The securities which may be offered have not been, nor will be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States or to U.S. persons without registration or applicable exemption from the registration requirement of such Act. This release does not constitute an offer for sale of such securities in the United States of America.
QNB Metals Inc. (CSE: TIM) is pleased to announce that it entered into an arm’s length binding letter of intent dated June 17, 2022 with Analog Gold Inc. with respect to a proposed transaction, whereby QNB Metals will acquire a 100% interest in Minagoldchoix SA de CV, Analog’s 99.97% owned Mexican subsidiary, which owns the Tres Oros gold property and two other properties.
The Tres Oros Property, located 47 km SE of Mazatlan, Mexico, is an active pilot mine that launched production in 2020. The polymetallic mineralised structure is open laterally and at depth. It is strategically located near stable modern electric grid, accessible via a new superhighway, and 5 kilometers from an available processing plant. The company have access at 600 tons/day flotation plant and operate the oxide and transition mineralized rock zone for the first 50 vertical meter and 350 meter longitudinal. The company project to start the underground development in Q4 2022.
Stéphane Leblanc, CEO of QNB Metals said, “This is an exciting transaction for the Corporation and its shareholders. This is an operational mine, with an experienced management team and a clear plan to pursue its development. Provided our due diligence is completed successfully, Analog intends to increase the capacity by completing the undertaken upgrade of the mine’s equipment, its plant, and increase the labor force.”
“This is an exciting moment for Analog Gold Inc to become a public entity through the merger with QNB Metals Inc. Analog’s management team believes this is an ideal opportunity to move the Analog to the next level. The company has gone from start-up to gold production in very short time through the support of a core of dedicated shareholders. Analog’s combination with QNB will allow the company to access a wider market as it continues to grow as a gold producer, said James A. Culver, Chairman and CEO of Analog.
Proposed Transaction Structure
The LOI provides for a business combination of QNB Metals and Analog, which would be implemented by way of a “Reverse Takeover” of QNB Metals by Analog. It is currently anticipated that the Proposed Transaction will be completed by way of a share exchange between the Corporation and the security holders of Analog, or the security holders of Analog Mexico, however that the definitive structure of the RTO will be determined based on further tax and structuring advice to be received prior to the execution of definitive agreements governing the Proposed Transaction on or before July 27, 2022 . In this news release, references to the “Resulting Issuer” is to QNB Metals after the closing of the Proposed Transaction.
The LOI also contemplates other material conditions precedent to be fulfilled prior to the closing of the Proposed Transaction, including, the completion of a financing to raise sufficient gross proceeds for the Resulting Issuer to meet listing requirement at a minimum price of $0.40 per share, customary due diligence, and all requisite board and shareholder approvals being obtained.
It is anticipated that the completion of the Proposed Transaction will involve, among other things, the following steps, but the parties may agree to adopt a different form or steps, if the parties agree that such form would better satisfy their objective (including, but not limited to, the tax efficiency to the parties):
Certain Resulting Issuer securities issuable under the Proposed Transaction may be subject to the escrow requirements of the exchange and hold periods as required by applicable securities laws.
Management of the Resulting Issuer
Upon closing of the Proposed Transaction, all of the Corporation’s current directors and officers will resign; the board of directors of the Resulting Issuer will consist of five directors, including André St-Michel, who will also be appointed President and CEO, James A. Culver, Peter Voldness, Manuel Garces and Marcel Labonté.
More details of insiders and proposed directors and officers of the Resulting Issuer will be disclosed in a further news release.
Trading in the QNB Metals shares has been halted as a result of this announcement. Trading in the QNB Metals shares will remain halted pending the review of the proposed transaction by the exchange and satisfaction of conditions of the exchange for resumption. It is likely that trading in QNB Metals shares will not resume prior to the completion of the Proposed Transaction.
Further details concerning the Proposed Transaction and other matters will be announced if and when a Definitive Agreement is executed.
Jacques Marchand, Geology Engineer, a qualified person for the purposes of National Instrument 43-101, has reviewed and approved the geological disclosure contained in this news release.
Completion of the transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable, disinterested 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 QNB Metals should be considered highly speculative.
The Canadian Securities Exchange has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this news release.
About QNB Metals Inc.
QNB Metals Inc. is an exploration and development company focused on creating shareholder value through the strategic acquisition of precious and base metals projects while closing and maintaining key partnerships.
About Analog Gold Inc.
Analog Gold is a mining investment company that combines proven, responsible, and sustainable mining practices with leading technology to increase shareholder value, transparency, and access to the commodities sector. Analog Gold focuses on the high value growth stage of precious metals projects: the transition from exploration to production.
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