Royal Fox Announces Completion of Reverse Takeover Transaction

- May 21st, 2021

Royal Fox Gold Inc. is pleased to announce the completion of its previously announced reverse takeover transaction pursuant to the policies of the TSX Venture Exchange . In connection with the completion of the Transaction, the Company filed a filing statement dated May 11, 2021 in support of its application to the TSXV to become a “Mining Issuer” . The Filing Statement has been filed on SEDAR under the Company’s …

Royal Fox Gold Inc. (formerly Hornby Bay Mineral Exploration Ltd.) (TSXV: HBE) (“Royal Fox” or the “Company”) is pleased to announce the completion of its previously announced reverse takeover transaction (the “Transaction”) pursuant to the policies of the TSX Venture Exchange (“TSXV”). In connection with the completion of the Transaction, the Company filed a filing statement dated May 11, 2021 (the “Filing Statement”) in support of its application to the TSXV to become a “Mining Issuer” (as that term is defined in the policies of the TSXV). The Filing Statement has been filed on SEDAR under the Company’s issuer profile at www.sedar.com. Readers are encouraged to review the Filing Statement for full details on the Transaction.

The Transaction

Pursuant to the terms of the share purchase agreement dated November 30, 2020, as amended March 23, 2021 and April 21, 2021, (collectively, the “Definitive Agreement“), entered into between the Company, Frank Guillemette (the “Principal Shareholder“), Jonathan Girard and Jean-Francois Girard (together with the Principal Shareholder, the “Vendors“), the Company purchased from the Vendors all of the issued and outstanding common shares in the capital of 9396-1217 Quebec Inc., whose sole asset is 100% of the common shares in the capital of 9220-5392 Quebec Inc. o/a Mines Royales Quebec (“MRQ“). MRQ holds an option to acquire a 100% interest in the Philibert property (the “Philibert Property“) located in Québec’s Chibougamau mining camp. The Definitive Agreement (including the subsequent amendments thereto) has been filed on SEDAR under the Company’s issuer profile.

Concurrent Financing

In connection with the Transaction, the Company completed a non-brokered private placement of subscription receipts (each, a “Subscription Receipt“) on January 6, 2021 pursuant to which the Company issued an aggregate of 64,890,005 Subscription Receipts for gross proceeds of $3,244,500 (the “Offering“).

The gross proceeds of the Offering (the “Escrowed Proceeds“) were held in escrow on behalf of the subscribers for the Subscription Receipts by TSX Trust Company (the “Escrow Agent“), pursuant to the terms of a subscription receipt agreement (the “Subscription Receipt Agreement“) entered into on January 6, 2021 among the Company and the Escrow Agent. The Company has delivered a notice to the Escrow Agent on May 6, 2021 confirming satisfaction of the applicable escrow release conditions, at which time each Subscription Receipt was automatically converted into one unit (a “Unit“) of the Company, and the Escrowed Proceeds were released to the Company. Each Unit is comprised of one common share of Hornby Bay (each, a “Unit Share“) and one common share purchase warrant (each, a “Warrant“). Each Warrant is exercisable by the holder thereof for one common share of the Company (each, a “Warrant Share“) until January 6, 2024 at an exercise price of $0.06 per Warrant Share, subject to adjustments in certain events.

The net proceeds of the Offering will be used to fund the cash portion of the consideration payable to MRQ pursuant to the Definitive Agreement and for general corporate purposes.

The securities offered pursuant to the Offering have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act“), or any U.S. state securities laws, and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons (as defined under the U.S. Securities Act) absent registration or any applicable exemption from the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws. This news release shall not constitute an offer to sell or the solicitation of an offer to buy securities in the United States, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

TSXV Approval and Resumption of Trading

Trading in the common shares of the Company was previously halted on November 30, 2020 at the request of the Company in connection with the announcement of the Transaction. The Transaction remains subject to final approval by the TSXV and fulfillment of all of the requirements of the TSXV in order to obtain such approval including, among other things, submission and acceptance of all documents requested by the TSXV in its conditional acceptance letter and payment of all outstanding fees to the TSXV. Until final approval of the TSXV is obtained and a Final Exchange Bulletin is issued, trading in the common shares of Royal Fox will remain halted. Upon resumption of trading, the common shares of Royal Fox will trade under the symbol “FOXG” and the Company will be listed as a Tier 2 Mining Issuer.

Name Change

Prior to the completion of the Transaction, the Company changed its name from “Hornby Bay Mineral Exploration Ltd.” to its current name, “Royal Fox Gold Inc.” in accordance with the provisions of the Business Corporations Act (Ontario).

Management of the Resulting Issuer

In connection with the completion of the Transaction, the current Board of Directors and management of the Company resigned, with the exception of Mr. Arvin Ramos, CPA, CGA, the Chief Financial Officer of the Company and as a result, the following persons were appointed, in the capacities listed below. Brief biographies of the current management team are as follows:

Victor Cantore, Executive Chairman

Mr. Cantore is a seasoned capital markets professional specializing in the resource and hi-tech sectors. He has more than 20 years of advisory and leadership experience having begun his career in 1992 as an investment advisor and then moving into management roles at both public and private companies. During his career he has organized and structured numerous equity and debt financings, mergers and acquisitions, joint venture partnerships and strategic alliances. Mr. Cantore is President, CEO and Director of Amex Exploration Inc., a junior mining exploration company, primary objective of which is to acquire, explore, and develop viable gold projects in the mining-friendly jurisdiction of Quebec. Amex is focused on its 100% owned Perron gold project located 110 kilometers north of Rouyn Noranda, Quebec, consisting of 116 contiguous claims covering 4,518 hectares. A number of significant gold discoveries have been made at Perron, including the Eastern Gold Zone, the Gratien Gold Zone, the Grey Cat Zone, and the Central Polymetallic Zone. High-grade gold has been identified in each of the zones. A significant portion of the project remains underexplored. In addition to the Perron project, the company holds a portfolio of three other properties focused on gold and base metals in the Abitibi region of Quebec and elsewhere in the province. Mr. Cantore serves on the boards of various companies both private and public.

Simon Marcotte, Director, President and Chief Executive Officer

Mr. Marcotte is a Chartered Financial Analyst (CFA) with over 20 years of experience with a focus on commodities, including more than 10 years in executive positions for junior mining companies. Mr. Marcotte co-founded Mason Graphite Inc. in 2012 and held the position of Vice-President of Corporate Development until February 2018. Under his leadership, Mason Graphite Inc. was awarded the TSX Venture recognition as top 10 performing stock in 2013, the best 50 OTCQX in 2016 and 2017, and was nominated for best investors relations in both 2016 and 2017. At the end of 2017, the company reached a peak market capitalization of $365 million, with approximately 35 institutional shareholders, uncommon for a junior mining company. Prior to 2012, Mr. Marcotte joined Verena Minerals Corp. in 2010, which was then renamed Belo Sun Mining Corp., as Vice-President Corporate Development, working alongside the President and Chief Executive Officer on all decision-making processes and helped develop and implement a turnaround strategy. Mr. Marcotte was also instrumental in raising approximately $100-million in capital for the company, resulting in an increase in market capitalization from $20-million to a peak of $400-million and a share price appreciation of more than 500 per cent over the same period. Mr. Marcotte has been involved with several other mining companies, either as an officer or a director, including with Alderon Iron Ore Corp between 2010 and 2013. Prior to his corporate involvement, Mr. Marcotte was working in senior positions in capital markets with CIBC World Markets, from 1998 to 2006, and with Sprott Securities Inc. and Cormark Securities Inc., from 2006 to 2010, where he also was a member of the board of directors. Mr. Marcotte currently acts as an independent consultant and is actively involved in merchant banking activities in the junior mining industry. Mr. Marcotte is a director of Freeman Gold Corp., which is advancing the Lemhi gold project in Idaho, United States. He is a CFA Charterholder and is a graduate from the University of Sherbrooke.

Jessica Whitton, Corporate Secretary

Ms. Whitton practices corporate and securities law and advises both public and private issuers. Ms. Whitton obtained a Bachelor of Arts (Honours) from Queen’s University in 2014, a Bachelor of Laws from the University of Southampton in 2017, and her Certificate of Qualification from the Federation of Law Societies in 2018. Ms. Whitton was called to the Ontario bar in September 2019 and is a member of the Law Society of Ontario. Previously, Ms. Whitton served as Interim CEO of QcX Gold Corp. (formerly First Mexican Gold Corp.). Ms. Whitton currently serves as Corporate Secretary of QcX Gold Corp., Generic Gold Corp., Mindset Pharma Inc. and Ophir Gold Corp.

Frank Guillemette, Director

Mr. Guillemette is an entrepreneur specializing in business finance and venture capital with over 20 years’ experience. Mr. Guillemette launched his career as an employee of Fonds Régional de Solidarité Nord-du-Québec where he was responsible for managing the company’s regional mining portfolio and was accountable for the associated financial duties. In 2004, he founded 9148-5706 Quebec Inc., a private company operating as Multi-Ressources Boréal (“Multi-Resource Boreal“) where he remains active in the management of exploration campaigns and mining land brokerage. Among other successfully executed gold property transactions are the Black Dog project (Formerly called Souart Project) that is located 15 km SW of Osisko Mining’s Windfall flagship project and 105 km West of Philibert was sold to Osisko Mining in February 2016 ($1.6 million after the escrow period ended) and an option deal in 2008 on the Monster Lake Project located within 12 km of both Philibert and Nelligan project where TomaGold & IAMGOLD have since invested $10 million in exploration. He was also responsible for managing multi-million dollars exploration fieldworks on gold, base metals, rare earth and other commodities including phosphorus, iron and titanium projects. Mr. Guillemette has also been working for more than 4 years as a “representative of an exempt market dealer” for a Montreal-based exempt market dealer, EMD Financial Inc.

Kelly Malcolm, Director

Mr. Malcolm holds a Bachelor of Science Honours in geology and a Bachelor of Arts in economics, both from Laurentian University. Mr. Malcolm is a Professional Geologist with extensive experience focused on precious and base metal exploration. He specializes in the integration and interpretation of geological, geochemical, and geophysical data to guide exploration and development activities. He has worked in the mineral exploration industry for several junior explorers and mid-tier producers, and has acted as director, advisor, or management for several public and private mineral exploration companies. He also acts as an advisor to several Toronto-based finance firms.

Brad Humphrey, Director

Mr. Humphrey is the president, chief executive officer and a director of QMX Gold Corp. QMX Gold Corporation is a Canadian based resource company traded on the TSXV under the symbol “QMX”, with strong shareholders, including Eldorado Gold Corp, Osisko Gold Royalties Ltd., and Probe Metals Inc. The Company is systematically exploring its extensive property position in the Val d’Or mining camp in the Abitibi District of Quebec. QMX Gold is currently drilling in the Val d’Or East portion of its land package focused on the Bonnefond Deposit and in the Bourlamaque Batholith. In addition to its extensive land package QMX Gold owns the strategically located Aurbel gold mill and tailings facility. Mr. Humphrey has over 20 years of international mining experience, predominantly as a precious metals analyst. Prior to joining QMX Gold, Mr. Humphrey worked for Morgan Stanley as an Executive Director and North American Precious Metals Analyst, where he was responsible for growing Morgan Stanley’s North American Gold research coverage. Mr. Humphrey was also a Managing Director and Head of Mining Research at Raymond James and covered precious metal equities at CIBC World Markets and Merrill Lynch. Before starting his capital markets career, Mr. Humphrey held a variety of mining industry roles from Corporate Development to contract underground miner.

Principals

As a result of the Transaction, Mr. Guillemette became an “Insider” and a new “Control Person” (as that term is defined in the policies of the TSXV) of the Company. Prior to the completion of the Transaction, Mr. Guillemette did not beneficially own or control any securities of the Company. Upon completion of the Transaction, Mr. Guillemette beneficially owns and controls 58,542,510 common shares of Company representing approximately 24.7% of the issued and outstanding common shares of the Company, on a non-diluted basis. At the annual and special meeting of the Company’s shareholders held on January 7, 2021, the disinterested shareholders of the Company approved the creation of a new control person, conditional upon completion of the Transaction.

Additional information regarding the timing of the trading resumption and the status of the Final Exchange Bulletin to be issued by the TSXV in respect of the Transaction will be provided in subsequent news releases of the Company.

ON BEHALF OF THE BOARD OF DIRECTORS
Simon Marcotte
Simon Marcotte, President and Chief Executive Officer of Royal Fox Gold Inc.

For further information, please contact:

Simon Marcotte
President and Chief Executive Officer of Royal Fox Gold Inc.
Email: smarcotte@royalfoxgold.com
Website: www.royalfoxgold.com

Neither the 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.

Cautionary Note

The information contained herein contains “forward-looking statements” within the meaning of applicable securities legislation. Forward-looking statements relate to information that is based on assumptions of management, forecasts of future results, and estimates of amounts not yet determinable. Any statements that express predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance are not statements of historical fact and may be “forward-looking statements.” Forward-looking statements are subject to a variety of risks and uncertainties which could cause actual events or results to differ from those reflected in the forward-looking statements, including, without limitation: risks related to the TSXV listing, risk related to the failure to obtain adequate financing on a timely basis and on acceptable terms; risks related to the outcome of legal proceedings; political and regulatory risks associated with mining and exploration; risks related to the maintenance of stock exchange listings; risks related to environmental regulation and liability; the potential for delays in exploration or development activities or the completion of feasibility studies; the uncertainty of profitability; risks and uncertainties relating to the interpretation of drill results, the geology, grade and continuity of mineral deposits; risks related to the inherent uncertainty of production and cost estimates and the potential for unexpected costs and expenses; results of prefeasibility and feasibility studies, and the possibility that future exploration, development or mining results will not be consistent with the Company’s expectations; risks related to commodity price fluctuations; and other risks and uncertainties related to the Company’s prospects, properties and business detailed elsewhere in the Company’s disclosure record. Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in forward-looking statements. Investors are cautioned against attributing undue certainty to forward-looking statements. These forward-looking statements are made as of the date hereof and the Company does not assume any obligation to update or revise them to reflect new events or circumstances, except in accordance with applicable securities laws. Actual events or results could differ materially from the Company’s expectations or projections.

NOT FOR DISSEMINATION OR DISTRIBUTION IN THE UNITED STATES OF AMERICA

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