VANCOUVER, British Columbia, May 11, 2018 (GLOBE NEWSWIRE) -- MX Gold Corp. (TSX-V:MXL)
(FSE:ODV) (OTCQX:MXLGF) (the “Company” or “MX Gold”) announces that, further to its news release
dated April 5, 2018, it has entered into a definitive agreement dated May 9, 2018 (the “Magistral Agreement”)
whereby, subject to the closing thereof, the Company has agreed to sell its 50% beneficial interest in the Mexican Magistral
Project (“Magistral”) for a purchase price of US$4.5 million.
The Magistral Agreement is in addition to the other four previously disclosed binding agreements that
collectively propose to sell the Company’s entire mining portfolio in an arm’s length transaction to a private company for the
aggregate purchase price of approximately CDN$14,952,000. The Company intends to use the funds to expand its existing and
successful cryptocurrency mining pilot project of 360 mining units through the purchase of an additional 2,000 mining units under
its existing lease arrangements located in Manitoba. The proposed sale of its mineral exploration assets and expansion of its
cryptocurrency business (together, the “Transaction”) will constitute a Change of Business as defined by the
policies of the TSX Venture Exchange (the “Exchange”).
The Magistral Agreement
Pursuant to the terms of the Magistral Agreement, US$3.75 million is payable on the closing date and US$750,000
is payable on or prior to May 14, 2018 into escrow. Of the escrowed amount, US$250,000 will be held as a deposit towards the
purchase price (the “Deposit”), US$250,000 will be held as a holdback for a period of six months following the
closing date (the “Holdback”) and US$250,000 as a remainder (the “Remainder”). Upon closing,
the Holdback will continue to be held in escrow and the Deposit and the Balance will be released to the Company. If closing does
not occur on or prior to May 15th, and neither the Company nor its joint venture partner (who is simultaneously selling its
interest in Magistral) is in breach of the Magistral Agreement, then the Holdback and the Balance will be returned to the purchaser
and the Deposit will be released to the Company. If closing does not occur on or before May 15th and either the Company or its
joint venture partner are in breach, then the entire escrow amount will be returned to the purchaser.
Closing is subject to certain conditions precedent including the simultaneous acquisition by the purchaser of
the Company’s joint venture partner’s interest in Magistral and approval by the Exchange. Unless extended by all parties, the
Magistral Agreement terminates if closing has not occurred on or prior to May 15, 2018.
The Company has also entered into a Liability Sharing Agreement with its joint venture partner, whereby the
parties have agreed to share certain liabilities on a 50/50 basis that relate to the joint venture project incurred from the
commencement of the joint venture to the closing date of the Magistral Agreement.
Previously Disclosed April 5, 2018 Agreements
The Company has entered into the following agreements which were previously disclosed in the Company’s April 5,
2018 news release, each of which are subject to the closing of the Magistral Agreement:
- Reimbursement Agreement dated April 5, 2018, whereby the purchaser has agreed to pay the Company an additional
US$3,525,000 as reimbursement for funds advanced by the Company in connection with the joint venture.
- FortyTwo Metals Share Purchase Agreement dated April 5, 2018, whereby the Company has agreed to sell to the
purchaser all of the issued and outstanding shares of its wholly-owned subsidiary FortyTwo Metals Inc.
(“FortyTwo”) for a purchase price of CDN$3,000,000. FortyTwo holds the past producing MAX molybdenum mine and
mill located in British Columbia and a CDN$730,000 reclamation bond for the MAX property held with the British Columbia Ministry
of Mines. FortyTwo is also subject to certain legacy liabilities associated with prior operations.
- Midas Property Purchase and Sale Agreement dated April 5, 2018, whereby the Company has agreed to sell the purchaser the
early stage Midas Property in British Columbia for a purchase price of CDN$1,600,000.
- Willa Property Purchase, Sale and Assignment Agreement dated April 5, 2018, whereby the Company has agreed to sell
the purchaser the advanced stage Willa Property in British Columbia for a purchase price of CDN$1 and assign certain legacy
obligations associated with the Willa Property, including a net smelter royalty, advance royalty payments, and the requirement to
retransfer the property back to the original optionors if the property is not in commercial production on or prior to September
28, 2020 with the underlying mineral claims in good standing for a period of not less than three years.
Change of Officer
The Company also announces that, effective May 7, 2018, Hugh Charles McPherson has resigned from his position as
President and Chief Operating Officer, but will continue as a member of the Company’s board of directors. The Company does not
anticipate further changes to its management team or board of directors in connection with the Transaction at this time.
Change of Business
The Company anticipates that the Transaction will be subject to shareholder approval in accordance with Exchange
policies and intends to prepare and file a Filing Statement setting out the material terms of the proposed Transaction in due
course. The Company intends to obtain such approval by way of written consent. In the event that the Company determines that the
Transaction also requires shareholder approval under the Business Corporations Act (British Columbia), the Company intends
to proceed with the closing of the Transaction and delay the closing of the Willa Property sale until such approval is obtained.
The Transaction is also subject to the Sponsorship requirements of the Exchange. The Company intends to seek an exemption from the
Sponsorship requirements and if one is not available, it intends to seek a waiver from such requirements.
Upon the closing of the Transaction, the Company anticipates it will be listed as a Tier 2 Technology Issuer
with the Exchange. As the Company is proposing to sell its current mineral exploration business for cash, no securities will be
issued in connection with the Transaction, no changes to the board or management team is expected at this time and no new insiders
will be created in connection with the Transaction. The Company is currently subject to a Cease Trade Order due to the failure to
file a Technical Report on its Magistral joint venture interest and MAX property. However, the Company intends to apply for an
application to revoke the Cease Trade Order following the closing of the Transaction and the sale of such property interests. The
Company may elect to change the name of the Company in connection with the closing of the Transaction but the board of directors
has not finalized such a change at this time.
On behalf of the Board of Directors,
“Dan Omeniuk”
For further information, please contact
Dan Omeniuk, CEO
Email: dano@mxgoldcorp.com
Phone: (204) 697-7640
Or at: info@mxgoldcorp.com
Statements in this news release that are not historical facts are forward-looking statements.
Forward-looking statements are statements that are not historical, and consist primarily of projections - statements regarding
future plans, expectations and developments. Words such as "expects", "intends", "plans", "may", "could", “potential”, "should",
"anticipates", "likely", "believes" and words of similar import tend to identify forward-looking statements. Forward-looking
statements in this news release include the expectation that the Company: (i) may close the Magistral Agreement and the other April
5th agreements; (ii) satisfy or waive all closing conditions and close the Transaction, including the requirement to obtain
Exchange approval; (iii) may successfully revoke the Cease Trade Order; (iv) may obtain shareholder approval under Exchange
policies and applicable corporate laws to close the Transaction; (v) may successfully acquire additional mining units as and when
required to implement its cryptocurrency mining business plan. All of these forward-looking statements are subject to a variety of
known and unknown risks, uncertainties and other factors that could cause actual events or results to differ from those expressed
or implied, including, without limitation that: (i) the Company is unable to close the Transaction for any reason, including
inability to obtain Exchange or shareholder approval; (ii) the Company is unable to revoke the Cease Trade Order; (iii) the Company
is unable to successfully implement its proposed business plan; and (iv) other risks and uncertainties identified under the heading
“Risk Factors” in the Company’s continuous disclosure documents filed on SEDAR. You are cautioned that the foregoing list is not
exhaustive of all factors and assumptions which may have been used. The Company cannot assure you that actual events, performance
or results will be consistent with these forward-looking statements, and management’s assumptions may prove to be incorrect. These
forward-looking statements reflect current expectations regarding future events and operating performance and speak only as of the
date hereof and the Company does not assume any obligation to update forward-looking statements if circumstances or management’s
beliefs, expectations or opinions should change other than as required by applicable law. For the reasons set forth above, you
should not place undue reliance on forward-looking statements.
Completion of the transaction is subject to a number of conditions, including but not limited to, Exchange
acceptance and if applicable, disinterested shareholder approval. Where applicable, the transaction cannot close until the required
shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the management information circular or filing statement
to be prepared in connection with the transaction, any information released or received with respect to the transaction may not be
accurate or complete and should not be relied upon. Trading in the securities of the Company should be considered highly
speculative.
Neither the TSX Venture Exchange Inc. nor its Regulation Service Provider (as that term is defined in the
policies of the TSX Venture Exchange Inc.) accepts responsibility for the adequacy or accuracy of this press
release.
