NQM I) and most recently, Mr. Sutherland served as
President of McEwen Mining (NYSE:MUX; TS X:MUX) and as Chief Executive Officer and
Managing Director of Archipel ago Resources Pte. Ltd., wher e he grew production to 200,000
ounces per year. Mr. Sutherland has held senior financial and executive roles with Timmins Gold
Corp., Capital Gold Corp., Nayarit Gold Inc. and Aurico Gold Inc. Mr. Sutherland has a
Bachelor of Business Administration, Accounting, from Saint Francis Xavier University.
Rick Vernon
Director
Mr. Vernon has thirty years of experience as a mining finance pr ofessional, having previously
been Managing Director and Head of Investme nt Banking at PI Financial Corp., Head of
Investment Banking at Stonecap Securities Inc. and Managing Director at Blackmont Capital.
Mr. Vernon BSc in Geological Sc iences from Queen’s University and an MBA from University
of Southern California.
Sung Min (Eric) Myung
Chief Financial Officer
Eric Myung is a Senior Financ ial Analyst of Marrell i Support Services Inc., providing CFO,
accounting, regulatory compliance, and management advisory services to numerous issuers on
the TSX, TSX-Venture and othe r Canadian and US exchange s. Previously, Mr. Myung has
worked at public accounting firms focused on sm all and medium business for seven years. Mr.
Myung is a Canadian Professiona l Accountant and has a Master of Accounting degree from
University of Waterloo.
Control Persons
As of the date hereof, no shareholders hold a c ontrolling interest in Croesus. The officers and
directors of Croesus are Messrs. Marc Pais and Paul Reid who together own an aggregate of
4,800,000 Croesus Shares, representing approximate ly 13.5% of the issued and outstanding
Croesus Shares as at the date hereof, with Mr. Reid owning 2,500,000 Croesus Shares (7%) and
Mr. Pais owning 2,300,000 Croesus Shares (6.5%), re spectively. Riverside Resources Inc. owns
5,300,000 Croesus Shares, representing 14.9% of th e issued and outstanding Croesus Shares.
The current ownership of the remaining interest in Croesus consists of approximately 70 Croesus
shareholders holding 25,608,400 Croesus Shares, repr esenting approximately 72% of the total
issued and outstanding Croesus Shares as of th e date hereof. Messrs. Pais and Reid are both
Canadian residents.
Trading of the Resulting Issuer Shares
Trading in the RTB Shares has been halted as a result of the announcemen t of the Transaction.
The Company expects that trading will remain halted pending closing of the Transaction, subject
to the earlier resumption upon TSXV acceptance of the Transaction and the filing of required
materials in accordance with TSXV policies.
Upon successful completion of the Transaction, it is anticipated that the Resulting Issuer will be
listed as a Tier 2 Mining issuer.
Filing Statement
In connection with the Transac tion and pursuant to TSXV require ments, RTB will file a filing
statement on SEDAR, which will contain deta ils regarding the Transaction, the Definitive
Agreement, the Concurrent Financing, RTB, Croesus and the Resulting Issuer.
About RTB
RTB is a capital pool company within the mean ings of the policies of the TSXV and does not
have any operations and has no assets other than cash. RTB’s business is to identify and evaluate
businesses and assets with a vi ew to completing a Qualifying Transaction under the policies of
the TSXV.
Forward Looking Information, Disclaimer and Reader Advisory
Not for distribution to United States newswire services or for dissemination in the United
States. This news release does not constitute an offe r 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 amended (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. S ecurities Act and applic able state securities
laws or an exemption from such registration is available.
All information provided in this press releas e relating to Croesus has been provided by
management of Croesus and has not been inde pendently verified by management of the
Company. As the date of this press release, the Company has not entered into a Definitive
Agreement with Croesus, and readers are cauti oned that there can be no assurances that a
Definitive Agreement will be executed.
Completion of the Transaction is subject to a number of conditions, including but not limited to,
TSXV acceptance and if applicable pursuant to TSXV requirements, majority of the minority
shareholder approval. Where applicable, th e transaction cannot cl ose until the required
shareholder approval is obtained. There can be no assurance th at 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 a capital pool company 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 approve d 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 re sponsibility for the adequacy or accuracy of
this release.
This press release contains statements th at constitute “forwa rd-looking information”
(collectively, “forward-looking statements”) with in the meaning of the applicable Canadian
securities legislation, All statements, other than statements of historical fact, are forward-looking
statements and are based on expectations, estimates and projections as at the date of this news
release. Any statement that discusses predicti ons, expectations, beliefs, plans, projections,
objectives, assumptions, future events or performa nce (often but not always using phrases such
as “expects”, or “does not expect”, “is expected”, “anticipates” or “does not anticipate”, “plans”,
“budget”, “scheduled”, “forecasts”, “estimates”, “bel ieves” or “intends” or variations of such
words and phrases or stating that certain actions, events or re sults “may” or “could”, “would”,
“might” or “will” be taken to occur or be achieved) are not statements of historical fact and may
be forward-looking statements. Forward-looking statements contained in this press release
include, without limitation, statements regarding: the terms, conditions, and completion of the
Transaction and the Concurrent Fi nancing; use of funds; and the business and operations of the
Resulting Issuer. In making the forw ard- looking statements containe d in this press release, the
Company has made certain assumptions, including that: due diligence will be satisfactory; the
Concurrent Financing will be completed on accepta ble terms; all applicable shareholder, and
regulatory approvals for the Transaction will be received. Although the Company believes that
the expectations reflected in forward-looking statem ents are reasonable, it can give no assurance
that the expectations of any forward-looking st atements will prove to be correct. Known and
unknown risks, uncertainties, and ot her factors which may cause th e actual results and future
events to differ materially from those expresse d or implied by such fo rward-looking statements.
Such factors include, but are not limited to: results of due diligence; availability of financing;
delay or failure to receive boa rd, shareholder or regulatory a pprovals; and general business,
economic, competitive, political and social uncer tainties. Accordingly, r eaders should not place
undue reliance on the forward-looking statements and information contained in this press release.
Except as required by law, the Company disclaim s any intention and as sumes no obligation to
update or revise any forw ard-looking statements to reflect actu al results, whether as a result of
new information, future events, changes in a ssumptions, changes in factors affecting such
forward-looking statements or otherwise.
For more information please contact RTB’s Chie f Executive Officer, Christopher Tate at
(647) 403-3797 or Croesus’s President, Marc Pais at (416) 565-7689.