• USHA Team

Usha Resources Announces Proposed Qualifying Transaction

Updated: Feb 7

Usha Resources Ltd. (“Usha”) is pleased to announce that it has entered into an

agreement (the “Agreement”) dated March 7, 2019 with Emerald Lake Development

Corporation (the “Vendor”) to complete an arm’s length business acquisition whereby

Usha will acquire a direct 51% legal and beneficial interest in a copper-nickel-cobalt

polymetallic sulphide deposit referred to as the Nicobat Project located in the Dobie

Township, Northwest Ontario (the “Property”).


Summary of the Acquisition


Pursuant to the Agreement, Usha will acquire a direct 51% legal and beneficial interest

in the Property (the "Acquisition") from the Vendor by issuing to the Vendor an

aggregate of 1,500,000 common shares of Usha (the "Consideration Shares") at a

deemed price of $0.10 per Consideration Share for aggregate consideration of

$150,000. In addition, Usha has agreed to pay the Vendor a 2% Net Smelter Returns

royalty (“NSR”) upon commencement of commercial production. A third party company

that holds a 15% interest in the Property has also agreed to pay the Vendor a 2% NSR

on the Property. Pursuant to the Agreement, Usha and the third party company may buy

back up to 1.5% of the NSR from the Vendor, on a pari passu basis, by paying

$2,000,000 to the Vendor at any time


The Vendor is controlled by Jerry Beaulac whose residence is located in Brights Grove,

Ontario, Canada.


The Acquisition is expected to constitute Usha’s Qualifying Transaction under the

Capital Pool Companies policy (the “CPC Policy”) of the TSX Venture Exchange (the

“Exchange”). Completion of the Acquisition and the issuance of the Consideration

Shares are subject to approval by Exchange.


On closing of the Acquisition, giving effect to the Private Placement described below,

Usha is expected to have 8,700,000 common shares outstanding (undiluted).

Upon completion of the Acquisition, the parties anticipate that Usha will be listed as a

Tier 2 mining issuer.


The Acquisition is arm’s length and is therefore not a Non-Arm’s Length Qualifying

Transaction under the CPC Policy. Accordingly, the CPC Policy does not require Usha

to obtain shareholder approval of the Acquisition.


Description of the Property

The Vendor currently owns a 100% recorded and 85% beneficial interest in the Property,

with a third party company owning the remaining 15% beneficial interest. The Property

consists of 2 combined surface and mining right patents. These patents are comprised

of 48 hectares. These two patents lie within Dobie Township, which is part of the Kenora

Mining Division, Province of Ontario.


The Property is a base-metal project in which a nickel-copper-PGE polymetallic deposit

has been partially outlined by drilling.


Usha is in the process of commissioning a technical report on the Property and further

and more fulsome disclosure will be provided in subsequent news releases. The

technical report will be filed on Usha’s SEDAR profile once it has been finalized.


Concurrent Financing


Concurrent with the closing of the Acquisition, Usha will conduct a private placement of

units for minimum gross proceeds of $225,000 (the “Private Placement”). Each unit will

be issued at $0.075 per unit and consist of one common share and one share purchase

warrant (a “Warrant”). Each whole Warrant will be exercisable into one common share

of Usha at $0.15 per common share for 2 years. Usha may pay finder’s fee in connection

with the Private Placement, in accordance with the policies of the Exchange. Proceeds of the private placement will be used for on exploration activities on the

Property and for working capital purposes.


Conditions of Closing


Completion of the Acquisition will be subject to certain conditions, including but not

limited to: (a) receipt of all necessary approvals of the boards of directors of Usha and

the Vendor; (b) receipt of all necessary third party consents; (c) approval of the

Acquisition by the Exchange as Usha’s Qualifying Transaction; and (d) Usha satisfying

the Initial Listing Requirements set by the Exchange for a Tier 2 mining issuer.


Sponsorship


Usha intends to apply to the Exchange for a waiver of the Exchange’s sponsorship

requirements on the basis that it is not a foreign issuer, the management of the Usha

upon completion of the Qualifying Transaction will possess appropriate experience and

qualifications, and Usha will be a mining issuer with a current geological report.

However, there is no assurance that this waiver will be granted.


Management and Board of Directors


It is not expected that the board of directors of Usha will be reconstituted upon

completion of the Qualifying Transaction.


Brief biographies for the anticipated management of Usha upon completion of the

Qualifying Transaction are set out below:


Deepak Varshney – Chief Executive Officer and Corporate Secretary

Mr. Deepak Varshney currently serves as a director of Usha. He has a B.Sc. in Earth

Sciences (Geology) from Simon Fraser University and a P. Geo. designation from

Engineers and Geoscientists British Columbia. Deepak is the Senior Project Manager at

TRI Environmental Consulting Inc., an environmental consulting firm.

Deepak previously acted as Environmental Geologist / Project Manager for Pacific

Environmental Consulting Ltd., an environmental consulting firm.


Leif Smither – Chief Financial Officer

Mr. Leif Smither currently serves as a director of Usha. He is also a director of Earny

Resources Ltd., a position he has held since February 2011. Leif was previously a

director of Jaxon Mining Inc. from March 2007 to October 2016 where he was involved in

raising funds for the company’s exploration work. Leif was a consultant for Westminster

Resources Ltd. from 2008 to 2016. He was also the Head of Corporate Development for

Starfield Resources Inc. from 2003 to 2007. At the time of Leif’s involvement, Starfield

Resources Inc. was a Tier 1 issuer on the Exchange and it is now a Toronto Stock

Exchange issuer. While engaged by Starfield Resources Inc., Leif was involved in

raising funds to advance one of the largest undeveloped nickel copper deposits.

Leif completed the Professional Financial Planner course at the Canadian Securities

Institute in 1997. He was granted the Professional Financial Advisor designation by the

Canadian Securities Institute in 1997. He is currently a non-practicing Professional Financial Advisor.


ON BEHALF OF THE BOARD


Usha Resources Ltd.


Navin Varshney

CEO, CFO, President, Corporate Secretary and Director


For further information contact:

Navin Varshney

CEO, CFO, President, Corporate Secretary and Director

604 251-6320


Statements in this press release regarding Usha which are not historical facts are

“forward-looking statements” that involve risks and uncertainties, such as the completion

of the proposed Qualifying Transaction. Such information can generally be identified by

the use of forwarding-looking wording such as “may”, “expect”, “estimate”, “anticipate”,

“intend”, “believe” and “continue” or the negative thereof or similar variations. Since

forward-looking statements address future events and conditions, by their very nature,

they involve inherent risks and uncertainties such as the risk that the closing may not

occur for any reason. Forwarding-looking statements in this news release include the

statements that: (i) Usha anticipates that it will be listed as a Tier 2 mining issuer and (ii)

list out the terms of the Private Placement.


Actual results in each case could differ materially from those currently anticipated in

such statements due to factors such as: (i) the decision to not close the Qualifying

Transaction or Private Placement for any reason, including adverse due diligence results

and Exchange refusal of the Qualifying Transaction; (ii) adverse market conditions; (iii)

the need for additional financing. Except as required by law, Usha does not intend to

update any changes to such statements.


Completion of the Acquisition is subject to a number of conditions, including but not

limited to, Exchange acceptance and if applicable pursuant to Exchange Requirements,

majority of the minority shareholder approval. Where applicable, the Acquisition cannot

close until the required shareholder approval is obtained. There can be no assurance

that the Acquisition 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 Acquisition, any information

released or received with respect to the Acquisition may not be accurate or complete

and should not be relied upon. Trading in the securities of a capital pool company should

be considered highly speculative.


The TSX Venture Exchange Inc. has in no way passed upon the merits of the

Acquisition and has neither approved nor disapproved the contents of this press release.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is

defined in the policies of the TSX Venture Exchange) accepts responsibility for the

adequacy or accuracy of this release.

© 2020 by USHA Resources