Cairo Resources Inc. Announces Letter Agreement FOR Qualifying Transaction with Bangles GOLD Pty. Ltd.
LEGAL_35488359.3
CAIRO RESOURCES INC.
1430-800 West Pender Street, Vancouver, BC V6C 2V6
January 26, 2021 TSX-V: QAI.H
CAIRO RESOURCES INC. ANNOUNCES LETTER AGREEMENT FOR QUALIFYING
TRANSACTION WITH BANGLES GOLD PTY. LTD.
Not for distribution to United States newswire services or for release publication,
distribution or dissemination directly, or indirectly, in whole or in part, in or into the
United States.
VANCOUVER, B.C. – Cairo Resources Inc. (TSX-V: QAI.H) (“ Cairo ”), a capital pool company
listed on the TSX Venture Exchange (the “ Exchange ”), is pleased to announce that it has
entered into a binding letter agreement (the “ Letter Agreement ”) dated January 26, 2021 with
Bangles Gold Pty Ltd. (“ Bangles ”) in respect of a proposed business combination (t he
“Proposed Transaction ”). It is anticipated that the Proposed Transaction will constitute the
“Qualifying Transaction” of Cairo in accordance wit h Policy 2.4 – Capital Pool Companies of the
Exchange.
About Bangles
Bangles is a private company existing under the law s of Australia and is based in Floreat,
Western Australia, and, immediately prior to closin g of the Proposed Transaction, will have
1,500,000 common shares (the “ Bangles Shares ”) outstanding, and no outstanding securities
exchangeable or convertible into Bangles Shares.
Bangles is the holder of a 100% legal and beneficia l interest in three (3) exploration licence
applications (“ ELA’s ”) located in New South Wales (“ NSW ”), Australia. ELA 6056, ELA 6058
and ELA 6059 cover an area of ~680 km 2 over sections of the mineralised Koonenberry Fault
and associated secondary faults and splays located in the north west of NSW, Australia.
Geoscientists from the Geological Survey of NSW (“ GSNSW ”) have concluded that
“mineralisation styles and structural development i n the Koonenberry Orogenic Belt are
remarkably similar to the Victorian Goldfields in t he Western Lachlan Orogen” (Greenfield and
Reid, 2006). In their detailed assessment and compa rison, they highlighted similarities in the
style of mineralisation, mineral associations, meta l associations, hydrothermal alteration,
structural setting, timing of metamorphism and the age of mineralisation, association with I-type
magmatism, and the character of the sedimentary host rocks. Mineralisation in the Koonenberry
region is classified as orogenic gold and is typica l of turbidite-hosted/slate-belt gold provinces
(Greenfield and Reid, 2006). The region hosts the h istoric Albert Goldfield, which was
discovered in the late 1800s and was centred on sev eral gold mining centres located through
out the district.
The Koonenberry region is an emerging gold district , with significant interest being shown by
listed and unlisted explorers of late. This include s Australian Stock Exchange listed Manhattan
Corporation Ltd. (ASX:MHC) and Red Mountain Mining Ltd. (ASX:RMX).
Bangles is in the process of completing the flying and post processing of an aero-magnetic
survey covering all of the ELA’s which will be used to identify and prioritize initial gold targets for
a phase 1 exploration program to include scout drilling.
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Jason Bontempo and Nick Rowley, the controlling shareholders of Bangles, reside in Australia.
A press release with further information in respect of Bangles, including significant financial
information, will follow in accordance with the policies of the Exchange.
Summary of the Proposed Transaction
The Letter Agreement contemplates that Cairo and Ba ngles will negotiate and enter into a
definitive agreement in respect of the Proposed Tra nsaction (the “ Definitive Agreement ”),
pursuant to which it is anticipated that Cairo will acquire all of the issued and outstanding
Bangles Shares, and the shareholders of Bangles wil l receive Cairo Shares in exchange for
their Bangles Shares. The Proposed Transaction will be structured as a share exchange or
other structure based on the advice of the parties’ respective advisors and taking into account
various securities, tax, operating and other considerations.
Prior to the closing of the Proposed Transaction, C airo will have 5,256,473 Cairo Shares issued
and outstanding. It is intended that an aggregate o f 5,000,000 Cairo Shares and C$112,500 will
be issued and paid pro rata to the shareholders of Bangles in exchange for 100% of the
Bangles Shares. It is anticipated that the resultin g entity (the “ Resulting Issuer ”) will continue
the business of Bangles under a name to be mutually agreed to by the parties (the “ Name
Change ”).
A finder’s fee of 386,161 Cairo Shares will be paya ble by Cairo to an arm’s length third party in
connection with the closing of the Proposed Transaction (the “ Finder’s Fees ”).
Certain common shares of the Resulting Issuer to be issued pursuant to the Proposed
Transaction are expected to be subject to restricti ons on resale or escrow under the policies of
the Exchange, including the securities to be issued to “Principals” (as defined under Exchange
policies), which will subject to the escrow requirements of the Exchange.
The completion of the Proposed Transaction remains subject to a number of terms and
conditions, including, among other things: the nego tiation and execution of the Definitive
Agreement; no material adverse changes occurring in respect of either Cairo or Bangles; the
Name Change shall have been implemented; completion of the Concurrent Financing described
below; Bangles shall have obtained a technical repo rt in connection with the Proposed
Transaction prepared in accordance with National In strument 43-101 – Standards of Disclosure
for Mineral Projects ; the parties obtaining all necessary consents, ord ers and regulatory and
shareholder approvals, including the conditional ap proval of the Exchange; completion of a
thorough business, legal and financial review by ea ch party of the other party; and other
standard conditions of closing for a transaction in the nature of the Proposed Transaction.
Upon completion of the Proposed Transaction, it is anticipated that the Resulting Issuer will be
listed as a Tier 2 Mining Issuer on the Exchange, w ith Bangles as its primary operating
subsidiary.
Upon execution of the Definitive Agreement, and subject to the approval of the Exchange, Cairo
will advance secured loans of up to C$250,000 to Ba ngles, which will be repayable to Cairo on
demand in the event that the Definitive Agreement i s terminated. The loan will be used by
Bangles for working capital purposes.
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Concurrent Financing
In connection with the Proposed Transaction, the pa rties will arrange a concurrent financing of
units of Cairo (“ Units ”) for gross proceeds of C$2,100,000 or such lesser or greater amount
agreed to by the parties, at a price of C$0.28 per Unit (the “ Concurrent Financing ”). Each Unit
will consist of one Cairo Share and one-half of a s hare purchase warrant of Cairo (“ Warrants ”),
with each whole Warrant exercisable for a period of eighteen (18) months at a price of C$0.40
per Cairo Share. The Concurrent Financing may be structured as a subscription receipt offering.
Other than in connection with the Concurrent Financ ing, neither party will issue any shares or
rights exchangeable or exercisable into shares of s uch party prior to closing of the Proposed
Transaction.
The proceeds of the Concurrent Financing will be us ed to fund a proposed phase 1 exploration
program on the ELA’s and for general working capital.
A further news release will be issued confirming th e final terms of the Concurrent Financing
once determined.
Summary of Proposed Directors and Officers of the Resulting Issuer
In conjunction with and upon closing of the Transaction, the board of directors and management
of the Resulting Issuer is expected to include Ian Harris (CEO), Matthew Roma (CFO), Shawn
Khunkhun (independent director), Jason Bontempo (in dependent director), Darren Devine
(independent director) and such other directors and officers as may be agreed to by the parties.
The following is a brief description of the directo rs and officers of the Resulting Issuer who have
been identified as of the date hereof:
Ian Harris – CEO
Mr. Harris is a mining engineer and executive with over 20 years' experience in leading
worldwide mining projects. He has mining and manage ment experience in over 20 countries,
with a wide range of mining methods, commodities, p roject phases and sizes, successful
advancing project in some of the most challenging e nvironments. Mr. Harris was CEO of AMAK
Mining Company (first private operating mining comp any in Saudi Arabia), and also served as
Senior VP and Country Manager of Corriente Resource s Inc. in Ecuador and was directly
involved in the operations and negotiations that le d to the sale of Corriente for C$690 million to
CRCC-Tongguan Investment (Canada) Co. Ltd.
Matthew Roma - CFO
Mr. Roma is currently the Chief Financial Officer of Oro X Mining Corp. Mr. Roma is a Chartered
Professional Accountant (CPA) with over 10 years of financial management experience. Prior to
joining Oro X, Mr. Roma was the Director of Finance for Core Gold Inc. until the sale of Core
Gold to an Australian mining Company. Mr. Roma arti cled at Deloitte LLP where he specialized
in assurance and advisory services for publicly lis ted mining companies based both in Canada
and the United States.
Shawn Khunkhun – Independent Director
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Mr. Khunkhun has over 15 years of experience in the capital markets, mineral exploration and
development sector. He is currently, CEO and Direct or of Dolly Varden Silver Corp (TSXV:DV).
Mr. Khunkhun has an extensive network of high net w orth retail and institutional investors,
analysts, brokers and private equity groups. He has facilitated over C$1B in equity raised for
resources companies over the past 17 years as a CEO, director, advisor or consultant.
Jason Bontempo – Independent Director
Mr. Bontempo has 22 years’ experience in public com pany management, corporate advisory,
investment banking and public company accounting, s ince qualifying as a chartered accountant
with Ernst & Young. Mr Bontempo has worked primaril y serving on the board and the executive
management of minerals and resources public companies focusing on advancing, financing and
developing mineral resource assets and business dev elopment. Mr. Bontempo also provides
corporate advice services for the financing of reso urce companies across multiple capital
markets and resource asset acquisitions and divestments.
Darren Devine – Independent Director
Mr. Devine is the principal of CDM Capital Partners a leading Vancouver based corporate
finance advisory services to private and public com panies. In this role, Mr. Devine acts as
founder, board member and management advisor with r espect to direct and indirect listings on
Canadian and international stock exchanges, public and private financings, corporate
governance, and the structuring of mergers, acquisitions and dispositions.
Mr. Devine is currently an active member of the TSX Venture Exchange’s Advisory Committee,
advising the stock exchange on policy decisions in relation to listing requirements for public and
going public transaction.
Mr. Devine is qualified as a barrister and solicito r in British Columbia and in England & Wales
and prior to founding CDM Capital Partners, practic ed exclusively in the areas of corporate
finance and securities law in Vancouver, Canada and London, England.
Additional information on the board and management of the Resulting Issuer will be provided
once identified. No insiders of the Resulting Issue r are expected other than the board and
management.
Sponsorship of a Qualifying Transaction
Sponsorship of a qualifying transaction is required by the Exchange unless exempt in
accordance with Exchange policies. Cairo is current ly reviewing the requirements for
sponsorship and may apply for an exemption from the sponsorship requirements pursuant to
the policies of the Exchange, however, there is no assurance that an exemption is available or
that Cairo will ultimately obtain an exemption if o ne is available. Cairo intends to include any
additional information regarding sponsorship in a subsequent press release.
Other Information relating to the Proposed Transaction
The Proposed Transaction will not constitute a “Non -Arm’s Length Qualifying Transaction” (as
such term is defined in the policies of the Exchang e) for Cairo. Accordingly, the Proposed
Transaction will not require the approval of the shareholders of Cairo.
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The Proposed Transaction will require the approval of the shareholders of Bangles. Bangles
intends to hold a shareholder meeting to seek all n ecessary approvals, the details of which will
be disclosed once available.
In accordance with the policies of the Exchange, th e Cairo Shares are currently halted from
trading and will remain so until such time as the Exchange determines, which, depending on the
policies of the Exchange, may not occur until completion of the Proposed Transaction.
Additional information concerning the Proposed Tran saction, Cairo, Bangles and the Resulting
Issuer will be provided once determined in a subseq uent news release and in the Filing
Statement to be filed by Cairo in connection with t he Proposed Transaction and which will be
available in due course under Cairo’s SEDAR profile at www.sedar.com.
About Cairo Resources Inc.
Cairo is designated as a Capital Pool Company under Exchange Policy 2.4. Cairo has not
commenced commercial operations and has no assets o ther than cash. Cairo’s objective is to
identify and evaluate businesses or assets with a v iew to completing a Qualifying Transaction.
Any proposed Qualifying Transaction must be approve d by the Exchange and, in the case of a
Non-Arm’s Length Qualifying Transaction, must also receive majority approval of the minority
shareholders. Until the completion of a Qualifying Transaction, Cairo will not carry on any
business other than the identification and evaluati on of businesses or assets with a view to
completing a proposed Qualifying Transaction.
For further information regarding Cairo and the Pro posed Transaction, please contact Darryl
Cardey, President and Chief Executive Officer, at (604) 638-8063.
Neither TSX Venture Exchange nor its Regulation Ser vices Provider (as that term is defined in the poli cies of
the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Completion of the Proposed Transaction is subject t o a number of conditions, including but not limited to, Exchange
acceptance and if applicable pursuant to Exchange R equirements, majority of the minority shareholder a pproval.
Where applicable, the Proposed Transaction cannot c lose until the required shareholder approval is obt ained. There
can be no assurance that the Proposed Transaction will be completed as proposed or at all.
Investors are cautioned that, except as disclosed i n the management information circular or filing sta tement to be
prepared in connection with the Proposed Transactio n, any information released or received with respec t to the
Proposed Transaction may not be accurate or complet e and should not be relied upon. Trading in the sec urities 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 Proposed Transaction and has neither
approved nor disapproved the contents of this press release.
All information contained in this news release with respect to Cairo and Bangles was supplied by the p arties,
respectively, for inclusion herein, and Cairo and i ts respective directors and officers have relied on Bangles for any
information concerning such party.
This news release does not constitute an offer to s ell or a solicitation of an offer to sell any of th e securities in the
United States. The securities have not been and will not be registered under the United States Securities Act of 1933,
as amended (the “ U.S. Securities Act ”) or any state securities laws and may not be offe red or sold within the United
States or to U.S. Persons unless registered under t he U.S. Securities Act and applicable state securit ies laws or an
exemption from such registration is available.
The information in this news release includes certa in information and statements about management's vi ew of future
events, expectations, plans and prospects that cons titute forward looking statements, including statem ents relating to
the completion of the Proposed Transaction, the pro posed business of the Resulting Issuer, the complet ion of the
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Concurrent Financing, completion of a NI 43-101 tec hnical report prior to the Proposed Transaction, th e proposed
directors and officers of the Resulting Issuer, the completion of the Name Change, Exchange sponsorshi p
requirements and intended application for exemption therefrom, shareholder, director and regulatory ap provals, and
future press releases and disclosure. These stateme nts are based upon assumptions that are subject to significant
risks and uncertainties. Because of these risks and uncertainties and as a result of a variety of fact ors, the actual
results, expectations, achievements or performance of each of Cairo and Bangles may differ materially from those
anticipated and indicated by these forward looking statements. Any number of factors could cause actua l results to
differ materially from these forward-looking statem ents as well as future results. Although each of Ca iro and Bangles
believes that the expectations reflected in forward looking statements are reasonable, they can give n o assurances
that the expectations of any forward looking statem ents will prove to be correct. Except as required b y law, each of
Cairo and Bangles disclaims any intention and assum e no obligation to update or revise any forward loo king
statements to reflect actual results, whether as a result of new information, future events, changes i n assumptions,
changes in factors affecting such forward looking statements or otherwise.