ABZ AsiaBaseMetals Inc

AsiaBaseMetals Inc. (TSX.V: ABZ) (the “Company”) is pleased to announce that it has entered into an arrangement agreement (the "Arrangement Agreement") with its newly incorporated wholly-owned subsidiaries, Mantra Exploration Inc. (“SpinCo 1”), Mantra Pharma Inc. (“SpinCo2”) and Mantra 2 Real Estate Inc. (“SpinCo 3”, and collectively with SpinCo1 and SpinCo 2, the “SpinCo Entities”) pursuant to which the parties intend to complete a spinout transaction by way of a court approved plan of arrangement under the Business Corporations Act (British Columbia) (the “Arrangement”).  Additionally, the Company is pleased to announce that it has received an Interim Order from the Supreme Court of British Columbia (the "Court") on July 17, 2020. The Interim Order provides for, among other things, the holding of the annual general and special meeting (the “Meeting”) of shareholders of the Company (“Shareholders”) to approve the Arrangement and the conditions that must be met to apply for a final order of the Court (“Final Order”) approving the Arrangement.

The purpose of the Arrangement is to reorganize the Company and its assets and operations into four separate companies: the Company, SpinCo 1, SpinCo 2 and SpinCo 3. The board of directors of the Company (the "Board") believes this will provide Shareholders with additional investment choices and flexibility and enhanced value as each of SpinCo 1, SpinCo 2 and SpinCo 3 will be solely focused on the pursuit and development of their respective business operations and assets.

Arrangement Details

Pursuant to the Arrangement Agreement, and in accordance with the plan of arrangement (the “Plan of Arrangement”), among other things:

1. SpinCo 1 will be transferred the Company's Jean Iron Ore Project, SpinCo 2 will be transferred the Company's option to acquire certain cannabis interests and SpinCo 3 will be transferred the Company's option to acquire certain real property interests, all as more fully set forth in the Circular (defined below). 
2. In consideration of the foregoing, the SpinCo Entities will transfer to the Company, the respective number of: (i) common shares in the capital of SpinCo 1 (“SpinCo 1 Shares”), (ii) common shares in the capital of SpinCo 2, (“SpinCo 2 Shares”); and (iii) common shares in the capital of SpinCo 3 (“SpinCo 3 Shares”, collectively with SpinCo 1 Shares and SpinCo 2 Shares, the “SpinCo Shares”), in each case, equal to the number of common shares of the Company (“ABZ Shares”) outstanding at the effective date of the Arrangement, currently anticipated to be September 1, 2020 (the “Effective Date”). The Company will retain its remaining assets and working capital and continue as a mineral exploration company. 
3. The authorized share structure of the Company will be reorganized and altered by (i) renaming and redesignating all of the issued and unissued ABZ Shares as “Class A Shares”; and (ii) creating a new class of “common shares without par value” (the “New ABZ Shares”). Thereafter, each Class A Share outstanding as of the Effective Date (excluding any Class A Shares held by Shareholders dissenting to the Arrangement), will be exchanged for: (i) one New ABZ Share; (ii) one SpinCo 1 Share; (iii) one SpinCo 2 Share; and (iv) one SpinCo 3 Share. 
4. The stock options and warrants of the Company outstanding immediately prior to the Effective Date will be adjusted by increasing the number of shares issuable upon exercise thereof, and reducing the exercise price per share, of such stock options and warrants.

Upon the Arrangement becoming effective, each of SpinCo 1, SpinCo 2 and SpinCo 3 will cease to be a wholly owned subsidiary of the Company and the Shareholders, as of the Share Distribution Date (as defined below), will hold 100% of the outstanding SpinCo Shares. The Company has set the record date to determine eligibility to participate in the Arrangement and receive the SpinCo Shares as the last trading date on the TSX Venture Exchange (“TSXV”) immediately prior the Effective date, being August 31, 2020 (the “Share Distribution Date”).

The foregoing description is qualified in its entirety by reference to the full text of the Plan of Arrangement, attached as Exhibit “A” to the Arrangement Agreement, which will be filed on SEDAR. The Arrangement is subject to approval of the Court, the Shareholders and the TSXV and there can be no assurance that such approvals will be obtained or that the Arrangement will be completed on the terms contemplated, or at all. Further information regarding the Arrangement will be contained in a management information circular (the “Circular”) that the Company will prepare, file and mail to the Shareholders in connection with the Meeting. All securityholders of the Company are urged to read the Circular once available as it will contain additional important information concerning the Arrangement.

The securities to be issued under the Arrangement have not been and will not be registered under the U.S. Securities Act of 1933, and may not be offered or sold in the United States absent registration or applicable exemption from registration requirements. It is anticipated that any securities to be issued under the Arrangement will be offered and issued in reliance upon the exemption from the registration requirements of the U.S. Securities Act of 1933 provided by Section 3(a)(10) thereof. This press release does not constitute an offer to sell, or the solicitation of an offer to buy, any securities.

Meeting Details

The Meeting will be held on August 19, 2020 at 10:00 am at 6153 Glendalough Place, Vancouver, B.C., V6N 1S5. In addition to consideration of the Arrangement, Shareholders will be asked to (i) fix the number of directors for the ensuing year at six; (ii) elect directors for the ensuing year; (iii) appoint Manning Elliott LLP, Chartered Accountants, as the Company’s auditors for the ensuing fiscal year at a remuneration to be fixed by the Board; and (iv) approve the Company’s 10% rolling stock option plan.

Only Shareholders of record at the close of business on July 13, 2020 will be entitled to vote at the Meeting.  The Arrangement is subject to shareholder approval of not less than 66 2/3 % of the votes cast at the Meeting.

Board of Director’s Recommendation

The Board approved the Arrangement, concluding that it is in the best interests of the Company and its Shareholders and recommends that Shareholders vote in favour of the Arrangement at the Meeting. In reaching this conclusion, the Board considered, among other things, the benefits to the Company and its Shareholders, as well as the financial position, opportunities and outlook for the future potential and operating performance of the Company, SpinCo 1, SpinCo 2 and SpinCo 3, respectively.

Final Order

The Arrangement is subject to receipt of the Final Order of the Court, which the Company will seek after the Meeting if it receives the requisite Shareholder approval for the Arrangement. The hearing in respect of the Final Order is currently scheduled to take place on August 26, 2020 at 9:45 a.m. (Vancouver time). If the Final Order is obtained on August 26, 2020, and all other conditions to completion of the Arrangement are satisfied or waived, it is expected that the Arrangement will be completed on the Effective Date.

On behalf of the Board of Directors of the Company

“Raj I. Chowdhry”Chief Executive Officer

About AsiaBaseMetals Inc.

AsiaBaseMetals Inc., a company focused on advancing its projects in the mining sector and developing and evaluating additional opportunities in the cannabis sector, is led by an experienced and successful business and mining team.  The Company is advancing its 100% owned Gnome Zinc/Cobalt Project and, subject to completion of the Arrangement, its 100% owned Jean Iron Ore Project in world-class mining districts in Canada, one of the safest and mining friendly districts in the world. The Company is advancing current opportunities and, subject to completion of the Arrangement, is exploring additional opportunities in the cannabis sector, with emphasis in Europe, and other non-mining opportunities, including real estate and casino opportunities in Croatia.  In addition, the Company is seeking to further diversify its portfolio, with special attention directed to advanced acquisition targets in the Americas, Asia and Africa for base metals {Copper (Cu)], alkali metals [Cobalt (Co)] / Lithium (Li)] and precious metals [Gold (Au) / Silver (Ag)].  The Company is awaiting the grant of exploration permits for lithium pursuant to a submitted application in Myanmar.

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.

Cautionary Statement Regarding Forward-Looking Information

All statements, trend analysis and other information contained in this press release about anticipated future events or results constitute forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as “seek”, “anticipate”, “believe”, “plan”, “estimate”, “expect” and “intend” and statements that an event or result “may”, “will”, “should”, “could” or “might” occur or be achieved and other similar expressions. All statements, other than statements of historical fact, included herein, including, without limitation, statements regarding, the completion of the Arrangement, the Meeting, the Final Order hearing of the Court, the anticipated benefits of the Arrangement, the Company’s plan to develop its business, diversify its portfolio and explore certain acquisition targets and anticipated permitting and development milestones, are forward-looking statements. Although the Company believes that the expectations reflected in such forward-looking statements and/or information are reasonable, undue reliance should not be placed on forward-looking statements since the Company can give no assurance that such expectations will prove to be correct. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements, including the risks, uncertainties and other factors identified in the Company’s periodic filings with Canadian securities regulators, and assumptions made with regard to: the Company’s ability to complete the proposed Arrangement on the terms and conditions contemplated, or at all; the Companies' ability to secure the necessary shareholder, Court and regulatory approvals required to complete the Arrangement; the estimated costs associated with the Arrangement; the timing of the Meeting, the Final Order hearing and the Arrangement, and the general stability of the economy and the industry in which the Company operates . Forward-looking statements are subject to business and economic risks and uncertainties and other factors that could cause actual results of operations to differ materially from those contained in the forward-looking statements. Important factors that could cause actual results to differ materially from the Company expectations include risks associated with the business of the Company; risks related to the satisfaction or waiver of certain conditions to the closing of the Arrangement; non-completion of the Arrangement; risks related to the Company failing to obtain the requisite shareholder approval required for the Arrangement; risks relating the number of dissenting shareholders requiring fair value for their securities in connection with the Arrangement; risks related to reliance on technical information provided by the Company; risks related to exploration and potential development of the Company projects; business and economic conditions in the mining industry generally; fluctuations in commodity prices and currency exchange rates; the need for cooperation of government agencies and native groups in the issuance of required permits; the need to obtain additional financing to develop properties and uncertainty as to the availability and terms of future financing; and other risk factors as detailed from time to time and additional risks identified in the Company filings with Canadian securities regulators on SEDAR in Canada (available at www.sedar.com). Forward-looking statements are based on estimates and opinions of management at the date the statements are made. The Company does not undertake any obligation to update forward-looking statements except as required by applicable securities laws. Investors should not place undue reliance on forward-looking statements.

For further information, please contact:
Raj Chowdhry, Chief Executive Officer 
Email: info@asiabasemetals.com