CALGARY, ALBERTA--(Marketwired - May 6, 2015) -
THIS PRESS RELEASE IS NOT AN OFFER OF THE SECURITIES FOR SALE IN THE UNITED STATES.
Quartet Resources Limited (TSX VENTURE:QRL.H) ("Quartet" or the "Company") and Goldbelt Empires Limited (name to be changed to Goldbelt International Limited) ("Goldbelt") are pleased to announce that they have entered into a letter of intent dated April 21, 2015 to complete a non-arm's length business transaction, pursuant to which Quartet has agreed, subject to certain conditions, to acquire all of the issued and outstanding securities of Goldbelt (the "Transaction"). The Transaction shall serve as the Company's "Qualifying Transaction", as defined in Policy 2.4 of the TSX Venture Exchange (the "Exchange") and is subject to the approval of the Exchange. The Transaction will result in a merger of Quartet and Goldbelt and upon completion of the Transaction the combined entity (the "Resulting Issuer") will continue to carry on the business of Goldbelt.
Quartet is a public company incorporated under the laws of Hong Kong and is a "capital pool company" under the policies of the Exchange, which gives it unique access to Asian markets among capital pool companies. Quartet has a head office in Hong Kong's Wan Chai district.
Goldbelt is a private company incorporated under the laws of Hong Kong focused on gold exploration in West Africa, which is wholly-owned by Goldfield Empires Holdings Limited (Hong Kong). Its flagship property is the South Morila (Kola) concession located in the Sikasso Region of southern Mali and covers an area of 150 km2 in size (the "South Morila Property").
The Transaction will be considered to be a "Non-Arm's Length Qualifying Transaction", as such term is defined under the policies of the Exchange. As a result, a meeting (the "Quartet Meeting") of the shareholders of the Company (the "Quartet Shareholders") is required by Exchange policies and Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transaction ("MI 61-101") to approve the Qualifying Transaction by majority of the minority approval. Direction and control over 3,550,000 of the ordinary shares of Quartet ("Quartet Shares") are held by "Non-Arm's Length Parties to the Qualifying Transaction" (as defined under Exchange policies) or persons who must be excluded from voting on the Qualifying Transaction pursuant to MI 61-101, representing approximately 43.56% of the issued and outstanding Quartet Shares. In particular, Quartet Shares held directly or indirectly by, or by persons affiliated with, James Varanese (director of Quartet) and Jonathan Challis (director of Quartet) will be excluded from voting on the Qualifying Transaction on the basis that they are each currently directors and/or senior officers of Goldbelt, among others.
At the Quartet Meeting, the Quartet Shareholders will also consider approving the issuance of Quartet Shares in connection with the Transaction and the Offering (as defined below) and to change its name to "Goldbelt Empires Ltd.", or such other name as determined by Goldbelt prior to the printing of the Quartet Meeting materials. It is expected that upon completion of the Transaction, the Resulting Issuer will meet the Initial Listing Requirements for a Tier 2 Mining issuer under the policies of the Exchange.
Quartet and Goldbelt will provide further details in respect of the Transaction, including the terms of consideration, the summary of financial information and the controlling shareholders of Goldbelt (including their jurisdiction of residence), in due course once available by way of press release.
Proposed Management Team
Upon completion of the Transaction, the directors and senior officers of the Resulting Issuer are anticipated to be:
Jonathan Challis - CEO and Director
Mr. Challis is a mining engineer with over 30 years' experience and a director of several TSX companies. Mr. Challis holds a degree in mineral exploitation from University College, Cardiff and a MBA from Cranfield University.
James Varanese - Chairman and Director
Mr. Varanese has over 17 years' experience in natural resources and M&A. He is a founder of several resources companies both private and quoted. Mr. Varanese is a graduate of Harvard University.
Marc Bamber - Director
Mr. Bamber is a senior natural resources investment specialist and was a core member of the $2.5B RAB Capital Special Situations Fund for over 7 years when he vetted and executed investments in over 900 resources companies.
Vick Dusik - CFO, Corporate Secretary and Director
Mr. Dusik is a Chartered Accountant and Chartered Business Valuator who has held senior positions with Ernst & Young. Mr. Dusik has been a director and CFO of several listed companies in the energy and resources sector. He holds a MBA from the Richard Ivey School of Business, Western University and an ICD from the Rotman School of Management, University of Toronto
Harry Ackerman - Director, Business Development
Mr. Ackerman has extensive experience in West Africa in the acquisition of mining and resource projects. Mr. Ackerman manages exploration programs in West Africa and Middle East for several public resource companies.
Robb McNaughton - Director
Mr. McNaughton is a partner in the Securities and Capital Markets Group at Borden Ladner Gervais LLP.
The Transaction
It is currently anticipated that the Transaction will occur as a share exchange, subject to tax, corporate and securities law advice. If and when a definitive agreement between the Company and Goldbelt is executed, the Company will issue a subsequent press release in accordance with the policies of the Exchange containing its details including information relating to consideration, summary financial information and technical information.
Completion of the Transaction is subject to a number of conditions including, but not limited to, completion of a financing sufficient to meet the minimum listing requirements of the Exchange, satisfactory due diligence by each of the Company and Goldbelt, the completion of a definitive agreement in respect of the Transaction, closing conditions customary to transactions of the nature of the Transaction, Exchange acceptance, and majority of the minority shareholder approval. The Transaction cannot close until the required shareholder approvals are obtained and there can be no assurance that the Transaction will be completed as proposed or at all.
Each of the Company and Goldbelt is incorporated under the provisions of the Companies Ordinance (Hong Kong) with its registered and head office in Hong Kong. At closing, it is expected that the Resulting Issuer will change its name to Goldbelt Empires Limited or such other name as the parties may agree to. The Resulting Issuer intends to issue options to the new directors and officers of the Resulting Issuer, the details of which will be disclosed when finalized.
Goldbelt holds a number of interests in West Africa. It is currently intended that the qualifying property for purposes of meeting the listing requirements of the Exchange will be the South Morila Property. Goldbelt has commissioned the preparation of a National Instrument 43-101 - Standards of Disclosure for Mineral Projects compliant report in connection with the South Morila Property. Further details of the South Morila Property and other interests held by Goldbelt will be disclosed in due course once available by way of press release, in accordance with the policies of the Exchange.
Financing
Quartet and Goldbelt are also pleased to announce that they have entered into an engagement letter dated April 28, 2015 (the "Engagement Letter") with Industrial Alliance Securities Inc. (the "Agent") with respect to the financing to be completed in connection with the Qualifying Transaction.
Under the terms of the Engagement Letter, the Agent has been appointed to act as agent in connection with a "best efforts" long form prospectus offering of up to 10,000,0000 units in the capital of Goldbelt ("Units") at a subscription price of $0.20 per Unit, for aggregate gross proceeds of a maximum of $2,000,000 (the "Offering"). Each Unit will be comprised of one ordinary share in the capital of Goldbelt (the "Ordinary Shares") and one Ordinary Share purchase warrant ("Warrants"). Each Warrant will entitle the holder to acquire one Ordinary Share at a price of $0.30 per Ordinary Share, exercisable on or before the date that is 24 months from the earlier of (i) the date the Ordinary Shares are distributed pursuant to a prospectus and concurrently listed on a recognized Canadian exchange, or (ii) the date of completion of Quartet's Qualifying Transaction with Goldbelt (the "Liquidity Date"). Subsequent to the date that is 12 months following the Liquidity Date, in the event that the Ordinary Shares are listed on a recognized stock exchange, including the Exchange and close for any 20 consecutive trading day period at a price of $0.40 or above, Goldbelt will have the right to require the conversion of the Warrants at the exercise price therefor.
The proceeds from the Offering will be used to (i) further the exploration and development of Goldbelt's property in Mali, (ii) to cover the expenses of the Offering and the Transaction, and (iii) for general working capital purposes.
The Agent will receive a commission of 8% of the aggregate gross proceeds of the Offering payable in cash, excluding the gross proceeds raised from subscribers on the "President's List" as agreed between the Agent and Goldbelt from which the Agent will receive a 4% cash commission. The Agent will also be granted non-transferable compensation options ("Agent's Options") equal to 8% of the aggregate number of securities sold pursuant to the Offering, excluding securities sold to subscribers on the "President's List" from which the Agent will receive Agent's Options equal to 4% of the aggregate number of securities sold. Each Agent's Option entitling the Agent to purchase one Unit at $0.20 per Unit exercisable on or before the date that is 24 months from the Liquidity Date. The Agent will also receive a non-refundable work fee, a non-refundable due diligence fee and an initial retainer for Agent's legal counsel.
The closing of the Offering will be conditional upon, among other things, the Agent being satisfied that all of the conditions of the Exchange as to the completion of the Qualifying Transaction have been satisfied or waived by the Exchange (other than the closing of the Offering), the completion of satisfactory due diligence by the Offering, the receipt of all necessary corporate and regulatory approvals, and the execution of a definitive agency agreement among the Agent and Goldbelt.
Sponsorship of the Qualifying Transaction is required by the Exchange unless an exemption from this requirement can be obtained in accordance with the policies of the Exchange. The Company intends to apply for an exemption to the sponsorship requirement. There is no assurance that an exemption from this requirement will be obtained.
Additional Information
The Quartet Shares are currently suspended from trading and are not expected to be reinstated for trading until completion of the Qualifying Transaction.
Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the Transaction and any related press release, 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.
Completion of the Transaction is subject to a number of conditions including but not limited to, Exchange acceptance and if required by Exchange policies, 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.
This press release contains forward-looking information. More particularly, this press release contains statements concerning the prospective Qualifying Transaction of the Company, the Quartet Meeting and the Offering. The information about Goldbelt contained in the press release has not been independently verified by the Company. Although the Company believes in light of the experience of its officers and directors, current conditions and expected future developments and other factors that have been considered appropriate that the expectations reflected in this forward-looking information are reasonable, undue reliance should not be placed on them because the Company can give no assurance that they will prove to be correct.
Forward looking information involves known and unknown risks, uncertainties, assumptions (including, but not limited to, assumptions on the performance and financial results of the properties of Goldbelt) and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information. The terms and conditions of the prospective Qualifying Transaction, the Quartet Meeting and the Offering may change based on the Company's due diligence on Goldbelt, the entering into a Definitive Agreement for the Qualifying Transaction, regulatory and third party comments, consents and approvals and the ability to meet the conditions of the required timeframes, including completing any financing. The forward-looking statements contained in this press release are made as of the date hereof and the Company undertakes no obligations to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
Completion of the Qualifying 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 proposed Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the proposed Transaction will be completed as proposed or at all.
This press release is not an offer of the securities for sale in the United States. The securities have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an exemption from registration. 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.
The 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.
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.
Contact Information:
Michael Kahn
Director
(647) 427-7330