03:34:38 EDT Fri 29 Mar 2024
Enter Symbol
or Name
USA
CA



United Hunter Oil & Gas Corp (3)
Symbol UHO
Shares Issued 24,755,375
Close 2020-08-06 C$ 0.09
Market Cap C$ 2,227,984
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United Hunter arranges $2.5-million private placement

2021-01-12 09:28 ET - News Release

Mr. Timothy Turner reports

UNITED HUNTER OIL & GAS CORP. AND BOCANA RESOURCES LTD. ANNOUNCE $2.5 MILLION PRIVATE PLACEMENT, WITH A LEAD ORDER FROM PALISADES GOLDCORP

As previously announced on Aug. 10, 2020, United Hunter Oil & Gas Corp. has entered into a non-binding letter of intent dated Aug. 7, 2020, to complete a reverse takeover transaction pursuant to which the company will, directly or indirectly, acquire all of the issued and outstanding securities of Bocana Resources Ltd.

In connection with the transaction, the company is pleased to announce a non-brokered private placement offering for up to $2.5-million, with a lead order from Palisades Goldcorp Ltd., an arm's-length party. Palisades is not expected to become an insider in connection with the lead order. The offering shall consist of i) $2-million in subscription receipts of Bocana and ii) $500,000 in units of Bocana. The subscription receipts and units shall each be priced at 10 cents.

Each subscription receipt will entitle the holder thereof, without payment of any additional consideration and without further action on the part of the holder, to receive one unit, upon the satisfaction of the escrow release conditions (as defined herein) prior to the termination time (as defined herein). Each unit shall consist of one common share of Bocana and one common share purchase warrant. Each warrant shall be exercisable at the option of the holder to purchase one common share at an exercise price equal to 25 cents for a period of 36 months following the listing date (as defined herein).

Overview of Bocana

Bocana is a private corporation incorporated under the CBCA and carrying on business as a mineral exploration company focused on the acquisition, exploration and development of mineral properties in Bolivia. Bocana, through its wholly owned subsidiary, Huiracocha International Service SRL, holds a 100-per-cent working interest in the mineral properties known as the Escala area concessions located at the department of Potosi, Sud Lipez province, Bolivia, and has pending additional applications with the Corporacion Minera de Bolivia to acquire the mining rights to two additional concession areas, also in the Sud Lipez province of Bolivia.

Transaction highlights

Potential gold-copper porphyry zone with peripheral supergene and shear hosted mineralization

  • Focused on exploration of 100-per-cent-owned Escala concession located in Bolivia; and
  • Exploration results indicate gold mineralization on surface and suggest a potential large, open-pit, gold-copper porphyry deposit. These results include:
    • Induced polarization chargeability anomaly in Cerro Galapagos area within intermediate intrusive body indicating extensive disseminated sulphide mineralization;
    • A 814.3-metre continuous rock chip sample at the Supergene Cerro Blanco with 0.51 gram per tonne gold average;
    • 219 metres at 1.08 g/t Au, including 102 metres at 2.44 g/t Au;
    • 171 metres at 1.14 g/t Au, including 51 metres at 2.32 g/t Au; and
    • Extensive underground development on polymetallic shear zones at the Escala mine area.

Historical drilling conducted by majors

  • Due to the scale of the known mineralization, the project has attracted several major mining companies. Historical drilling includes 37 diamond drill holes previously conducted by major mining companies, including Barrick Gold, Normandy Mining and La Source.

Valuation and RTO financing terms

  • Transaction announced, with premoney valuation of $6.5-million, including the value of the shell; and
  • No statutory hold period for the common shares upon completion of the transaction, expected April, 2021.

Exploration program planned following RTO closing

  • High-impact drilling program anticipated to provide steady news flow, with potential expansion of surface mineralization and delineation of higher-grade gold zones; and
  • Additional drilling opportunities may be available with two new concessions currently pending Bolivian government approval.

Management aligned with shareholders

  • Experienced management team with history of operations in Bolivia, and material insider ownership (approximately 21 per cent).

Additional information regarding the offering

The gross proceeds of the subscription receipts from the offering shall be deposited into an interest-bearing escrow account with an escrow agent. The escrowed funds will be released from escrow to the company on the date of the RTO closing and upon the escrow release conditions (as defined herein) having been satisfied or waived (to the extent waiver is permitted). This will be done on the delivery by the company of a written direction to the escrow agent confirming that the escrow release conditions have been met and directing the escrow agent to release the escrowed funds to the company, along with any interest accrued thereon.

The combined Bocana and United Hunter entity will be referred to herein as the resulting issuer. Upon completion of the transaction and satisfaction of the escrow release conditions, the common shares of the resulting issuer will be listed on the TSX Venture Exchange. Subject to terms in the transaction and exchange approval, United Hunter will acquire one RI common share for every 1.6877 shares of United Hunter.

The escrow release conditions shall be set forth in the subscription receipt agreement between the company and the escrow agent, and shall include:

(i) The completion, satisfaction or waiver of all conditions precedent to the transaction, other than the release of the escrowed funds;

(ii) The receipt of all shareholder and regulatory approvals, including the approval required by the exchange required in connection with (a) the transaction, and (b) the conditional listing approval (subject only to standard listing conditions) of the RI common shares by the exchange, including the RI common shares issued in exchange for the units, or such equivalent securities as may be issued pursuant to the transaction;

(iii) Written confirmation from the company that all conditions of the transaction have been satisfied, other than release of the escrowed funds, and that the transaction will be completed forthwith upon release of the escrowed funds; and

(iv) The distribution of units underlying the subscription receipts and the RI common shares, or such equivalent securities to be issued in exchange for the securities pursuant to the transaction, following the satisfaction of the escrow release conditions being exempt from applicable prospectus and registration requirements of applicable securities laws and not subject to any hold or restricted period. It is anticipated that the securities issuable pursuant to the transaction will be issued in reliance of the prospectus exemptions as set forth in National Instrument 45-106 and a first trade in the resulting issuer securities received in exchange therefor will not be subject to any resale restrictions or hold periods provided the conditions set forth in Section 2.6(3) of National Instrument 45-102 Resale of Securities have been satisfied.

If: (i) the escrow release time does not occur at or prior to 5 p.m. (Toronto time) on the day that is 120 days following the closing date, or as extended, for the subscription receipts; (ii) the transaction is terminated in accordance with its terms; or (iii) the company has advised the public that it does not intend to proceed with the transaction, the company shall refund the escrowed funds without penalty or deduction to the subscribers of the offering, such that it would be the sole responsibility and liability of the company to return the full amount of the issue price to each holder of a subscription receipt, together with such holder's pro rata portion of the interest earned thereon, if any. In any event, no refunds will be made for subscriptions of units.

The net cash proceeds of the subscription receipts offering will be used for working capital and general corporate purposes and exploration expenditures on the Escala property. The net cash proceeds of the unit portion of the offering will be used for corporate purposes in connection with the transaction, along with preliminary geological and geophysical site work.

The securities to be issued under the offering will be offered by way of private placement in each of the provinces of Canada and such other jurisdictions as may be determined by the company, in each case, pursuant to applicable exemptions from the prospectus requirements under applicable securities laws.

The offering is expected to close on or about the week Feb. 8, 2021, or on such date, or dates, as the company may determine. Upon completion of the transaction, the RI common shares (including those issued in exchange for the common shares comprising the units issued upon conversion of the subscription receipts) will be listed with no statutory hold period upon closing of the RTO on the exchange.

In connection with the offering, the company may pay finder's fees equal to 8 per cent of the gross proceeds from the offering and finder's warrants equal in number to 8 per cent of the number of subscription receipts and units sold under the offering. Each finder's warrant shall be exercisable to acquire one unit for a period of 36 months following the listing date at the offering price. Upon the completion of the transaction, the finder's warrants will be exchanged for finder's warrants of the resulting issuer on equivalent terms.

We seek Safe Harbor.

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