TSX Venture Exchange: VIC.P
VANCOUVER, BC, Feb. 8, 2021 /CNW/ - Victory Capital Corp.
("Victory" or the "Company") is pleased to announce
that further to the letter of intent entered into on November 24, 2020 (the "LOI") with
Acapulco Gold Corp. ("Acapulco"), a corporation incorporated
under the Business Corporations Act (British Columbia), it has entered into a
binding merger agreement effective on February 5, 2021, with Acapulco, and 1287878
B.C. Ltd. ("Victory Subco"), a wholly-owned
subsidiary of Victory (the "Merger Agreement") in respect of
the completion of an arm's length reverse-takeover transaction of
Acapulco by Victory (the
"Proposed Transaction"), which will constitute the
completion of Victory's Qualifying Transaction (as such term is
defined in Policy 2.4 – Capital Pool Companies of the
Corporate Finance Manual ("Policy 2.4") of the TSX Venture
Exchange (the "Exchange")).
The completion of the Proposed Transaction is subject to the
satisfaction of various conditions that are customary for a
transaction of this nature, including but not limited to: (i) the
completion of a concurrent financing for gross proceeds of a
minimum of $2,000,000 (the
"Private Placement") through the issuance of subscription
receipts of Acapulco (the
"Subscription Receipts"); (ii) the approval by the directors
of Victory and Acapulco of the
Proposed Transaction and the matters related therein; and (iii) the
receipt of all requisite regulatory, stock exchange, or
governmental authorizations and consents, including the
Exchange.
Subject to satisfaction or waiver of the conditions precedent
referred to herein and in the Merger Agreement, Victory and
Acapulco anticipate that the
Proposed Transaction will be completed no later than June 30, 2021. There can be no assurance that the
Proposed Transaction or Private Placement will be completed on the
terms proposed above or at all.
Trading in the common shares of Victory (the "Victory Common
Shares") is currently halted in accordance with the policies of
the Exchange and will remain halted until such time as all required
documentation in connection with the Proposed Transaction has been
filed with and accepted by the Exchange and permission to resume
trading has been obtained from the Exchange.
The Qualifying Transaction
The Proposed Transaction will result in Victory acquiring all of
the issued and outstanding securities of Acapulco in exchange for the issuance of
securities of Victory, which will result in Acapulco becoming a wholly-owned subsidiary of
Victory (after completion of the Proposed Transaction, the
"Resulting Issuer"); the existing shareholders of
Acapulco will own a majority of
the outstanding Victory Common Shares (after completion of the
Proposed Transaction, referred to herein as the "Resulting
Issuer Shares"). Upon completion of the Proposed Transaction,
it is anticipated that the Resulting Issuer will be a Tier 2 Mining
Issuer listed on the Exchange.
The Proposed Transaction is contemplated as an amalgamation
under the Business Corporations Act (British Columbia) between Victory Subco and
Acapulco and will not constitute a
non-arm's length Qualifying Transaction or a related party
transaction pursuant to the policies of the Exchange. As such, the
approval of the holders of the Victory Common Shares (the
"Victory Shareholders") is not anticipated to be required to
approve the Proposed Transaction. Nonetheless, although the
approval of the Victory Shareholders is anticipated to not be
required for the Proposed Transaction, if the Proposed Transaction
is not completed by March 31, 2021,
in accordance with the Exchange's updates to Policy 2.4 effective
January 1, 2021 (the "Policy 2.4
Updates"), the approval of the Victory Shareholders may be
required to be obtained by June 30,
2021 in connection with approving the Policy 2.4 Updates as
applicable to Victory.
As consideration for the acquisition of all of the outstanding
securities of Acapulco, holders of
the issued and outstanding common shares of Acapulco (the
"Acapulco Common Shares") will receive one (1) Victory
Common Share for each one (1) Acapulco Share (the "Exchange
Ratio") held. As such, Victory
will issue approximately an aggregate of 32,460,771 Victory Common
Shares to the shareholders of Acapulco.
Upon closing of the Proposed Transaction, subject to receiving
the approval of the Exchange, a finder's fee in the amount of up to
5% of the value of the Proposed Transaction, plus applicable taxes,
payable through the issuance of Resulting Issuer Shares to a finder
(the "Finder"). The Finder is an arm's length party to both
Acapulco and Victory.
Bridge Loan
Subsequent to the approval of the Exchange, Victory will provide
Acapulco with a bridge loan in the
aggregate amount of up to $100,000
for working capital purposes, of which $25,000 was immediately advanced to Acapulco pursuant section 8.5(b) of Policy 2.4
of the policies of the Exchange and a promissory note entered into
between the parties (the "Promissory Note"). The Promissory
Note bears an interest rate of 6% per annum and the outstanding
principal plus accrued interest shall be payable back on the
earlier of: (i) receipt of final approval of the Exchange for the
Proposed Transaction; and (ii) June 30,
2021.
The Private Placement
In conjunction with the Proposed Transaction, Acapulco intends to complete a concurrent
non-brokered Private Placement for aggregate gross proceeds of a
minimum of $2,000,000 up to a maximum
of $3,000,000, through the offering
of Subscription Receipts to be sold at an issue price to be
determined in the context of the market. Acapulco intends to use the net proceeds from
the Private Placement for expenditures for the further advancement
of its mining properties and general corporate purposes.
The Private Placement shall be completed on such date to be
determined between Acapulco and
Victory and is a condition precedent to closing the Proposed
Transaction.
Acapulco Financial Information
The financial statements of Acapulco are currently being generated and the
parties expect to provide an update with respect to the financial
information of Acapulco in a
subsequent press release in accordance with Policy 2.4.
Insiders of the Resulting Issuer
Upon completion of the Proposed Transaction, it is anticipated
that the board of directors of the Resulting Issuer will consist of
four nominees: Michael Williams (Chairman), David Jones, John
Larson, and Vikas Ranjan. The
management of the Resulting Issuer shall be determined by Victory
and Acapulco and shall be
disclosed by the parties in a subsequent press release.
Michael Williams (Vancouver, British Columbia), Director
Michael Williams has over 20
years of experience as a senior executive within the mining
industry. Experienced in the structuring, administrating and
marketing of Toronto Stock Exchange listed companies. Executive
Chairman of numerous public companies including Underworld
Resources Ltd, which was sold to Kinross Gold Corp for $138,000,000. He has developed an international
banking and financing network that includes extensive contacts with
both institutional and retail investors; raised significant capital
funds for advanced exploration and development projects. He
currently serves as a director, President and CEO of Vendetta
Mining Corp. and is the Founder and Chairman of Aftermath
Silver.
David Jones (Tucson,
Arizona), Director
David M. Jones is a graduate of
Dartmouth College (B.A.) and the
University of Arizona (M.S.) with 42
years of experience in mineral exploration and project development
in the U.S. and Latin America. As the foremost expert in the
Guerrero Gold Belt, Mr. Jones discovered the Los Filos gold deposit
in 1995 (Teck), was the leader of the technical team that won the
bid for the Morelos reserve in
1998 (El Limon-Guajes deposits) and served as the principal
geologic advisor in the start-up of Torex Gold. For the past
20 years he has worked extensively in epithermal precious metals
system in Oaxaca and was
responsible for targeting the recent discovery of Gold Resource
Corporation's polymetallic Switchback mine. Mr. Jones was a
board member of Cayden Resources at the time of its sale to Agnico
Eagle, and is currently a director of Minaurum Gold, Megastar
Development, and the private concern Acapulco.
John Larson (Tucson, Arizona), Director
John Larson holds advanced
degrees in geology and chemistry from the University of Western Ontario and the Colorado School of Mines. With over 40 years'
experience, he is known as an expert in volcanogenic massive
sulphide deposits and porphyry systems. His career exploration team
successes include the La Choya and
La Trinidad gold deposits in
Mexico; the HD Summit, Big Ledge,
Snoose Creek and Loomis Creek barite
deposits in the U.S.; and the Santo
Domingo copper-iron-gold deposit in Chile.
Vikas Ranjan (Mississauga, Ontario), Director
Vikas Ranjan is a management
professional with an MBA in Finance from McGill University, Montreal, Canada. His background includes over
25 years experience in diverse areas of finance, capital markets,
entrepreneurship and investing. He is a co-founder of Gravitas
Group of companies and his experience encompasses working in senior
executive roles, both in Canada
and India. Mr. Ranjan has been
involved in launching several public and private enterprises in the
areas of capital markets and growth investing. He currently serves
on the boards of several public and private companies.
Sponsorship
Sponsorship of a Qualifying Transaction is required by the
Exchange unless a waiver from the sponsorship requirement is
obtained. Victory intends to apply for a waiver from sponsorship
for the Proposed Transaction. There is no assurance that a waiver
from this requirement will be obtained.
About Acapulco
Acapulco Gold Corp, and its wholly owned Mexico subsidiary Empresa Minera Acagold, S.A.
de C.V., is a private corporation which has entered into an
agreement for 100% interest in two drill-ready high-potential
copper-gold volcanogenic massive sulfide (VMS) properties
(Riqueza Marina and Zaachila) in the state of Oaxaca, and a third high-potential gold
property (El Rescate) (collectively, the "Acapulco
Property") in the state of Puebla. The Oaxaca projects incorporate the most highly
prospective areas of high-grade copper mineralized surface
exposures ('gossans') and prominent gravity anomalies along an
emerging copper-gold VMS belt that includes Minaurum Gold's
Santa Marta project (see
https://www.minaurum.com/news/2013/minaurum-receives-report-from-dr-james-franklin-on-the-santa-marta-vms-project/
). The Oaxacan VMS belt is similar to the geology of other
deposits in Mexico such as
Campo Morado mine (Guerrero) and San Nicholas (Zacatecas), and is reported by expert Dr.
Jim Franklin as having
characteristics similar to the world-class Noranda camp of
Canada.
The El Rescate gold project lies adjacent to a currently
producing high-grade vein/intrusive breccia gold mine in the state
of Puebla where recent mapping has
identified 900 meters of undrilled surface veining similar in
nature and mineralogy that currently being mined.
History of the Acapulco Property
The prospects of the Acapulco Property for polymetallic
volcanogenic massive sulfide deposits ("VMS") was first
recognized by geologist David M.
Jones over a number of years in the early 2000's. This led
to the filing of concession applications on the project areas
through his Mexican subsidiary, Minera Zalamera S.A. de C.V
("Zalamera"). The potential for high-grade gold
mineralization at the El Rescate project (state of Puebla) was recognized through his decades of
work in that part of Mexico, which
started with his discovery of the Los Filos gold deposit
(Guerrero) on behalf of Teck
Corporation in 1995.
In 2011, the Zaachila and
Riqueza Marina concessions were optioned to Acapulco, and limited funds were raised
through equity (share) sales to support initial exploration efforts
in 2011-2012. This work identified multiple target areas with
anomalous geochemistry in favorable geologic settings, including
the first find of gossan (oxidized sulfide) material inferred to be
derived from massive sulfide mineralization. In April 2017, Acapulco, Zalamera, and OZ Exploration PTY
Ltd. ("OZ") entered into a tripartitie option agreement (the
"Tripartitie Option Agreement"). From 2017 to 2019, the
joint venture between the parties conducted extensive exploration
work consisting of geologic mapping, geochemical sampling, and
geophysics. The Tripartitie Option Agreement was formally
terminated in late 2019.
The cumulative exploration history of the Acapulco Property is
summarized in the following table:
Riqueza Marina and
Zaachila Exploration History
|
Years
|
2000-2003
|
2006-2008
|
2012-2013
|
2017-2019
|
Riqueza
Marina
|
Geology
|
Observations
|
1
|
5
|
109
|
2053
|
Geochemistry
|
StreamSeds
|
0
|
0
|
46
|
0
|
Rock
|
6
|
0
|
200
|
668
|
Soil
(NitonXRF)
|
0
|
0
|
0
|
740
|
Geophysics
|
Gravity
|
-
|
-
|
-
|
754
stations
|
GroundMag
|
-
|
-
|
-
|
63
line-km's
|
Zaachila
|
Geology
|
Observations
|
29
|
9
|
16
|
1756
|
Geochemistry
|
StreamSeds
|
0
|
10
|
31
|
0
|
Rock
|
0
|
26
|
124
|
179
|
Soil
(NitonXRF)
|
0
|
0
|
0
|
26
|
Geophysics
|
Gravity
|
-
|
-
|
-
|
370
stations
|
GroundMag
|
-
|
-
|
-
|
33
line-km's
|
At Riqueza Marina, exploration
work generated five high-potential target areas of well-mineralized
VMS-style gossans within a multiple kilometer trend; each of these
areas are modestly to strongly mineralized with a polymetallic
suite of Cu-Au-Ag-Pb-Zn. Such multiple gossan centers are
characteristic of highly prospective VMS belts where clusters of
deposits are the norm rather than the exception. A ground
gravity survey over selected areas yielded a blind anomaly
approximately equivalent in size and magnitude as that seen above
the San Nicholas VMS deposit (Zacatecas). Exploration drill targets
have been selected and environmental permitting for a minimum
first-round core drill program of 3000 meters minimum is
underway. Further field work, target definition, and optional
ground geophysics are planned for the most recently found
high-potential areas that have seen little work to date.
At Zaachila, exploration work
identified a minimum 5-kilometer trend of surface copper
mineralization in a highly prospective geologic terrane flanking a
large granitic (trondhjemite) intrusion. The center of this
mineralized belt correlates with a positive gravity anomaly and a
negative magnetic anomaly, both considered highly positive
indicators for VMS potential. Exploration drill targets have
been selected and environmental permitting for a first-round core
drill program of 1800 meters minimum is pending. Further
field work and target definition are planned for additional
high-potential areas that have seen little work to date.
About Victory Capital Corp.
Victory is a capital pool company created pursuant to the
policies of the Exchange. It does not own any assets, other than
cash or cash equivalents and its rights under the Merger Agreement.
The principal business of Victory is to identify and evaluate
opportunities for the acquisition of an interest in assets or
businesses and, once identified and evaluated, to negotiate an
acquisition or participation subject to acceptance by the Exchange
so as to complete a Qualifying Transaction in accordance with the
policies of the Exchange.
Forward-Looking Statements Disclaimer and Reader Advisory
Not for dissemination in the United
States or for distribution to U.S. newswire services. The
securities offered have not been registered under the U.S.
Securities Act of 1933, as amended (the "U.S. Securities
Act"), or any applicable state securities laws and may not be
offered or sold in the United
States or to, or for the account or benefit of, a person in
the United States or a U.S. person
(as defined in Regulation S under the U.S. Securities Act) absent
registration under the U.S. Securities Act and any applicable state
securities laws, or compliance with an exemption therefrom. This
press release shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of the
securities in any state in which such offer, solicitation or sale
would be unlawful.
Certain information in this press release may contain
forward-looking statements. This information is based on current
expectations that are subject to significant risks and
uncertainties that are difficult to predict. Actual results might
differ materially from results suggested in any forward-looking
statements. Victory assumes no obligation to update the
forward-looking statements, or to update the reasons why actual
results could differ from those reflected in the forward
looking-statements unless and until required by securities laws
applicable to Victory. Additional information identifying risks and
uncertainties is contained in filings by Victory with the Canadian
securities regulators, which filings are available at
www.sedar.com.
Completion of the Proposed Transaction is subject to a number
of conditions, including but not limited to, Exchange acceptance
and if applicable pursuant to Exchange requirements, 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 Proposed 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.
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.
The Victory Common Shares will remain halted until such time
as permission to resume trading has been obtained from the
Exchange. Victory is a reporting issuer in Alberta, British
Columbia, Saskatchewan, and Ontario.
SOURCE Victory Capital Corp.