Xau Resources Inc. Announces Entry into Definitive Agreement to Acquire Qs Holdings Inc.
XAU RESOURCES INC. ANNOUNCES ENTRY INTO DEFINITIVE AGREEMENT TO
ACQUIRE QS HOLDINGS INC.
Toronto, Ontario – June 10, 2026
XAU Resources Inc. (TSXV: GIG) (“XAU” or the “Company”) is pleased to announce, further
to its prior news release on April 23, 2026, that it has entered into a definitive business
combination agreement dated June 10, 2026 (the “ Business Combination Agreement ”)
with QS Holdings Inc., a company incorporated under the laws of Barbados (“ QS
Holdings”), pursuant to which XAU will acquire all the issued and outstanding common
shares of QS Holdings (the “Acquisition”) by way of a three-cornered amalgamation under
the Companies Act of Barbados. The Acquisition will entail QS Holdings amalgamating with
a newly incorporated wholly owned subsidiary of XAU (“ Subco”), and the amalgamated
entity (“Amalco”) will become a wholly owned subsidiary of XAU. The shareholders of QS
Holdings will receive common shares of XAU (the “Consideration Shares”) in exchange for
their QS Holdings shares, based on an exchange ratio calculated using a deemed aggregate
purchase price of C$70,000,000 for the QS Holdings shares and a price of $0.50 per
common share of XAU, which was the “Market Price” (as defined under the policies of the
TSX Venture Exchange) of the common shares of XAU immediately preceding the execution
of the Business Combination Agreement.
Trading of the common shares of XAU has been halted and will remain halted pending
receipt and review by the TSXV of the requisite filings in respect of the proposed Acquisition.
The Acquisition is subject to the satisfaction of customary closing conditions, including
receipt of all required regulatory approvals, and is expected to close in the third quarter of
2026.
Completion of the Acquisition is subject to a number of conditions, including but not limited
to: (i) approval of the Acquisition by the shareholders of QS Holdings as required by the
Companies Act of Barbados ; (ii) approval of the Acquisition by the shareholders of XAU as
required under TSXV Policies and/or applicable securities laws; (iii) conditional approval by
the TSXV for the listing of the Consideration Shares; (iv) the completion of the Concurrent
Financing (as described below); (v) the completion and delivery of audited financial
statements of QS Holdings (as described below) ; (vi) the entering into o f investor rights
agreements with certain shareholders (as described below) ; (vii) the reconstitution of the
XAU board to six directors, which shall include the incumbent XAU directors and two
nominees of certain shareholders of QS Holdings (as described below) ; (viii) holders of not
more than 10% of the common shares of QS Holdings having exercised any applicable
dissent rights; (ix) there being no mate rial adverse effect in respect of either party; (x) the
satisfaction of any requirements pursuant to MI 61 -101; and (xi) other customary closing
conditions. The Outside Date for completing the Acquisition is October 31, 2026.
QS Holdings has a 100% interest in Qstone Inc., a private Guyanese company, which is the
registered owner of the mining permits known as the Quartzstone Gold Project which cover
296 km² across 83 contiguous medium -scale mining permits in Guyana. The Quartzstone
Gold Project is subject to an earn-in agreement with Fortuna Mining Corp. (“ Fortuna”)
pursuant to which Fortuna may earn up to a 70% interest in the Quartzstone Gold Project.
Fortuna may earn an initial 51% interest in the Quartzstone Gold Project by completing a
minimum of 60,000 metre s of drilling within four years, while paying all license fees and
funding all related expenditures. Upon exercise of the first option, Fortuna will form a joint
venture with Qstone. Fortuna may earn an additional 19% interest in the Quartzstone Gold
Project, for an aggregate 70% interest, by solely funding a feasibility study within three years
of exercising the first option and continuing to pay all license fees.
In addition to royalties payable to the Government of Guyana on gold production, the
Quartzstone Gold Project is subject to a 4.5% net smelter returns royalty in favour of a prior
owner, which may be repurchased at any time at a price to be determined by the parties.
Certain directors and officers of XAU also hold interests in QS Holdings. Peter Hambro and
Gary Bay are directors and officers of XAU and are also shareholders of QS Holdings. Gary
Bay is also a director of QS Holdings. Accordingly, the Acquisition does not constitute an
“Arm’s Length Transaction” under TSXV Policy and may constitute a "related party
transaction" or "business combination" under MI 61 -101. XAU’s special committee of
independent directors (the “Special Committee”), comprised of Nataliya Hearn (Chair) and
Danièle Spethmann, has overseen the negotiation of the Business Combination Agreement
and has received a fairness opinion from Evans & Evans, Inc. stating that, and based upon
and subject to the assumptions, limitations, and qualifications set forth therein, the
consideration offered pursuant to the Acquisition is fair, from a financial point of view, to the
Company’s shareholders.
Recommendation
The Special Committee, and the board of directors of XAU based on the unanimous
recommendation of the Special Committee, has determined that the Acquisition is fair, from
a financial point of view, to the shareholders of XAU and is in the best interests of XAU. The
XAU board of directors recommends that XAU shareholders vote in favour of the Acquisition
and the related transactions and matters contemplated in the Business Combination
Agreement. The parties will determine the applicability of specific MI 61 -101 and TSXV
requirements in connection with the Acquisition. The management and board of directors
of XAU are expected to remain the same both before and after giving effect to the
Acquisition, subject to the addition of Robert Jenkins and Rory Carleton Paget as nominees
of certain QS Holdings shareholders to the XAU board.
The Business Combination Agreement supersedes the non-binding letter of intent dated
March 26, 2026, as amended. The Business Combination Agreement contains customary
provisions governing the conduct of business pending closing, non-solicitation covenants,
rights to match competing proposals, expense reimbursement provisions, and other
customary terms and conditions. There can be no assurance that the Acquisition will be
completed as proposed or at all. Investors are cautioned that, except as disclosed in any
management information circular of XAU to be prepared in connection with the Acquisition,
any information released or received with respect to the Acquisition may not be accurate or
complete and should not be relied upon. Trading in the securities of XAU should be
considered highly speculat ive. The TSXV has in no way passed upon the merits of the
Acquisition and has not approved or disapproved of the contents of this news release.
Financial Information
The following is a summary of significant financial information for Qstone Inc., the operating
subsidiary of QS Holdings which holds the Quartzstone Gold Project assets. The financial
information is derived from audited financial statements prepared in acc ordance with
International Financial Reporting Standards for Small and Medium -sized Entities (IFRS for
SMEs) issued by the International Accounting Standards Board and adopted by the Institute
of Chartered Accountants of Guyana, and the International Stand ards on Auditing, and
audited by Jivish & Associates Professional Services.
Completion of the Acquisition is subject to the completion and delivery to the satisfaction
of XAU of audited financial statements of QS Holdings for the year ended October 31, 2025
together with the audited financial statements of Qstone Inc. for the year ended December
31, 2025 and the four months ended December 31, 2024, in each case audited by RSM
Canada LLP in accordance with IFRS and Canadian Generally Accepted Auditing Standards,
and unaudited review- engagement financial statements of QS Holdings for the six month
fiscal period ended April 30, 2026.
As of December 31, 2025 (audited): Qstone Inc. reported total assets of G$69,500
(consisting entirely of cash at bank). Total liabilities consisted of non-current liabilities of
G$909,473 owed to a related company (West Bank Demerara Gold) for operating expense s
paid on the company’s behalf, and current liabilities (accruals) of G$76,400, for total
liabilities of G$985,873. The company had an accumulated deficit of G$1,016,373 and total
shareholders’ deficit of G$916,373. Share capital was G$100,000 (100,000 ordinary shares
issued and fully paid).
For the year ended December 31, 2025 (audited): Qstone Inc. reported total expenditures of
G$315,773, consisting of legal and professional fees (G$246,073), audit fees (G$66,700),
and bank charges (G$3,000). The company recorded a net loss for the year of G$315,773.
Qstone Inc. has not commenced operations to date and has no revenues.
As of December 31, 2024 (audited, four-month stub period following incorporation): Qstone
Inc. reported total assets of G$22,500 (cash at bank). Total liabilities were G$723,099,
comprising non-current liabilities of G$646,699 owed to a related company and curr ent
liabilities of G$76,400. The company had an accumulated deficit of G$700,600 and total
shareholders’ deficit of G$700,599. For the four months ended December 31, 2024, total
expenditures were G$700,600, resulting in a net loss for the period of G$ 700,600. The
exchange rate between the Guyanese Dollar (G$) and the Canadian Dollar (C$) is
G$149.14:C$1, based on the Bank of Guyana as of June 8, 2026.
Terms of the Acquisition
Pursuant to the Business Combination Agreement, XAU will acquire all of the issued and
outstanding common shares of QS Holdings (currently consisting of 100,000 common
shares) in consideration of the issuance of Consideration Shares based on an exchange
ratio calculated using a deemed aggregate purchase price of C$70,000,000 for the QS
Holdings shares. The value of Consideration Shares to be issued is based on a price of $0.50
per common share of XAU, which was the “Market Price” (as defined under the polic ies of
the TSX Venture Exchange) of the common shares of XAU immediately preceding the
execution of the Business Combination Agreement. The Acquisition will be structured as a
three-cornered amalgamation under the Companies Act of Barbados, whereby QS Holdings
will amalgamate with Subco, resulting in Amalco becoming a wholly owned subsidiary of
XAU. No cash consideration is payable as part of the Acquisition; the entire purchase price
is to be satisfied through the issuance of Consideration Shares. No fractional Consideration
Shares will be issued; any fractional entitlement will be rounded down to the next lesser
whole number of Consideration Shares without additional compensation.
No finder’s fee or commission has been paid or is payable in connection with the
Acquisition, other than any such fee or commission which may be agreed to in relation to
the Concurrent Financing (as described below).
The Business Combination Agreement includes customary representations, warranties,
covenants and conditions and certain other provisions including non-solicitation provisions
and other deal protection clauses, subject to the right of XAU to accept a superior proposal
in certain circumstances, with QS Holdings having a 5-business day right to match any such
superior proposal. The Business Combination Agreement also provides for each party to be
reimbursed (by the other) for its reasonable and necessary costs and expenses incurred in
connection with the Acquisition if the Business Combination Agreement is terminated by
the other party in certain circumstances. Such reimbursement will be limited to a maximum
of C$200,000 in certain circumstances.
Upon completion of the Acquisition , existing XAU shareholders will own between
approximately 47.7% (minimum Concurrent Financing) and 42.8% (maximum Concurrent
Financing) of XAU (which figures include the Consideration Shares to be received by Peter
Hambro and Gary Bay (together with his spouse Ksenia Povzner-Bay), who are shareholders
of both XAU and QS Holdings) , former QS Holdings shareholders (excluding Peter Hambro
and Gary Bay (together with his spouse Ksenia Povzner -Bay)) will own between
approximately 41.0% (minimum Concurrent Financing) and 36.8% (maximum Concurrent
Financing) of XAU, and investors in the Concurrent Financing will own between 11.3% and
20.3% of XAU Shares , in each case on an undiluted basis. XAU will have approximately
176,761,500 common shares issued and outstanding assuming the minimum Concurrent
Financing or approximately 196,761,500 common shares issued and outstanding assuming
the maximum Concurrent Financing . The Acquisition may be considered an “RTO” under
TSXV Policy. XAU will continue to be involved in the same industry sector, and XAU will
continue trading under the name XAU Resources Inc. and ticker symbol TSXV:GIG following
the closing of the Acquisition.
Location of Target Assets and Jurisdiction of Target Company
QS Holdings is incorporated under the laws of Barbados. QS Holdings is the sole beneficial
owner of all of the issued and outstanding share capital of Qstone Inc., which is
incorporated under the laws of the Co -operative Republic of Guyana, with its regist ered
office located at Lot 143A Robin’s Place West, Bel Air Park, Georgetown, Guyana. Qstone
Inc. holds the mineral rights in respect of the Quartzstone Gold Project, consisting of 83
contiguous medium-scale mining permits totalling 73,062 acres (approxima tely 296 km²)
located in the Cuyuni/Mazaruni Area, Region #7, Guyana. The mining permits are governed
by the Mining Act (Cap. 65:01) of Guyana and related legislation.
About the Quartzstone Gold Project
The Quartzstone Gold Project (the “ Property”) is an advanced-stage gold exploration
property located in the Cuyuni-Mazaruni Region of north-central Guyana, approximately 120
kilometres west of Georgetown and 45 kilometres east -southeast of Zijin Mining Group's
Aurora Gold Mine. The Property compris es 83 medium -scale mining permits covering
approximately 29,570 hectares, all in good standing with the Guyana Geology and Mines
Commission.
The Property lies within the Palaeoproterozoic Barama-Mazaruni Supergroup of the Guiana
Shield — one of the world's most prolific orogenic gold belts — and hosts gold mineralization
along a regional north -south shear zone spanning more than 25 kilometres along the
western flank of a Trans-Amazonian granite intrusive. The tectonic setting is comparable to
that for the Oko deposits (G Mining and G2 Goldfields) 22 kilomet res southeast of
Quartzstone, which occur along a north-south shear zone on the western flank of the Bartica
Gneissic complex. Refer to Figure 1.
Gold at Quartzstone occurs in quartz and quartz -tourmaline-carbonate veins and breccia
zones plus sericite -silica alteration zones hosted in the granite contact shear structure,
within north-northeasterly trending cross structures which cut across the western volcano-
sediments and into the granite on the east, and within quartz -veined brittle deformation
zones within the granite. Historical drilling by the prior owner included 183 diamond drill
holes totalling over 23,000 metres, with significant (un-cut) gold intersections including 10.5
metres at 19.9 g/t Au 1 (Main Pit zone), 12.0m at 10.8 g/t Au 2 (Main Pit zone) and 5.6 metr es
at 27.8 g/t Au 3 (Blue South zone). Drilling has tested less than 5 kilometr es of strike of the
25+ kilometre long granite contact structure. In addition, several trenches along the main
north-south structure returned exceptional (un -cut) gold intersections which have not yet
been drill-tested, including 21.5 metr es at 13.2 g/t Au 4, 7.1 met res at 21.9 g/t Au 5 and 17
metres at 4.5 g/t Au. Neither QS Holdings nor Qstone Inc. has conducted any exploration or
development work on the Property since its acquisition of the Property in 2025.
The Property hosts a historical Mineral Resource estimated to consist of 933,000 tonnes at
5.44 g/t Au for 163,200 ounces of gold Indicated plus 1,911,000 tonnes at 4.79 g/t Au for
294,500 ounces of gold Inferred 6. Further drilling and economic modelling is required to
1 Drill core samples (half core obtained with a diamond blade core saw) from the Main Pit prospect located at
251340E/735819N (UTM WGS84 Zone 21N). Drill hole oriented at 100° azim, - 60° dip. Intercept from 91.2m
down-hole and included 3.9m @ 52.1 g/t Au (uncut) from 91.2m. True width of the mineralization estimated to
be 95% of the core length.
2 Drill core samples from the Main Pit prospect located at 251243E/735868N. Drill hole oriented vertically.
Intercept from 242.7m down- hole and included 1m @ 101.6 g/t Au (uncut) from 246.7m. True width of the
mineralization estimated to be 60% of the core length.
3 Drill core samples from the Blue South prospect located at 251599E/736820N. Drill hole oriented vertically.
Intercept from 89.2m down- hole and included 2.5m @ 24.0 g/t Au (uncut) from 93.4m. True width of the
mineralization estimated to be 45% of the core length.
4 Trench intercept from the Camp Granite prospect centred at 251633E/735453N. 1-metre horizontal channel
samples obtained along close to the base of one wall, perpendicular to the strike of the geology and structure.
5 Trench intercept from the Mango Tree prospect centred at 251946E/737743N. 1 -metre horizontal channel
samples obtained along close to the base of one wall, perpendicular to the strike of the geology and structure.
Analysis of split drill core and trench samples was by 50g FA AAS finish, conducted at the independent Acme
Guyana Laboratory (later acquired by Bureau Veritas) in Georgetown, Guyana. QAQC consisted of sample
duplicates and pulp duplicates for a total of 1 0% of samples and was considered very good. Certified
Reference Standards and blanks were not introduced into the exploration programs until late, after these
samples were obtained. Review of the historical data, methodology and QAQC did not identify any c oncerns
that could materially affect the accuracy or reliability of the data.
6 Historical Mineral Resource Estimate (‘MRE’) prepared by Anton Kornitskiy presented in unpublished
Technical Report on the Quartzstone Project, Guyana, May 2020, authored by Jason Ché Osmond of Wardell
Armstrong, UK. The resource estimation was based on a sectional wireframe interpretation using a 0.40 g/t Au
cut-off. 64% of the total resource was classified as Inferred and 36% Indicated. Potentially open- pitable
resource material was constrained by $1,500 Au optimized pit shells with a 0.4 g/t Au cut -off. 65% of the total
resource fell below the conceptual pit shells and was classified as an underground resource for minimum
mining widths of 2.0 metres and using a cut -off grade of 1.5 g/t Au. The economic viability of the underground
resource was not validated by the 2020 resource estimation. The 2020 MRE included all of the known drilling
for the Quartzstone project and represents the most recent known resource estimation for the project. Further
(infill) drilling, an update of economic input parameters, remodelling and newly generated optimized pit shells
would be required to generate a current resource for the project. Using a higher gold price over the $1,500 used
in 2020 could deepen the conceptual pits and take in resource material that was considered underground
resource material in 2020. Mineralization falling below updated conceptual pits would need to be validated as
economically viable underground resources in order to be included in a current MRE update.
make the resource current. The historical Mineral Resource Estimate (“MRE”) is relevant for
understanding the general scale and style of mineralization; however, its reliability is limited
due to the use of estimation methodologies that do not meet current CIM Definition
Standards. Uncertainties exist in the historical MRE as the underlying data and estimation
methods have not been fully verified by the Company’s Qualified Person.
The mineralized zones remain open, and ongoing exploration has the potential to expand
the known mineralization in addition to making new discoveries on multiple, untested strike-
extensive structures, which could add to the resource at Quartzstone.
Figure 1. Location and Geological Setting of the Quartzstone Property
The qualified person has not done sufficient work to classify the historical estimate as
current mineral resources or mineral reserves. The issuer is not treating the historical
resource estimate as current mineral resources or mineral reserves.
Principals and Insiders of the Resulting Issuer
Upon closing of the Acquisition, the board of directors of XAU will be reconstituted and
expanded to consist of six directors, which will include two new directors as nominees of
certain QS Holdings shareholders (as described below). The current incumbent directors of
XAU will remain on the board, and the officers of XAU will not change as a consequence of
the Acquisition. The following persons will constitute Principals or Insiders of the Resulting
Issuer:
Gary Bay – Chief Executive Officer and Director. Mr. Bay is a founding director and the Chief
Executive Officer of XAU. Mr. Bay currently holds 370,000 XAU Shares (approximately 2.2%).
Mr. Bay, together with his spouse Ksenia Povzner -Bay, holds 17,000 QS Holdings shares
(17.0%), of which Mr. Bay holds 10,000 shares (10.0%) directly and Ms. Povzner-Bay holds
7,000 shares (7.0%). Following the Acquisition, Mr. Bay and Ms. Povzner-Bay will hold, in the
aggregate, approximately 24,170,000 XAU Shares (approximately 12.3% to 13.7%,
depending on the extent of the Concurrent Financing). Mr. Bay is also the sole director of QS
Holdings. Mr. Bay resides in Toronto, Canada.
Peter Hambro – Chairman and Director. Mr. Hambro serves as Chairman of the Board of XAU
and is a significant shareholder, beneficially owning or controlling in excess of 10% of XAU’s
outstanding shares. Mr. Hambro is Chairman and majority shareholder of Peter Hambro
Limited, a London -based investment house specializing in mining and private equity, Co -
Founder of Petropavlovsk plc, and a former Chairman and Director of IRC Ltd. (HKEX). Mr.
Hambro currently holds 2,509,689 XAU Shares (approximately 14.97%), of which 1,177,689
are held through Catopriam Ltd., a company controlled by Mr. Hambro. Mr. Hambro also
holds, through Peter Hambro Limited , 31,210 QS Holdings shares (31.21%). Following the
Acquisition, Mr. Hambro will hold approximately 46,203,689 XAU Shares (approximately
23.5% to 26.1%, depending on the extent of the Concurrent Financing ), and will become a
Control Person of XAU. Mr. Hambro resides in London, United Kingdom.
Nataliya Hearn – Director and Chair of Special Committee. Ms. Hearn serves as a director of
XAU and as Chair of the Special Committee of independent directors overseeing the
Acquisition. Ms. Hearn is the President of Link-Tech Inc. (since April 2015) and a Director of
Bio Life Sciences Inc. (since December 2020). Ms. Hearn was previously CEO of American
Rare Earths and Materials (2010 –2012) and CEO of Element 21 Sports (2002– 2010). Ms.
Hearn resides in Toronto, Canada.
Danièle Spethmann, P.Geo. – Director and Member of Special Committee. Ms. Spethmann
serves as a director of XAU and as a Member of the Special Committee of independent
directors overseeing the Acquisition. Ms. Spethmann is the retired CEO, Founder and
Director of Kirkland Lake Discoveries Corp. She previously worked with IAMGOLD, African
Copper, Aurelian Resources and Boliver Goldfields, and is a member of APGO. Ms.
Spethmann resides in Toronto, Canada.
Andrey Maruta – Chief Financial Officer and Corporate Secretary. Mr. Maruta has served as
CFO of XAU Resources Inc. since 2022. He was formerly CFO of Otso Gold Corp (TSXV), CFO
of Kore Potash Plc (ASX/AIM/JSE) and CFO of Petropavlovsk plc (LSE). Mr. Maruta resides in
London, United Kingdom.