Usha Resources Announces Proposed Qualifying Transaction
Updated: Feb 7, 2021
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,
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 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.
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.
CEO, CFO, President, Corporate Secretary and Director
For further information contact:
CEO, CFO, President, Corporate Secretary and Director
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.