Califfi Capital Corp. Announces Proposed Qualifying Transaction
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CALIFFI CAPITAL CORP.
423 East 10th Street
North Vancouver, B.C.
V7L 2E5
Trading Symbol: TSX-V: CFI.P Telephone: 604-619-0225
Fax: 604-980-6264
Email: [email protected]
Califfi Capital Corp. Announces Proposed Qualifying Transaction
Not for distribution to U.S. Newswire Services or for dissemination in the United States.
Any failure to comply with this restriction may constitute a violation of U.S. Securities laws.
June 18, 2020 - Vancouver, British Columbia: Califfi Capital Corp. (the “Corporation” or “ Califfi”) (TSXV: CFI.P) is
pleased to announce that it has entered into a letter of intent dated June 16, 2020 negotiated on an arm’s-length
basis to acquire all of t he issued and outstanding shares of Bonanza Mining Corporation (“Bonanza”), a private
British Columbia mineral exploration company which holds certain mineral property interests in British Columbia,
including the MC Project (details below) (the “Proposed Transaction”). The letter of intent provides that it will be
superceded and replaced with a more formal definitive agreement that will contain standard representations and
warranties for agreements of a like nature. The letter of intent and the more forma l definitive agreement are
hereinafter referred to collectively as the “Agreement”.
Pursuant to the Agreement, Califfi will acquire 100% of the issued and outstanding shares of Bonanza from the
holders thereof for consideration consisting of two (2) Califfi Shares (as defined below) for each one (1) Bonanza
Share (as defined below) issued and outstanding as of the Closing (the “Purchase Price”). The only 10% or greater
shareholder of the resulting entity (the “Resulting Issuer”) will be Alfredo De Lucrezia, a resident of British
Columbia and currently the President, Chief Executive Officer and a Director of Califfi.
Califfi was incorporated on November 24, 2016 under the laws of British Columbia , is a reporting issuer in the
provinces of British Columbia and Alberta, and is a “capital pool company” (a “CPC”) under the policies of the TSX
Venture Exchange (the “Exchange”). The transaction contemplated by the Agreement will constitute Califfi’s
“Qualifying Transaction” as defined under Exchange Policy 2.4. The acquisition of Bonanza will be carried out by
parties dealing at arm’s length to one another and therefore will not be considered to be a “Non -Arm’s Length
Qualifying Transaction”, as such term is defined under the policies of the Exchange. As result, a formal meeting of
Califfi’s shareholders to approve the Proposed Transction is not required, although receipt of Exchange
acceptance will be a condition of closing.
In connection with the Proposed Transaction, Califfi intends to carry out certain concurrent transactions, including
the Financing (as defined below). On the closing of the Proposed Transaction and the Financing (the “Closing”) ,
the Resulting Issuer will be listed on Tier 2 of the Exchange under the “Minin g Issuer” industry segment and will
change senior management and directors (details below), and will change its name to complement the business of
the Resulting Issuer.
The Proposed Transaction
Subject to Exchange acceptance, the completion of the Financing (as described below) , and the satisfaction of
other conditions contained or to be contained in the Agreement, Califfi will issue on Closing to the Bonanza
shareholders two (2) Califfi Shares at a deemed price of C$0. 15 per Califfi Share for each one (1) Bonanza Share
issued and outstanding as of the Closing in satisfaction of the Purchase Price (there currently being 7,095,001
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Bonanza Shares issued and outstanding, with up to an additional 1,000,000 Bonanza Shares expected to be issued
pursuant to an interim financing Bonanza expects to complete by July 10, 2020.)
The MC Project, Skeena Mining District, British Columbia
The MC property comprises 903.31 hectares in the heart of the Stewart mining camp 12 kilometers north of the
town of Stewart B.C. just 3 kilometers east of Ascot Gold Corp’s Premier mine. Ascot has recently filed a feasibility
study to restart the Premier mill. The property can be accessed off paved highway 37A and a BC Hydro
transmission line crosses it. The MC property hosts 17 historical mineral occurrences and a large undrilled
polymetallic gold-silver-lead-zinc-copper soil anomaly and two significant, undrilled Volterra 3D IP chargeability
anomalies that have been developed by Bonanza from grass roots exploration since 2017. B oth the soil and IP
anomalies are now drill ready.
The large soil anomaly was developed on contour lines roughly 100 meters apart with 50 meter sample spacing
and occurs within a complex gossanous alteration and structural deformation zone associated with a ground
magnetic anomaly and one or more cross cutting igneous dikes as well as numerous quartz -carbonate
polymetallic mineral showings. The soil anomaly is ~ 1,000 meters long by ~300 meters wide and is open ended
both to the west and east. The assay r esults from 24 rock samples selected from various mineral showings
associated with the soil anomaly returned values up to 10.5 g/t gold, 1,503 g/t silver, 5.3 % lead, 5.7 % zinc and
.67 % copper. Six of the rock samples contained > 1.0 g/t gold and > 20 g/t silver.
The largest IP chargeability anomaly C -1 measures 400 meters by 700 meters in size and comes to surface on its
eastern side near the historical Dalhousie workings, but appears to be centered further west at a depth of ~ 500
meters. BC assessment report #7841 reported a trench blasted across a zone of quartz, pyrite, chalcopyrite and
magnetite mineralization at the Dalhousie workings assayed 0.43 oz/t gold over 6 meters, but this assay result has
not been confirmed by Bonanza. The second IP anomaly C-2 appears to be spread out for about 900 meters along
strike and includes 4 near surface pods, some of which are near historical mineral occurrences and workings such
as the Rock of Ages vein system. The main chargeability pod measures 400 meters by 20 0 meters and is centered
approximately 300 meters below surface and 800 meters north of the larger C-1 IP anomaly.
A current NI-43-101 technical report on the property has been prepared and will be filed in conjunction with the
closing of the Proposed Transaction.
The Shag Property, Golden Mining District, British Columbia
The Shag Property comprises 2 mineral claims totaling 1,124.66 hectares and is located in the BC southern Rockies
approximately 24 km northeast of the town of Canal Flats and 35 km east of Radium Hotsprings and is readily
accessed by major BC forestry service roads from both towns, however the upper portions of Shag creek valley
will require helicopter access.
Zinc-lead-silver mineralization was first discovered on the Shag property in 1977 during a regional sedimentary
hosted lead -zinc exploration program funded by Riocanex Ltd. Subsequently there have been 9 separate
exploration programs conducted on t he property from 1977 to 1998 that included small diamond drilling
programs by Riocanex in 1978 and 1979 followed by two small drilling programs by Esso Minerals in 1981 and
1982. The lead -zinc mineralization on the property is interpreted to belong to the MVT class of deposits and is
similar to the past producing Monarch and Kicking Horse mines located along trend in the same carbonate rock
formations near Field BC approximately 100 km north.
Twenty separate lead -zinc showings have been discovered on the Shag property along at least three separate
horizons over a strike length of 5 km. The BM horizon is comprised of 4 separate showings along a 500 meter
strike length and was the subject of Riocanex’s 1978 drill program. The C-4 type horizon occurs approximately 100
meters above the BM horizon and is comprised of 4 separate showings located along a strike length of about
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1,000 meters and was the subject of Riocanex’s 1979 drill program. The main Redbed horizon occurs
approximately 200 meters above the BM horizon and is composed of 7 main showings and 3 float showings along
a 600 meter strike length and was the subject of Esso’s drill programs in 1981 and 1982. The best results from
Esso’s drilling were intersections of 10.5% zinc over 3.3 meters within a larger 10.5 m intersection of 5% zinc.
Three separate soil sampling surveys have been conducted on the property from which a strong zinc -lead soil
anomaly over 3 km long was outlined along the Shag creek valley. As well a 10.7 line km IP and magnetic survey
was conducted in 1988 that outlined 4 separate IP chargeability high anomalies associated with the zinc -lead soil
anomaly that were recommended for drilling but no drilling was done to test them.
The Frog Property, Liard Mining District, British Columbia
The Frog property comprises three mineral claims totaling 1,166.78 hectares and is located approximately 170 km
east of Imperial Metals – Newcrest’s Red Chris mine near Dease Lake, BC and about 70 km east of the major
Kutcho Creek copper -zinc massive sulf ide project that is being developed by Capstone Mining Corp’s subsidiary
Kutcho Copper Corp. There is an airstrip at Kutcho and a 100 km long road connects the project to the town of
Dease Lake and paved highway 37.
The Frog zinc-lead-silver-copper property dates back to the 1950’s when an area of massive argentiferous galena -
sphalerite-chalcopyrite-rhodochroisite boulders roughly 180 meters by 120 meters was discovered in sedimentary
rocks there. The property was held by Conwest Mining Ltd. from that time until the early 1970’s and subsequently
by Cominco Ltd. through the 1970’s until 1989. In the early 1960’s Conwest dug two hand trenches across the
zone of massive sulfide boulders and excavated ~ 30 tons of high grade mineralization and assayed several
samples which averaged 29.7% lead, 6.8% zinc, 16.6 oz/t silver, 0.6% copper and 0.01 oz/t gold.
In 1971 Conwest completed an IP survey and followed it up with a small drill program to test the IP metal factor
anomalies but the holes did not intersect signi ficant mineralization. Cominco geologists later mapped the zone
and concluded that the Conwest drill holes were drilled parallel to the interpreted trend of the mineralization and
therefor in the wrong direction. As well the IP data has recently been rewor ked and the tenor of the IP values are
significantly higher than the metal factor values used. Over the years eight separate surveys were conducted on
the property attempting to locate the source of the massive sulfide boulders. These surveys include a soi l sample
survey and an IP survey by Conwest, as well as 2 gravity and ground magnetic surveys by Cominco, all of which
outlined significant anomalies, however no further drilling was conducted. One of the most significant surveys
was the Conwest soil surve y that outlined a large, high value lead, zinc and manganese anomalous area roughly
2km by 2km in size. This anomaly remains open to the southeast and shows the main mineralized zone has a
south-southeast trend which was not tested by the previous exploration efforts.
In 2005 the BC government funded a regional airborne magnetic survey that covered the area where the Frog
property is located and published the results in Open File # 3198 titled Cassiar Geophysics. Importantly an
isolated, discreet aeromagnetic high anomaly measuring 10 km by 10km was outlined and its 2 km by 2 km central
peak area is centered directly under the mineralized area of the Frog property, indicating strong potential for the
discovery of a porphyry copper and/or a large sk arn deposit below the higher level lead -zinc-copper-silver-
manganese mineralization.
The Financing
The terms of the Agreement include that Califfi and Bonanza shall arrange for the completion of a financing for
gross proceeds of a minimum of C$1.64 million (the “Financing”) prior to and/or concurrent with the closing of
the Proposed Transaction. Further information with respect to the Financing will be disclosed in due course once
available, by way of press releases.
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Currently, the authorized share capi tal of Califfi consists of an unlimited number of common shares (the “ Califfi
Shares”) of which (a ) 15,487,000 Califfi Shares are currently issued and outstanding; and (b) 1,500,000 Califfi
Shares are reserved for issuance under outstanding stock options uner Califfi’s stock option plan (the “Option
Plan”, as described below). Immediately prior to Closing, no more than 16,987,000 Califfi Shares will be issued
and outstanding as fully paid and non-assessable.
Upon Closing of the Proposed Transaction and assuming completion of the minimum C$1.64 million under the
Financing, it is expected that there will be approximately 41.677 million shares of the Resulting Issuer issued and
outstanding, with approximately a further 4.16 million shares reserved for issuance under incentive stock options
available for future grant.
Changes to Board and Management
On Closing, it is anticipated that Christopher Graf will be appointed the President, CEO and a director of the
Resulting Issuer, Andrew Burgess will be appointed a director, Alfredo De Lucrezia, Califfi’s current President, CEO
and a director, and John Pallot, also currently a director of Califfi, will remain as directors , with one or more
additional directors as chosen by Bonanza also to be appointed. Bios for Messrs. Graf, Burgess, De Lucrezia and
Pallot are presented below:
Christopher Graf obtained a B.Ap.Sc degree in geological engineering from UBC in 1974 and has been
registered as a Professional Engineer with the Association of Professional Engineers of B.C. since 1980. He
has successfully applied his profession for the past 40 years in B .C., Alberta, Yukon and Mexico, his forte
being mineral property evaluation, field exploration and designing diamond drilling programs.
In 1983 he staked the Kerr claims on an area of promising porphyry copper -gold mineralization at
Sulphurets creek in NW BC. This property is now a major part of Seabridge Gold Corp’s world class KSM
project that contains an estimated 30 million ounces of gold and 12 billion pounds of copper. In 1978 he
staked the Akie claims on a previously unexplored zinc prospective area in the northern BC Rockies and he
continuously explored and developed it until it was taken over by another company in 2007. The Akie
deposit contains an indicated plus inferred resource of 30 million tonnes grading 10% zinc/lead and is the
second largest zinc deposit ever discovered in BC after the Sullivan deposit. In 2001 he staked the
Wicheeda claims on a zone of rare earth mineralization near Prince George BC and in 2008 and 2009
designed and conducted the first drilling and metallurgical programs on the property. The deposit has an
indicated plus inferred resource of 15 million tonnes grading 2.5 % REE and with its very favorable
infrastructure is arguably the most significant rare earth deposit in Canada.
Mr. Graf was a director of the BC and Yukon Chamber of Mines during the 1990’s and was very involved
with the Chamber’s Aboriginal Affairs and Environmental/Park committees which were trying to mitigate
BC’s ambitious policies that were largely negative for mineral exploration in BC. For his work h e was the
2011 recipient of the Frank Woodside Past Presidents Award for distinguished service to the minerals
industry from the Chamber, now named AME BC.
Andrew Burgess, B. Comm. (Hons), University of Manitoba is a C.A. C.P.A. (Alberta) and is an experienced
professional with more than 35 years experience with natural resource, service and industrial companies
in the areas of financial and management reporting, taxation, corporate reorganizations, investments,
acquisitions, divestitures, equity and deben ture financing, budgeting, investor relations and
administration. He has extensive public company experience. He is currently a director of Defense Metals
Corporation and the CFO and a director of Spectrum Mining Corporation.
Alfredo De Lucrezia is the President, CEO and a director of Vincero Capital Corp., a CPC listed on the
Exchange which announced a proposed Qualifying Transaction on May 27, 2020 with NewGen
Therapeutics, Inc. He was also the President, CEO, CFO and a director of former CPC Manera Capital Corp.
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(now GT Gold Corp.) from September 2013 until it completed its Qualifying Transaction on November 10,
2016. He also serves as the President, CEO and a director of Califfi, the shares of which were listed on the
Exchange on July 19, 2017. He a lso manages Delrizia Investments, has managed real estate portfolios for
several private companies, and has been a director and/or an officer of a number of reporting issuers over
the past 25 years, where he structured companies transitioning from the priv ate sector to becoming
publicly listed.
John Pallot has been a self-employed consultant in the mining industry since 2002. He has more than
twenty years of involvement with public companies as a director and/or in senior executive capacities
with such companies as Statesman Resources Ltd., Messina Minerals Ltd., Windarr a Minerals Ltd.
(acquired by Wesdome Gold Mines Ltd.), Westwood Explorations Ltd. and Red Mile Minerals Corp. (now
Orla Mining Ltd.) He presently serves as an independent director of eac h of Klondike Gold Corp. and GT
Gold Corp. (previously Manera Capital Corp.).
Incentive Stock Option Plan
Pursuant to Califfi’s Option Plan, the Resulting Issuer will be able to grant options exercisable for common shares
to directors, senior officers and employees of the Resulting Issuer and any subsidiaries and consultants retained
by the Resulting Issuer and any subsidiaries. The purpose of the Option Plan is to provide incentive compensation
to attract, retain and motivate directors, senior officers, employees and consultants and to align their interest s
with the interests of the Resulting Issuer’s shareholders by providing them with the opportunity to acquire
increased equity ownership in the Resulting Issuer. The Option Plan will be administered by the Board of Directors
of the Resulting Issuer.
The maximum number of common shares reserved for issuance pursuant to the Option Plan , together with any
common shares reserved for issuance pursuant to any other security-based compen sation arrangements (as
defined by the rules of the Exchange ), will be 10% of the issued and outstanding common shares of the Resulting
Issuer from time to time. As a result, any increase in the number of issued and outstanding common shares will
result in an increase in the number of common shares available for issuance under the Option Plan. In ad dition,
the Option Plan will be considered an “evergreen” plan, and any common shares issued pursuant to options which
have been exercised will be available for subsequent grants under the Option Plan.
Sponsorship of Qualifying Transaction
Sponsorship of a capital pool company’s Qualifying Transaction is required by the Exchange unless exempt in
accordance with Exchange policies. Califfi and Bonanza are currently reviewing the Exchange requirements for
sponsorship and intend to comply with the policies of the Exchange after discussions with the Exchange regarding
sponsorship.
Qualified Person
Christopher Graf, P. Eng., is the Qualified Person who prepared the scientific and technical disclosure in this press
release.
Additional Information
In accordance with the policies of the Exchange, Califfi’s common shares are currently suspended from trading
and will remain suspended until further notice as a result of not having completed a Qualifying Transaction within
two years of its shares having been listed on the Exchange, as provided for in Exchange Policy 2.4.
Califfi and Bonanza will provide f urther details in respect of the Proposed Transaction and the Financing in due
course once available, by way of press releases.
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All information in this press release related to Bonanza has been provided by management of Bonanza and has
not been independently verified by management of Califfi.
Completion of the Qualifying Transaction is subject to a number of conditions including, but not limited to,
Exchange acceptance and if applicable pursuant to Exchange Requirements, majority of the minority sharehold er
approval. Where applicable, the Qualifying Transaction cannot close until the required shareholder approval is
obtained. There can be no assurance that the Qualifying 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 Qualifying Transaction, any information released or received with respect to the
Qualifying 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 Qualifying Transaction and has neither
approved nor disapproved the contents of this press release.
For further information, please contact:
Califfi Capital Corp.
423 East 10th Street
North Vancouver, B.C. V7L 2E5
Attention: Alfredo De Lucrezia, President,
CEO and Director
Tel: (604) 619-0225
Email: [email protected]
Bonanza Mining Corporation
100 Deermoss Crescent SE
Calgary, Alberta T2J 6P4
Attention: Andrew Burgess, CFO and Director
Tel: (403) 383-8254
Email: [email protected]
This press release contains "forward-looking information" within the meaning of applicable securities laws relating
to the proposal to complete the Proposed Transaction and associated transactions, including statements
regarding the terms and conditions of the Proposed Transaction, the Agreement, the Financing and the use of
proceeds of the Financing. Readers are cautioned to not place undue reliance on forwar d-looking information.
Actual results and developments may differ materially from those contemplated by these statements depending
on, among other things, the risks that the parties will not proceed with the Proposed Transaction, the Agreement,
the Financi ng and associated transactions, that the ultimate terms of the Proposed Transaction, the
Agreement, the Financing and associated transactions will differ from those that are currently contemplated, and
that the Proposed Transaction, the Agreement, the Financing and associated transactions will not be successfully
completed for any reason (including the failure to obtain the required approvals or clearances from regulatory
authorities). The statements in this press release are made as of the date of this release. Califfi undertakes no
obligation to comment on analyses, expectations or statements made by third -parties in respect of Califfi,
Bonanza, their securities, or their respective financial or operating results.
This press release does not constitute an offer to sell or a solicitation of an offer to buy any securities in the United
States. The securities disclosed herein have not been and will not be registered under the United States Securities
Act 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. Securities Act and applicable state securities
laws or an exemption from such registration is available.