Canamex Gold offers GoldUSA tokens for warrants

Jul 17, 2018

2018-07-16 10:48 ET – News Release

Mr. Greg Hahn reports

WARRANTS – CONVERSION OFFER TO GOLDUSA SECURITY TOKENS

Canamex Gold Corp. arranged a non-brokered private placement to accredited investors of GoldUSA Ethereum ERC20 cryptotokens via a security token offering (STO) on May 15, 2018.

The company has issued various unlisted warrants to subscribe to equity shares in the company to various persons and entities as recorded on the books and record of the company. In conjunction with the STO, which is still open to subscription, the company will offer to all warrantholders conversion of warrants to discounted GoldUSA tokens.

Warrant conversion offer

The company will offer all warrantholders conversion of warrants to discounted GoldUSA tokens. In consideration for subscribing to the GoldUSA tokens at a substantial discount, such warrants will be cancelled by the company as full settlement for value received from the discounted offer.

The company has authorized the issuance of such number of GoldUSA tokens in the capital of the company as fully paid and non-assessable GoldUSA tokens of the company. The cash consideration to be received by the company for each warrant converted into GoldUSA tokens is three U.S. cents(or four Canadian cents) to convert each warrant into 0.01 GoldUSA token. This is equivalent to $600 (U.S.) per gold ounce, which is more than a 50-per-cent value discount, based on the current spot gold price. The warrant conversion offer will be open for 30 calendar days from the date of the offer to warrantholders.

Warrant conversion — example

An example warrantholder has 100,000 warrants in the company and elects to convert all of them to GoldUSA security tokens under the terms of the offer.

The 100,000 warrants would convert at three U.S. cents for each 0.01 GoldUSA token for a total of $3,000 (U.S.) consideration paid to the company. In return for the discount value received, the 100,000 warrants would be cancelled and the warrantholder is issued 1,000 GoldUSA security tokens (100,000 multiplied by 0.01). Each token is 0.005 ounce of gold, so 1,000 tokens is equal to five ounces of gold.

Effectively, the warrantholder spends $3,000 (U.S.) for five multiplied by $1,250 (U.S.), which is $6,250 (U.S.) worth of gold at approximate current spot price (or more than a 50-per-cent discount to the spot gold price). The value received by the warrantholder in this case is $3,250 (U.S.) ($6,250 (U.S.) minus $3,000 (U.S.)), compared with buying gold at spot price or 3.25 cents per warrant (or 4.5 cents Candian for each warrant). This compares with the current value of the warrants, which is zero, as they are all out of the money at the current market share price of the company.

For the warrantholder to realize 4.5 cents in value, the company market share price would need to be trading around 25 cents in the market. The warrantholder then needs to subscribe $20,000 at the strike price of 20 cents to exercise and realize that value. Alternatively, the warrantholder can convert under this offer now for $3,000 (U.S.) ($4,000 Canadian) to get the similar value received, which is a saving of $16,000 to the warrantholder in this example.

Considerations and risks

An investment in the GoldUSA tokens offered via this STO should be considered speculative due to various factors, including the nature of the industry in which the company operates. Risk factors relating to the company are discussed in certain public disclosures of the company, which are available for review on the company’s SEDAR profile. Risk factors should be carefully reviewed and considered by an investor before a decision is made to invest in the GoldUSA tokens. Relevant considerations and risks associated with the STO are comprehensively detailed in the white paper at the company’s website.

About Canamex Gold Corp.

Canamex Gold is engaged in fast-tracking toward development of the Bruner gold development project in the prolific gold jurisdiction of Nye county, Nevada. The region is home to several producing and past-producing mines along the Walker Lane trend. Canamex Gold completed a positive preliminary economic assessment on the Bruner gold development project in 2016. Based on additional drilling conducted on the property, the company completed an updated preliminary economic assessment in 2018, which increased the resources and improved the economics of the project.

Greg Hahn (CPG No. 7122), president and chief operating officer of the company, is the qualified person who has reviewed and approved all technical disclosures in this release.

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