Tilting Capital Corp. Announces Update on Proposed Reverse Takeover Transaction and Signing of Definitive Agreement With Gold Line Resources Ltd.

/NOT FOR DISTRIBUTION TO UNITED STATES NEWS SERVICES OR DISSEMINATION IN THE UNITED STATES/

VANCOUVER, BC, Aug. 10, 2020 /CNW/ - Tilting Capital Corp. ("TLL" or the "Corporation") (NEX: TLL.H) is pleased to announce that, further to its news release dated May 26, 2020 (the "Initial NR"), it has entered into a definitive amalgamation agreement, effective August 10, 2020 (the "Definitive Agreement") with Gold Line Resources Ltd. ("GLR") and 1257120 B.C. Ltd. ("Tilting Subco"), a wholly-owned subsidiary of the Company, pursuant to which the Company will acquire all of the issued and outstanding common shares in the capital of GLR. The Definitive Agreement replaces the letter of intent between the Company and GLR with respect to the Transaction, which was announced in the Company's Initial NR.

Background on Gold Line Resources Ltd. and the Långtjärn Property

GLR is a private Canadian company focused on acquiring gold projects with exceptional exploration potential in the most prolific gold-producing regions of Sweden. GLR is working in one of the world's top mining jurisdictions and emerging exploration frontiers due to its strong mineral endowment, stable tenure, straightforward permitting, favorable tax regime and supportive geopolitical landscape.

GLR currently holds a prospective portfolio of five gold exploration projects in Sweden with one project in the Skellefteå Belt of North Central Sweden and four projects located within the Gold Line Mineral Belt of North Central Sweden. The projects are located on a 200 kilometer [km] Proterozoic greenstone-sedimentary belt that is host to multiple gold showings and deposits. GLR acquired the properties in April 2019 from Eurasian Minerals Sweden AB ("EMSAB") and Viad Royalties AB, both wholly-owned Swedish subsidiaries of EMX Royalty Corporation ("EMX"). GLR currently anticipates conducting exploration work on the Långtjärn Property.

The Långtjärn Property comprises two contiguous granted exploration permits (Storjuktan nr 101 and Storjuktan nr 105) located in the Sorsele Municipality of Västerbotten County in the Kingdom of Sweden (Sweden) in the traditional province of Lapland approximately 830km north of the Swedish capital city of Stockholm. The combined total area of the property is 5,147.5ha.

The Skellefte District and adjacent areas in northern Sweden is one of the most prominent gold and base-metal districts in the Fennoscandian Shield with c. 150 known precious and base-metal prospects and deposits. The Långtjärn property is located in the north-western part of the Skellefteå district lying at the northern extent of a north-northwest (NNW) trending corridor dubbed the "Gold Line" that is host to at least 14 gold prospects ranging from early-stage exploration occurrences to closed historic mines. Two mines within the Gold Line have been in production; Blaiken (closed in 2007) and Svartliden (closed in 2015) with the Fäboliden and Barsele gold deposits currently at an advanced exploration to pre-production stage.

Since acquiring the Långtjärn property in 2017, GLR and in-country partner EMSAB have completed a partial ground magnetic survey, rock-grab sampling, C-horizon soil sampling, BLEG sampling, Ionic Leachtm sampling and assaying of historic Swedish Geological Survey (SGU) boulder samples. The high resolution ground magnetic data identified a strong magnetic anomaly not easily explained by lithology which has been interpreted as a prominent shear zone that may be spatially related to the alteration and mineralisation found at Långtjärn South and continues south of the historic resource area for several kilometres. The survey resolution was also of a high enough quality to differentiate between different granitoid intrusions, which will aid in future targeting.

As the main area of known mineralisation has been relatively well tested with historic drilling (Långtjärn South) down to 120m depth, the most significant upside potential for the property to host significant gold mineralisation is along strike or at depth. The property hosts ~7km of prospective strike length of which only a fraction has been drill tested previously and potential exists for similar gold mineralisation to that which has already been delineated, to exist elsewhere within the Långtjärn property. Exploring for extensions to the existing zones and new zones should be a priority of any future work on the property.

The Långtjärn property is a typical Swedish, under-explored, greenfields gold property that displays good potential for additional gold and possible base metal mineralisation. It is anticipated that the next phase of exploration at the Långtjärn property should include the following: (1) expanding the magnetic survey (utilizing drone technology) north to cover the Långtjärn and Dobblonbäcken prospects; (2) completion of a modern induced polarization (IP) survey over the known areas of gold mineralization; (3) re-logging and check sampling the historic drillcore; (4) completion of petrographical analysis on a selection of representative samples from across the property to aid in geological interpretation and model development; (5) completion of additional Ionic Leachtm sampling over the Dobblonbäcken prospect and to infill the area across prospects in the south of the property; (6) completion of detailed geological and structural mapping in the Dobblonbäcken area where the gold mineralisation is known to outcrop; and drill testing the open positions at Långtjärn South and Dobblonbäcken. Should the next phase of exploration at Långtjärn produce encouraging results, a second round of diamond drilling and regional bottom-till (BOT) drilling should be implemented in addition to a second geophysics survey and more Ionic Leachtm sampling. The proposed budget for the next phase of exploration at Långtjärn is $864,650.

Selected Financial Information of Gold Line Resources Ltd.

The following selected financial information is taken from the audited financial statements of GLR as at and for the year ended December 31, 2019 and the unaudited financial statements of GLR as at and for the interim period ended March 31, 2020: 

Transaction Structure

In accordance with the terms of the Definitive Agreement, the Transaction will be effected by way of a "three-cornered" amalgamation (the "Amalgamation"), in which: (a) Tilting Subco will amalgamate with GLR to form an amalgamated company ("Amalco"); (b) all issued and outstanding shares of GLR will be exchanged for common shares of the Company on a 1:1 basis; and (c) Amalco will become a wholly-owned subsidiary of the Company. Upon completion of the Transaction, the Company (after completion of the Transaction, the "Resulting Issuer") will change its name to "Gold Line Resources Ltd." and will carry on the business carried on by GLR.

Pursuant to the Transaction, TLL will acquire 100% of the issued and outstanding shares of the GLR at a ratio of one TLL common share (each, a "TLL Share") for every one GLR common share (each, a "GLR Share"). Upon closing of the Transaction, it is expected that TLL will issue approximately 35,415,210 TLL shares to shareholders of GLR, and 1,800,000 outstanding options of GLR will be exchanged or replaced with equivalent securities of TLL. In connection with closing, TLL will issue 4,391,084 TLL Shares to EMX, GLR's largest shareholder, in accordance with the terms of an agreement between and GLR relating to the Långtjärn Property. As disclosed in the Company's Initial NR, a finder's fee of 1,800,000 TLL Shares and an administration fee of 340,000 TLL Shares will also be payable in connection with closing of the Transaction.

The completion of the Transaction is subject to requisite regulatory approval, including the approval of the TSX Venture Exchange (the "TSXV"), and a number of additional conditions precedent, including (i) completion of the Financing (as defined below); (ii) receipt of the requisite approval of GLR shareholders of the Amalgamation; (iii) approval by the directors of TLL and GLR; and (iv) filing of the technical report in respect of the Långtjärn Property that is compliant with NI 43-101. There can be no assurance that the Transaction will be completed on the terms proposed in the Definitive Agreement or at all.

Further details regarding the Transaction are disclosed in the Company's Initial NR.

Private Placement Financing

Prior to the completion of the Transaction, TLL is expected to complete a private placement of approximately of 24,000,000 subscription receipts ("Subscription Receipts") at a price of $0.25 per Subscription Receipt for aggregate gross proceeds to TLL of approximately $6,000,000 (the "Financing"). The Subscription Receipts will be issued pursuant to subscription agreements entered into by the Company and each of the subscribers. Each Subscription Receipt will be automatically converted, without payment of additional consideration or further action by the holder thereof, immediately prior to completion of the Transaction  upon satisfaction of all conditions precedent to the Transaction other than the Transaction having been completed and made effective and the Subscription Receipt proceeds having been released (collectively, the "Conditions") on or before December 31, 2020 (the "Deadline"), into one unit of the Company. Each unit will be comprised of one TLL Share and non-transferable common share warrant to purchase, for a period of 24 months from the date of issue, one additional TLL Share at an exercise price of $0.40 per TLL Share, subject to acceleration. If the Conditions are not satisfied on or prior to the Deadline, the Subscription Receipts will be cancelled and the aggregate subscription price paid by each of the subscribers will be returned to each of the subscribers. The Financing is expected to close on or before the Deadline, subject to, among other things, TSXV approval.

In connection with the Financing, the Company may pay a cash commission or finder's fee equal to 6% of the gross proceeds from the Financing to certain parties designated by the Company, and may also issue to such parties non-transferable warrants to purchase such number of TLL Shares as are equal to 6% of the number of Subscription Receipts issued pursuant to the Financing. It is intended that the net proceeds from the Financing will be used to fund operations of the Resulting Issuer and for general working capital purposes.

Proposed Management and Directors

Upon completion of the Transaction, it is anticipated that the board of the Resulting Issuer will be comprised of Henrik Lundin (who will also be appointed as Chairman), Adam Cegielski (who will also be appointed as CEO), Dr. Eric Jensen, Joel Shacker and Simon Studer. Szascha Lim is expected to be appointed as CFO and Corporate Secretary.

Stock Option Grant

Concurrent with the closing of the Transaction, the Company intends to grant 5,500,000 stock options to directors, officers, employees and consultants of the Company pursuant to the Company's stock option plan. The stock options will have an exercise price of $0.25 per option, expire 10 years from date of grant and vest according to their terms, subject to TSXV approval.

Qualified Person

Michael Dufresne, M.Sc., P.Geol., P.Geo. of APEX Geoscience Ltd., a consultant to the Company and a Qualified Person as defined by National Instrument 43-101, has reviewed and approved the scientific and technical contents of this news release.

Filing Statement

In connection with the Transaction and pursuant to the requirements of the TSXV, TLL will file a filing statement on its issuer profile on SEDAR at www.sedar.com, which will contain details regarding the Transaction, the Financing and GLR.

Trading Halt

Trading in the common shares of TLL is currently halted in compliance with the policies of the TSXV. TLL anticipates that trading will remain halted pending the review of the Transaction by the TSXV.

About Tilting Capital Corp.

TLL is incorporated under the provisions of the Business Corporations Act (British Columbia) with its registered and head office in Vancouver, British Columbia. TLL is a "reporting issuer" in the provinces of Ontario, British Columbia and Alberta.

Completion of the Transaction is subject to a number of conditions, including but not limited to, TSXV acceptance and if applicable, disinterested shareholder approval. Where applicable, the Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the Transaction, any information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of Tilting Capital Corp. should be considered highly speculative.

The TSXV has in no way passed upon the merits of the Transaction and has neither approved nor disapproved the contents of this news release.

Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.

Cautionary Statements Regarding Forward-Looking Information

This news release contains forward-looking information within the meaning of Canadian securities laws. Such information includes, without limitation, information regarding the terms and conditions of the Transaction, the terms of the Financing and the composition of the board of directors of the Resulting Issuer upon completion of the Transaction. Although TLL believes that such information is reasonable, it can give no assurance that such expectations will prove to be correct.

Forward looking information is typically identified by words such as: "believe", "expect", "anticipate", "intend", "estimate", "postulate" and similar expressions, or are those, which, by their nature, refer to future events. TLL cautions investors that any forward-looking information provided by TLL is not a guarantee of future results or performance, and that actual results may differ materially from those in forward looking information as a result of various factors, including, but not limited to: TLL's ability to complete the Transaction; the expected timing and terms of the Transaction and the Financing; the state of the financial markets for TLL's securities; the state of the natural resources sector in the event the Transaction is completed; recent market volatility and potentially negative capital raising conditions resulting from the continued COVID-19 pandemic and risks relating to the extent and duration of such pandemic and its impact on global markets; TLL's ability to raise the necessary capital or to be fully able to implement its business strategies; and other risks and factors that TLL is unaware of at this time.

The forward-looking statements contained in this news release are made as of the date of this news release. TLL disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

The securities referred to in this news release have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons absent U.S. registration or an applicable exemption from the U.S. registration requirements.

This news release does not constitute an offer for sale of securities, nor a solicitation for offers to buy any securities. 

SOURCE Tilting Capital Corp.