Nubian signs definitive deal to acquire 60% of Yandoit

Oct 27, 2020

2020-10-27 08:55 ET – News Release

Mr. Martin Walter reports

NUBIAN RECEIVES FIRB APPROVAL AND FINALIZES DEFINITIVE DOCUMENTS FOR ACQUISITION OF YANDOIT ADVANCED GOLD PROJECT IN VICTORIA, AUSTRALIA

Further to its news releases dated May 28, 2020, and Aug. 25, 2020, Nubian Resources Ltd. has entered into a definitive subscription agreement and has settled on definitive agreements to acquire a 60-per-cent interest and the right to acquire the remaining 40-per-cent interest in the Yandoit gold project, situated in the historic Daylesford gold corridor of central Victoria, Australia. The Project consists of approximately 38 square kilometres (3,800 ha) of property interest held under one Mining Licence and two Exploration Licences, containing six historic gold mines.

Martin Walter, President & CEO of Nubian, commented, “We are very pleased to have settled the definitive agreements and to have entered into the Subscription Agreement to acquire the Yandoit Gold Project. The process to finalize structure and documentation in Australia and regulatory approval in Canada required the Company to seek FIRB (Foreign Investment Review Board) approval for the Company’s investment into Australia. We’re pleased to confirm that Nubian has now received FIRB approval for all its acquisitions including the Yandoit Gold Project and the Fosterville East Project, both located in Victoria, Australia and the Lefroy and Mathinna projects located in Tasmania, Australia (see press release of July 15 th). With FIRB approval having been received, Nubian is progressing to complete the transactions.”

The Company, through its wholly-owned subsidiary Blackwood Prospecting Pty Ltd (“Blackwood”), entered into the Subscription Agreement to acquire its initial interest in the Project by purchasing 60% of the shareholdings of Ballarat Investment Management Pty Ltd (“BIPM”) from the existing shareholders of BIPM (the “BIPM Shareholders”). BIPM is a privately held corporation incorporated pursuant to the laws of Victoria, Australia and is the owner or has rights to the licenses comprising the Project.

Under the Subscription Agreement, the consideration for the 60% equity interest in BIPM, Blackwood: (a) will pay on closing to the BIPM Shareholders A$370,000 in cash; (b) will deliver to the BIPM Shareholders an aggregate of 4,361,760 common shares in the capital of the Company at a deemed price of C$0.15 per share, and subject to adjustment of the Australian and Canadian foreign exchange rate on the date of closing; and (c) will issue to the BIPM Shareholders a promissory note, redeemable at the expiration of 18 months from the closing date for, at the sole election of Blackwood, one of the following: (i) the payment of AUD$750,000 in cash; or (ii) the issuance to the BIPM Shareholders of a number of common shares in the capital of the Company equal to the quotient obtained by dividing the Canadian dollar equivalent of AUD$750,000, by the volume weighted average price of the Company’s common shares traded on the TSX Venture Exchange for the 20 trading days immediately preceding the redemption date; or (iii) by transferring to the BIPM Shareholders a number of shares of BIPM equivalent to 35% of the issued capital of BIPM (thereby reducing the Company’s indirect holdings in BIPM to 25% of the issued capital of BIPM). The Subscription Agreement contains representations, warranties and covenants customary for a transaction of this nature.

On closing, Blackwood and the BIPM Shareholders will enter into a shareholders agreement (the “Shareholders Agreement”) with respect to the ownership of the shares of BIPM and the governance of BIPM which Shareholders Agreement provides the Company (through Blackwood) to acquire the remaining 40% of the share of BIPM from the BIPM Shareholders at any time before the date which is the earlier of the date that is 60 days following: (i) the date that is 24 months from the closing date, and (ii) the date that the closing price of the Company’s common shares on the TSX Venture Exchange is C$1.20 or greater for a period of 60 consecutive days. Within seven days of exercising its right to acquire the remaining 40% of the shares of BIPM, Blackwood must deliver to the BIPM Shareholders a number of common shares in the capital of the Company equal to the quotient obtained by dividing the Canadian dollar equivalent of AUD$3,500,000, by the volume weighted average price of the Company’s common shares traded on the TSX Venture Exchange for the 20 trading days immediately preceding the date on which the option is exercised. The Shareholders Agreement contains an adjustment mechanism for the option price in the event that certain license transfers to BIPM are not effected. In the event that Blackwood does not exercise the option to acquire the remaining 40% of the shares of BIPM, then it will transfer 1,000 shares of BIPM to the BIPM Shareholders, reducing its holdings to not less than 25% of the issued capital of BIPM.

Under the terms of the Shareholders Agreement, Blackwood is required to solely fund the expenses of BIPM for a period of two years after the closing date to a maximum amount of AUD$1,000,000. The Shareholders Agreement also provides that two of the three initial directors of BIPM shall be nominees of Blackwood and contains other provisions typical of an agreement of this nature including, restrictions on the transfer of BIPM shares and drag-along provisions. In connection with the transaction, the BIPM Shareholders will also be entitled to a 2% net smelter return royalty, which can be purchased by the Company forAUD$250,000 at any time after 36 months from the agreement date. The completion of the transaction is subject to obtaining the approval of the TSX Venture Exchange.

ABOUT NUBIAN

Nubian Resources Ltd. is a public traded precious and base metals exploration company listed on the TSX Venture Exchange. The Company is managed by a team of experienced mining and geological professionals. In May 2020, Nubian entered into an agreement to acquire and develop the Yandoit Gold Project in central Victoria, Australia and in July 2020, Nubian entered into an agreement to acquire Stavely Mineral Limited’s Fosterville East project and its Lefroy and Mathinna projects in Tasmania. Nubian’s main asset is the Esquilache Silver Project located within the Tintaya porphyry copper belt of southern Peru.

We seek Safe Harbor.

https://www.nubianr.com/