CCMC.V · 2019-02-22 12:00:00

Xander Resources Inc. Announces Entry into Letter of Intent for Reverse Takeover

Mergers & Acquisitions

XANDER RESOURCES INC.

Suite 3302 ‐ 939 Homer Street

Vancouver, BC V6B 2W6

FOR IMMEDIATE RELEASE February 22, 2019

Xander Resources Inc. Announces Entry into Letter of Intent for Reverse Takeover

Xander Resources Inc. (TSX‐V: XND) (the “Company”) is pleased to announce that the Company

has entered into a non‐binding letter of intent (the “LOI”), dated February 18, 2019, with

2649385 Ontario Inc. (“NumberCo”), a private Ontario corporation, to combine the businesses

of the two companies. The LOI outlines the terms and conditions pursuant to which the

Company and NumberCo will complete a transaction that will result in a reverse takeover of the

Company by NumberCo (the “Proposed Transaction”). The Proposed Transaction will be an

arm’s length transaction, and, if completed, will constitute a reverse takeover of the Company

by NumberCo as defined under the policies of the TSX Venture Exchange (the “Exchange”).

The Proposed Transaction

The Proposed Transaction is expected to be structured by way of a share exchange, merger,

amalgamation, arrangement or other similar business combination as agreed to by the parties

which will result in NumberCo and any applicable subsidiary becoming direct or indirect wholly‐

owned subsidiaries of the Company. In consideration for the acquisition of all of the issued and

outstanding shares of NumberCo (each, a “NumberCo Share”), the Company anticipates issuing

a total of 50,000,000 common shares in the capital of the Company (each, a “Share”) to the

shareholders of NumberCo (assuming the prior completion of the Initial Acquisition, as defined

below). The Company also anticipates granting a total of 4,500,000 stock options in

consideration for the exchange or replacement of the existing 4,500,000 stock options currently

granted by NumberCo. Accordingly, and based upon a NumberCo valuation of $5 million

following the Initial Acquisition, the Company (which shall be referred to on a post‐closing basis

as the “Resulting Issuer”) anticipates having 71,292,541 Shares issued and outstanding (each,

a “Resulting Issuer Share”) on the closing of the Proposed Transaction (the “Closing”) and on a

non‐diluted basis assuming a minimum raise of $1 million in the Private Placement (as defined

below) and 77,251,141 Resulting Issuer Shares on a fully‐diluted basis. This would result in the

current Company shareholders holding 15.8% of the Resulting Issuer Shares (16.5% on a fully‐

diluted basis) and the NumberCo shareholders holding 70.1% of the Resulting Issuer Shares

(70.5% on a fully‐diluted basis).

The Closing is conditional upon the parties negotiating and entering a definitive agreement in

respect of the Proposed Transaction on or before March, 30, 2019 (the “Definitive

Agreement”). Further, the final structure of the Proposed Transaction is subject to receipt by

the Company and NumberCo of tax, corporate and securities law advice and any valuation of

NumberCo that may be required in the circumstances.

Acquisition of La Joya Minerals SLU

Prior to the closing of the Proposed Transaction, Numberco intends to acquire all of the issued

and outstanding securities of La Joya Minerals SLU (“La Joya”), a private Spanish corporation

(the “Initial Acquisition”). Upon the closing of the Initial Acquisition, La Joya will be a wholly‐

owned subsidiary of NumberCo.

The La Joya LOI

Pursuant to a letter of intent dated August 1, 2018 (the “La Joya LOI”) among La Joya, Auplata

S.A., a private Spanish corporation (“Auplata”), and Amaiur Recursos Minerales, S.L., a private

Spanish corporation (together with Auplata, the “Joint Venture Partners”), La Joya holds the

right to earn a 100% interest (the “Interest”) in and to a joint venture (the “Joint Venture”)

whose sole purpose will be the exploration and development of the Pueblo De La Reina

Property (the “Property”).

Pursuant to the terms of the La Joya LOI, La Joya shall earn the Interest as follows:

 25% upon an initial payment of €250,000 in exploration expenditures on the Property;

 an additional 25% (50% total) upon payment of €250,000 (cumulative of €500,000) in

exploration expenditures on the Property;

 an additional 25% (75% total) upon payment of €250,000 (cumulative of €750,000 total)

in exploration expenditures on the Property (the three cumulative payments,

collectively, the “Initial Payment”); and

 at any time after the Initial Payment, the Joint Venture Partners may sell their remaining

25% interest to La Joya (100% total) for €75,000 payable in common shares of La Joya’s

parent corporation.

Upon La Joya earning a 100% interest in the Property, the Joint Venture Partners will retain a

1% royalty or net smelter return. In addition, La Joya is required to pay an annual payment of

€50,000 (the “Annual Fee”), which Annual Fee is payable at the start of the second year of the

Joint Venture until the exploitation permit for the Property is applied for. The Annual Fee is to

be paid by La Joya within the first semester of each subsequent year.

Following the payment of the Initial Payment, La Joya and the Joint Venture Partners have

agreed to establish a technical committee comprised of two technical persons who will be

charged with, and responsible for, the Joint Venture’s exploration program on the Property

(the “Exploration Program”). Accordingly, if either La Joya or the Joint Venture Partners are

not able to, or choose not to fund its proportionate share of the Exploration Program, the other

party may fund the shortfall and increase its proportionate share in the Joint Venture, thus

diluting the other party’s interest. In the event a party decides not to fund its share of the

Exploration Program, then such party’s interest in the Joint Venture shall be diluted 1% for each

€10,000 funded by that Party and the other party’s interest shall be increased by that same

percentage.

Pursuant to the terms of the La Joya LOI, a board of directors (the “JV Board”) shall be set up to

manage the Joint Venture which board shall consist of three (3) directors whereby each La Joya,

on the one hand, and the Joint Venture Partners, on the other hand, shall appoint one director.

The CEO and the operator of the Joint Venture will be appointed by La Joya.

The Property

The Property consists of a Zn‐Cu‐Pb prospect and is located in Badajoz province of south

western Spain, approximately 180 km north of Seville near the village of Puebla de Ia Reina.

The Property consists of the prospecting permit P.I. Herrerias no. #12.875‐00 which covers a

total of 8,981 hectares situated within the Ossa‐Morena Zone of the Central Iberica Belt which

consists of a Stratigraphic succession from the Upper Precambrian to the Lower‐Middle

Cambrian. Rock‐types within the succession include shales, greywackes, basic to intermediate

metavolcanics, acidic volcanics and carbonates. Auplata is the sole legal and beneficial owner

of the “Herrerias” Investigation Permit No. 06C12785‐00.

Private Placement

The Closing is conditional upon a concurrent private placement (the “Private Placement”) of

Resulting Issuer Shares for gross proceeds of no less than $1,000,000, at a price of $0.10 per

Resulting Issuer Share.

Other Matters

Directors and Officers of the Resulting Issuer

On the Closing, the Company anticipates that the board of directors of the Company will consist

of six members, of which five will be nominees of NumberCo and one will be a nominee of the

Company. The directors and officers of the Resulting Issuer will be determined at a later date

and disclosed by news release in accordance with the policies of the Exchange.

Trading

Trading in the Shares has been halted in compliance with the policies of the Exchange. Trading

in the Shares will remain halted pending the review of the Proposed Transaction by the

Exchange and satisfaction of the conditions of the Exchange for resumption of trading. It is

likely that trading in the Company’s Shares will not resume prior to Closing.

Finder’s Fee

In connection with the Closing, the Company has agreed to pay a finder’s fee to Seatrend

Strategy Group (34%) and Skyridge Consulting Inc. (66%) (together, the “Finders”) for the

maximum amount permitted in accordance with the policies of the Exchange.

Escrow

Following Closing, a portion of the Resulting Issuer Shares held and issued to “Principals”, as

such term as such term is defined in Exchange Policy 1.1 ‐ Definitions, will be subject to escrow

provisions, providing for escrow and release, over time, as determined by the Exchange.

Sponsorship

Sponsorship may be required by the Exchange unless exempt in accordance with Exchange

policies. The Company intends to make an application to the Exchange for exemption from the

sponsorship requirements.

Significant Shareholders ‐ NumberCo

As at the date hereof, Norman Brewster is the largest shareholder of NumberCo. After the

Initial Acquisition of La Joya and immediately prior to the Proposed Transaction, Mr. Brewster

will hold directly and indirectly 6,750,000 NumberCo Shares, representing 13.5% of the issued

and outstanding NumberCo Shares.

Conditions of the Proposed Transaction

The Proposed Transaction is subject to customary closing conditions in addition to the

following: (1) the satisfactory completion of due diligence by the Company and NumberCo of

each other; (2) approvals and authorizations including any applicable shareholder approval of

the Company and NumberCo; (3) Exchange approval; (4) satisfaction of any Exchange

requirements, including but not limited to the receipt of audited consolidated financial

statements of NumberCo and a technical report on the Property in accordance with National

Instrument 43‐101 – Standards of Disclosure for Mineral Projects (“NI 43‐101”); (5) closing of

the Initial Acquisition; (6) closing of the Private Placement; (7) the Company having completed a

name change to “Cordoba Mining Ltd.” or such other name as determined by NumberCo; and

(8) entry of the Definitive Agreement.

The Company intends to issue additional news releases in accordance with the policies of the

Exchange providing further details in respect of the Proposed Transaction, the Private

Placement, the officers, directors and insiders of the Resulting Issuer and other material

information as it becomes available.

John Ostler, P.Geo, a Qualified Person under NI 43‐101 has reviewed and approved the

technical information set out in this news release.

Further Information

Completion of the Proposed Transaction is subject to a number of conditions, including but not

limited to, Exchange 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 the Company should be considered

highly speculative.

The Exchange has in no way passed upon the merits of the Proposed Transaction and has

neither approved nor disapproved the contents of this news release.

On behalf of the Board of Directors,

“Dwayne Yaretz”

Dwayne Yaretz, Chief Executive Officer

Tel: (604) 647‐2291

Email: [email protected]

Neither Exchange nor its Regulation Services Provider (as that term is defined in the policies of the

Exchange) accepts responsibility for the adequacy or accuracy of this release.

CAUTIONARY NOTE REGARDING FORWARD LOOKING INFORMATION

This news release contains forward‐looking information that involves various risks and uncertainties

regarding future events. Such forward‐looking information can include without limitation statements

based on current expectations involving a number of risks and uncertainties and are not guarantees of

future performance of the Company, such as statements regarding the Proposed Transaction, entry into

and closing of the Definitive Agreement, the resumption of trading of the Company’s Shares, and

Exchange approval thereof. There are numerous risks and uncertainties that could cause actual results

and the Company’s plans and objectives to differ materially from those expressed in the forward‐looking

information, including: (i) adverse market conditions; (ii) the inability of the Company to close the

Proposed Transaction as initially proposed or at all; or (iii) the inability to obtain Exchange approval for

the Proposed Transaction. Actual results and future events could differ materially from those anticipated

in such information. These and all subsequent written and oral forward‐looking information are based on

estimates and opinions of management on the dates they are made and are expressly qualified in their

entirety by this notice. Except as required by law, the Company does not intend to update these forward‐

looking statements.

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