Kelly Ventures signs LOI to acquire VulEnergy as QT

Executive Summary

• Kelly Ventures Ltd. has entered into a binding Letter of Intent (LOI) to acquire 100% of VulEnergy, a geothermal and lithium exploration company based in Argentina, in a qualifying transaction under TSX Venture Exchange policies.
• The transaction is expected to result in the formation of "VulEnergy Corp." (or similar name), with VulEnergy becoming a wholly owned subsidiary. The indicative post-transaction ownership split is 94% VulEnergy and 6% Kelly Ventures.
• A concurrent private placement financing of $6 million to $8 million is being arranged by Research Capital Corp., which will help determine the final exchange ratio and valuation of the deal.

Key Details

• Transaction Structure: Binding LOI dated Oct. 22, 2025, for a business combination where Kelly Ventures acquires all issued and outstanding securities of VulEnergy for shares of the resulting issuer.
• Entity Details:
  • Acquirer: Kelly Ventures Ltd.
  • Target: VulEnergy (incorporated in Argentina), owned by Belag S.A. (to be incorporated in the British Virgin Islands).
  • Resulting Entity: Will change name to "VulEnergy Corp." or similar; VulEnergy will be a wholly owned subsidiary.
• Valuation & Ownership:
  • Exchange ratio and valuation are not yet finalized; to be determined via concurrent financing terms.
  • Indicative split: 94% VulEnergy, 6% Kelly Ventures.
• Financing:
  • Concurrent private placement financing of $6 million to $8 million.
  • Capital Markets Adviser: Research Capital Corp.
  • Securities: Subscription receipts of VulEnergy (price and terms to be determined).
• Fees:
  • Finder's fee capped at $60,000 payable to Seahawk Capital Corp. (Principal: Saf Dhillon).
• Regulatory Status:
  • Classified as a "Qualifying Transaction" (QT) under TSX-V policies.
  • Not a non-arm's-length transaction; no insider interest in VulEnergy.
  • Subject to shareholder approval (subject to legal review).
  • Trading in Kelly Ventures shares remains halted pending receipt and review of acceptable documentation.
• Target Asset (VulEnergy):
  • Location: Catamarca, Argentina (within the lithium triangle).
  • Assets: Rights to ~25,000 hectares of mining concessions.
  • Technology/Resource: High-potential geothermal project with identified heat sources (41°C surface / 220°C deep-level).
  • Strategy: Eco-friendly geothermal electricity generation and potential direct lithium extraction (DLE) from geothermal brines.
  • Progress: Preliminary temperature mapping, surface sampling, and extensive operational preparation completed.
• Management:
  • VulEnergy CEO: Warren Levy (raised >$1.8B for LatAm projects).
  • VulEnergy CFO: Hernan Montoya (Argentinian energy sector experience).
  • VulEnergy COO: Fernando Figini (30+ years oil and gas in Argentina).
  • Kelly Ventures Director: Paul Larkin (founder/director of U.S. Geothermal Inc.) will join the board of the resulting issuer.
• Next Steps:
  • Negotiation of definitive agreement.
  • Subsequent news release to disclose summary financial information, final valuation, consideration shares, and proposed management/board.
  • Potential engagement of a sponsor or request for waiver of sponsorship requirement from TSX-V.

Notable Quotes

• None explicitly quoted in the text, though the LOI outlines the terms and conditions.