Conquest Closes over Subscribed $3,110,000 Subscription Receipt Financing and $1,300,000 Strategic Investment BY Kirkland Lake GOLD
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55 University Avenue, Suite 1805
Toronto, Ontario, Canada,
M5J 2H7
www.ConquestResources.com
+1 647 728 4126
CONQUEST CLOSES OVER SUBSCRIBED $3,110,000
SUBSCRIPTION RECEIPT FINANCING AND $1,300,000
STRATEGIC INVESTMENT BY KIRKLAND LAKE GOLD
Toronto, Ontario, September 16, 2020 -- Conquest Resources Limited (TSX-V: CQR) (“Conquest” or the
“Company”) is pleased to announce that it has closed its previously announced non -brokered
subscription receipt financing to raise gross proceeds of $3,110,000 (the “Non-Brokered Financing ”),
and a separate concurrent subscription receipt financing with Kirkland Lake Gold Ltd. (TSX:KL) (NYSE:KL)
(ASX:KLA) to raise gross proceeds of $1,300,000 (the “KL Financing”).
John Kearney , Chairman of Conquest stated, “We are very pleased with the strong interest in our
financings and, in particular, we welcome Kirkland Lake as a strategic shareholder . We look forward to
completing the acquisition of Canadian Continental Exploration Corp ., following which the enlarged
Conquest will own a unique and very prospective portfolio of exploration properties in some of the most
well-known mining camps in Ontario. Conquest will be well capitalized with over $5 million in cash and
we look forward to beginning our drill program in October. ”
Kirkland Lake Strategic Investment
In connection with the KL Financing, Conquest has issued 10,000,000 subscription receipt s (the “ KL
Subscription Receipts ”) to Kirkland Lake Gold Ltd. (“ Kirkland Lake ”) at a price of $0.13 each to raise
gross receipts of $1,300,000. Each KL Subscription Receipt entitles the holder to acquire one unit of
Conquest (a “ KL Unit”), for no additional consideration . Each KL Unit consists of one common share of
Conquest (as it exists after giving effect to the previously announced 2.5 for o ne consolidation of the
issued and outstanding Conquest shares (the “ Consolidation”)) and one quarter of one share purchase
warrant of Conquest. Each full share purchase warrant (a “Warrant”) is exercisable at $0.18 for a period
of two years following the completion of Conquest’s previously announced acquisition (the
“Acquisition”) of Canadian Continental Exploration Corp . (“CCEC”). See Conquest News Releases
July 16, 2020, August 7, 2020, and August 27, 2020 .
The gross proceeds of the KL Financing have been deposited in escrow (the “ KL Escrowed Funds”). The
KL Subscription Receipts will automatically convert into KL Units and the KL Escrowed Funds will be
released to Conquest upon completion of the Acquisition and Consolidation (the “ Escrow Release
Conditions”). In the event that the Escrow Release Conditions are not satisfied by November 30, 2020,
the KL Escrowed Funds will be returned to KL and the KL Subscription Receipts will be cancelled.
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In connection with the KL Financing , Conquest has granted Kirkland Lake certain investor rights, so long
as Kirkland Lake holds at least 5% of the outstanding shares of Conquest, including the right to nominate
one director to the board of Conquest , the pre-emptive right to participate pro -rata in any future
financings by the Company, and a condition that the Company will not encumber any of its properties
with any new third party royalty agreements without the prior written approval of Kirkland Lake, such
consent not to be unreasonably withheld.
$3,110,000 Non-Brokered Financing
In connection with the Non-Brokered Financing, Conquest has issued 21,105,266 subscription receipts
at a price of $0.12 each (the “ Non-Brokered HD Subscription Receipts ”), for gross proceeds of
$2,532,631 and 3,880,004 subscription receipts at a price of $0.15 each (the “ Non-Brokered FT
Subscription Receipt s”), for gross proceeds of $582,000. Each Non-Brokered HD Subscription Receipt
entitles the holder to acquire one unit of Conquest (a “ Non-Brokered Unit ”), for no additional
consideration. Each Non -Brokered Unit consists of one share of Conquest (as it exists following the
Consolidation) and one-half of one Warrant. Each Non -Brokered FT Subscription Receipt entitles the
holder to acquire one flow -through share (an “ FT Share”) of Conquest (as it exists after giving effect to
the Consolidation, for no additional consideration.
An insider of Conquest subscribed for 200,000 Non-Brokered FT Subscription Receipts for gross
proceeds of $30,000 .
The gross proceeds of the Non -Brokered Financing have been deposited in escrow (the “ Non-Brokered
Escrowed Funds ”). The Non -Brokered HD Subscription Receipts will automatically convert into Non -
Brokered Units, the Non-Brokered FT Subscription Receipts will automatically convert into FT Shares and
the Non -Brokered Escrowed Funds will be released to Conquest upon the satisfaction of the Escrow
Release Conditions. In the event that the Escrow Release Conditions are not satisfied by November 30,
2020, the Non -Brokered Escrowed Funds will be returned to the subscribers for Non -Brokered HD
Subscription Receipts and Non -Brokered FT Subscription Receipts (collectively, the “ Non-Brokered
Subscription Receipts ”) and the Non-Brokered Subscription Receipts will be cancelled.
Upon completion of the Acquisition and conversion of the KL Subscription Receipts into KL Units (the
“Escrow Deadli ne”) and Non -Brokered Subscription Receipts into Non -Brokered Units and FT Shares ,
Kirkland Lake will hold approximately 8% of Conquest’s then outstanding shares, and 9.6% of Conquest’s
shares on a partially diluted basis, assuming no further issuances of securities by Conquest prior to such
date.
All securities issued and issuable in connection with the KL Financing and the Non -Brokered Financing
are subject to a hold period of four months and one day from the closing dat e of such financings ,
expiring on January 9, 2021 and January 16, 2021, respectively .
Finders fees in the total amount of $145,000 cash will be paid to certain arms-length parties for assisting
in the Non-Brokered Financing.
PowerOne Capital Markets Limited acted as finder in connection with a portion of the Non-Brokered
Financing and has been appointed to act as a financial advisor to Conquest to provide ongoing financial
advisory and consulting services . Conquest has agreed to grant PowerOne 750,000 stock options under
the Company’s stock option plan, each exercisable at a price of $0.13 to acquire one share of Conquest
(after giving effect to the Consolidation) , for a period of two years , subject to completion of the
Acquisition. PowerOne, an Exempt Market Dealer, is a long -term investor focused on providing early
stage capital and advisory services to emerging growth companies.
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Acquisition of Canadian Continental Exploration Corp.
Subject to final acceptance of the TSXV, t he Acquisition is expected to close immediately following a
special meeting of shareholders of CCEC, scheduled to be held on September 23, 2020.
Pursuant to the Acquisition, Conquest will issue 40,306,667 shares of Conquest (after giving effect to the
Consolidation) to the shareholders of CCEC, on the basis of one share for each shar e of CCEC held.
Conquest will also issue 2,900,000 option s (the “ Replacement Options”), under the Company’s stock
option plan in replacement of existing options currently outstanding in CCEC. Each Replacement Option
will be exercisable at $0.15 to acquire one share of Conquest (after giving effect to the Consolidation) and
expire in September 2021,
CCEC holds an extensive package of mining claims and has approximately $900,000 in a combination of
cash and marketable securities. See Conquest News Releases July 16, August 7, and August 27, 2020.
Upon completion of the Acquisition, and release of the KL Escrow Funds and Non -Brokered Escrowed
Funds to Conquest, Conquest is expected to have a total of approximately $5,200,000 in available funds
to pursue its planned drilling and exploration activities, of which approximately $800,000 will be flow
through funds.
Final acceptance of the Acquisition by the TSXV is subject fulfilling the requirements of the TSXV.
Canadian Continental Properties
The CCEC land package consists of almost 10,000 hectares of underexplored mining lands in Northern
Ontario, which the Company believes are highly prospective for precious and base metals . The land
package includes the Teckmag1 and Eaglerock claims , which immediat ely surround Conquest’s Golden
Rose Property, situated in Afton and Scholes townships at Emerald Lake approximately 65 km northeast
of Sudbury, Ontario. When combined with the Company’s current land holdings, Conquest will control
over 130 square kilometers making it one of the largest land holders in the Temagami Mining Camp area.
Conquest’s Golden Rose Property
Conquest’s Golden Rose Property encompasses patented and staked mining claims measuring 770
hectares in size that encompass the former Golden Ro se gold mine and highly prospective North and
South banded iron formations at Emerald Lake. The Golden Rose gold mine (which is currently flooded)
consists of more than six kilometres of underground workings, as well as a three (3) compartment, 228 -
metre-deep shaft, and a modern decline ramp from surface to the 6th level of the mine. An inclined winze
connects the 6th and 7th levels to the 5th level of the mine.
It is reported that b etween 1935 and 1941, mining operations at the Golden Rose gold mine by
Consolidated Mining and Smelting Company of Canada, Limited (Cominco) produced 46,000 ounces of
gold from structurally controlled, shallow to steeply dipping, high -grade quartz -pyrite veins, hosted
almost exclusively in an east-west trending Banded Iron Formation (BIF). The property largely lay dormant
from 1941 to 1982, when exploration resumed.
Diamond drilling of the mine sequence stratigraphy in 1984 intersected numerous high -grade gold
intercepts. This drill campaig n led to reopening and mine development by Noramco between 1986 -87
which included widening of the mine adit and portal down to the 600 -foot level. Minor gold production
of approximately 7,000 oz. was reported.
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Further, surface drilling between 1984-2011 by a previous operator identified mineralization lying
adjacent to known underground development. It was reported by the previous operator that diamond
drilling between 2009-2011 intersected gold grades as high as 155.7 grams of gold per tonne ov er 1.82
metres. However, the potential quantity and grade is conceptual in nature and Conquest has not
undertaken sufficient exploration to define a mineral resource and it is uncertain if further exploration
will result in the targets being delineated as a mineral resource.
Share Consolidation
At the annual and special meeting of shareholders held on August 31, 2020, Conquest shareholders
approved the Consolidation.
It is intended that Articles of Amendment in prescribed form will be filed with the Director under the
Business Corporations Act (Ontario) (the “OBCA”) immediately prior to completion of the Acquisition and
such Articles of Amendment will become effective upon the issuance by the Director under the OBCA of
a Certificate of Amendment. See Conquest News Release August 31, 2020.
The TSXV has conditionally approved the Consolidation subject to the Company fulfilling all the conditions
of the TSXV in respect of the Consolidation.
ABOUT CONQUEST
Conquest Resources Limited, incorporated in 1945, is a mineral exploration company that is exploring for
gold on mineral properties in Ontario.
Conquest holds a 100% interest in the Golden Rose Project, acquired in December 2017, located at
Emerald Lake approximately 65 kilometres northeast of Sudbury, Ontario, which hosts the former Golden
Rose Gold Mine and is underlain by highly prospective Abitibi greenstone geology along a strike length of
seventeen (17) kilometres. The property is located deep within the regionally large, unexplained Emerald
Lake (Temagami) Anomaly which closely resembles the magnetic signature of the adjacent Sudbury Basin.
Conquest also holds a 100% interest in the Alexander Gold Property located immediately east of the Red
Lake and Campbell mines in the heart of the Red Lake Gold Camp on the important “Mine Trend” regional
structure. Conquest’s property is almost entirely surrounded by Evolution Mining land holdings.
In addition, Conquest owns a 100% interest in th e Smith Lake Gold Property of six patented claims and
181 staked mining claims to the north, west and south of the former Renabie Gold Mine in Rennie
Township in northern Ontario that had reported gold production of over 1,000,000 ounces.
Qualified Person
Paul Smith P. Geo. , (NS) Senior Geologist, directs the Company’s explorations programs and is the
Company’s Qualified Person for the purposes of National Instrument 43-101 – Standards of Disclosure for
Mineral Projects and has reviewed and approved the technical disclosure contained within this news
release.
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FOR FURTHER INFORMATION CONTACT:
www.ConquestResources.com
John F. Kearney
Chairman
416-362-6686
Robert Kinloch
President
306-881-8296
Paul Smith
Senior Geologist
902-698-2662
Forward-looking statements. This news release may include certain "forward-looking statements". All statements other than
statements of historical fact, included in t his release, including, without limitation, statements regarding the completion of the
Acquisition and the Consolidation, the release of escrowed funds, future cash on hand, potential mineralization, resources and reserves,
exploration results, and future plans and objectives of Conquest, are forward-looking statements that involve various risks
and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events
could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ
materially from Conquest’s expectations are exploration risks detailed herein and from time to time in the filings made by
Conquest with securities regulators. Neither the TSXV nor its Regulation Services Provider (as defined in the policies of TSXV)
accepts responsibility for the adequacy or accuracy of this release.