Usha Resources subsidiary closes $4.5-million placement

Executive Summary

• Totec Resources Ltd. and Usha Resources Ltd. have completed a concurrent private placement financing for gross proceeds of $4.5 million, structured in anticipation of a qualifying transaction where Totec acquires Usha’s subsidiary (Subco) and the associated White Willow mineral property.
• The transaction involves the issuance of 30 million units at 15 cents per unit, with each unit comprising one common share and one warrant exercisable at 25 cents.
• Upon completion, Totec will consolidate its shares on a one-for-two basis, and investors in the concurrent financing will receive shares in Totec, with warrants converting to Totec shares.

Key Details

• Financing Structure: 30 million units issued by 1540359 B.C. Ltd. (Subco), a wholly owned subsidiary of Usha Resources Ltd.
• Price: 15 cents per unit.
• Gross Proceeds: $4,500,000.
• Unit Composition: Each unit consists of one common share of Subco and one common share purchase warrant.
• Warrant Terms (Investors): Exercisable into one additional Subco share at an exercise price of 25 cents for a period of two years from issuance.
• Finder’s Fees: Aggregate cash fees of $146,122 and 974,143 non-transferable finders' warrants issued to eligible finders.
• Finder’s Warrant Terms: Exercisable into one Subco share at 25 cents for three years; automatically convert to Totec shares at 25 cents for two years upon closing.
• Transaction Type: Qualifying transaction under TSX Venture Exchange rules; Totec acquires Subco and Usha sells 489 mineral claims constituting the White Willow property.
• Share Consolidation: Totec will consolidate common shares on a one-for-two basis.
• Investor Conversion: Investors receive one Totec share (post-consolidation) for each Subco share held; Subco warrants automatically become exercisable into one Totec share at 25 cents for two years.
• Use of Proceeds: Exploration at the White Willow property and general working capital for Totec and Subco.
• Conditions: Subject to exchange acceptance and other conditions; trading in Totec shares is halted pending Policy 2.4 requirements.
• Termination Clause: If abandoned, funds returned to investors and Usha remains sole shareholder of Subco.
• Arm's Length: No non-arm's-length parties participated; not subject to Policy 5.9.