Orcus Resources Ltd. Announces Qualifying Transaction with Western Metallica Corp.
57667267.1
ORCUS RESOURCES LTD.
1575 Kamloops Street
Vancouver, BC V5K 3W1
NEWS RELEASE
November 3, 2021 SYMBOL – ORCS-P
ORCUS RESOURCES LTD. ANNOUNCES QUALIFYING TRANSACTION WITH
WESTERN METALLICA CORP.
Orcus Resources Ltd. (“ Orcus” or the “Company”) is pleased to announce that it has
entered into a letter of intent (the “LOI”) dated November 1, 2021 with Western Metallica
Corp. (“Western Metallica ”), a private company incorporated on September 28, 2018
under the Business Corporations Act (Ontario). Orcus and Western Metallica propose to
complete a business combination by way of a share exchange (the “ Transaction”). The
Transaction is expected to constitute Orcus’s Qualifying Transaction under the Capital
Pool Companies policy (the “ CPC Policy ”) of the TSX Venture Exchange (the
“Exchange”). The Transaction is arm’s length and is therefore not a Non-Arm’s Length
Qualifying Transaction under the CPC Policy. Orcus, after completion of the Qualifying
Transaction, is referred to in this news release as the “Resulting Issuer”.
Western Metallica is in the business of mineral resource exploration and development.
Western Metallica has an interest in three Spanish gold projects in the “Navelgas Gold
Belt” in Asturias (Penedela, Valledor and Sierra Alta), and one project located in
Andalucia (Nueva Celti). Both Nueva Celti and Valledor and the Penedela extension are
100% owned by Western Metallica and are not subject to any royalty payments. Western
Metallica has an option to acquire 100% interest in Penedela (Asturias) and prior to or at
the time of closing the Transaction will be the beneficial owner of a 55% interest in this
project. Western Metallica has the option to earn a 55% interest in the Sierra Alta project
at which time the Company will enter into a joint venture with Emerita Resources Corp.
The controlling shareholders of Western Metallica are Greg Duras and Joaquin Merino.
Further information about Western Metallica, including financial information, will be
provided in a subsequent news release. Western Metallica’s current liabilities are
primarily comprised of contractual commitments associated with the 100% acquisition of
Asminarq SL, which holds the Penedela concessions.
Upon completion of the Transaction, the parties anticipate that the Resulting Issuer will
be listed as a Tier 2 Mining Issuer.
The Transaction is arm’s length and is therefore not a Non-Arm’s Length Qualifying
Transaction under the CPC Policy. Accordingly, the CPC Policy does not require Orcus
to obtain shareholder approval of the Transaction.
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Summary of the Transaction
The LOI contemplates that Orcus and Western Metallica will complete a share exchange
whereby the holders of the issued and outstanding common shares of Western Metallica
(the “Western Metallica Shares ”) will exchange such shares in consideration for
common shares of Orcus (the “Orcus Shares”).
The precise exchange ratio is subject to board approval by each of the parties following
receipt of financial advice and a review of the parties’ respective capital structures. It is
presently expected that the Transaction will result in the issuance of approximately
15,300,000 common shares of Orcus to the holders of Western Metallica Shares. Upon
completion of the Transaction (assuming completion of the Private Placement described
below), current shareholders of Orcus will hold approximately 17% of the issued and
outstanding shares of the Resulting Issuer, shareholders of Western Metallica will hold
approximately 40% of the issued and outstanding shares of the Resulting Issuer and
subscribers in the Private Placement will hold approximately 43% of the issued and
outstanding shares of the Resulting Issuer.
It is contemplated that Orcus will issue replacement warrants (the “ Orcus Replacement
Securities”) to replace the warrants of Western Metallica (the “ Western Metallica
Warrants”) outstanding on the Closing Date, in consideration of the cancellation of the
Western Metallica Warrants, which Orcus Replacement Securities shall be exercisable
to acquire Orcus Shares in lieu of Western Metallica Shares based on the Exchange
Ratio and otherwise bear the same terms and conditions as the existing Western
Metallica Warrants so cancelled.
Concurrent Financing
Concurrent with the closing of the Transaction, Orcus will conduct a private placement of
units at a price of $0.30 per unit for estimated gross proceeds of up to $5,000,000 (the
“Private Placement”). Each unit will consist of one common share and one half of one
warrant. Each whole warrant will be exercisable into one common share of the Resulting
Issuer at $0.45 per common share for 2 years. The warrants are subject to an
acceleration expiry if the closing price of the Resulting Issuer’s common shares is $0.75
or higher for 10 consecutive trading days. Or cus may pay a finder’s fee in connection
with the Private Placement, in accordance with the policies of the Exchange.
Conditions of Closing
Completion of the Transaction will be subject to certain conditions, including but not
limited to: (a) the parties’ entry into a defin itive agreement in furtherance to the LOI; (b)
completion of a minimum gross proceeds of $3,000,000 under the Private Placement; (c)
receipt of all necessary approvals of the board of directors of Orcus and Western
Metallica; (d) receipt of all third party consents; (e) approval of the Transaction by the
Exchange as Orcus’ Qualifying Transaction; and (f) Orcus satisfying the Initial Listing
Requirements set by the Exchange for a Tier 2 Mining Issuer.
Sponsorship
Orcus intends to apply to the Exchange for a waiver of the Exchange’s sponsorship
requirements. There is no assurance that this waiver will be granted; however, Orcus
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anticipates that, considering the Transaction is a relatively straightforward resource
acquisition, there are reasonable expectations that the Exchange will grant the waiver.
Management and Board of Directors
Upon completion of the Qualifying Transaction, it is expected that certain members of
the Orcus board will resign and the board of directors of the Resulting Issuer will be
reconstituted with nominees put forth by Western Metallica, expected to include Greg
Duras Joaquin Merino Marquez, Deepak Varshney, James Walker and a fifth director to
be nominated by Western Metallica, subject to the receipt of all applicable regulatory
approvals.
Greg Duras, Chief Executive Officer, Corporate Secretary and Director
Gregory has over 20 years of experience working in the resource sector and over 10
years of experience working as Chief Financial Officer for various publicly traded
companies most recently working for Sava ry Gold Corp., a gold exploration Company
operating in Burkina Faso which was acquired by Semafo Inc. for a substantial premium
and Avion Gold Corp. which had mining operations in Mali and Burkina Faso. Gregory
has an abundance of international mining experience, having served as Vice President
of Finance and Administration at S.C. Rosia Montana Gold Corporation, a mineral
exploration and mining development company based in Romania, and more recently
working in the resource sector based in Se ville, Spain as CFO. Gregory has a Bachelor
of Administration from Lakehead University and is a Certified Professional Accountant.
Joaquin Merino Marquez, Director
Mr. Merino has been providing services to the mining industry as a consultant for the last
five years. Mr. Merino is a professional geologist with 25 years of progressive
experience in exploration, mining and business development obtained in the Americas,
Asia Pacific and Europe. Before independent, Mr. Merino was Vice President
Exploration for Primero Mining Corp., focusing in exploration strategies and evaluating
opportunities around the world. From 2006 to 2010, he also held the position of Vice
President Exploration for Apogee Silver and prior to that he was the exploration manager
for Placer Dome at Porgera Mine, in PNG. Earlier in his career Mr. Merino worked as
exploration geologist in different roles of increasing responsibility in Spain for Cominco
Resources and Placer Dome; and in Chile, Peru and Venezuela for Hecla Mining and
other exploration Canadian companies. Mr. Merino holds a Master degree in Sciences
from Queens University (Ontario), and a Bac helor degree in Geology from University of
Seville (Spain). Mr. Merino is a member of the Association of Professional Geoscientists
of Ontario and a Fellow of the Society of Economic Geologists.
Deepak Varshney, Director
Deepak Varshney is a professional geologist and has over 10 years of experience in the
capital markets and mineral exploration and de velopment sector. He is presently CEO
and a Director of Usha Resources Ltd., a gold and copper-focused junior mining
exploration company, and CEO and director of Xander Resources Inc., a gold and
nickel-focused junior mining explorati on company. He has developed long-standing
relationships with an extensive network of high net worth retail investors, brokers, and
private equity groups.
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James Walker, Director
Mr. Walker has extensive experienc e in engineering and project management;
particularly within mining engineering, mechanical engineering, construction,
manufacturing, engineering design, infrastructure, safety management, and nuclear
engineering. He is currently the CEO and President and Director of Ares Strategic
Mining and a Director of Bayhorse Silver Inc., both TSX Venture Exchange listed
issuers, and a director of Orcus Resources Ltd. His previous experience includes his
time at Lithium Energy Products where he oversaw the exploration of multiple lithium
projects.
Peter Imhof, Director
Mr. Imhof has over 23 years of experience working in the asset management business
as lead manager or co-manager of over $1.5 billion in assets specializing in the
Canadian Small Capitalization sector. Previo us roles included Managing Director at
Sceptre Investment Counsel ( bought by Fiera Capital ), Investment Strategist at Sprott
Asset Management and Vice President at AG F Management. Mr. Imhof’s expertise lies
in funding small capitalization companies to take them through their next stage of
growth. Over the last 15 years Mr.Imhof has been a regular guest on BNN ( Business
News Network) and frequently quoted in the Globe and Mail, Financial Post as well as
other business journals. Mr. Imhof is a Chartered Investment Manager.
Khalid Naeem, CFO
Khalid Naeem is a Canadian Chartered Professional Accountant (CPA) with over 15
years of financial and executive experience. Mr. Naeem is also the CFO of Usha
Resources Ltd., a TSX Venture Exchange listed issuer. Mr. Naeem has extensive
experience in tax and compliance, public and private enterprises’ financial policy,
management and internal financial reporting, including senior roles at junior mining and
oil and gas public companies and the Canada Revenue Agency.
ON BEHALF OF THE BOARD
Orcus Resources Ltd.
Deepak Varshney
Chief Executive Officer, Corporate Secretary and Director
For further information contact:
Deepak Varshney
Chief Executive Officer, Corporate Secretary and Director
778 899-1780
Statements in this press release regarding Orcus which are not historical facts are
“forward-looking statements” that involve risks and uncertainties, such as the completion
of the proposed Qualifying Transaction. Such information can generally be identified by
the use of forward-looking wording such as “may”, “expect”, “estimate”, “anticipate”,
“intend”, “believe” and “continue” or the negative thereof or similar variations. Since
forward-looking statements address future events and conditions, by their very nature,
they involve inherent risks and uncertainties such as the risk that the closing may not
occur for any reason. Forward-looking statements in this news release include the
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statements that: (i) the parties anticipate that the Resulting Issuer will be listed as a Tier
2 Mining Issuer and (ii) list out the terms of the Private Placement.
Actual results in each case could differ materially from those currently anticipated in
such statements due to factors such as: (i) the decision to not close the Qualifying
Transaction or Private Placement for any reason, including adverse due diligence results
and Exchange refusal of the Qualifying Transac tions; (ii) adverse market conditions; and
(iii) the need for additional financing. Except as required by law, the Company does not
intend to update any changes to such statements.
Completion of the 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 Transaction cannot
close until the required shareholder approval is obtained. There can be no assurance
that the 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 Transaction, any information
released or received with respect to the 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 Exchange has in no way passed upon the merits of the proposed Transaction and
has neither approved nor disapproved the contents of this press release.
Neither the Exchange nor its Regulation Services Provider (As that term is defined in the
policies of the Exchange) accepts responsibility for the adequacy or accuracy of this
release.