Cario Resources Inc. Announces Execution of Definitive Agreement and Updates Proposed Qualifying Transaction with Bangles GOLD
CAIRO RESOURCES INC.
1430-800 West Pender Street, Vancouver, BC V6C 2V6
June 21, 2021 TSX-V: QAI.H
CARIO RESOURCES INC. ANNOUNCES EXECUTION OF DEFINITIVE AGREEMENT AND
UPDATES PROPOSED QUALIFYING TRANSACTION WITH BANGLES GOLD
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” or the “ Company”), a capital
pool company listed on the TSX Venture Exchange (the “Exchange”), is pleased to announce that, further
to its news release dated January 26, 2021, it has entered into a share exchange agreement (the “Definitive
Agreement”) dated June 15, 2021 with Bangles Gold Pty. Ltd. (“Bangles”) and the shareholders of Bangles
(the “ Bangles Shareholders ”) pursuant to which the Company will acquire 100% of the issued and
outstanding ordinary shares in the capital of Bangles (the “ Proposed Transaction”). It is anticipated that
the Proposed Transaction will constitute the “Qualifying Transaction” of Cairo in accordance with Policy
2.4 – Capital Pool Companies of the Exchange.
Summary of the Transaction
In accordance with the terms and conditions of the Definitive Agreement, the Company will acquire all of
the issued and outstanding ordinary shares in the capital of Bangles (the “ Bangles Shares ”) from the
Bangles Shareholders. In consideration for the acquisition of the Bangles Shares the Company will:
(a) issue from treasury to the Bangles Shareholders (or their nominees), pro rata in proportion to their
holdings of Bangles Shares, an aggregate of 5,000,000 common shares in the capital of the
Company (the “Payment Shares”); and
(b) make a cash payment in the aggregate sum of $112,500.00 to the Bangles Shareholders pro rata in
proportion to their holdings of Bangles Shares.
It is anticipated that the resulting entity (the “Resulting Issuer”) will continue the business of Bangles and
change its name to “Gladiator Metals Corp.” (the “ Name Change”). 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.
Certain common shares of the Resulting Issuer to be issued pursuant to the Proposed Transaction are
expected to be subject to restrictions 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: 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 report in connection with the Proposed Transaction prepared in
accordance with National Instrument 43-101 – Standards of Disclosure for Mineral Projects ; the parties
obtaining all necessary consents, orders and regulatory and shareholder approvals, including the conditional
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approval of the Exchange; and other standard conditions of closing for a transaction in the nature of the
Proposed Transaction.
About Bangles
Bangles is a private company existing under the laws of Australia and is based in Floreat, Western Australia.
Bangles is the holder of a 100% legal and beneficial interest in three (3) exploration licences (the “ EL’s”)
totalling 682km2 located in New South Wales (“ NSW”), Australia (the “ Koonenberry North Project”).
The ELs cover sections of the mineralised Koonenberry Fault and associated secondary faults and splays
located in the north west of NSW. Geoscientists from the Geological Survey of NSW (“ GSNSW”) have
concluded that “mineralisation styles and structural development in the Koonenberry Orogenic Belt are
remarkably similar to the Victorian Goldfields in the Western Lachlan Orogen” (Greenfield and Reid,
2006). In their detailed assessment and comparison, they highlighted similarities in the style of
mineralisation, mineral associations, metal 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
typical of turbidite-hosted/slate-belt gold provinces (Greenfield and Reid, 2006). The region hosts the
historic Albert Goldfield, which was discovered in the late 1800s and was centred on several 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 includes 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.
Cono Bontempo and Nick Rowley, the controlling shareholders of Bangles, reside in Australia.
Audited financial information of Bangles for the period of incorporation on September 4, 2020 to February
28, 2021 is summarized below:
Statement of Financial Position AUD$ CAD$
(converted into CAD$ at
AUD$1.00 to CAD$0.9815)
Cash and cash equivalents $2,400 $2,356
Other current assets $30,436 $29,873
Non-current assets $53,659 $52,666
Total assets $86,495 $84,895
Current liabilities $17,182 $16,864
Non-current liabilities $123,467 $121,183
Total liabilities $140,649 $138,047
Shareholders’ equity ($54,154) ($53,152)
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Concurrent Financing
Prior to the completion of the Proposed Transaction, Cairo proposes to undertake a financing by way of a
non-brokered private placement of units of the Company (“ Units”) at a price of $0.28 per Unit for gross
proceeds of $2,380,000 (the “Concurrent Financing”). Each Unit will consist of one common share in the
capital of the Company (each, a “Common Share”) and one half of one Common Share purchase warrant
(each whole warrant, a “Warrant”). Each whole Warrant will be exercisable by the holder thereof into one
Common Share at a price of $0.40 per Common Share for a period of twenty-four (24) months from the
date of issuance.
Cairo may pay a cash finders’ fee (the “ Concurrent Financing Finders’ Fee ”) of up to 6% of the gross
proceeds of the Concurrent Financing and issue non-transferable compensation warrants (the “Concurrent
Financing Compensation Warrants”) of up to 6% of the number of Units issued under the Concurrent
Financing, in accordance with the policies of the Exchange. Each Concurrent Financing Compensation
Warrant, if issued, will entitle the holder thereof to purchase one Common Share of the Resulting Issuer at
a price of $0.28 per Common Share for a period of twenty-four (24) months from the date of issuance.
The net proceeds from the Concurrent Financing are expected to be approximately $2,237,200 after
deducting $142,800 in Concurrent Financing Finder’s Fees (assuming such fees are paid on all Units issued
in the Concurrent Financing). The proceeds from the Concurrent Financing will be used to fund phase 1 of
the exploration program on the Koonenberry North Project and for working capital purposes.
Loan Agreement
In connection with the Proposed Transaction, Cairo and Bangles entered a promissory note dated February
4, 2021 (the “Promissory Note”). Under the terms of the Promissory Note, Cairo agreed to advance secured
loans of up to $250,000 to Bangles (the “Bangles Loan”), which are non-interest bearing and have a term
of one year. In the event that the Definitive Agreement is terminated, the Bangles Loan will be due on
demand and bear interest at 10%, compounded monthly. The Bangles Loan is secured by the all of the
issued and outstanding Bangles Shares. The Bangles Loan will be used by Bangles for working capital
purposes. As of the date of this Filing Statement, Cairo has advanced $225,000 to Bangles under the terms
of the Promissory Note.
Finder’s Fee
In connection with the Proposed Transaction, Cairo has entered into a finder’s fee agreement (the “Finder’s
Fee Agreement”) with Alex Klenman, an arm’s length finder (the “Finder”), pursuant to which Cairo has
agreed to issue 386,160 Common Shares to the Finder as a finder’s fee.
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 (independent director), and Darren Devine (independent director).
The following is a brief description of the directors 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 management experience in over 20 countries, with a wide range of mining
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methods, commodities, project phases and sizes, successful advancing project in some of the most
challenging environments. Mr. Harris was CEO of AMAK Mining Company (first private operating mining
company in Saudi Arabia), and also served as Senior VP and Country Manager of Corriente Resources Inc.
in Ecuador and was directly involved in the operations and negotiations that led 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 articled at Deloitte LLP where he specialized in assurance and advisory
services for publicly listed mining companies based both in Canada and the United States.
Shawn Khunkhun – Independent Director
Mr. Khunkhun has over 15 years of experience in the capital markets, mineral exploration and development
sector. He is currently, CEO and Director of Dolly Varden Silver Corp (TSXV:DV). Mr. Khunkhun has an
extensive network of high net worth 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 company management, corporate advisory, investment
banking and public company accounting, since qualifying as a chartered accountant with Ernst & Young.
Mr Bontempo has worked primarily 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 development. Mr. Bontempo also provides corporate advice services for the financing of resource
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 companies. In this role, Mr. Devine acts as founder, board member and
management advisor with respect 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 solicitor in British Columbia and in England & Wales and prior
to founding CDM Capital Partners, practiced exclusively in the areas of corporate finance and securities
law in Vancouver, Canada and London, England.
No insiders of the Resulting Issuer are expected other than the board and management.
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Sponsorship of a Qualifying Transaction
Sponsorship of a qualifying transaction is required by the Exchange unless exempt in accordance with
Exchange policies. Cairo will be seeking a waiver of any requirement for a sponsor.
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 Exchange) for Cairo. Accordingly, the Proposed Transaction will not require
the approval of the shareholders of Cairo.
In accordance with the policies of the Exchange, the Common 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 Transaction, Cairo, Bangles and the Resulting Issuer will
be provided once determined in a subsequent news release and in the Filing Statement to be filed by Cairo
in connection with the 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 other than cash. Cairo’s objective is to identify and evaluate
businesses or assets with a view to completing a Qualifying Transaction. Any proposed Qualifying
Transaction must be approved 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 evaluation of
businesses or assets with a view to completing a proposed Qualifying Transaction.
For further information regarding Cairo and the Proposed Transaction, please contact Darryl Cardey,
President and Chief Executive Officer, at (604) 638-8063.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this
release.
Completion of the Proposed 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 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 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.
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All information contained in this news release with respect to Cairo and Bangles was supplied by the
parties, respectively, for inclusion herein, and Cairo and its respective directors and officers have relied
on Bangles for any information concerning such party.
This news release does not constitute an offer to sell or a solicitation of an offer to sell any of the 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
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.
The information in this news release includes certain information and statements about management's view
of future events, expectations, plans and prospects that constitute forward looking statements, including
statements relating to the completion of the Proposed Transaction, the proposed business of the Resulting
Issuer, the completion of the Concurrent Financing, completion of a NI 43-101 technical report prior to
the Proposed Transaction, the proposed directors and officers of the Resulting Issuer, the completion of
the Name Change, Exchange sponsorship requirements and the application for exemption therefrom,
shareholder, director and regulatory approvals, and future press releases and disclosure. These statements
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 factors, 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 actual results to differ materially from
these forward-looking statements as well as future results. Although each of Cairo and Bangles believes
that the expectations reflected in forward looking statements are reasonable, they can give no assurances
that the expectations of any forward looking statements will prove to be correct. Except as required by law,
each of Cairo and Bangles disclaims any intention and assume no obligation to update or revise any
forward looking statements to reflect actual results, whether as a result of new information, future events,
changes in assumptions, changes in factors affecting such forward looking statements or otherwise.