NORTHWAY RESOURCES CORP (C-NTW) - News Release
ORIGINAL: Northway Enters Into Letter of Intent with Kenorland Minerals Ltd. for a Proposed Reverse Takeover
2020-07-29 09:00 ET - News Release NTW Close 2020-07-24 C$ 0.14
Vancouver, British Columbia--(Newsfile Corp. - July 29, 2020) -
Northway Resources Corp. (TSXV: NTW) (the "
Company") and
Kenorland Minerals Ltd. (
"Kenorland") jointly announce that they have entered into a letter of intent dated July 28, 2020 whereby the Company will acquire all of the issued and outstanding securities of Kenorland by way of a share exchange, amalgamation or such other form of business combination as the parties may determine.
Upon successful completion of the proposed acquisition of the securities of Kenorland (the "
Transaction"), it is anticipated that the Company will be listed as a Tier 2 Mining issuer on the TSX Venture Exchange ("
TSX-V") and will carry on the combined business of Northway and Kenorland (the "
Resulting Issuer"). The Transaction constitutes a 'reverse takeover' of the Company pursuant to Policy 5.2 of the TSX-V. Following completion of the Transaction but prior to the completion of any concurrent private placement as discussed below, shareholders of Northway will hold 12.13% of the Resulting Issuer with shareholders of Kenorland holding the remaining 87.87%.
As Kenorland is the holder of 6,000,000 common shares of the Company, representing 14.50% of the issued and outstanding shares (18.44% on a partially diluted basis), the Transaction constitutes a 'related party transaction' as defined in Multilateral Instrument 61-101 -
Protection of Minority Security Holders in Special Transactions ("
MI 61-101"). As a result, the completion of the Transaction will be subject to majority of the minority shareholder approval requirements of MI 61-101.
The Company has appointed a special committee comprised of three independent directors to review and approve the Transaction.
Transaction Summary Pursuant to the Transaction, the Company will issue common shares ("
NTW Shares") to the holders of common shares in the capital of Kenorland ("
Kenorland Shares") on the basis of approximately two post-Consolidation (as defined below) NTW Shares for each Kenorland Share. It is anticipated that approximately 30.05 million NTW Shares will be issued pursuant to the Transaction based on the current capital structure of Kenorland.
No advances to be made by the Company to Kenorland are contemplated by the letter of intent and no finder's fees are payable in connection with the Transaction.
The Transaction is subject to a number of terms and conditions, including, but not limited to, the parties entering into a definitive agreement with respect to the Transaction on or before August 31, 2020 (such agreement to include representations, warranties, conditions and covenants typical for a transaction of this nature), the completion of satisfactory due diligence investigations, the completion of a private placement by the Company as further described below, the completion of the Consolidation and the approval of the TSX-V and other applicable regulatory authorities. All dollar figures referenced herein, unless otherwise specified, refer to Canadian dollars.
Trading in the NTW Shares will remain halted pending the satisfaction of all applicable requirements of Policy 2.4 of the TSX-V. There can be no assurance that trading of NTW Shares will resume prior to the completion of the Transaction. Further details concerning the Transaction (including additional financial information) and other matters will be announced if and when a definitive agreement is reached.
Information Concerning Kenorland Kenorland is a private exploration company incorporated under the laws of the Province of British Columbia and based in Vancouver, British Columbia , Canada. Kenorland's business model is project generation focused on early to advanced stage exploration assets. The company currently holds three properties where work is being completed under an earn-in agreement from third parties. The Frotet and Chicobi Projects, which are both located in Quebec, Canada, are optioned to Sumitomo Metal Mining Canada Ltd. and the Chebistuan Project, also located in Quebec, is optioned to Newmont Mining. The company also owns 100% of the advanced stage Tanacross porphyry Cu, Au, Mo project in Alaska, USA. Additional information concerning Kenorland is available at
www.kenorlandminerals.com.
John Tognetti holds 4,980,000 Kenorland Shares, representing 33.15% of the outstanding Kenorland Shares. The Company's CEO, Zachary Flood, who is also the President, CEO and a director of Kenorland hold 1,780,000 Kenorland Shares, representing 11.85% of the outstanding Kenorland Shares.
Kenorland Minerals announces grassroots gold discovery with intersects up to 29m at 8.47 g/t Au, including 11.13m at 18.43 g/t Au, at Regnault, in the Frotet-Evans Belt of Quebec Kenorland is pleased to report the discovery of significant gold mineralization in multiple drill hole intersections at the Regnault target of its Frotet Project, located in the Frotet-Evans Greenstone Belt, Quebec, Canada. Complete results from the 15-drill hole maiden program, funded by Sumitomo Metal Mining Canada Limited ("SMMCL"), are summarized below.
Highlights include:
- The discovery of a new significant gold system in the Frotet Evans greenstone belt in an area with no known mineral occurrences or historic drilling.
- Initial drilling encountered high grade gold mineralization associated with quartz veins along with lower grade, broadly disseminated gold mineralization.
- Results from 20RDD007 intersected 29.08m at 8.47 g/t Au including 11.13m at 18.43 g/t Au.
Recognition of geological controls and geophysical expressions of gold mineralization which will aid in targeting for future drill programs