VVC Announces New Private Placement Closing, Debt Conversion, Acquisition of Samalayuca Shares and Grant of Options
TORONTO, Sept. 28, 2020 - VVC Exploration Corp. ("VVC" or the "Company") (TSX-V:VVC) announces the following:
The Company's unaudited Financials for the Quarter Ended July 31, 2020 and the accompanying Management's Discussion and Analysis were filed on SEDAR on September 25 and will be uploaded to the Company's website.
Private Placement Financing
VVC has closed subscriptions on a non-brokered private placement of units of the Company at a price of CA$0.05 per Unit, whereby each Unit consists of one common share ("Share") and one common share purchase warrant ("Warrant") entitling the holder to purchase one additional Share of the Company for a period of three years from Closing, at an exercise price of CA$0.075 per share. Aggregate subscriptions amount to CA$2,876,310 (or US$2,177,000) representing 57,526,200 Units. One insider, the COB of the Company, subscribed for US$50,000. The Company will pay a Finder's Fee of US$52,150 to two arm's length finders, of which US$8,400 will be paid in cash and the balance will be settled by the issuance of 1,169,500 Shares and Warrants.
The Company expects to close the Private Placement on September 30, subject to the final acceptance of the TSXV. All securities to be issued pursuant to the offering will be subject to the applicable statutory, exchange and regulatory hold period of four months and any other required resale restrictions. The securities to be issued have not and will not be registered under the US Securities Act of 1933, as amended, or any state securities laws.
Net proceeds of the Financing, after paying the general costs of the issue and the cash portion of the Finder's Fee, will be used as needed for (a) development on the Kaity Property in Chihuahua, Mexico, including costs associated with various permits, metallurgical bench testing of the copper mineralization, and investigation, evaluation, planning and implementation of the Gloria Pilot Mining Project, (b) property option payments in Mexico, (c) reserve for future acquisitions, (d) current accounts payable, (e) general administrative expenses, and (f) working capital.
In conjunction with the Private Placement Financing, the Company is also settling an aggregate $91,205 of indebtedness by the issuance 1,824,100 Shares and 879,800 Warrants (collectively the "Units"). The Units being issued, the terms of the Warrants included in the Units and the applicable resale restrictions will the same as those for the Units issued through the Private Placement. One insider, the CEO of the Company is participating by converting $47,215 owed to him, however he will not receive any Warrants.
Acquisition of Samalayuca Shares
The Company finalized an agreement with Micose S.A. de C.V. for the acquisition of 33,333 shares of Samalayuca Cobre S.A. de C.V. ("SCSA") in consideration for cash payments of US$200,000 and issuance of 3,000,000 VVC Shares (the "VVC-Micose transaction"). Subject to all conditions precedent been satisfied in Mexico and obtaining TSXV approval, the Shares will be issued and a first payment of $100,000 made on Closing, with the remaining cash payments to be made over a period 120 days following receipt the Explosive Permit in Mexico.
The due diligence has been completed with respect to the Amending Agreement Orford and IAP (News release of September 1), and the SCSA Shares to be acquired thereunder. The Company is now proceeding with an application to the TSXV for an amendment to their approval of the previous option agreement with Orford and IAP, as reflected in the Amending Agreements. The VVC-Micose Transaction will be submitted to the TSXV at the same time. The Company expects all transactions to be completed and closed in early November, but no later than December 31, following which the Company will own all of the issued and outstanding SCSA Shares.
SCSA is the owner of the Kaity Property where the Gloria Cooper Project is located. A National Instrument (NI) 43-101 Technical Report on the Kaity Property by Jacques Marchand P.Eng. Geology, dated April 21, 2019, was filed on SEDAR on May 7, 2019.
Stock Option Plan and Option Grants
The TSX Venture Exchange ("TSXV") has accepted for filing the Stock Option Plan ("SOP") approved by shareholders on August 28. The SOP is being filed on SEDAR and uploaded to the Company's website.
The Board granted incentive stock options ("Options") under the SOP, to officers, directors and consultants of the Company, to purchase up to an aggregate of 11,950,000 common shares, representing about 2.9% of the outstanding shares of the Company. The Options are exercisable at a price of CA$0.05 per share expiring September 28, 2030. Pursuant to the TSX Venture Exchange policies, the exercise price was fixed at the minimum allowable price. The Options, granted in accordance with the provisions of the SOP, are subject to the TSX Venture Exchange policies and the applicable securities laws. Of the Options granted, 27.2% were to Officers, 49.8% to Directors, and 23.0% to Employees/Consultants of the Company.
The Company’s business involves a variety of operational, financial and regulatory risks that are typical in the natural resource industry. These risk factors are more fully described in the "Financial Instruments and Risk Management" section and the "Business Risks" section of its Management's Discussion & Analysis (MD&A) which are prepared quarterly in conjunction with its Financial Statements and filed on SEDAR (www.sedar.com).
About VVC Exploration Corporation
VVC is a Canadian exploration and mining company focused on the exploration and development of copper and gold deposits in Northern Mexico, specifically the Kaity Copper Project located in in Chihuahua State. VVC has other projects in Mexico and Canada, including gold and silver prospects, Cumeral and La Tuna, in Sonora and Sinaloa States, Mexico and a grassroots gold/VMS prospect in the Timmins area of Northern Ontario. Visit our website at: http://vvcexpl.com.
|On behalf of the Board of Directors|
|Michel J. Lafrance, Secretary-Treasurer|
|For further information, please contact:|
|Patrick Fernet - (514) 631-2727||or||Trevor Burbank - (214) 641-1041|
|E-mail: firstname.lastname@example.org||E-mail: email@example.com|
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
This news release contains "forward-looking information" (within the meaning of applicable Canadian securities laws) and "forward -looking statements" (within the meaning of the U.S. Private Securities Litigation Reform Act of 1995). Such statements or information are identified with words such as "anticipate", "believe", "expect", "plan", "intend", "potential", "estimate", "propose", "project", "outlook", "foresee" or similar words suggesting future outcomes or statements regarding an outlook. Such statements include, among others, the approvals and closings of (i) Private Placement, (ii) Debt Conversion, and (iii) SCSA shares, etc.
Such forward-looking information or statements are based on a number of risks, uncertainties and assumptions which may cause actual results or other expectations to differ materially from those anticipated and which may prove to be incorrect. Assumptions have been made regarding, among other things, management's expectations regarding financing efforts, acquisitions, future development and growth, plans for and completion of projects by Company’s third-party relationships, availability of capital, and the necessity to incur capital and other expenditures. Actual results could differ materially due to a number of factors, without limitation, operational risks in the completion of Company’s anticipated projects, delays or changes in plans with respect to the development of Company’s anticipated projects by Company’s third-party relationships, risks related to Covid-19, risks affecting the ability to develop projects, risks inherent in operating in foreign jurisdictions, the ability to attract key personnel, and the inability to raise additional capital. No assurances can be given that the efforts by Company will be successful. Additional assumptions and risks are set out in detail in the Company’s MD&A, available on SEDAR at www.sedar.com.
Although the Company believes that the expectations reflected in the forward-looking information or statements are reasonable, prospective investors in the Company's securities should not place undue reliance on forward-looking statements because the Company can provide no assurance that such expectations will prove to be correct. Forward-looking information and statements contained in this news release are as of the date of this news release and the Company assumes no obligation to update or revise this forward-looking information and statements except as required by law.
Investors are cautioned that notwithstanding the expectations described herein, there can be no assurance that the plans described herein will be completed as proposed. Trading in the securities of VVC should be considered highly speculative. All forward-looking statements contained in this press release are expressly qualified in their entirety by this cautionary statement.