VON Capital Corp. Enters into Letter of Intent for Qualifying Transaction with Xplore Resources Corp.
VON Capital Corp.
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VON Capital Corp. Enters into Letter of Intent for
Qualifying Transaction with Xplore Resources Corp.
August 12, 2019
Vancouver, British Columbia - VON Capital Corp. (“VON” or the “Corporation”), a capital pool
company as defined by the TSX Venture Exchange (“TSXV” or the “Exchange”), announces that it has
entered into a Letter of Intent (the “LOI”) dated August 6, 2019 with Xplore Resources Corp. (“Xplore”),
an arm’s length private mineral exploration company incorporated under the laws of the Province of Ontario
with an interest in the Valk Project located in Province of British Columbia (the “ Valk Project ” or
“Project”). The proposed transaction (the “Transaction”) will be a “qualifying transaction” for VON
under TSXV Policy 2.4 (the “QT”).
Upon completion of the Transaction, VON expects that it, as the resulting issuer (the “Resulting Issuer”)
will be named Xplore Resources Corp. and will be listed as a Tier 2 Mining Issuer on the Exchange.
Summary of the Qualifying Transaction
The LOI sets out certain non-binding understandings and binding agreements between VON and Xplore
and serves as an agreement in principle concerning a proposed arm's length business combination
transaction between VON and Xplore that will result in a reverse takeover of VON by the shareholders of
Xplore (the “Xplore Shareholders”). The Transaction will not constitute a non-arm’s length transaction,
and as such will not require the approval of VON’s shareholders.
The common shares in the capital of Xplore (the “Xplore Shares”) outstanding immediately prior to the
completion of the Transaction (other than Xplore Shares held by Xplore Shareholders who exercise their
dissent rights, if applicable) are expected to be exchanged for fully paid and non-assessable common shares
in the capital of the Resulting Issuer (the “Resulting Issuer Shares”) on a one-for-one basis. It is expected
that there will be approximately 11,000,000 shares of Xplore outstanding prior to closing the QT, although
additional shares may be issued as part of a pre-closing financing in Xplore.
The completion of the Transaction is subject to the satisfaction of various conditions that are standard for
a transaction of this nature, including but not limited to (i) execution of a definitive agreement (the
“Definitive Agreement”) on or prior to September 13, 2019; (ii) the completion of a concurrent financing
for up to $1,000,000 (the “Financing”); (iii) the approval by the shareholders of Xplore in respect of the
Transaction (iv) receipt of all requisite regulatory, TSXV, court or governmental authorizations and third
party approvals or consents; and (v) the completion of satisfactory due diligence by each of the parties.
Subject to satisfaction or waiver of the conditions precedent referred to herein and in the Definitive
Agreement, VON and Xplore anticipate the Proposed Transaction will be completed on or before November
30, 2019.
VON Capital Corp.
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Additional Information
No finder’s fees will be paid in connection with the QT. It is not expected that VON will be advancing any
funds to Xplore prior to closing of the QT.
The Financing is expected to be undertaken through the sale of 5,000,000 shares at $0.20 per share; with
closing contingent on closing of the QT.
If and when the Definitive Agreement is executed, the Corporation will issue a subsequent press release in
accordance with the policies of the Exchange containing the details of the Definitive Agreement and
additional terms of the Transaction, including information relating to sponsorship, summary financial
information, and to the extent not contained in this press release, additional information with respect to the
Concurrent Financings and insiders (if any) of the Resulting Issuer upon completion of the Transaction
About Xplore and the Valk Project
Xplore is an Ontario-incorporated privately held mining exploration company, incorporated May 28, 2018,
focused on the acquisition and development of copper and gold properties. Xplore’s main focus on copper
is driven by the long-term view of increased demand from electrification with no new major copper deposit
discoveries, leading to a future shortage of supply and increase in price.
Xplore follows a lean management philosophy to maintain low operating costs to ensure capital raised is
deployed directly to its exploration program to build out the asset base and increase shareholder value.
The principal shareholders of Valk are Wesley C. (Wes) Hanson, Charles Edgeworth, Robert Brain, Tim
McGuire, and Jamie Hyland (see profiles below).
The Valk Project consists of 1,614 ha located within the Nanaimo Mining Division, British Columbia,
approximately 20 km NW of Port Hardy. Xplore has entered into an earn-in agreement to acquire a 100%
interest in the project. The Project is road accessible via an extensive network of provincial highways, local
roads and logging roads. The Project is dominated by theoleiitic basalts of the Karmutsen Formation. The
Valk Project is located 25 km north of the historic Island Copper Mine (345 Mt @ 0.41% Cu) and the North
Island Copper and Gold Project (indicated resource of 305 Mt @ 0.21% Cu).
Regional scale rock and soil geochemistry has identified widespread, anomalous copper and vanadium
mineralization that is open along strike on a NW trend. Xplore contracted Longford Exploration Services
Ltd. (“Longford”) to complete follow up reconnaissance soil and rock sampling to confirm and expand the
known anomalies on the Project. Longford completed the field work in July at a cost of $115,000. Longford
is currently compiling the results and drafting a Technical Report on the Valk Project.
Board of Directors
It is the intention to establish and maintain a board of directors (the “Board”) of the Resulting Issuer that
has a mix of appropriate skill sets and is compliant with all regulatory and corporate governance
requirements.
Upon completion of the Transaction, it is presently intended that the Board of the Resulting Issuer will be
comprised of Wesley C. (Wes) Hanson, P.Geo. of Ontario (Chief Executive Officer & Director); Charles
Edgeworth, MBA of Ontario (Chief Financial Officer & Director); Robert Brain, LL.B of Ontario
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(Corporate Secretary & Director); Tim McGuire, B.Comm of Ontario (Director); and Jamie Hyland, BCom.
of British Columbia (Director).
The relevant experience of the proposed directors and officers of the Resulting Issuer is set out below:
Mr. Hanson provides over 35 years of industry experience covering all aspects of mineral exploration,
resource and reserve estimation, project evaluation, development, construction, operation and corporate
management. He worked on a number of large capital projects as a consulting geologist with Kilborn - SNC
Lavalin before transitioning into senior management roles with Kinross Gold, Western Goldfields and
Silver Bear Resources. Wes served as President and CEO of Noront Resources from 2009 through 2012.
Since then he has provided contract geological services for various junior companies listed on the TSX
Venture Exchange. Wes graduated from Mount Allison University with a BSc Geology (1982) and is a
practicing member of the Association of Professional Geoscientists of Ontario.
Mr. Edgeworth is currently the Managing Director of Union Merchant Capital. He has over 20 years of
experience in debt, equity and project finance as well as cash management and risk mitigation. He has
advised and structured numerous financings for junior and senior mining companies globally. He has an
extensive network of corporates, banks, law firms, accounting firms, multilateral finance agencies & foreign
governments throughout North & South America, UK, Europe and Africa. Previously, Charles was
responsible for corporate banking in Europe and Africa for Export Development Canada and prior to this,
he was with HSBC Bank and Canaccord Genuity. In addition, Charles has served as a senior officer in the
Royal Canadian Navy. Charles holds a B.A. in Political Science & Economics from the University of
Victoria, BCom in Entrepreneurial Management from Royal Roads University and MBA in Finance from
HEC Montreal.
Mr. Brain is a practicing lawyer and currently works as a Deputy Judge Advocate with the Office of the
Judge Advocate General. He has over 29 years of service with the Canadian Armed Forces. He also has
over 16 years of legal and executive experience while previously working as the Chief Legal Officer for
private and publicly traded international corporations, such as Huawei, Redknee, Infor and Workbrain,
where he was entrusted to advise on and manage all legal issues for his clients. Robert is also active in the
community and sits on a number of Boards and Committees. Robert holds a B.A. (Hons.) in Law and
Society from York University, a LL.B. from the University of Windsor, and is called to the Ontario Bar.
Mr. McGuire is a 20-year banking executive focusing on corporate debt, credit structuring, loan
syndications, M&A, project finance, credit and political risk insurance. The past 12 years have been spent
on leading global business development and management of a $20 billion portfolio for companies in the
mining, energy and banking sectors. Tim earned a Bachelor of Commerce (with Distinction) in International
Business from the University of Victoria, Victoria, BC, Canada.
Mr. Hyland brings more than 25 years of experience in the public markets as a financial and marketing
consultant, a corporate founder and manager of numerous early stage public and private businesses. His
industry expertise includes mining, publishing, financial services, oil & gas, hospitality, technology,
alternative energy and healthcare appliances. He is currently a Director of Universal Copper Ltd (TSX.V:
UNV), Resolve Ventures Inc. (TSX.V: RSV) and BLOK Technologies Inc. (CSE: BLK). Mr. Hyland has
an extensive network of contacts within the financial community including brokers, fund managers,
industry analysts and media, throughout North America, the United Kingdom and continental Europe. He
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earned a Bachelor of Commerce in Entrepreneurial Management from Royal Roads University, Victoria,
BC, Canada.
Trading Halt
Trading in the shares of VON is currently halted by the Exchange. Trading is expected to remain halted
until, at the earliest, the completion of the Transaction.
VON will issue additional press releases related to the final legal structure of the Transaction subsequent
to the definitive Agreement being entered into, financing terms, officers and directors of the resulting issuer,
sponsorship and other material information as it becomes available.
Qualified Persons
The scientific and technical information contained in this news release has been reviewed and approved by
Luke van der Meer, P.Geo, an independent consulting geologist who is a “Qualified Person” (QP) as such
term is defined under National Instrument 43-101 - Standards of Disclosure for Mineral Projects.
Sponsorship
The Transaction is subject to the sponsorship requirements of the TSXV, unless an exemption from the
sponsorship requirement is available or a waiver is granted. VON intends to apply for an exemption to the
sponsorship requirement. There is no assurance that an exemption from this requirement will be obtained.
About VON Capital Corp.
VON is a capital pool company. Its business activity is limited to identifying and evaluating assets or
business for acquisition. The Corporation is headquartered in Vancouver, British Columbia.
Cautionary Notes:
Completion of the transaction is subject to a number of conditions, including but not limited to, TSXV
acceptance and, if applicable, pursuant to the requirements of the TSXV, 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 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.
VON Capital Corp.
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ON BEHALF OF THE BOARD
“David Patterson”
President & CEO
For further information, please contact:
Phone: 604 629-2991
NEITHER THE 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.
This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities in
any jurisdiction.
ANY SECURITIES REFERRED TO HEREIN WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT
OF 1933, AS AMENDED (THE “1933 ACT”), AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES
OR TO A U.S. PERSON IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE 1933 ACT.
Notice on forward-looking statements:
Information set forth in this news release contains forward-looking statements. These statements reflect management's
current estimates, beliefs, intentions and expectations; they are not guarantees of future performance. VON cautions
that all forward-looking statements are inherently uncertain and that actual performance may be affected by a number
of material factors, many of which are beyond VON's control. Such factors include, among other things: risks and
uncertainties relating to VON's ability to complete the proposed Transaction; and other risks and uncertainties,
including those to be described in the Filing Statement to be filed by VON on sedar.com. Accordingly, actual and
future events, conditions and results may differ materially from the estimates, beliefs, intentions and expectations
expressed or implied in the forward-looking information. Except as required under applicable securities legislation,
VON undertakes no obligation to publicly update or revise forward-looking information.