November 13, 2020 – Vancouver, BC, Canada. ECC Ventures 2 Corp. (“ECC2” or the “Company”) (TSXV: ETWO.P) is pleased to announce that it has entered into a non-binding letter of intent (the “LOI”) dated effective November 9, 2020 outlining the general terms and conditions with respect to a proposed acquisition (the “Acquisition”) by ECC2 of all the issued and outstanding share capital of Infield Minerals Corp. (“Infield”).
The Acquisition of Infield will constitute a reverse takeover and ECC2’s Qualifying Transaction under Policy 2.4 of the TSX Venture Exchange (the “Exchange”). Assuming completion of the Acquisition, it is anticipated that ECC2 will graduate to Tier 2 of the Exchange as a mining issuer.
Infield is a private company incorporated pursuant to the laws of British Columbia on March 25, 2019. Infield’s sole director is Evandra Nakano of Vancouver, British Columbia, and its officers are Evandra Nakano as President and CEO, and Richard Dufresne of Vancouver, British Columbia, as VP Exploration. Infield has a current working capital position of approximately $1,545,000, has 15,675,100 common shares (the “Infield Shares”) issued and outstanding, and has no options, warrants or other classes of securities outstanding. Evandra Nakano controls 3,500,100 (22.3%) of the issued and outstanding Infield Shares. Infield’s principal asset is the Mercury One Property (the “Property”) in the state of Nevada, USA. Infield also has an option on an additional silver-gold project in Nevada (the “Bandit Property”).
Mercury One Property Description
The Property is located approximately 75 km north of the city of Ely in White Pine County, Nevada. It consists of 250 contiguous unpatented lode mining claims for a total of 2,090 hectares. The project is road accessible with nearby infrastructure, including US Highway 93 and 69kV transmission lines six km west of the Property.
The Property was explored for silver in the 1870s once the Pony Express Trail was developed through the Shellbourne Pass. Aside from the silver rush in the 1870s, there is little to no documented systematic exploration on the Property until 1988. Between 1988 and 1991, Freeport Exploration, Inc. and Coeur Explorations Inc. explored for shallow Carlin-style disseminated gold deposits, and a combined 32 holes were drilled on the Property.
In the last two decades, structurally hosted gold and silver deposits have been discovered in Eastern Nevada, as is the case with the Long Canyon (Nevada Gold Mines) and the Kinsley Mountain (New Placer Dome) deposits. These deposits show characteristics of Carlin-style, through decarbonatization and extensive development of breccia bodies, and the subsequent continuum towards epithermal gold and silver deposition in silica veins along the same fluid conduits.
At the Property, several structurally complex precious metal-bearing prospects have been identified, with the Property being cut by numerous large-scale normal faults that have NE-SW and NW-SE orientations. The North Zone contains elevated concentrations of gold and silver in jasperoids that are spatially associated with complex faulting. Mapping and rock and soil sampling in 2018 and 2019 identified a 900 m long brecciated, silicified and iron oxidized lithological contact zone, which led to the discovery of the North Star Prospect. The South Zone contains two prospects: the South Star Prospect and the Barrett Prospect. The South Star Prospect is approximately 160 m long by 120 m wide and contains historical workings, including test pits, trenches and adits. The anomalous gold values are interpreted to be associated with a NE-trending silicified fault structure, proximal to a massive limestone to silty bedded limestone contact. The Barrett Prospect, which is interpreted to be associated with a NE-SW fault zone, is approximately 600 m to the NW of the South Star Prospect and was identified during a 2019 exploration program. The results of 1.4 m of chip sampling across the Barrett Prospect Main area returned a weighted average of 1.51 g/t gold and 79 g/t silver, including 5.13 g/t gold and 184 g/t silver over 0.20 m. The results of 1.5 m of continuous chip sampling across the Barrett Prospect NE area returned a weighted average of 2.69 g/t gold and 79 g/t silver, including 5.62 g/t gold and 177 g/t silver over 0.59 m.
On June 30, 2020, Infield entered into a property option agreement with Mercury Exploration Nevada Inc. (“MExN”) to acquire 100% interest in the Property (the “Option Agreement”). The option terms consist of a combination of cash and share payments which escalate annually until completion at the 3-year anniversary, for an aggregate payment of US$207,500 and 345,000 common shares in the capital of Infield. As part of the Option Agreement, expenditures on the Property of not less than C$200,000 are to be made by September 30, 2021.
Bandit Property
On June 30, 2020, Infield entered into a property option agreement with MExN to acquire 100% interest in 73 claims which comprise the Bandit Property, subject to a 2% NSR royalty on 13 claims which falls under an option assignment agreement (the “Assignment Agreement”) with Silver Range Resources Ltd. The option terms consist of a combination of cash and share payments which escalate annually until completion at the 3-year anniversary, for an aggregate payment of US$217,500 (including US$20,000 under the Assignment Agreement), and 345,000 common shares in the capital of Infield. As part of the option agreement, expenditures on the Bandit Property of not less than C$100,000 are to be made by September 30, 2021. Additional consideration includes a one-time payment of US$2 per gold-equivalency ounce defined as a Measured or Indicated Resource or a Proven or Probable Reserve as contained in a NI 43-101 compliant technical report applicable to the 13 claims under the Assignment Agreement.
Further information on Infield, including current financial statements, and a geological report in accordance with National Instrument 43-101 in respect of the Property are currently being prepared for filing with the Exchange, and will be filed and posted on SEDAR when available.
Terms of the Acquisition
Under the terms of the Acquisition, ECC2 will complete a share consolidation on a 2.25 for 1 basis (the “Consolidation”), and shareholders of Infield will be issued post-Consolidation common shares of ECC2 (the “Consideration Shares”) in exchange for Infield Shares on a 1 Infield Share for 2.25 Consideration Shares basis (the “Share Exchange Ratio”). This will result in the issuance of 35,268,975 Consideration Shares based on the current capital structure of Infield. Certain of the Consideration Shares will be subject to escrow and resale restrictions pursuant to the policies of the Exchange.
Following completion of the Acquisition, it is anticipated that there will be 37,868,975 post-consolidated common shares issued and outstanding in the Resulting Issuer (defined below), (excluding securities issued pursuant to the QT Financing defined and described below), of which shareholders of Infield will own 35,268,975 (93.1%) and shareholders of ECC2 will own 2,600,000 (6.9%). Convertible securities currently outstanding in ECC2 will be subject to the Consolidation, resulting in 111,111 stock options being exercisable at $0.225 until April 18, 2023, and 139,999 stock options being exercisable at $0.225 until the date which is ninety days after closing of the Acquisition, subject to the provisions of the Company’s stock
option plan. It is also anticipated that ECC2 will change its name to Infield Minerals Corp. in connection with completion of the Acquisition.
The Acquisition is not a Non-Arm’s Length Qualifying Transaction under the policies of the Exchange and therefore will not require approval of ECC2’s shareholders. However, ECC2 has scheduled an annual general and special meeting of shareholders for December 18, 2020 whereat, among other things, the shareholders of ECC2 will be asked to approve certain matters including but not limited to the appointment of a new slate of four directors, assuming closing of the Acquisition. Sponsorship of a qualifying transaction of a capital pool company is required by the Exchange unless an exemption from the sponsorship requirement is available. ECC2 intends to apply for a waiver from sponsorship requirements. However, there is no assurance that ECC2 will obtain this waiver.
The Acquisition will be completed through a definitive agreement (the “Definitive Agreement”) that is to be negotiated by the parties, which will contain customary representations and warranties for similar transactions. It is currently anticipated that the Acquisition will be completed by way of a three-cornered amalgamation, pursuant to which a subsidiary of ECC2 will merge with Infield to form the resulting issuer (the “Resulting Issuer”).
In connection with the Acquisition and pursuant to the requirements of the Exchange, ECC2 will file on SEDAR (www.sedar.com) a filing statement which will contain details regarding the Acquisition, ECC2, Infield and the Resulting Issuer.
Completion of the Acquisition is subject to a number of conditions, including Exchange acceptance, the completion of due diligence investigations to the satisfaction of each of ECC2 and Infield, the execution of the Definitive Agreement, and completion of the QT Financing. Trading of ECC2’s common shares will remain suspended until completion of the proposed Acquisition.
Financing
As a condition to completing the Acquisition, the parties intend to complete a private placement financing (the “QT Financing”) of subscription receipts through a subsidiary of the Company (the “Subscription Receipts”), the terms of which will be determined in the context of the market, to raise a minimum of $3,000,000.
The proceeds of the QT Financing will be held in escrow, pending the Company receiving all applicable regulatory approvals, and completing all matters and conditions relating to the Acquisition, including the Consolidation. Upon satisfaction of the escrow conditions, each Subscription Receipt will automatically convert, for no additional consideration, into post-Consolidation securities of the Company. In the event that the Acquisition is not completed, each Subscription Receipt will be cancelled, and the subscription funds will be returned to the subscribers. The Company may pay a commission in connection with the QT Financing, in accordance with the policies of the Exchange. Once released from escrow, the Resulting Issuer will use the proceeds of the QT Financing for a work program on the Property, and for general working capital purposes.
ECC2 intends to issue a subsequent press release in accordance with the policies of the Exchange providing further details in respect of the QT Financing.
Board of Directors and Management Changes
On completion of the proposed Acquisition, the Resulting Issuer’s Board of Directors and management team will be constituted as follows:
Evandra Nakano, President, CEO and Director
Ms. Evandra Nakano, is the founder, Director and CEO of Infield Minerals Corp. She is also the co-founder, Director, CEO, CFO and Corporate Secretary of Kismet Resources Corp., a Capital Pool Company listed on the Exchange. From 2010 to 2014, Ms. Nakano was a technical team member of B2Gold Corp., where she participated in the evaluation of several major acquisitions. With more than a decade of international mineral exploration and mining industry experience, Ms. Nakano brings a strong combination of technical expertise and business acumen to the Resulting Issuer. She holds a B.Sc. (Honours Geology) from the
University of British Columbia (UBC) and an MBA (Finance) from Sauder School of Business, UBC. Robert Chisholm, CFO and Corporate Secretary
Mr. Robert Chisholm is the CFO of Emprise Capital Corp. (“Emprise”), a private merchant bank based in Vancouver, BC, which provides management, restructuring, accounting and financial services to public companies. Prior to Emprise, Mr. Chisholm was the CFO for PNI Digital Media, a publicly listed company (acquired by Staples). Mr. Chisholm holds a professional accounting designation in Canada and received his BBA with a major in accounting from Saint Francis Xavier University in Nova Scotia.
Richard Dufresne, VP Exploration
Mr. Richard Dufresne is a professional geologist active in the mining and mineral exploration industry for more than 30 years. He has held executive and senior management positions for both junior and major companies exploring in North and South America as well as West Africa. From 2009 to 2014, Mr. Dufresne was VP Exploration for Camino Minerals Corp., where he managed all operational and technical aspects of exploration activities in Mexico. From 2002 to 2007, Mr. Dufresne held the position of Senior Geologist for Anglo American Exploration (Canada) Ltd., managing Eastern Canada exploration. Mr. Dufresne is a Geology graduate from University of Montreal and hold a P.Geo. designation with Engineers and Geoscientists BC (EGBC).
Shervin Teymouri, Director
Mr. Shervin Teymouri is the founder, CEO and Principal Mining Engineer of Mineit Consulting Inc. Prior to MineIt Consulting, Shervin was a senior mining engineer with Roscoe Postle Associates, and a senior mining engineer at Alexco Resource Corp. Mr. Teymouri has served as a director and on advisory boards for several public and private mining companies. He is a technical director with the Canadian Institute of Mining in Vancouver, and a member of the Mining Technical Advisory and Monitoring Committee of the Canadian Securities Administrators. Mr. Teymouri is also an Adjunct Professor of Mining Engineering at UBC. He holds a B.A.Sc. (Geological Engineering) and Masters (Mining Engineering/Mining Economics) from UBC and holds a P.Eng. designation with EGBC.
David Hladky, Director
Mr. David Hladky is a Professional Geologist with over 22 years of hands-on international mineral exploration experience. His positions have included Senior Geologist and Project Manager for projects in Mexico, Canada, Argentina and Peru. Mr. Hladky is currently a consultant for Newrange Gold Corp., and Exploration Manager for GR Silver Mining Ltd. in Mexico. He also serves as a Director for Kismet Resources Corp., and as a Director and Technical Advisor for TRU Precious Metals Corp. Mr. Hladky holds a B.Sc. from the University of Alberta, and a P.Geo. designation with APEGA.
Scott Ackerman, Director
Mr. Scott Ackerman, a current director and CEO, CFO and Corporate Secretary of the Company, is the President and CEO of Emprise. Mr. Ackerman has been active in the public markets for more than 25 years, having held senior executive roles in various capacities from Investor Relations to Executive Management. In addition to his role with Emprise, Mr. Ackerman serves as director and/or officer of a number of publicly traded and private “start-up” venture companies.
Qualified Person
Scientific and technical aspects of this news release have been reviewed and approved by Richard Dufresne P.Geo., VP Exploration of Infield, who is a qualified person as defined by National Instrument 43-101.
The potential quantity and grade of mineralization described herein is conceptual in nature as there has been insufficient exploration to define a mineral resource and it is uncertain if further exploration will result in the target being delineated as a mineral resource.
For more information please contact the Company at 778-331-8505 or email: sackerman@emprisecapital.com
On Behalf of the Board of Directors of ECC Ventures 2 Corp.
Scott Ackerman
Director
Completion of the Acquisition is subject to a number of conditions, including, among others, Exchange acceptance and if applicable pursuant to TSXV Requirements, majority of the minority shareholder approval. Where applicable, the Acquisition cannot close until the required approvals are obtained. There can be no assurance that the Definitive Agreement will be executed or that the Acquisition will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the disclosure document to be prepared in connection with the Acquisition, any information released or received with respect to the Qualifying Transaction or the Acquisition may not be accurate or complete and should not be relied upon. Trading in the securities of ECC2 should be considered highly speculative.
The TSXV has in no way passed upon the merits of the proposed Acquisition and has neither approved nor disapproved the contents of this news 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.
Forward-Looking Statements
Statements included in this announcement, including statements concerning our and Infield’s plans, intentions and expectations, which are not historical in nature are intended to be, and are hereby identified as, “forward‐looking statements”. Forward-looking statements include, among other matters, the terms and timing of the Acquisition (including the entering into of the Definitive Agreement) and the QT Financing, the growth plans of Infield and statements concerning the Company following the Acquisition, including the composition of the Company’s board of directors and management team. Forward‐looking statements may be, but are not always, identified by words including “anticipates”, “believes”, “intends”, “estimates”, “expects” and similar expressions. The Company cautions readers that forward‐looking statements, including without limitation those relating to the Company's and Infield’s future operations and business prospects, are subject to certain risks and uncertainties (including risks that the Acquisition does not proceed, or proceed on the expected terms, geopolitical risk, regulatory, Covid-19 and exchange rate risk) that could cause actual results to differ materially from those indicated in the forward‐looking statements. There can be no assurance that any forward-looking statement will prove to be accurate or that management's assumptions underlying such statements, including assumptions concerning the Acquisition or future developments, circumstances or results will materialize. The forward
looking statements included in this news release are made as of the date of this new release and the Company does not undertake to update or revise any forward-looking information included herein, except in accordance with applicable securities laws.
