Vancouver, British Columbia – Wednesday, August 12, 2020 – PKS Capital Corp. (“PKS” or the “Company”) is pleased to announce that it has entered into a share exchange agreement (the “Agreement”) dated August 7, 2020 with Horizon Gold Ltd. (“Horizon Gold” or “Horizon”) and shareholders of Horizon Gold (the “Horizon Share- holders”) to complete a reverse takeover whereby the Company will acquire all of the issued and outstanding shares of Horizon in consideration for the issuance of common shares of the Company (the “Acquisition”), further to its news release dated June 4, 2020.
PKS intends that the Acquisition will constitute its Qualifying Transaction, as such term is defined in the Policy 2.4 – Capital Pool Companies (the “CPC Policy”) of the TSX Venture Exchange (the “Exchange”). The Company, upon completion of the Acquisition, expects to change its name to “Horizon Gold Corp.” or such other name as may be approved by PKS and Horizon (the “Name Change”), such entity to be referred to herein as the “Resulting Issuer”.
Summary of the Acquisition
Pursuant to provisions of the Agreement, the Horizon Shareholders will sell, transfer and convey their ordinary shares of Horizon (“Horizon Shares”) in consideration for the issuance of 20,600,000 common shares of the Resulting Issuer (the “Consideration Shares”) at a deemed price of $0.25 per Consideration Share for aggregate consideration of
$5,150,000. As a result of the Acquisition, Horizon Gold will become a wholly-owned subsidiary of the Company. The Agreement also provides that the Name Change will occur immediately prior to closing of the Acquisition. Com- pletion of the Acquisition and the issuance of the Consideration Shares are subject to approval by the Exchange.
On closing of the Acquisition, PKS is expected to have 31,150,000 common shares outstanding upon giving effect to the Minimum Private Placement (as defined below) and 32,150,000 common shares outstanding upon giving effect to the Maximum Private Placement (as defined below), all on an undiluted basis.
In connection with the Acquisition, the Resulting Issuer will apply to list its common shares (the “Resulting Issuer Shares”) on the Exchange as a Tier 2 mining company.
The Acquisition is arm’s length and is therefore not a Non-Arm’s Length Qualifying Transaction under the CPC Policy. Accordingly, the CPC Policy does not require PKS to obtain shareholder approval for the Acquisition.
About Horizon Gold
Horizon Gold is a private company recently incorporated in the United Kingdom that is focused on gold discovery in mineral-rich Sweden. Horizon is controlled by the Horizon Shareholders, who are as follows: Anders West (resides in Sweden), Douglas J. Kirwin (resides in Thailand), Aidan Bishop (resides in the Philippines) and Rupert Williams (resides in the United Kingdom).
Since incorporation, Horizon has had no operations other than the acquisition of the Property and commencing the transfer of the tenement underlying the Property. Pursuant to the audited financial statements of Horizon Gold for the period from incorporation on April 15, 2020 to June 30, 2020, Horizon Gold has exploration and evaluation assets of
$10,907, current liabilities of $10,900 and shareholders’ equity of $7.
Horizon Gold owns 100% of the Vittanträsket nr 1 tenement, no 2019000975 located in the municipality of Lycksele in the county of VästerbottensIän in Sweden covering 3,724.17 hectares (the “Property”) and the related Vittanträsket nr 1 exploration permit (the “Exploration Permit”). The Exploration Permit was granted on December 20, 2019 and is valid until December 20, 2022. The tenement underlying the Property is currently still in process of being transferred from Goldore AB Sweden (“Goldore”), the prior owner, to Horizon Gold.
The Property is located in Northern Sweden, approximately 90 km to the northwest of the provincial capital town of Umeå in the southern part of the Gold-line metallogenetic district of Sweden. The Exploration Permit covers a signif- icant gold anomaly, based on gold in glacial till anomaly maps published by the Swedish Geological Survey (SGU) from samples gathered during the 1980s. While the Property area has been partially covered by previous exploration permits in the past it appears that none of the companies holding these previous exploration permits carried out any exploration work within the Property. Several gold mines and gold and base metal deposits have been discovered within the area called the “Gold-line” on the basis of a district-wide gold-in-till anomaly discovered during the 1980s. The Property is located in the southern part of the Gold-line.
Horizon Gold has not yet carried out any exploration work at the Property. The Property is an early stage gold explo- ration project, based primarily on geochemical anomaly studies published by the Swedish Geological Survey. A num- ber of gold and base metal deposits and mines are known to exist within the Gold-line metallogenic district and bear a strong relationship to the overlying gold-in-till anomalies in their area. These suppositions will be tested during the proposed exploration work on the Property, such program set forth in the Technical Report (as defined below).
The Property is subject to a 1% net smelters return (NSR) royalty (the “Royalty”) in favour of Goldore upon the Property reaching commercial production, which Royalty was granted pursuant to the agreement between Horizon Gold and Goldore with respect to Horizon Gold’s purchase of the Property (the “Underlying Agreement”). Further to the Underlying Agreement, the Company will have the option of buying out the Royalty for US$4,000,000 at any time.
PKS is in the process of finalizing a 43-101 technical report on the Property (the “Technical Report”) and further and more fulsome disclosure will be provided in subsequent news releases. The Technical Report will be filed on the Company’s SEDAR profile once it has been finalized. All technical information in this news release has been derived from the Technical Report.
Concurrent Financing
Concurrently with the closing of the Acquisition, the Company will conduct a private placement (the “Private Place- ment”) for the issuance of common shares of the Company for minimum gross proceeds of $1,000,000 (“Minimum Private Placement”) and a maximum gross proceeds of $1,250,000 (the “Maximum Private Placement”). Each Common Share will be issued at $0.25 per common share. In connection with the Private Placement, the Company will pay a cash fee to certain finders equal to 7% of the total gross proceeds of the Private Placement from sales to purchasers introduced by such finders under the Private Placement (the “Finder’s Cash Fee”) and will issue to certain finders non-transferable common share purchase warrants to purchase that number of Resulting Issuer Shares equal to 7% of common shares sold to purchasers introduced by such finders under the Private Placement (the “Finder’s Warrants”). Each Finder’s Warrant is exercisable at $0.25 per common share for a period of two years from the date of issuance.
Completion of Closing of Acquisition
Completion of the Acquisition will be subject to certain conditions, including but not limited to: (a) receipt of all necessary approvals of the boards of directors of PKS and Horizon Gold; (b) receipt of all necessary third party con- sents; (c) approval of the Acquisition by the Exchange as the Company’s Qualifying Transaction; and (d) PKS satis- fying the initial listing requirements of the Exchange for a Tier 2 mining issuer.
PKS intends to apply to the Exchange for a waiver of the Exchange’s requirement to have at least $100,000 of ap- proved expenditures on the Property in the last 36 months as the Company submits that this requirement is satisfied by the $500,000 recommended work program on the Property. However, there is no assurance that this waiver will be granted.
Sponsorship
PKS intends to apply to the Exchange for a waiver of the Exchange’s sponsorship requirements on the basis that it is not a foreign issuer, the management of PKS upon completion of the Qualifying Transaction will possess appropriate
experience and qualifications, and PKS will be a mining issuer with a current geological report. However, there is no assurance that this waiver will be granted.
The Resulting Issuer’s Management
In connection with the Acquisition, it is expected that there will be changes to the Company’s management and board of directors. Brief biographies for the anticipated members of management and the board of directors of the Resulting Issuer are set out below:
Anders West – Chief Executive Officer and Director
Mr. West is a Swedish Mining Engineer and Economic Geologist. He is currently the managing director of Horizon and was the President of Goldore in Sweden from April 2016 to April 2020. Mr. West previously managed Wolfland Resources Inc. in the Philippines, where he managed the Bottilao porphyry and the Mainit Gold projects until 2013. After working in the Philippines, Mr. West was the President of Orezone AB, now Euro Battery Metals, in Sweden until March 2016.
Mr. West obtained his M. Sc. in Economic Geology from the Norwegian University of Technology in 1983. Ravinder Kang – Chief Financial Officer and Corporate Secretary
Mr. Kang has been self-employed since April 2015 and was the Director of Listed Issuer Services and held other positions with TMX Group from March 1992 to March 2015. Mr. Kang is a corporate finance professional who is experienced in all aspects of Exchange policy, corporate governance and public company obligations. He is currently the principal of RSJ Consulting Inc., a firm that provides corporate finance advice and the director and/or CFO of various public companies.
Mr. Kang received a Bachelor of Commerce degree from the University of British Columbia in 1988 and obtained his
C.A. designation at Ernst and Young.
Aidan Bishop – Director
Mr. Bishop is the founder and executive director of Bluebird Merchant Ventures Ltd., a gold development company that is focused on reopening two historic underground gold mines in South Korea and targeting gold production, listed on the London Stock Exchange. Mr. Bishop is also the founder and executive director of a London Stock Exchange- listed technology company called BigDish Plc., which operates a dynamic pricing restaurant booking application in the United Kingdom and also has operations in the Philippines.
Rupert Williams – Director
Mr. Williams started his career in 1992 as a mining broker at First Marathon Securities where he helped finance Lytton Minerals and Mountain Province Diamonds in their exploration of the Northwest Territories. He later co-founded Ocean Equities, a mining focused broker and assisted with the listing of numerous companies in the mining sector on AIM, TSX and ASX markets, most notably looking after the early funding of Kirkland Lake Gold.
After divesting in 2013, Mr. Williams founded Smaller Company Capital Ltd. (“SCC Ltd.”) in 2014 whereby he has been involved with assisting several early stage companies to the market in Canada and in the UK. He has been a director of SCC Ltd. since 2014. Currently, Mr. Williams is also a director of the Exchange-listed Goldhills Holdings Ltd.
Peeyush Varshney – Director
Mr. Varshney is currently a director of PKS and has served in this position since January 29, 2019. Mr. Varshney obtained a Bachelor of Commerce Degree (Finance) in 1989 and a Bachelor of Laws in 1993, both from the University of British Columbia. He has been a member of the Law Society of British Columbia since September 1994. Mr. Varshney worked as an associate lawyer at the law firm of Campney & Murphy, of Vancouver, British Columbia,
from September 1994 to July 1996, primarily in corporate and securities law. Mr. Varshney has been actively involved in the capital markets since 1996 and is a director of Varshney Capital Corp., a private merchant banking, public venture capital and corporate advisory firm. He is currently a director or officer of several public companies listed on the Exchange. Mr. Varshney is also a director of The Varshney Family Charitable Foundation and is a past member of the Business Families Center Advisory Board at the Sauder School of Business.
Douglas J. Kirwin, MSc (Applied Geology), FSEG, FAUSIMM, FAIG, MSGA – Technical Advisor
Mr. Kirwin is an independent geologist with 45 years of international experience. He has held senior positions with Anglo American and Amax during the 1970s. In 1995, he accepted a role as VP Exploration for Indochina Goldfields and subsequently became Executive VP of Ivanhoe Mines Limited until 2012, after which Ivanhoe was acquired by Rio Tinto. As a member of the joint discovery team for the Hugo Dummett deposit at Oyu Tolgoi in Mongolia, Mr. Kirwin was a co-recipient of the PDAC inaugral Thayer Lindsley medal awarded for the most significant international mineral discovery in 2004.
Mr. Kirwin holds a Master of Science degree in mineral exploration from James Cook University in Queensland, Australia, where he is currently an adjunct professor.
Trading of the common shares of the Company has been halted and will remain halted in accordance with Exchange policies until all required documentation with respect to the Acquisition has been received and the Exchange is other- wise satisfied that the halt should be lifted.
About PKS Capital Corp.
PKS is a CPC that completed its initial public offering and obtained a listing on the Exchange in August 2019 (trading symbol: “PKS.P”). It does not own any assets, other than cash or cash equivalents and its rights under the LOI. The principal business of PKS is to identify and evaluate opportunities for the acquisition of an interest in assets or busi- nesses 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.
ON BEHALF OF THE BOARD of DIRECTORS
PKS CAPITAL CORP.
Hari Varshney
Chief Executive Officer, Chief Financial Officer and Director
For further information please contact:
Investor Relations Satnam Brar
Tel: 604-684-2181
Cautionary Statement
Statements in this press release regarding PKS which are not historical facts are “forward-looking statements” that involve risks and uncertainties, such as the completion of the proposed Qualifying Transaction. Such information can generally be identified by the use of forwarding-looking wording such as “may”, “expect”, “estimate”, “anticipate”, “intend”, “believe” and “continue” or the negative thereof or similar variations. Since forward-looking statements address future events and conditions, by their very nature, they involve inherent risks and uncertainties such as the risk that the closing may not occur for any reason. Forwarding-looking statements in this news release include the statements that: (i) PKS anticipates that it will be listed as a Tier 2 mining issuer and (ii) list out the terms of the Private Placement. Actual results in each case could differ materially from those currently anticipated in such state- ments due to factors such as: (i) the decision to not close the Qualifying Transaction or Private Placement for any reason, including adverse due diligence results and Exchange refusal of the Qualifying Transaction; (ii) adverse market conditions; (iii) the need for additional financing. Except as required by law, PKS does not intend to update any changes to such statements.
Completion of the Acquisition is subject to a number of conditions, including but not limited to, Exchange acceptance. Where applicable, the Acquisition cannot close until the required shareholder approval is obtained. There can be no assurance that the Acquisition 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 trans- action, 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 specula- tive.
The TSX Venture Exchange Inc. has in no way passed upon the merits of the Acquisition 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 the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.