Usha, Totec finalize deal for White Willow project

Executive Summary

• Totec Resources Ltd. and Usha Resources Ltd. have entered into a definitive share purchase agreement for a qualifying transaction under TSX Venture Exchange Policy 2.4, involving the acquisition of Subco (1540359 B.C. Ltd.), which holds the White Willow property.
• The transaction involves Totec acquiring Subco from Usha in exchange for $50,000 and 5.5 million common shares of Totec (deemed price of 15 cents per share), alongside a concurrent private placement raising up to $4.2 million.
• Upon completion, the resulting issuer will be listed as a Tier 2 mining issuer, with a new leadership team appointed and an anticipated share count of 36,563,000 common shares.

Key Details

• Transaction Structure: Totec acquires all issued and outstanding securities of Subco (1540359 B.C. Ltd.) from Usha Resources.
• Consideration for Subco: Totec pays $50,000 cash to Usha and issues 5.5 million common shares of Totec to Usha at a deemed price of 15 cents per share.
• Investor Consideration: Totec will issue one Totec share (post-consolidation) for each investor share held by investors as of the closing date, following the concurrent financing, at a deemed price of 15 cents per share.
• Share Consolidation: Prior to completion, every two Totec shares will be consolidated into one Totec share.
• Target Asset: Subco holds 489 mineral claims comprising the White Willow property, covering approximately 10,220 hectares in the Thunder Bay mining division, ~170 km west of Thunder Bay.
• Royalties: The White Willow property is subject to Net Smelter Return (NSR) royalties of 3.0% to 2758145 Ontario Ltd. and 1.5% to Grid Metals Corp. These NSRs can be purchased for $1.25 million and $1.0 million, respectively.
• Concurrent Financing: Subco intends to complete a private placement of up to 28 million units at 15 cents per unit for gross proceeds of up to $4.2 million.
• Warrant Terms (Concurrent Financing): Each unit comprises one common share and one warrant exercisable into one additional share at an exercise price of 25 cents for a period of two years.
• Use of Proceeds: Net proceeds from the concurrent financing are expected to finance exploration at the White Willow property and for general working capital.
• Finder’s Fees: Subco may pay finders' fees of up to 7% cash and 7% finders' warrants (exercisable at 25 cents/share for three years). No finders' fees are payable on the transaction itself.
• Hold Periods: Securities issued in the concurrent financing are subject to a statutory hold period of four months and one day.
• Post-Transaction Share Count: Assuming $4.2 million in gross proceeds, the resulting issuer will have 36,563,000 common shares issued and outstanding.
• New Leadership:
  • Deepak Varshney: CEO, Corporate Secretary, Director
  • Khalid Naeem: CFO, Director
  • James Walker: Director
  • Zachary Kotowych: Director
  • Rishi Kwatra: Director
• Regulatory Status: Trading in Totec shares is halted pending satisfaction of TSX-V Policy 2.4 requirements. The transaction is not considered a related party transaction or non-arm's-length qualifying transaction under specific exchange policies.
• Conditions Precedent: Receipt of regulatory/exchange approvals, completion of concurrent financing (minimum $1 million gross proceeds), completion of NI 43-101 technical report, and clearance of Form 3B2 filing statement.

Notable Quotes

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