Blue Rhino Signs Letter of Intent to Acquire Zebediela Nickel Project
BLUE RHINO CAPITAL CORP.
Suite 507, 837 West Hastings Street
Vancouver, British Columbia, V6C 3N6
NEWS RELEASE
BLUE RHINO SIGNS LETTER OF INTENT TO ACQUIRE ZEBEDIELA NICKEL PROJECT
January 13, 2021 – Blue Rhino Capital Corp (TSX-V: RHNO.P) (the “Company”) has entered
into a letter of intent, dated January 7, 2021, with URU Metals Limited (“URU”) whereby the
Company proposes to acquire all of the issued and outstanding share capital of Zebediela Nickel
Company (Pty) Ltd. (“ZEB”). ZEB controls the Zebediela Nickel Project (the “Project”), a mining
license application located in the Limpopo Province in the Republic of South Africa, near the
platinum mining town of Mokopane.
Upon successful completion of the proposed acquisition of ZEB (the “Transaction”), it is
anticipated that the Company will be listed as a Tier 2 Mining issuer on the TSX Venture Exchange
(“TSX-V”) and will be involved in the exploration and development of the Project. The Transaction
is intended to constitute the Company’s “qualifying transaction” pursuant to Policy 2.4 – Capital
Pool Companies of the TSX-V.
Transaction Summary
Pursuant to the terms of the Transaction, it is contemplated that the Company will consolidate its
share capital on a 2.3-for-1 basis (the “Consolidation”), following which it will issue 41,000,000
post-Consolidation common shares (the “Consideration Shares”) to URU in consideration for all
of the outstanding share capital of ZEB. The Company will also assume all ongoing liabilities and
obligations of ZEB, which will include a 2.5% royalty on all revenue generated from the Project
(the “Royalty”). Two percent of the Royalty can be purchased for a one-time cash payment of
US$3,000,000.
The Company is at arms-length from each of URU and ZEB, and ZEB is a wholly-owned
subsidiary of URU. Upon the completion of the Transaction, it is expected that ZEB will become
a wholly owned subsidiary of the Company (the "Resulting Issuer"), and URU will become a
“control person” of the Company.
Information Concerning URU and ZEB
URU is a project developer which maintains a portfolio of exploration-stage mineral projects. URU
is a widely-held public company, established under the laws of British Virgin Islands, and listed
on the Alternative Investment Market (AIM) of the London Stock Exchange.
ZEB is a wholly-owned subsidiary of URU, established under the laws of the Republic of South
Africa. ZEB owns a seventy-four percent interest in Umnex Minerals Limpopo (Pty) Ltd., which in
turn holds an interest in Lesego Platinum Uitloop (Pty) Ltd. which controls the Project. Aside from
its interest in the Project, ZEB has no assets. Selected financial information material to ZEB will
be released by the Company as soon as it becomes available.
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Management and Board of Directors
Upon completion of the Transaction, it is expected that all the directors and officers of the
Company, other than Anton Drescher, will resign and the board of directors and management will
be reconstituted to consist of nominees of URU. The following sets out the names and
backgrounds of all persons who are expected to be appointed as officers and directors of the
Resulting Issuer:
Wayne Isaacs, Chief Executive Officer, Corporate Secretary and Director. Mr. Isaacs has a
thirty-year career on Bay Street specializing in the resource sector both as a corporate executive
of resource companies and as aninvestment banker. This extensive experience has allowed him
to successfully seek out and engage and acquire significant resource assets and financing to
support exploration, development and mining activities for his operating and investee companies.
Mr. Isaacs has been involved as principal in 30 listed companies and has served as a director
and / or senior officer of over 35 listed companies. He was the President and Director of Forsys
Metals Corp. from 2003 to 2007, a TSX listed company with uranium properties in Namibia, Africa
which he managed from start up to in excess of $750 million in market capitalization raising over
$70 million to advance its uranium property from the exploration stage to the production decision
stage. Mr. Isaacs is currently a Director of AM Resources Corp. (TSX.V: AMR), a mining company
engaged in the exploration of coal, hydrocarbons and gold mining sites located in Colombia. He
is a graduate of the University of Western Ontario and has held numerous securities certifications
and licenses.
Tom Panoulias, Director. Mr. Panoulias is a capital markets professional with over fifteen years
of experience. He has previously worked at Echelon Wealth Partners, Fraser Mackenzie, and
Dundee Capital Markets, raising over one billion dollars for issuers in the mining sector and
advising senior management teams on numerous merger and acquisition transactions. Prior to
entering capital markets, Mr. Panoulias held senior roles at Kinross Gold Corporation and TVX
Gold Inc. in corporate development, responsible for managing various acquisition and divestiture
activities. He currently is the Vice President of Corporate Development for Freeman Gold Corp.
and a director of Bonavista Resources Corp. Mr. Panoulias holds an Honours Bachelor of
Commerce degree from the University of Toronto and is a member of the Canadian Institution of
Mining and Metallurgy and the Toronto Society of Financial Analysts.
Anton Drescher, Director. Mr. Drescher has been a Certified Public Accountant, Certified
Management Accountant since 1981. Mr. Drescher is currently involved with several public
companies including as: a director (since 1991) of International Tower Hill Mines Ltd., a public
mining company listed on the TSX and the NYSE-MRT; a director (since 1996) and Chief
Financial Officer (since 2012) of Xiana Mining Inc., a public mineral exploration company listed
on the TSXV; a director (since 2007) and the Chief Financial Officer of Oculus VisionTech Inc., a
public company involved in watermarking of film and data listed on the TSXV and the OTC Bulletin
Board; a director (since 2014) of CENTR Brands Corp., a public company listed on the CSE. Mr.
Drescher is also the President (since 1979) of Westpoint Management Consultants Limited, a
private company engaged in tax and accounting consulting for business reorganizations, and the
President (since 1998) of Harbour Pacific Capital Corp., a private company involved in regulatory
filings for businesses in Canada.
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Greg McKenzie, Director. Mr. McKenzie (JD, MBA) is a former senior investment banker with
more than twenty years of e xperience in financing, M&A, financial advisory, valuation, and
strategic advice to mid-cap companies. Mr. McKenzie has held positions with Morgan Stanley,
CIBC World Markets and Haywood Securities, and has been involved in transactions valued in
excess of $ 18 billion. In addition to his capital market experience Mr. McKenzie previously
practiced corporate law with a leading Canadian securities and M&A law firm. He is currently the
President & CEO of Golden Tag Resources, a Mexican Silver Exploration and Development
Company.
Jay Vieira, Director. Mr. Vieira is a sole practitioner specializing in securities and corporate law.
From 2016 to 2019, Mr. Vieira was Vice President, Corporate & Legal Affairs for Distinct
Infrastructure Group Inc. Prior to joining Distinct Infrastructure Group Inc., Mr. Vieira was a
partner at the law firm Blaney McMurtry LLP and Fogler Rubinoff LLP. Mr. Vieira was called to
the Ontario Bar in 1999.
David Cross, Chief Financial Officer. Mr. Cross, a Certified Public Accountant, Certified
Management Accountant, started his accounting career at a Chartered Accountant firm in 1997.
Currently he is a partner of Cross Davis & Company LLP, an accounting firm founded in 2010,
which is focused on providing accounting and management services for publicly traded
companies. Mr. Cross also serves as the Chief Financial Officer and director of several publicly
listed companies.
Martin Vydra, Strategic Advisor. Mr. Vydra, President of Giga Metals, joined Giga Metals after
a thirty-one year career with Sherritt International Corporation, a leader in the mining, processing
and refining of lateritic nickel and cobalt with operations in Canada, Cuba and Madagascar. Martin
is widely recognized as an expert in nickel and cobalt extraction, processing and refining including
the development and application of advanced technologies to maximize the recovery of valuable
metals such as nickel and cobalt from a variety of feeds. While at Sherritt, Martin’s technical
accomplishments spanned four continents and over 20 operations including postings in Australia
where he was integrated in Murrin Murrin’s refinery start up; Finland for the design of Harjavalta’s
nickel reduction circuit; and, in Chile where he oversaw the design, construction and
commissioning of a major pressure oxidation operation. Most recently, Martin served as Sherritt's
Senior Vice President, Commercial and Technologies, where he had oversight for the sales and
marketing of nickel and cobalt, and marketing and commercialization of Sherritt's proprietary
technologies. Mr. Vydra also currently works for Conic Metals Corp. in a strategic capacity.
Justin Cochrane, Advisor to the Board. Mr. Cochrane, President and CEO of Conic Metals
Corp., has 20 years of royalty and stream financing, M&A and corporate finance experience. Prior
to Conic Metals, he served as President & COO of Cobalt 27 Capital Corp. and before that as
Executive Vice President and Head of Corporate Development for Sandstorm Gold Ltd. Mr.
Cochrane’s expertise is in the structuring, negotiation, execution and funding of royalty and
stream financing contracts around the world, across dozens of projects, totaling over $2 billion.
Prior to Sandstorm, he spent nine years in investment banking and equity capital markets with
National Bank Financial where he covered the resource, clean-tech and energy technology
sectors. In addition, Mr. Cochrane is currently a board member of Nevada Copper Corp.
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Concurrent Financing
Pursuant to the letter of intent, and in connection with the Transaction, the Company will complete
a non-brokered private placement (the “Concurrent Financing”) of subscription receipts (each,
a “Receipt”) at a price of $0.25 per Receipt to raise a minimum of $2,000,000. Proceeds from
the Concurrent Financing will be held in escrow pending completion of the Transaction. Following
completion of the Transaction, the Receipts will automatically be converted into post-
Consolidation common shares of the Company. Net proceeds of the Concurrent Financing will
be used for the exploration and development of the Project, and for working capital and general
corporate purposes. The Company may pay finders’ fees to eligible parties who assist introducing
subscribers to the Concurrent Financing. All securities issued in connection with the Concurrent
Financing will be subject to a four-month-and-one-day statutory hold period in accordance with
applicable securities laws.
Sponsorship
The Transaction is subject to the sponsorship requirements of the TSX-V unless an exemption
from those requirements is granted. The Company intends to apply for an exemption from the
sponsorship requirements; however, there can be no assurance that an exemption will be
obtained. If an exemption from the sponsorship requirements is not obtained, a sponsor will be
identified at a later date. An agreement to act as sponsor in respect of the Transaction should not
be construed as any assurance with respect to the merits of the Transaction or the likelihood of
its completion.
Name Change
Upon completion of the Transaction, the Company intends to change its name to “ZEB Nickel
Corp.” or such other name as the Company and URU may determine, and the parties expect that
the TSX-V will assign a new trading symbol for the Resulting Issuer.
Finders Fee
In connection with completion of the Transaction, the Company anticipates issuing 250,000 post-
Consolidation common shares (the “Finders Fee Shares”) to Anton Drescher in consideration for
facilitating the negotiation and completion of the Transaction. Mr. Drescher is a director and
officer of the Company, and the issuance of the Finders Fee Shares to him constitutes a related-
party transaction within the meaning of Policy 5.9 of the TSX-V and Multilateral Instrument 61-
101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”). In connection
with the issuance of the Finders Fee Shares, the Company intends to rely upon the exemptions
from the formal valuation and minority shareholder approval requirements of MI 61-101 set forth
in Sections 5.5(a) and 5.7(1)(a) of MI 61-101 on the basis that the fair market value (as determined
under MI 61-101) of the Finders Fee Shares does not exceed twenty-five percent of the market
capitalization of the Company (as determined under MI 61-101).
In accordance with Policy 2.4 of the TSX-V, the Company is required to obtain disinterested
shareholder approval for the issuance of the Finders Fee Shares. The Company intends to seek
such approval at a meeting of shareholders to be held prior to completion of the Transaction(the
“Meeting”).
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Escrow Amendment
In connection with the initial public offering of the common shares of the Company, and the listing
of the Company on the TSX-V, 2,000,000 common shares of the Company held by the directors
and officers of the Company, are subject to escrow in accordance with Policy 2.4 of the TSX-V
(the “Existing Escrow”). The Existing Escrow provides for the release of shares from escrow
over a thirty-six-month period commencing upon completion of a “qualifying transaction” by the
Company.
In accordance with amendments to Policy 2.4 adopted by the TSX-V, the Company is permitted
to reduce the length of the Existing Escrow, provided that disinterested shareholder approval is
received for the reduction. A t the Meeting, the Company intends to seek disinterested
shareholder approval to reduce the length of the Existing Escrow to an eighteen-month period
commencing upon completion of a “qualifying transaction.”
Further Information
Completion of t he Transaction is subject to a number of conditions including the satisfactory
completion of due diligence, the negotiation and entering into of definitive agreements, the
completion of the Concurrent Financing, receipt of all required shareholder, regulatory and third-
party consents, including approval of the TSX-V and the shareholders of URU, and satisfaction
of other customary closing conditions. The Transaction and Concurrent Financing cannot close
until the required approvals are obtained. There can be no assurance that the Transaction and
Concurrent Financing will be completed as proposed or at all. Except in connection with the
Concurrent Financing and the issuance of the Finders Fee Shares, no finders’ fees or
commissions are payable in connection with completion of the Transaction, and no advances or
loans to URU or ZEB are contemplated prior to completion of the Transaction.
In connection with the Transaction, the Company has commissioned a geological report on the
Project. Prior to completion of the Transaction, a copy of the geological report will be filed and
posted on SEDAR. Further information on the Transaction will be available and posted on SEDAR
upon completion of a filing statement that will be prepared by the Company.
Trading in the common shares of the Company will remain halted pending further filings with the
TSX-V.
About the Company
The Company is a capital pool company (“CPC”) within the meaning of the policies of the TSX-V
that has not commenced commercial operations and has no assets other than cash. The current
directors and officers of the Company consists of A nton Drescher (Director, President, Chief
Executive Officer and Corporate Secretary), Raphael Danon (Director), David Brett (Director) and
David Cross (Chief Financial Officer).
The Company currently has 5,400,000 common shares issued and outstanding, as well as
200,000 incentive stock options and 200,000 broker warrants to acquire common shares, each
exercisable at $0.10 per share. Following the Consolidation, the Company will have approximately
2,347,826 shares outstanding, and 86,957 incentive stock options and 86,957 broker warrants,
each exercisable at $0.23 per share.
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For further information please contact:
Anton Drescher
Director, President, Chief Executive Officer and Corporate Secretary
Tel. (604) 685-1017
Completion of the Transaction is subject to a number of conditions, including but not limited to,
TSX Venture Exchange acceptance. The Transaction cannot close until the required approvals
are obtained, and the outstanding conditions satisfied. 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 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 the Company should be considered highly speculative.
The TSX Venture 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 TSX
Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the
TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
This news release may contain certain “Forward-Looking Statements” within the meaning of the
United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities
laws. When or if used in this news release, the words “anticipate”, “believe”, “estimate”, “expect”,
“target, “plan”, “forecast”, “may”, “schedule” and similar words or expressions identify forward-
looking statements or information. These forward-looking statements or information may relate
to proposed financing activity, regulatory or government requirements or approvals, the reliability
of third-party information and other factors or information. S uch statements represent the
Company’s current views with respect to future events and are necessarily based upon a number
of assumptions and estimates that, while considered reasonable by the Company, are inherently
subject to significant business, economic, competitive, political and social risks, contingencies
and uncertainties. Many factors, both known and unknown, could cause results, performance or
achievements to be materially different from the results, performance or achievements that are or
may be expressed or implied by such forward-looking statements. The Company does not intend,
and does not assume any obligation, to update these forward-looking statements or information
to reflect changes in assumptions or changes in circumstances or any other events affecting such
statements and information other than as required by applicable laws, rules and regulations.