Vancouver, British Columbia / ACCESSWIRE
/ March 4 2014 / AFRICAN QUEEN
MINES LTD. (the "Company") is pleased to announce that it
has entered into a letter agreement dated March 2, 2014 with XORTX
Pharma Corp. ("XORTX")
relating to a transaction (the "XORTX Transaction") pursuant to which
the Company proposes to acquire all of the issued and outstanding
securities of XORTX in exchange for the issuance of securities of
the Company. Trading in the shares of the Company has been halted
in accordance with the policies of the TSX Venture Exchange (the
"Exchange") and will remain
halted until such time as all required documentation has been filed
with and accepted by the Exchange and permission to resume trading
has been obtained from the Exchange.
XORTX Pharma
Corp.
XORTX is a Calgary-based,
bio-pharmaceutical company, incorporated August 2012 and is
dedicated to innovation, discovery, development and
commercialization of therapies that will improve patient health
throughout the world. XORTX is founded on patents and patent
applications that include US and worldwide rights for the
development of uric acid lowering agents to treat diabetic
nephropathy, hypertension, insulin resistance, metabolic syndrome
and diabetes. Basic and clinical science underpinning XORTX patent
applications and innovative technology has recently been confirmed
by successful phase II pilot trials in adolescent hypertension and
chronic kidney injury showing that when uric acid levels are
decreased, clinically meaningful benefit reduction in hypertension
occurs. XORTX is a phase II clinical stage company focused on
developing treatments for hypertension and diabetic
nephropathy.
XORTX is a private CBCA company with
approximately 38 shareholders, of which Dr. Allen Davidoff is the
only significant shareholder. Following the merger, it is
anticipated that Dr. Allen Davidoff - current Director, President
and CEO of XORTX, Irwin Olian - current Chairman of the Company and
Jennifer Todhunter - current CFO of the Company, will constitute
principals of the resulting company, with no individual or entity
holding greater than 10% of the outstanding shares.
Transaction
Summary
The XORTX Transaction is expected to
be effected by way of a share exchange agreement where the holders
of all of the issued and outstanding securities of XORTX will
receive securities in the Company. XORTX will become a wholly-owned
subsidiary of the Company, which will change its name to reflect
its new business (the "Resulting
Issuer"). Under the terms of the XORTX Transaction:
-
1.Prior to the
completion of the XORTX Transaction (the "Closing"), the Company will effect a
consolidation of its common shares, with each 10 common shares
being consolidated into one common share (the post-consolidation
shares are called the "Resulting
Issuer Shares"), and all outstanding options and warrants to
purchase common shares of the Company will be adjusted
accordingly;
-
2.Prior to the Closing,
members of the Company's management may purchase from existing
shareholders of XORTX up to 2,500,000 but not less than 1,750,000
XORTX shares ("Seed
Shares"), of which 1,000,000 Seed Shares will be deposited
into a voluntary escrow for a period of 24 months following the
Closing;
-
3.On the Closing, each
XORTX shareholder will receive one Resulting Issuer Share for every
common share of XORTX (the "XORTX
Shares") held, which after completion of certain pre-closing
transactions is expected to result in the issuance of 21,100,000
Resulting Issuer Shares at the deemed price of $0.30 per Resulting
Issuer Share for total deemed consideration of $6,330,000;
-
4.On the Closing,
members of the Company's management will be granted options
exercisable for one year to purchase up to 2,500,000 but not less
than 1,750,000 Resulting Issuer Shares issued under paragraph 3
above at the price of $0.18 per Resulting Issuer Share; and
-
5.Incentive stock
options to purchase Resulting Issuer Shares at the lowest price
permitted by the Exchange will be granted to management, directors,
officers, employees and advisors of the Resulting Issuer, entitling
such persons to purchase such aggregate number of shares of the
Company as does not exceed 10% of the number of common shares of
the Company then issued and outstanding.
Following the Closing, the Resulting
Issuer will carry on the business of XORTX described above.
Management believes the XORTX Transaction will be deemed to
be a Change of Business (COB) under the policies of the
Exchange.
The XORTX Transaction is an arm's
length transaction.
The Company is required to obtain
the approval of the Exchange, which in turn may require the
approval of the Company's shareholders, in order to complete the
XORTX Transaction.
Private
Placement
In connection with or prior to the
Closing, the Company will complete a brokered private placement
(the "Private Placement") to
raise not less than CDN$3,000,000 and not more than CDN$6,000,000
through the issuance of units of the Resulting Issuer (the
"Units") at an approximate
price of $0.50 per Unit. Each Unit will be comprised of one
Resulting Issuer Share and one-half of one Resulting Issuer share
purchase warrant entitling the holder to purchase one additional
Resulting Issuer Share at an exercise price and for a term to be
agreed upon by the Company and XORTX. In connection with the
Private Placement, the Company may pay to finders a cash commission
equal to 7% of the gross proceeds of the Private Placement, and may
also issue warrants to the finders.
The use of proceeds from the Private
Placement, along with the existing working capital in the Company
(which is expected to be approximately $5,400,000 at the
Closing of the XORTX Transaction, assuming the maximum Private
Placement) is currently intended to be allocated as
follows:
Manufacturing
$550,000
Clinical Trials
$4,000,000
Working
capital$850,000
Directors and
Officers of the Resulting Issuer
The board of directors of the
Resulting Issuer will initially be comprised of Irwin Olian, Dr.
Allen Davidoff, Robert Rieder, Dr. Alan Moore and one more person
to be agreed upon by the Company and XORTX. The Company will
procure duly executed resignations and releases in favour of the
Resulting Issuer, effective at the Closing, from each director and
officer of the Company who will no longer be serving in such
capacities. On the Closing, Irwin Olian will continue as the
Resulting Issuer's Chairman, Jennifer Todhunter will continue as
its Chief Financial Officer and Dr. Allen Davidoff will be
appointed Chief Executive Officer of the Resulting Issuer.
The nominees of XORTX that will
initially comprise the board of directors and management of the
Resulting Issuer are:
Dr. Allen Davidoff -
Chief Executive Officer and
Director of XORTX Pharma Corp., was formerly the Chief
Scientific Officer, VP Product Development and co-founder of Stem
Cell Therapeutics Corp. (seven yrs). Prior to that, he was Senior
Scientist and Head of Pharmacology at Cardiome Pharma Corp.
("Cardiome").
His overall experience includes over 10 years of drug development
experience with broad clinical and regulatory leadership
experience. Senior management experience in pharmaceutical R&D
includes two investigational new drug ("IND") applications or supplemental
IND's, two phase I studies (four multi-country), seven phase II
studies, and one NDA. Dr. Davidoff has previously served as
Director of Neurogenesis (predecessor of Stem Cell Therapeutics
Corp.), and is currently a Director of Patient Stem Cell Resource
Inc.
Robert Rieder -
Director of XORTX Pharma
Corp. is an experienced C-level executive in the
pharmaceutical industry. Mr. Rieder is currently the CEO of
ESSA Pharma Inc. and Chairman of the Board for Cardiome. From 1998
to 2009, Mr. Rieder was the CEO of Cardiome, a NASDAQ-traded public
pharmaceutical company. Under his leadership, Cardiome negotiated
partnerships with two leading pharmaceutical companies, Merck Frost
& Co and Estella's Pharmaceuticals, and raised over $250
million from public capital markets. Mr. Rieder led that company
from the pre-clinical research stage to NDA submission. He has been
a Director for nine public and private technology companies. In
2009, he was recognized as "Executive of the Year" by Life Sciences
BC and in 2007 was named Ernst and Young "Entrepreneur of the Year"
for the Medical Products area in the Pacific Region.
Dr. Alan Moore, Ph.D.
- Director
of XORTX Parma Corp.
has extensive clinical development, regulatory and leadership
experience and 23 years of senior management experience in
pharmaceutical R&D with Procter and Gamble. Dr. Moore served as
Chief Clinical and Regulatory Officer with Cardiome, then President
and CEO of Stem Cell Therapeutics Corp. and subsequently CEO of
Beta Stem Therapeutics and Charge Therapeutics. During his career,
he has completed 11 IND applications or supplemental IND's, 15
phase I studies, 12 phase II studies, seven phase III studies and
two new drug applications.
Dr. Grace Jung,
Ph.D. - Management - Chemistry and
Manufacturing
has 21 years of experience in drug discovery and development. She
was formerly Senior Director of Research (Chemistry) at Cardiome.
During her 14 years at Cardiome, she led the chemistry team in the
discovery of antiarrhythmic vernakalant and in process research
efforts to devise a scalable manufacturing route for
vernakalant. Before joining Cardiome, Grace spent seven years at
Boehringer Ingelheim (Laval, QC, Canada), where she was a medicinal
chemist working on renin inhibitors as antihypertensive
drugs.
Brian Mangal, MSc.
Biostatistics -
Management - Business Development and Product
Development has 12 years of clinical
development experience. He was formerly Director of Biostatistics
for Cardiome and responsible for all biometric activities related
to the advancement of Cardiome's clinical programs. His clinical
development experience includes design, analysis and reporting on
over 50 clinical trials, three FDA submissions, one TPD submission
and a successful EMEA submission. Prior to Cardiome, he worked on
building a CRO - Everest Clinical Research, specializing in
dealings with NIH in the US, and as a Biostatistician at
Pharmacia/Pfizer, working on the successful sundae for Linezolid
and numerous successful trials with Celecoxib. Mr. Mangal brings
extensive industry contacts to the XORTX team.
Selected
Financial Information of XORTX
The following unaudited financial
information for the period ended December 31, 2013 has been
provided by XORTX. Such information is subject to all other
information contained in the relevant financial statements
disclosed in the disclosure document to be prepared in connection
with the XORTX Transaction.
During the period from incorporation
through February 28, 2014, XORTX raised cash net proceeds of
approximately CDN$821,000 from the issuance of XORTX Shares and
debt and used these funds for aggregation of intellectual property,
pre-clinical studies, and activities supporting future clinical
studies on behalf of XORTX. As at December 31, 2013, XORTX had
approximately $174,000 of cash.
Capitalization of
XORTX
Currently, there are:
-
1.20,060,667 XORTX
Shares issued and outstanding;
-
2.warrants issued and
outstanding which are exercisable for two years from the date of
issue to purchase an aggregate of 29,760 XORTX Shares at $0.50 per
XORTX Share; and
-
3.options issued and
outstanding to purchase an aggregate of 1,500,000 XORTX Shares at
$0.10 per share.
Other than the above, no other stock
options, warrants or other securities entitling holders to acquire
XORTX Shares are outstanding. XORTX is not a reporting issuer and
its securities are not listed or posted for trading on any stock
exchange.
Capitalization of
the Resulting Issue
Assuming the completion of the share
consolidation and the maximum amount of the Private Placement, the
Resulting Issuer is expected to have at Closing approximately
41,000,000 issued common shares, 8,800,000 warrants and 1,750,000
options outstanding.
Sponsorship
The Company does not intend to
retain a sponsor unless it is required to do so by the
Exchange.
Conditions
Precedent to Completing the XORTX Transaction
The parties' obligations to complete
the XORTX Transaction are subject to the satisfaction of a number
of conditions including, but not limited to, completion of
satisfactory due diligence reviews, completion of the Private
Placement, Exchange approval, any required approval of the
shareholders of the Company, and other conditions customary for a
transaction of this type.
About
African-Queen
The Company is an
exploratory resource company with diversified mineral properties in
East and West Africa. It is exploring its properties in Ghana and
Kenya for gold and other metals. In Ghana it has 30.23 sq. km.
under license for gold under an agreement with another company. In
Kenya it has approximately 850 sq. km. under license for gold and
metals, and a further 737 sq. km. of gold and other minerals
licenses under agreements with two other companies. The Company's
operations in Ghana are carried out through its subsidiary AQ Ghana
Gold Limited. Its operations in Kenya are carried out through its
operating subsidiary AQ Kenya Gold Limited. The Company has its
executive offices in Vancouver, Canada. The Company was
incorporated under the laws of the Province of British Columbia,
Canada on April 30, 2008, and received certain southern African
assets in a spin off transaction related to the acquisition of Pan
African Mining Corp. by Asia Thai Mining Co., Ltd.
ON BEHALF OF THE
BOARD OF DIRECTORS OF
AFRICAN QUEEN MINES LTD.
"Irwin
Olian"
Irwin
Olian
Chairman & CEO
For more information, contact:
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|Irwin Olian, President and CEO |Carrie Howes, Corporate CommunicationsEmail: carrie@africanqueenmines.comPhone:Germany -|
|E-mail: tigertail@africanqueenmines.com|+49 (0) 21141 7404U.K.- +44 (0) 870 490 5443Canada - +1 416 900 3634Dubai - +971 55 997 |
|Phone: (604) 899-0100 |0427 |
|Fax: (604) 899-0200 | |
|--------------------------------------------------------------------------------------------------------------------------------|
| |
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Completion of the transaction is subject to a number of conditions,
including Exchange acceptance. The transaction cannot close until
any 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 Filing
Statement or Information Circular 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 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 described herein and has neither approved nor
disapproved the contents of this news release.
Neither 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 news release.
All
information contained in this news release with respect to XORTX
was supplied by XORTX for inclusion herein.
The
securities of the Company being offered have not been, nor will be,
registered under the U.S. Securities Act and may not be offered or
sold within the United States or to, or for the account or benefit
of, U.S. persons absent U.S. registration or an applicable
exemption from U.S. registration requirements. This news release
does not constitute an offer or sale of securities in the United
States.
Forward-Looking Information
This news
release contains "forward-looking information", which may include,
but is not limited to, statements with respect to the XORTX
Transaction and the future financial or operating performance of
the Company, XORTX and their subsidiaries. Often, but not always,
forward-looking information can be identified by the use of words
such as "plans", "expects", "is expected", "budget", "scheduled",
"estimates", "forecasts", "intends", "anticipates", or believes" or
variations (including negative variations) of such words and
phrases, or state that certain actions, events or results "may",
"could", "would", "might" or "will" be taken, occur or be achieved.
Forward-looking information is based on a number of assumptions
management believes to be reasonable and involves known and unknown
risks, uncertainties and other factors which may cause the actual
results, performance or achievements of the Company and XORTX to be
materially different from any future results, performance or
achievements expressed or implied by the forward-looking
information. Forward-looking information is subject to risks
associated with our business, including but not limited to the risk
that the XORTX Transaction may not be completed on the terms
expected or at all. Forward-looking statements contained herein are
made as of the date of this news release and the Company and XORTX
disclaim, other than as required by law, any obligation to update
any forward-looking information whether as a result of new
information, results, future events, circumstances, or if
management's estimates or opinions should change, or otherwise.
There can be no assurance that forward-looking information will
prove to be accurate, as actual results and future events could
differ materially from those anticipated. Accordingly, the reader
is cautioned not to place undue reliance on forward-looking
information.
Not for
distribution to United States wire services or dissemination in the
United States. This news release does not constitute an offer to
sell or a solicitation of an offer to buy any of the securities in
the United States. The securities have not been and will not be
registered under the United States Securities Act of 1933, as
amended (the "U.S. Securities Act") or any state securities laws
and may not be offered or sold within the United States or to U.S.
Persons unless registered under the U.S. Securities Act and
applicable state securities laws or an exemption from such
registration is available.
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