Mr. Lucas Russell reports

VALDOR ENTERS INTO DEFINITIVE AGREEMENT FOR ACQUISITION OF 1000175307 ONTARIO LTD.

Valdor Technology International Inc., further to its news release of Dec. 2, 2022, has entered into a definitive arrangement agreement dated July 7, 2023, with 1000175307 Ontario Ltd. (307), an Ontario corporation, pursuant to which Valdor will acquire, through a wholly owned subsidiary, all of the issued and outstanding common shares of 307 from the shareholders of 307. 307 is party to an option agreement with Minera Atenea SA (MAS), a private Paraguay company, pursuant to which 307 has the option to acquire from MAS an 80-per-cent interest in and to certain mining rights located in Paraguay, with an additional 5-per-cent interest that may be earned upon 307 making certain payments following the completion of the Paraguay transaction.

Transaction overview

The transaction will be effected by way of a court-approved plan of arrangement under the provisions of the Business Corporations Act (Ontario). Under the terms of the arrangement, Valdor will issue to holders of 307 shares one common share in the capital of Valdor at a deemed price of 10 cents per Valdor share for each one 307 share, representing aggregate consideration of approximately $12.17-million. The increase in aggregate consideration (as originally set out in the initial press release) accounts for the substantially oversubscribed private placement of 307 shares at a price of 10 cents per 307 share, with gross proceeds currently exceeding the initial equity financing requirements as set forth in the letter of intent relating to the transaction and as disclosed in the initial press release.

Both companies' boards of directors have determined that the proposed transaction is in the best interests of their respective companies and have unanimously approved the transaction. Each company's board of directors has recommended that their respective shareholders vote in favour of the transaction at their respective shareholder meetings. In making its recommendation, the board of directors of 307 considered a number of factors, including the receipt by the 307 board of a verbal fairness opinion from RwE Growth Partners Inc. that, as of the July 7, 2023, and subject to the assumptions, qualifications and limitations provided therein, the consideration to be received by the 307 shareholders pursuant to the arrangement is fair, from a financial point of view, to the 307 shareholders.

Completion of the arrangement is subject to (i) approval by the Ontario Superior Court of Justice (commercial list) and (ii) the affirmative vote of respective shareholders of the companies at shareholder meetings to be held on the same day, targeted for late summer 2023. The arrangement is also subject to customary conditions and receipt of applicable regulatory and third party approvals and consents as may be required to effect and complete the transaction, including approval of the Canadian Securities Exchange (CSE) as the transaction constitutes a fundamental change of Valdor pursuant to the policies of the CSE. The arrangement agreements includes customary provisions, including fiduciary-out provisions, covenants not to solicit other acquisition proposals and the right to match any superior proposal.

Assuming that all requisite approvals are received, the parties expect to close the proposed arrangement in the third quarter of 2023 or such other date as the parties may agree. Upon completion of the arrangement, all of the members of the 307 board will resign and the management of Valdor will manage 307 after completion of the arrangement.

The terms of the arrangement will be described in further detail in the management information circular of the parties to be filed with regulatory authorities and mailed to shareholders of in accordance with applicable securities laws.

In connection with the transaction, on Dec. 21, 2022, Valdor and 307 entered into a loan agreement and general security agreement in respect of a line of credit loan provided by Valdor to 307 for up to $100,000 bearing an interest of 10 per cent per annum. The loan was used by 307 for general working capital purposes and has been fully repaid.

Shareholders and other interested parties are advised to read the materials relating to the proposed arrangement, including the arrangement agreement, that will be filed by Valdor with securities regulatory authorities in Canada when they become available. Anyone may obtain copies of these documents when available free of charge under Valdor's profile on SEDAR.

About Valdor Technology International Inc.

Valdor has an operating subsidiary company, Valdor Fiber Optics Inc., headquartered near San Francisco, Calif., which assembles optical fibre components and specializes in the design, manufacture and sale of passive fibre optic equipment.

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