Califfi Capital Corp. Announces 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 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.
April 11, 2019 - Vancouver, British Columbia: Califfi Capital Corp. (the “Corporation” or “ Califfi”) (TSXV: CFI.P) is
pleased to announce that it ha s entered into a letter of intent dated April 5, 2019 to acquire Fenix Gold I nc.
(“Fenix”), a private Ontario mineral exploration company (the “Acquisition”). 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will be superceded and replaced with a more formal definitive agreement that will contain standard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 a greements of a like nature. The letter of intent and the more formal
definitive agreement are hereinafter referred to collectively as the “Agreement”.
Fenix holds certain mineral concessions, applications in the process of becoming mineral concessions an d
interests in joint venture earn -in agreements, all of which co mprise the Abriaqui and Santo Do mingo mine ral
exploration projects in Colombia.
Pursuant to the Agreement, Califfi will consolidate its currently issued and outstanding shares on a “one new for 2
old” basis, and acquire 100% of the issued and outstanding shares of Fenix from their holders for consideration
consisting of 25 million post -consolidated shares of Califfi (the “Purchase Price”) . The only 10% or greater
shareholder of the Resulting Issuer will be 23342982 Ontario Inc., which is wholly -owned by John Carlesso, a
resident of Ontario.
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” 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 Fenix 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 Acquisition should not be required, as said approval will likely be obtained by
consent from the holders of in excess of 50% of Califfi’s current issued and outstanding share capital , although
receipt of Exchange acceptance will be a condition of closing.
In connection with the Acquisition, Califfi intends to carry out certain concurrent transactions, including the
Financing (as defined below). The concurrent closing of the Acquisition and the Financing (collectively, “the
Closing”) is presently targeted to occur on or before July 31, 2019. On Closing, the resulting entity (the “Resulting
Issuer”) shall change senior management and directors (detail s below), and will change its name to complement
the business of the Resulting Issuer.
The Acquisition
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 Fenix
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shareholders 25 million post-consolidated Califfi Shares (as defined below) at a deemed price of C$0.27 per share,
in satisfaction of the Purchase Price.
The Abriaqui mineral exploration project
The Abriaqui Project consists of fo ur mining claims. Two claims are 100% owned by Fenix, and the third and
fourth claims are held pursuant to a JV with a local mining co -operative whereby Fenix has acquired 35%
ownership and has the right to earn -in up to 90% interest in the claim (50% own ership upon completion of a USD
$50,000 substraction report and production facility, and US D $100,000 payment; 90% ownership upon US D
$900,000 exploration expenses and USD $100,000 payment).
The Santo Domingo mineral exploration project
The Santo Domingo Project consist of 3 mining claims. Two of these are 100% owned by Fenix. The third claim is
held pursuant to a JV earn -in agreement with 4 local individuals, whereby Fenix has the right to earn -in up to a
90% interest based on USD $500,000 expenditures and a USD $100,000 payment.
The Financing
The terms of the Agreement include that Fenix shall arrange for the completion of a financing for gross proceeds
of a minimum of C$2 million (the “Financing”) prior to and/or concurrent with the closing of the Acquisition.
Further information with respect to the Financing will be disclosed in due course once available, by way of press
releases.
Currently, the authorized share capital of Califfi consists of an unlimited number of common shares (the “Califfi
Shares”) of which (a ) 15,125,000 Califfi Shares are currently issued and outstanding; (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) and 375,000 Califfi Shares are reserved for issuance under outstanding compensation options .
Immediately prior to Closing, no more than 17,000 ,000 pre-consolidated Califfi Shares will be issued and
outstanding as fully paid and non-assessable.
Upon Closing of the Acquisition and assuming completion of the minimum C$2 million under the Financing, it is
expected that there will be approximately 41 million post-consolidated shares of the Resulting Issuer issued and
outstanding, with approximately a further 13 million shares reserved for issuance under outstanding warrants and
incentive stock options granted or available for future grant.
Changes to Board and Management
On Closing, it is anticipated that Mr. John Carlesso will be appointed as President, CEO and a director of the
Resulting Issuer , David Mitchell and Stuart Moller will serve as director s, Alfredo De Lucrezia, Califfi’s current
President, CEO and a director, will remain a director, with one additional director as chosen by Fenix also to be
appointed. Bios for Messrs. Carlesso, Mitchell, Moller and De Lucrezia are presented below:
John Carlesso has extensive experience in Latin America in the development and sale of both private and
public companies, including 10+ years in Colombia. He was formerly VP Corporate Development at Desert
Sun Mining (acquired by Yamana Gold).
David Mitchell founded, in 2004, and is currently the CEO of Stillbridge Ventures Inc., a corporate
consulting and advisory firm to small and emerging businesses. Mr. Mitchell has over 30 years of
experience in the Canadian finance industry, having been employed by a number of intermediate and
boutique size investment firms i n roles ranging from a floor trader to being a director and officer. Mr.
Mitchell is very active in the Capital Pool Company (“CPC”) program overseen by the TSX Venture
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Exchange through: having managed underwritings of CPCs, taken on director roles in CPC s, and also
having founded two series of CPCs – with the most recent being the Whiteknight Acquisition series (all the
Whiteknight Acquisition series of CPCs completed Qualifying Transactions and are listed on the Exchange.
Mr. Mitchell has been a directo r of Exchange-listed companies in the fields of mining, healthcare,
technology and alternate finance. He is currently CEO and director of Commerce Acquisitions ( TSX -V:
CAQ.P) which has announced its qualifying transaction.
Stuart Moller is former VP Expl oration of Continental Gold and led the discovery of the 12+ million ounce
Buritica deposit, currently undergoing mine construction. He was VP Exploration at Pan American Silver
and Country and Project Manager at Barrick Gold.
Alfredo De Lucrezia is the former owner and president of a commercial and luxury residential painting
company. Mr. De Lucrezia ran the company from May 1998 to January 2019. Mr. De Lucre zia was the
president, CEO, CFO and a director of former CPC Manera Capital Corp. (now GT Gold C orp.) from
September 2013 until it completed its Qualifying Transaction on November 10, 2016. He also 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 r eporting issuers over the past 25 years, where he st ructured
companies transitioning from the private sector to becoming publicly listed.
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 pursua nt 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 out standing 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 covered by options wh ich 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 Fenix 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.
Additional Information
In accordance with the policies of the Exchange, Califfi’s common shares are currently halted from trading and will
remain halted until further notice.
Califfi and Fenix will provide further details in respect of the Acquisition 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 Fenix has been provided by management of Fenix 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 shareholder
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 Qu alifying 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.
Alfredo De Lucrezia
President, CEO, CFO and Director
Tel: (604) 619-0225
Email: [email protected]
Fenix Gold Inc.
77 King Street West, Suite 1700
Toronto, Ontario M5K 1G8
John Carlesso, President
Email: [email protected]
This press release contains "forward-looking information" within the meaning of applicable securities laws relating
to the proposal to complete the Qualifying Transaction and a ssociated transactions, including statements
regarding the terms and conditions of the Qualifying Transaction, the Agreement, the Financing, the Acquisition,
and the use of proceeds of the Financing. Readers are cautioned to not place undue reliance on for ward-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 Qualifying Transaction, the
Agreement, the Ac quisition, the Financing and associated transactions, that the ultimate terms of the
Qualifying Transaction, the Agreement, the Acquisition, the Financing and associated transactions will differ
from those that currently are contemplated, and th at the Qualifying Transaction, the Agreement, the Acquisition,
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). T he 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, Fenix, 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 St ates 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.