Lido Minerals Enters into Business Combination Agreement with Cappex Mineral Ventures Inc. and Announces $1.5 Million Private Placement
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LIDO MINERALS ENTERS INTO BUSINESS COMBINATION AGREEMENT WITH CAPPEX MINERAL
VENTURES INC. AND ANNOUNCES $1.5 MILLION PRIVATE PLACEMENT
VANCOUVER, BRITISH COLUMBIA – May 18, 2021 – Lido Minerals Ltd . (“ Lido” or the “ Company”)
(CSE:LIDO) is pleased to announce that it has entered into a definitive business combination agreement
dated May 18, 2021 (the “Agreement”) with CAPPEX Mineral Ventures Inc. (“CAPPEX”) and 1303554 B.C.
Ltd. (“Subco”), a newly incorporated, wholly-owned subsidiary of Lido. Pursuant to the Agreement, Lido
will acquire all of the issued and outstanding shares of CAPPEX in exchange for shares of Lido (the
“Transaction”). The Transaction will constitute a reverse takeover of Lido by CAPPEX and will be a
“fundamental change” of Lido pursuant to the policies of the Canadian Securities Exchange (“ CSE”),
requiring approval from the CSE. Approval of the shareholders of Lido and CAPPEX will also be required.
Pursuant to the Agreement, the Transaction will be structured as a three -cornered amalgamation, with
CAPPEX amalgamating with Subco under the Business Corporations Act (British Columbia), and becoming
a wholly-owned subsidiary of Lido. Shareholders of CAPPEX will receive one common share in the capital
of Lido in exchange for each outstanding common share of CAPPEX held by them, with Lido expected to
issue an aggregate of 37,160,813 Lido shares to the CAPPEX shareholders under the Transaction.
About CAPPEX Mineral Ventures Inc.
CAPPEX is a mineral exploration company with a highly experienced team focused on the Alta Victoria
silver-polymetallic project (“Project”) in central Peru. The Project is located 160 kilometers northeast of
Lima and consists of 18 mining concessions over a total area of 71 km 2 within the Central Cordillera
Polymetallic Mineral Belt , which hosts significant silver and polymetallic mineral deposits . Mining
production within the district is from CRD, skarn, vein, manto, and diatreme related deposits, and four of
these major mines (Santander, Chungar, Iscaycruz and Casapalca) lie along and/or adjacent to the
Alpamarca Fault to the NW and SE of the Project. Conc essions controlled by CAPPEX straddle nearly 14
km of the Alpamarca/Chonta Fault at the heart of this district (see Figure 1).
Further technical information on the Project can be found below.
About the Combined Company
Upon completion of the Transaction, the resulting company (the “Combined Company”) will continue to
carry on the business of CAPPEX and the exploration of the Project as well as targeting the acquisition of
additional mineral projects by leveraging the team’s significant experience in Peru and South America
more widely. The board and management of Lido will be reconstituted on close of the Transaction and is
expected to be comprised of the following:
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Ronald Stewart, Chief Executive Officer – Mr. Stewart is a mining professional with over 30 years of
international experience in exploration, project development, operations and capital markets. Early in his
career he led the discovery team at the 5 million-ounce Musselwhite deposit in Ontario and was an integral
team member involved in the discovery and advancement of Wallaby in West Australia and Volte Grande in
Brazil. Mr. Stewart was President and CEO of Beaufield Resources Corp., which was acquired by Osisko Mining
Inc. He spent eight years as an award -winning equity analyst and investment banker at Dundee Capital
Markets, Clarus Securities Inc. and Macquarie Capital Markets. Mr. Stewart holds an H.BSc. in geology from
Lakehead University and is a registered Professional Geoscientist (P.Geo.) in Ontario.
Paul Ténière, President – Mr. Ténière is a Professional Geologist (P.Geo.) and currently the CEO of Lido.
Mr. Ténière has over 20 years of diverse experience in the mining and oil & gas sectors in Canada, United
States, and internationally taking projects from exploration stage to mine development. Mr. Ténière has
held senior to executive roles with junior to major mining companies developing precious metal, base
metal, and metallurgical coal deposits, and has significant capital markets and corporate finance
experience through his past senior roles with the TSX and TSX Venture Exchange. Mr. Ténière has also
worked on MVT lead -zinc deposits, porphyry -style copper-lead-zinc deposits, and gold -PGM deposits in
Canada, United States, and Europe. Mr. Ténière also serves as the CEO and Director of Metallica Metals
Corp., Director of Monarca Minerals Inc., and President of Major Precious Metals Corp. Mr. Ténière holds
an M.Sc. in Geology from Acadia University and a B.Sc. (Honours) from Dalhousie University in Nova Scotia.
Stephen Brohman, Chief Financial Officer, Corporate Secretary – Mr. Brohman is currently CFO and
Corporate Secretary of Lido. Mr. Brohman has ten years of working experience in a variety of roles with
public companies and has become experienced in corporate finance, project acquisition, executive
management, corporate communications, corporate branding, shareholder relations and investor lead
generation. Mr. Brohman has extensive experience in the audit of publicly traded companies, and has
worked with mining and exploration, oil and gas, real estate investment, and merchant banking
companies during his time in public practice. Mr. Brohman has served as director and/or executive officer
for several publicly traded mineral exploration companies. Mr . Brohman obtained a BBA from Capilano
University in 2008 and obtained his CPA, CA (Chartered Professional Accountant) designation in 2011.
Philip Anderson, Director – Mr. Anderson is the founder and current President and director of CAPPEX.
Starting his career in Alaska, his work in exploration spans 40 years in over a dozen countries since
graduating from Colorado School of Mines in Geological Engineering i n 1981. As an independent
explorationist, he has been based in South America since the early 1990’s. Leadership roles include VP
Exploration with Canadian Shield Resources Ltd. from 2007 to 2010 and Chile -Peru exploration manager
for Brett Resources Inc. from 1996 to 2003 where his early work led to the discovery and development of
the Pallancata Mine in Peru, a primary silver producer. In 2017 Mr. Anderson formed CAPPEX, financed
the acquisition and initial groundwork on the Project, and subsequently rai sed an additional C$2.5M
privately, to advance the project to its present stage.
Fabian Baker, Director – Mr. Baker is currently a director of CAPPEX and CEO of ASX -listed Kingsrose
Mining Ltd. Mr. Baker is a geologist, with a Bachelor of Science in Appli ed Geology from the Camborne
School of Mines. He was the founder and CEO of Tethyan Resource Corp., a mineral exploration company
that was listed on the TSX Venture Exchange. Under his leadership, Tethyan identified and negotiated the
acquisition of signif icant gold, copper, and base metal exploration assets in Serbia. In October 2020,
Tethyan was acquired by ASX and LSE -listed mining company Adriatic Metals plc. Prior to Tethyan, Mr.
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Baker was Chief Geologist at Lydian International where he played a key r ole in the growth and
advancement of the 5 million-ounce Amulsar gold deposit to completion of a feasibility study.
Nate Brewer, Director – Mr. Brewer’s experience spans 40 years in over 20 countries as an exploration
geologist for major mining companies. He started his career in Alaska with BP Minerals and Anaconda
Minerals Company after graduating with a B.A. in Geology from University of C alifornia at Santa Barbara
in 1975. Starting in the early 1990’s, Mr. Brewer worked for 25 years in Latin America principally with
Homestake Mining Company and Gold Fields Limited, where he played a leadership role in the evaluation
and acquisition of the Veladero gold-silver deposit in Argentina and the Cerro Corona deposit in Peru. Mr.
Brewer and his team were directly responsible for the discovery and advancement through to feasibility
of the Chucupaca deposit in Peru and Salares Norte deposit in Chile.
Hannah Jin, Director – Ms. Jin is a Professional Geologist (P.Geo.) and currently a director of Lido. Ms. Jin
is also the Director of Corporate Development for VRB Energy, a privately -held battery technology
innovator and energy storage system manufacturer , and a director of Gold Lion Resources. Ms. Jin has
over 15 years of technical and business development experience specializing in project evaluation, due
diligence, and valuation analysis of precious and base metal projects. Ms. Jin holds an M.Sc. in Geology
from Western University and an M.B.A. from the University of British Columbia.
Patrick O’Flaherty, Director – Mr. O’Flaherty is currently a director of Lido and is a Chartered Accountant
and a Chartered Financial Analyst. He also holds a degree in Economics from Union College, in
Schenectady, NY. Mr. O’Flaherty has several years of experience in financial services, including public
accounting and wealth management. He has worked for a recognized accounting firm and two recognized
banking institutions and has served as an officer and director of several Canadian publicly traded
companies.
Private Placement
In connection with the Transaction, Lido also announces that it has completed a non-brokered private
placement of 10,000,000 subscription receipts (the “ Subscription Receipts”). The Subscription Receipts
were issued at a price of $0.15 per Subscription Receipt for gross proceeds of $1,500,000. Each
Subscription Receipt will, on closing of the Transaction on or before November 15, 2021, be automatically
converted into one common share and one warrant of the Combined Company. Each warrant will be
exercisable into one common share of the Combined Company at an exercise price of $0.25 per share for
a period of two years from the date of issuance.
On close of the Transaction, it is anticipated that former shareholders of CAPPEX will hold approximately
61.5% of the Combined Company, shareholders of Lido will hold approximately 22.0% of the Combined
Company, and 16.5% of the Combined Company will be held by subscribers to the private placement.
The proceeds of the private placement will be held in escrow and released to the Combined Company on
close of the Transaction. The proceeds of the private placement will be used to fund the exploration of
the Project and for general working capital purposes.
Paul Ténière, CEO of Lido, commented, “Lido has spent the past year searching for a significant high grade
silver project with a high calibre exploration and management team that could transform the Company
into a leading precious metals explorer in North and South America . CAPPEX and the Alta Victoria Silver
Project fit that bill and also bring a management team with a track record of significant value creation
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across South America and around the world. I look forward to welcoming the new executives and directors
to our team and working with them to develop precious metal projects in Peru.”
Phil Anderson, President of CAPPEX, added, “ this combination with Lido is the crit ical and timely step
needed to take CAPPEX and the Alta Victoria Project forward and continue adding value for all
shareholders of CAPPEX and Lido. The team we have managed to bring together has been directly involved
with the discovery of tens of millions of ounces of gold and silver across the globe over the last 3 decades
and will provide an unusually high probability of further exploration success going forward. My thanks go
out to those on both sides that have worked so diligently over the past months to help bring this
transaction along and to CAPPEX shareholders for their unwavering support over the last 3 years.”
Alta Victoria Silver-Polymetallic Project Details
Silver-polymetallic mineralization is widespread throughout the Project area (Figure 1) and is controlled
by structure and stratigraphy, exposed as outcropping veins and breccias as well as mantos that form at
stratigraphic contacts. Mineralization at surface and within underground artisanal mine workings on the
Project extends over an area of approximately 4 km x 1 km and forms a series of exposed exploration
targets, yet very little modern exploration has been completed to date. Mineralization shows a marked
zonation from more distal silver-gold-manganese veins and mantos at the Santa Teresita target to gold -
silver-copper-molybdenum mineralization hosted in veins, breccias and mantos in the Lagunas Pachas
area, suggesting closer proximity to a mineralizing source that may represent a porphyry target. Rock-chip
sampling f rom the five prospects around Laguna Pachas returned numerous high -grade results with
grades up to 6.2 g/t Au, 4,800 g/t Ag (154 opt), 18.7 % Pb, 30.1 % Zn, 0.64 % Cu and 0.14 % Mo.
Of the 18 mining concessions that make up the Project, ten are held by CAP PEX’s Peruvian subsidiary,
Minera CAPPEX S.A.C., and Minera CAPPEX S.A.C. holds an option to acquire the remaining eight mining
concessions through an option agreement to acquire Minera Yantac S.A.C. (“Yantac”).
Exploration and Drilling Activities
Since acquiring the Project four years ago, CAPPEX has completed geological mapping and geochemical
sampling of surface and underground workings, soil geochemical surveys, and an Induced Polarization (IP)
survey totaling 39.7 line-km. IP chargeability was a significant factor in determining drill hole targets for a
the first ever 7 -hole scout drilling program on the Project that was completed between September 11,
2020 and November 8, 2020 and totaled 2,300 metres (Table 1 and Figure 2). Two main target zones were
tested; Santa Teresita where six of the seven holes were collared, and Sanguinetti where one hole was
collared. Drilling encountered significant silver and gold mineralization localized in zones of stratigraphic
and/or structural controls (Table 2).
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Figure 1: Location of Alta Victoria Project within the Central Cordillera Polymetallic Mineral Belt
Figure 2: 2020 scout drill hole locations for Alta Victoria Project
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Table 1: 2020 Scout Drill Hole Locations – Alta Victoria Project
Drillhole ID Target Area
UTM WGS 84-18S
Elevation (m) Azimuth Dip Depth (m)
Easting Northing
AV20-01 Santa Teresita 346703 8744096 4,833 45 -60 416.3
AV20-02 Santa Teresita 346743 8744173 4,850 225 -75 474.1
AV20-03 Santa Teresita 346839 8744096 4,857 10 -60 210.5
AV20-04 Santa Teresita 346729 8744363 4,816 295 -70 99.3
AV20-05 Santa Teresita 346671 8744322 4,828 215 -70 320.2
AV20-06 Santa Teresita 346765 8743840 4,733 0 -90 443.7
AV20-07 Sanguinetti 345080 8745359 4,679 95 -65 336.2
Table 2: Alta Victoria Project - Significant Drilling Intercepts
Drill hole From
(m)
To
(m)
Interval
(m)
Au
(g/t)
Ag
(g/t)
Cu
(%)
Pb
(%)
Zn
(%)
AgEq*
(opt) Remarks
AV20-01 92 96 4 0.21 48.6 0.04 0.07 0.23 2.3 4.0m @ 2.3 opt AgEq
110 113 3 0.02 22.3 - 0.72 1.44 2.8 3.0m @ 2.8 opt AgEq
179.2 184.2 5 0.63 7.8 - 0.06 0.25 1.9 5.0m @ 1.9 opt AgEq
incl 179.2 180.2 1 1.97 30.4 - 0.07 0.26 5.6 1.0m @ 5.6 opt AgEq
AV20-02 23.3 36 12.7 0.09 2.7 - - - 1.4 12.7m @ 1.4 opt AgEq
incl 26.1 27.6 1.5 0.1 91.4 - 0.07 - 3.2 1.5m @ 3.2 opt AgEq
incl 33.1 34.6 1.5 0.3 108 - 0.06 0.11 4.3 1.5m @ 4.3 opt AgEq
108.2 109.2 1 0.04 29.9 0.12 0.218 0.63 2.2 1.0m @ 2.2 opt AgEq
AV20-02 190.4 192.1 1.7 4.3 14.4 0.02 0.88 0.53 11 1.7m @ 11.0 opt AgEq
AV20-02 232 248 16 0.56 6.3 - 0.04 0.14 1.6 16.0m @ 1.6 opt AgEq
incl 236 238 2 0.53 31.7 0.03 0.13 0.38 2.7 2.0m @ 2.7 opt AgEq
incl 242 246 4 1.1 4.3 - 0.03 0.13 2.7 4.0m @ 2.7 opt AgEq
AV20-03 0 20 20 0.02 86.6 0.03 0.11 0.2 3.2 20.0m @ 3.2 opt AgEq
incl 2 10 8 0.02 108.2 0.04 0.11 0.16 3.4 8.0m @ 3.7 opt AgEq
AV20-03 118.3 119 0.7 1.81 0.85 - - - 4 0.7m @ 4.0 opt AgEq
AV20-04 No significant intercepts
AV20-05 37 42.5 5.5 0.02 12.2 - 0.28 0.41 1.1 5.5m @ 1.1 opt AgEq
AV20-06 No significant intercepts
AV20-07 No significant intercepts
Notes:
• *AgEq was calculated using the following price assumptions: Au=$1838/oz, Ag= $27.00/oz, Cu=$3.71/lb, Pb= $0.94/lb,
Zn= $1.22/lb. AqEq reported in ounces per ton (opt).
• Reported intervals do not represent true thickness. True thickness is unknown at this time.
• Numbers in this table may not add exactly as numbers have been rounded to the nearest decimal.
Drilling was completed using a track-mounted diamond drill ing rig and supervised by CAPPEX geological
staff. HQ-sized c ore was collected and transported to CAPPEX’s core facility, where it was logged and
sampled at either 2 metre intervals or with the aid of a handheld XRF spectrometer. Sample intervals were
also based on structural and lithological contacts. Core recovery levels were generally near 100% ,
however, poor recoveries were encountered in zones of intense faulting or due to voids from historical
mine workings.
A total of 772 samples were analyzed during the 2020 scout drilling program on the Project. The QAQC
protocol by CAPPEX included 24 Certified Reference Material s (standards), 16 coarse blanks and 8
duplicate samples that were inserted into 14 sample batches. QAQC materials comprised approximately
7% of the total samples. Assay results of standards and duplicates were within the range of tolerance. Of
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the 16 coarse blank samples, results were within the tolerance range for all elements with the exception
of copper which varied outside tolerance levels. Analytical work was done by ALS Global located in Lima,
Peru. ALS Global is ISO 9002 certified and independent of CAPPEX. All samples submitted were analyzed
for 48 elements using a four-acid digestion and ICP-MS and ore grade gold using 30g charge Fire Assay/AA
finish. Overlimit analysis was done on Ag, Pb, Zn using four acid digestion, ICP -AES. In addition, 5 pulp
duplicate samples were sent for check assays to CERTIMIN S.A. , also a certified independent laboratory
located in Lima, Peru.
Summary
Overall, the 2020 scout drilling program confirmed manto style replacement and structurally -controlled
polymetallic mineralization on the Project with silver grades up to 108 g/t Ag in holes AV20-01 to AV20-
03. The thickest, highest grade intercept (20m @ 86.6 g/t Ag – see Table 2 ) was encountered in a
calcareous sandstone unit, the apparent base of the Pariahuanca Formation limestone. Other altered and
mineralized zones within in siliciclastic units demonstrate that permeability contrast between siltstone
and coarser grain sandstone, with or without a carbonate component, are essential in providing conduits
for fluid flow and mineralized manto formation.
CAPPEX plans to complete an additional 3,000 metres of diamond drilling and detailed mapping and
ground geophysics over other target areas in the Project with known polymetallic mineralization.
Data Verification
Both Mr. Paul Ténière, P.Geo., and Mr. Walter La Torre, MAusIMM (CP), have verified the scientific and
technical information disclosed in this news release including all sampling, analytical, and drilling data
underlying the information disclosed above. Mr. La Torre verified all technical information while authoring
an independent NI 43 -101 technical report for the Project. This included the completion of a database
audit of all sample and drilling assay data disclosed and completion of a site visit (personal inspection) of
the Project in July 2020, where Mr. La Torre verifi ed the geology, mineralization, and historical mine
workings. Mr. Ténière has verified the technical information disclosed through a detailed technical due
diligence review over the past four months, which included a full review of the sampling, analytical , and
drilling data from the CAPPEX exploration and drilling programs.
Conditions to Closing Transaction
Lido and CAPPEX will conduct meetings of their shareholders for purposes of obtaining shareholder
approval of the Transaction and related matters. Further details about the Transaction and the Combined
Company will be provided in the information circulars and a listing statement of Lido to be prepared and
filed in respect of the Transaction. Investors are cautioned that, except as disclosed in the info rmation
circulars or listing statement, any information released or received with respect to the Transaction may
not be accurate or complete and should not be relied upon.
Completion of the Transaction is subject to a number of conditions, including, but not limited to, receipt
of regulatory approval, compliance with applicable securities laws, and the receipt of all requisite
shareholder approvals. Trading in the common shares of Lido will remain halted pending review of the
Transaction by the CSE. There can be no assurance that trading in the common shares will resume prior
to completion of the Transaction.
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Qualified Person Statement
All scientific and technical information contained in this news release was prepared and approved by Paul
Ténière, M.Sc., P.Geo., CEO of Lido Minerals Ltd. who is a non-independent Qualified Person as defined in
NI 43-101, and Walter La Torre, MAusIMM (CP), who is an independent Qualified Person as defined in NI
43-101.
For further information, please contact:
Paul Ténière, M.Sc., P.Geo.
Chief Executive Officer
(604) 687-2038
The CSE has not, in any way, passed upon the merits of the Transaction and associated transactions and
has not, in any way, approved or disapproved of the contents of this news release. The CSE has not
reviewed and does not accept responsibility for the adequacy or accuracy of this news release.
Forward-Looking Information
Certain information contained herein constitutes “forward-looking information” under Canadian securities
legislation. Forward-looking information includes, but is not limited to, statements with respect to the
Transaction, the completion thereof and the use of proceeds. Generally, forward-looking information can
be identified by the use of forward -looking terminology such as “will” or variations of such words and
phrases or statements that certain actions, events or results “will” occur. Forward-looking statements are
based on the opinions and estimates of management as of the date such statements a re made and they
are subject to known and unknown risks, uncertainties and other factors that may cause the actual results
to be materially different from those expressed or implied by such forward-looking statements or forward-
looking information, including the receipt of all necessary regulatory and shareholder approvals. Although
management of the Company have attempted to identify important factors that could cause actual results
to differ materially from those contained in forward -looking statements or forward-looking information,
there may be other factors that cause results not to be as anticipated, estimated or intended. There can
be no assurance that such statements will prove to be accurate, as actual results and future events could
differ materially from those anticipated in such statements. Accordingly, readers should not place undue
reliance on forward-looking statements and forward-looking information. The Company will not update
any forward-looking statements or forward-looking information that are incorporated by reference herein,
except as required by applicable securities laws.