BB1 Acquisition Corp. Announces Proposed Qualifying Transaction with Cerrado Gold Inc.

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Toronto, Ontario–(Newsfile Corp. – August 4, 2020) –  BB1 Acquisition Corp. (TSXV: BBA.P) (“BB1” or the “Company”), a capital pool company, and Cerrado Gold Inc. (“Cerrado“) are pleased to announce that they have entered into a binding Letter of Intent, dated August 4, 2020 (the “LOI“), which sets forth the general terms and conditions of a proposed transaction (the “Transaction“) pursuant to which BB1 will acquire all of the issued and outstanding shares of Cerrado. The Transaction will constitute a “Qualifying Transaction” of BB1, as such term is defined in Policy 2.4 of the Corporate Finance Manual (the “Policy“) of the TSX Venture Exchange (the “TSXV“).

The LOI is to be superseded by a definitive agreement (the “Definitive Agreement“) between BB1 and Cerrado with such agreement to include representations, warranties, conditions and covenants typical for a transaction of this nature. The Transaction is subject to, among other details, final approval of the TSXV and standard closing conditions, including the conditions described below.

Cerrado Gold Inc.

Cerrado is a gold mining and exploration company with assets in Argentina and Brazil. Cerrado was continued under the laws of the Province of Ontario on October 3, 2017. In Argentina, the Company owns Minera Don Nicolas, a well-established in-production gold mine. The mine commenced operations in 2017 and is targeting to produce in excess of 50,000 oz per year via a 1,000 tpd CIL plant and related facilities. In Brazil the company is exploring at its Monte do Carmo gold project in Tocantins state. The project currently has a mineral resource prepared in accordance with NI 43-101 containing 813,000 oz with significant upside expected via further exploration. The Board and management of Cerrado have a long history of success having developed numerous projects from early stage exploration through development and production.

Cerrado acquired Minera Don Nicolas (“MDN“) in March of 2020 for a purchase price of US$45MM, payable in staged payments. Cerrado paid an upfront payment of US$15MM on closing (March 16, 2020) with the remaining US$30MM payable over a 5-year period as follows: US$10 million payable 24 months following closing (March 16, 2022); US$10 million payable 48 months following closing (March 16, 2024); and US$10 million payable 60 months following closing (March 16, 2025). The operation is located in the mineral rich and prolific Deseado Massif in the province of Santa Cruz, Argentina. MDN consists of an open pit gold mine with an associated 1,000 tpd carbon in leach (CIL) gold recovery plant, targeting to produce 50-60koz/yr gold doré per annum. Current operations are focused on two mining areas, La Paloma and Martinetas, with material processed at a central plant facility. The project has significant exploration potential with a land package in excess of 273,000 ha’s.

Construction of mine and related facilities was completed in 2017 and the operations have been ramping up to full capacity during 2018 and 2019. The project currently supports 325 employees and contractors on a fly-in fly-out basis. Don Nicolas has strong local and regional backing having signed agreements with the two neighboring communities and has received strong support from the government of Santa Cruz.

The gold deposits at MDN are classified as an epithermal gold vein style of deposit typical of the region which is host to numerous large-scale gold operations. Cerrado has commenced a new exploration program to confirm the current resource base and to focus on expanding the mine life through further exploration on surface and at depth.

The Monte do Carmo (“MDC“) Gold Project is located in the state if Tocantins, Brazil, immediately east of the town of Monte do Carmo. Currently work has focused on the Serra Alta deposit, however, numerous analogs remain to be fully defined. The Monte do Carmo property consists of 11 exploration permits totaling 52,213 ha’s. The property has access to excellent local infrastructural with limited garimpeiro activity on site and strong local support from the community.

Regional investment in mineral exploration in the area, by others, is reported to have amounted to US$4.7 million from 1985 through 1995, and over US$20.0 million from 1996 to 2018 by various operators.

Cerrado acquired the MDC project from Monte Sinai Mineracao Ltda (“Monte Sinai‘) in 2017 and since then has undertaken various drilling and other exploration activities on site over the past couple of years. To date a mineral resource report prepared in accordance with NI 43-101 dated December 5, 2018 has outlined an initial mineral resource of 13.7 million tonnes grading 1.85 g/t, for contained gold of 813,000 oz. Continued exploration is planned at Serra Alta and the surrounding area with the objective to rapidly expand this mineral resource base to support a significant open pit mining operation.

The technical information contained in this news release was reviewed and approved by Robert Campbell (M.Sc., P.Geo) who is a Qualified Person (“QP“) under National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101“).

BB1 Capital Corp.

BB1 is a capital pool company within the meanings of the policies of the TSXV and does not have any operations and has no assets other than cash. BB1’s business is to identify and evaluate businesses and assets with a view to completing a Qualifying Transaction under the policies of the TSXV.

The Proposed Transaction

Pre-Closing Capitalization of Cerrado

As of the date hereof, Cerrado has (a) 46,608,030 common shares issued and outstanding (the “Cerrado Shares“), (b) 4,000,000 stock options exercisable to acquire 4,000,000 Cerrado Shares the “Cerrado Options“), (c) 6,820,003 restricted stock units (“RSUs”) exercisable to acquire 6,820,003 Cerrado Shares the “Cerrado RSUs“) and (d) 2,000,000 warrants to acquire 2,000,000 Cerrado Shares (the “Cerrado Warrants“) that total 59,428,033 fully diluted shares (the Cerrado Shares, Cerrado Options and Cerrado Warrants are collectively referred to herein as the “Cerrado Securities“).

Pre-Closing Capitalization of BB1

As of the date hereof, BB1 has 15,000,000 issued and outstanding common shares (each a “BB1 Share“) and securities exercisable or exchangeable for, or convertible into, or other rights to acquire, an aggregate of 1,100,000 BB1 Shares at an exercise price of $0.10 per BB1 Share (collectively with the BB1 Shares, the “BB1 Securities“).

The BB1 Shares are currently listed on the TSXV under the symbol “BBA.P“. The BB1 Shares are currently halted from trading and are expected to remain halted pending the completion of the Transaction.

BB1 is expected to have a minimum cash balance of $800,000 upon closing of the transaction.

Terms of the Transaction

Under the terms of the LOI, it is anticipated that Cerrado and BB1 will enter into a business combination agreement (the “Definitive Agreement“) pursuant to which the Transaction will be completed by way of a merger, amalgamation, or other similar form of transaction, the final structure of which will be subject to receipt by the parties of relevant tax, corporate and securities law advice. The corporation resulting from the Transaction (the “Resulting Issuer“) will continue under the name ‘Cerrado Gold Inc.’, or such other name as Cerrado and BB1 may determine.

The LOI serves as an agreement in principle concerning a “Arm’s Length Qualifying Transaction” between BB1 and Cerrado that will result in a reverse takeover of BB1 by the shareholders of Cerrado. Prior to the completion of the Transaction, the BB1 Shares shall be consolidated at a ratio (the “Consolidation Ratio‘) of 8.31 pre-consolidation BB1 Shares for every 1 post-consolidation BB1 Share (each a “Post-Consolidation BB1 Share“), or such other consolidation ratio as to account for a basic market capitalization of an aggregate of $1,920,652 for the 1,805,054 post-consolidation BB1 Shares.

The Transaction will take the form of a three-cornered amalgamation whereby BB1 will acquire all of the issued and outstanding securities of Cerrado (other than Cerrado Shares held by Cerrado Shareholders who exercise their dissent rights, if applicable) in consideration for the issuance of 46,608,030 Post-Consolidation BB1 Shares, the issuance by BB1 of common share purchase warrants exercisable for up to 2,000,000 Post-Consolidation BB1 Shares, the issuance of options to acquire up to 4,000,000 Post-Consolidation BB1 Shares and the issuance of 6,820,003 RSUs on a post-consolidation basis. Post-Consolidation BB1 Shares, following completion of the Transaction, shall also be hereinafter referred to as “Resulting Issuer Shares“.

The Company will hold a special meeting (timing to be announced at a later date) of its shareholders (the “Meeting“) to approve, among other things: (i) the board of directors of the Resulting Issuer following the completion of the Transaction, (ii) the appointment of auditors of the Resulting Issuer, and (iii) the change of its name to ‘Cerrado Gold Inc.’ Further details regarding the Meeting will be contained in a management information circular which will be sent to shareholders of BB1.

Closing of the Transaction is expected to occur on or before November 30, 2020. The LOI may be terminated by either party if a definitive agreement is not entered into by October 15, 2020.

The Transaction is not a “Non-Arm’s Length Qualifying Transaction” within the meaning of Policy 2.4 of the TSXV.

Conditions of the Transaction

Completion of the proposed transaction is subject to a number of conditions including, but not limited to: (i) completion of mutually satisfactory due diligence reviews; (ii) execution of the Definitive Agreement; (iii) requisite shareholder approvals; and (iv) receipt of all requisite regulatory approvals relating to the Transaction, including, without limitation, the TSXV.

Financing

In connection with the Transaction, Cerrado will complete a “best efforts” private placement of up to 6,250,000 special warrants (the “Special Warrants“) at a price of US$0.80 per Special Warrant, for aggregate gross proceeds of up to US$5,000,000 (the “Concurrent Financing“). Haywood Securities Inc. (the “Agent“) has been engaged to act as lead agent in connection with the Concurrent Financing. Cerrado has granted the Agent an option, exercisable in whole or in part by the Agent, to sell up to an additional US$2,000,000 of Special Warrants at US$0.80 per Special Warrant.

Each Special Warrant will be exercisable by the holder thereof at any time after the date of closing of the Concurrent Financing, without payment of any additional consideration therefor, for one Cerrado Share, subject to customary adjustments. Each unexercised Special Warrant shall be deemed to be exercised for one Cerrado Share in connection with the completion of the Transaction.

In the event that the Transaction has not occurred prior to 4:00 p.m. (Toronto time on the date which is 180 days following the date of closing of the Concurrent Financing (the “Qualification Deadline“), each unexercised Special Warrant will be deemed exercised and will automatically be exchanged for 1.1 Cerrado Shares without further payment or action by the holder thereof.

Cerrado will pay the Agent a cash commission (the “Agent’s Commission“) equal to 7% of the aggregate gross proceeds of the Concurrent Financing. Cerrado will also issue compensation special warrants to the Agent (the “Compensation Warrants“) equal to 7% of the aggregate number of Special Warrants issued by the Company under the Concurrent Financing. Each Compensation Warrant may be exercised by the Agent, without payment of any additional consideration therefor and subject to adjustment, at any time after the closing of the Concurrent Financing and the earlier of (i) the completion of the Transaction; and (ii) the Qualification Deadline for one compensation option (a “Compensation Option”) entitling the Agent to purchase one Cerrado Share or Resulting Issuer Share, as the case may be, with an exercise price of $0.80 per share. The Compensation Options shall have a term of 24 months from the date of the closing of the Concurrent Financing. Each unexercised Compensation Warrant shall be automatically exchanged for one Compensation Option upon the occurrence of the Transaction, entitling the Agent to purchase that number of Resulting Issuer Shares equal to 7.0% of the aggregate number of Special Warrants issued by Cerrado. Notwithstanding the foregoing, in the event that the Transaction has not occurred prior to the Qualification Deadline, each Compensation Option will be deemed exercised, without payment of any additional consideration therefor and subject to adjustment, and will automatically be exchanged for 1.1 Compensation Options on the date which is three business days following the Qualification Deadline.

The net proceeds from the Concurrent Financing will be used to complete an Initial Preliminary Economic Assessment prepared in accordance with NI 43-101 based upon the current defined resources at MDC, complete an updated NI 43-101 mineral resource report for MDN, to undertake a new exploration drill program and associated metallurgical test work aimed at expanding the current resource and for general working capital purposes.

Sponsorship

The Transaction is subject to the sponsorship requirements of the TSXV, unless an exemption from the sponsorship requirement is available or a waiver is granted. The Company intends to apply for an exemption to the sponsorship requirement. There is no assurance that an exemption from this requirement will be obtained.

Management and Insiders of the Resulting Issuer

Upon completion of the Transaction, the current directors and officers of the Company will resign (other than Mark Brennan and Stephen Shefsky) and the proposed board of directors of the Resulting Issuer will include Mark Brennan, Stephen Shefsky, Cliff Hale-Sanders, Kurt Menchen, Robert Campbell, Jad Salomão, Oscar Neto de Gouveia and Elmer Prata Salomao. It is proposed to appoint Mark Brennan as Chief Executive Officer and Co-Chairman, Cliff Hale-Sanders as President, Rohan Hazelton as Chief Financial Officer, Maria Virginia Anzola as General Counsel and Corporate Secretary, Kurt Menchen as Chief Operating Officer and Robert Campbell as Vice-President of Exploration of the Resulting Issuer. Additional details with respect to the directors and officers of the Resulting Issuer, if any, will be announced once available.

As of the date hereof, no shareholders hold a controlling interest in Cerrado other than Monte Sinai which owns 13,500,000 Cerrado Shares representing approximately 29% of the issued and outstanding Cerrado Shares, and which were issued as consideration for the acquisition by Cerrado of the MDC project. Other than Monte Sinai, the parties do not expect any persons will hold more than 10% or more of the issued and outstanding Resulting Issuer Shares upon completion of the Transaction. Jad Salomão, Oscar Neto de Gouveia and Elmer Prata Salomao are directors of both Cerrado and Monte Sinai. The officers and directors of Cerrado are Mark Brennan, Stephen Shefsky, Kurt Menchen, Robert Campbell, Jad Salomão, Oscar Neto de Gouveia, Elmer Prata Salomao, Cliff Hale-Sanders, Rohan Hazelton and Maria Virginia Anzola who together directly or indirectly own or control an aggregate of 23,018,887 Cerrado Shares, representing approximately 49% of the issued and outstanding Cerrado Shares as at the date hereof. The current ownership of the remaining interest in Cerrado consists of approximately 60 shareholders holding 23,589,143 Cerrado Shares, representing approximately 51% of the total issued and outstanding Cerrado Shares as of the date hereof. Messrs. Brennan, Shefsky, Campbell, Hale-Sanders, Hazelton and Anzola are each Canadian residents. Messrs. Menchen, Salomao, Neto de Gouveia and Salomao are each Brazilian residents. Monte Sinai is a limited liability company existing under the laws of Brazil and the shareholders of Monte Sinai are Jad Salomão, Oscar Neto de Gouveia and Oseias de Gouveia Carvalho, who is also a Brazilian resident.

Mark Brennan, a director of BB1, is also Co-Chairman and a director of Cerrado and currently owns an aggregate of 3,372,222 Cerrado Shares representing 7.24% of the issued and outstanding Cerrado Shares. Stephen Shefsky, a director of BB1, is Co-Chairman and a director of Cerrado and owns 2,708,333 Cerrado Shares representing 5.81% of the outstanding Cerrado Shares. Each of Messrs. Brennan and Shefsky is a “Non-Arm’s Length Party to the CPC” (as defined in Policy 2.4).

There are no finder’s fees payable in connection with the Transaction. All the above is as of the date hereof.

The relevant professional experience of the proposed directors and officers of the Resulting Issuer is set out below:

Management

Mark Brennan
Chief Executive Officer & Co Chairman

Mr. Brennan is currently Executive Chairman of Ascendant Resources Inc. Prior to co-founding Ascendant, he was the President and Chief Executive Officer of Sierra Metals Inc., a multi-mine polymetallic producer, from April 2015 to March 2017. He was the President and Chief Executive Officer of Largo Resources Ltd., a greenfield to production mining company, from March 2005 to March 2015. He was the co-founder of Brasoil do Brasil Exploracao Petrolifera S.A., a private oil and gas producing exploration Corporation in Brazil. In addition, he has been President of Linear Capital Corporation, a private merchant bank, since February 1998. He is a Founder and a director of James Bay Resources Limited since November 2007.

Cliff Hale-Sanders, MBA, CFA
President

Mr. Hale-Sanders is one of the founding partners in the formation of Ascendant Resources Inc. Prior to this Mr. Hale-Sanders had a career that spanned over 20 years in the capital markets industry working as a leading base metals and bulk commodities research analyst in Canada working at RBC Capital Markets, TD Securities, CIBC World Markets and Cormark Securities. During this period, Mr. Hale-Sanders visited and reviewed numerous mining operations and corporate entities around the world. Mr. Hale-Sanders holds a B.Sc. in Geology and Chemistry, an MBA from McMaster University and is a CFA Charterholder.

Rohan Hazelton, CPA, CA
Chief Financial Officer

Mr. Hazelton is a Chartered Professional Accountant with 25 years of international finance experience including 20 years in the mining sector. He was formerly Vice President, Strategy at Goldcorp Inc. where he held a variety of roles including Vice President Finance, Chief Financial Officer of Mexican Operations and Corporate Controller. He holds a B.A. in Applied Mathematics and Economics from Harvard University.

Kurt Menchen
Chief Operating Officer & Director

Mr. Menchen was formerly the President of Operations, Brazil, of Largo Resources Ltd, and has over 42 years of experience operating and managing mining projects, including over 20 years as General Manager at the Jacobina Gold project in Bahia State, Brazil. His prior experience also includes Anglo American’s Vaal Reefs underground gold mine in South Africa and De Beers Diamonds in Angola. Mr. Menchen holds a degree in mining engineering from the Federal University of Rio Grande do Sul, Brazil.

Robert Campbell
Vice President of Exploration & Director

Mr. Campbell is an exploration geologist with over 42 years experience in the mining and exploration industry through Canada, United States and Latin America. He has worked for a number of major mining companies, most notably Noranda and Lac Minerals and is currently the Vice President of Exploration for Ascendant Resources. Mr. Campbell most recently worked with Largo Resources from its inception in November 2003 to November 2018 as Vice President of Exploration. He has also held other senior management positions such as Vice President of Exploration for Apogee Minerals Ltd.

Maria Virginia Anzola
General Counsel & Corporate Secretary

Ms. Anzola has over 20 years of experience advising companies in the extraction industry. In her role as General Counsel, Ms. Anzola provides leadership and direction on all legal matters involving Cerrado and its operations. As Corporate Secretary, she is responsible for all matters relating to the Board of Directors, its committees, and the overall implementation of corporate governance best practices. Prior to joining Ascendant in 2017, Ms. Anzola served as Assistant General Counsel for Primero Mining Corp, and prior to that she served as Senior Counsel for Hudbay Minerals Inc. In addition, Ms. Anzola served as Consultant to the Tax Group of Borden Ladner Gervais LLP for over two years. Prior to moving to Canada, Ms. Anzola spent 11 years in private practice in her home country of Venezuela, mostly advising international companies engaged in the oil and gas business. Ms. Anzola has been called to the BAR in Ontario and Venezuela and has an LL.M from the University of Michigan, Ann Arbor and from Osgoode Hall Law School.

Board of Directors

Mark Brennan
Chief Executive Officer & Co-Chairman

See above under the heading, “Management”.

Stephen Shefsky
Co-Chairman

Mr. Shefsky is the Chief Executive Officer, President and a Director of James Bay Resources Limited (CSE:JBR) and Crestar Integrated Natural Resources Limited (CINL) since incorporation. Mr. Shefsky is currently Co-Chairman and Founder of Cerrado Gold, a precious metals exploration and production company in Brazil and Argentina. Mr. Shefsky is a founder and executive chairman of tilr Corporation, a leading patent pending on demand recruitment technology platform that connects companies with immediately qualified employees. Mr. Shefsky was the co-founder of Brasoil do Brasil Exploracao Petrolifera S.A., a private oil and gas producing and exploration company operating in Brazil from 2006-2017. From 1996 to August 2007, Mr. Shefsky held the positions of the President and Chief Executive Officer of Verena Minerals Corporation (TSXV:VML), a minerals exploration company with a focus on precious metal properties in Brazil (currently Belo Sun Mining Corp., (TSXV:BSX)). Mr. became the Chairman and Director of Ascendant Resources Inc. in December 2009, and is currently a Director. Mr. Shefsky has been a Director and Officer of BB1 Acquisition Corp. (TSXV:BB1.P), a capital pool company, since March, 2018. Mr. Shefsky holds a Bachelor of Arts from the University of Toronto, a Master of Science Degree in Urban Planning from Columbia University, and a Juris Doctor Degree from Pepperdine University School of law.

Cliff Hale-Sanders, MBA, CFA
President

See above under the heading, “Management”.

Elmer Prata Salomão
Director

From 1990-1995, Mr. Salomão served as General Director of Brazil’s National Department of Mineral Production, DNPM, the federal agency in charge of administration of mineral concessions and the implementation of Brazilian mining policy. Mr. Salomão is founder and now managing director of well recognized GEOS-Mining Services Ltda., originally incorporated in 1974, and is now managing director of EPS Consulting Ltda., a solely owned mining consulting company.

Kurt Menchen
Chief Operating Officer & Director

See above under the heading, “Management”.

Robert Campbell
Vice President of Exploration & Director

See above under the heading, “Management”.

Jad Salomão
Director

Mr. Salomão has 42 years of experience in mineral exploration & mining and project evaluation with both major and Junior company in Brazil and Canada. He has managed several base metals projects (in special massive sulphides and sedimentary copper), precious metals (gold, PGM), diamonds, Industrial minerals (Ilmenite) and gem (Emerald, Alexandrite) projects. He is presently a major shareholder of the company Monte Sinai Mineração Ltda., which holds the Serra Alta project. Together with his partner, Oscar Neto, Mr. Salomão founded Verena Mineração Ltda – which became a junior mining company listed in the Toronto Stock Market in Canada from 1996 through 2010 – Verena Minerals Corporation (VMC) – which is now known as Belo Sun Mining Corp. Mr. Salomão and Mr. Oscar Neto are credited with the discovery and definition of the Belo Sun Volta Grande deposit; a deposit with over 7 million ounces of gold.

Oscar Neto de Gouveia
Director

Mr. Neto worked as a field and project geologist for Billiton between 1980 to 1985 exploring for base metals in volcano-sedimentary environments in the states of Goias and Pará. He also worked for BP Minerals in the state of Rondônia as a mine geologist at the Potosi Mine, 14 de Abril and Serra da Onça Mines, directly in charge of the mining operations. He also worked as Chief Project geologist for Master Incosa Engenharia S/A in gold exploration in the state of Pará. In late 1985, working with Brazilian geologist, Jad Salomão, Neto started exploration for gold in the state of Tocantins, Brazil. In mid-1986, founded the company Verena Mineração Ltda. and started accumulating an extensive portfolio of gold in the municipalities of Porto Nacional, Natividade and Conceição, state of Tocantins, Brazil. Between 1988 and 1994, participated of several negotiations with major companies – RTZ (1989), Paranapanema (1991), Bank of Bahia (1993) and TVX (1994) – which spent close to US$5 million on these properties. In 1996, together with his partner, Jad Salomão, Mr. Neto founded Verena Mineração Ltda – which became a junior mining company listed in the Toronto Stock Market in Canada from 1996 through 2010 – Verena Minerals Corporation (VMC) – which is now known as Belo Sun Mining Corp. Mr. Neto and Mr. Salomão are credited with the discovery and definition of the Belo Sun Volta Grande deposit; a deposit with over 7 million ounces of gold.

Selected Financial Information of Cerrado

Relevant unaudited financial information for Cerrado is summarized below:

As at fiscal year-end December 31, 2019 and 2018
(Expressed in thousands of US dollars)
March 31, 2020 December 31, 2019 December 31, 2018
Cash $7,404 $38 $81
Total Assets $83,783 $17,180 $16,000
Total Liabilities $64,903 $4,976 $3,670
Shareholders’ Equity $18,880 $12,204 $12,330

 

The unaudited interim financial information as at March 31, 2020 includes the consolidation of the MDN project.

Trading of the Resulting Issuer Shares

Trading in the BB1 Shares has been halted as a result of the announcement of the Transaction. The Company expects that trading will remain halted pending closing of the Transaction, subject to the earlier resumption upon TSXV acceptance of the Transaction and the filing of required materials in accordance with TSXV policies.

Upon successful completion of the Transaction, it is anticipated that the Resulting Issuer will be listed as a Tier 1 Mining issuer.

Filing Statement

In connection with the Transaction and pursuant to TSXV requirements, BB1 will file a filing statement on SEDAR, which will contain details regarding the Transaction, the Concurrent Financing, the Definitive Agreement, BB1, Cerrado and the Resulting Issuer.

Forward Looking Information, Disclaimer and Reader Advisory

Not for distribution to United States newswire services or for dissemination in the United States. This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

All information provided in this press release relating to Cerrado has been provided by management of Cerrado and has not been independently verified by management of the Company. As the date of this press release, the Company has not entered into a Definitive Agreement with Cerrado, and readers are cautioned that there can be no assurances that a Definitive Agreement will be executed.

Completion of the Transaction is subject to a number of conditions, including but not limited to, TSXV acceptance and if applicable pursuant to TSXV requirements, majority of the minority 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 a capital pool company should be considered highly speculative.

The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed Transaction and has neither approved nor disapproved the contents of this press release. Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

This press release contains statements that constitute “forward-looking information” (collectively, “forward-looking statements”) within the meaning of the applicable Canadian securities legislation, All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Any statement that discusses predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as “expects”, or “does not expect”, “is expected”, “anticipates” or “does not anticipate”, “plans”, “budget”, “scheduled”, “forecasts”, “estimates”, “believes” or “intends” or variations of such words and phrases or stating that certain actions, events or results “may” or “could”, “would”, “might” or “will” be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements. Forward-looking statements contained in this press release include, without limitation, statements regarding: the terms, conditions, and completion of the Transaction; use of funds; and the business and operations of the Resulting Issuer. In making the forward- looking statements contained in this press release, the Company has made certain assumptions, including that: due diligence will be satisfactory; all applicable shareholder, and regulatory approvals for the Transaction will be received. Although the Company believes that the expectations reflected in forward-looking statements are reasonable, it can give no assurance that the expectations of any forward-looking statements will prove to be correct. Known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: results of due diligence; availability of financing; delay or failure to receive board, shareholder or regulatory approvals; and general business, economic, competitive, political and social uncertainties. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this press release. Except as required by law, the Company disclaims any intention and assumes no obligation to update or revise any forward-looking statements to reflect actual results, whether as a result of new information, future events, changes in assumptions, changes in factors affecting such forward-looking statements or otherwise.

For more information please contact BB1’s Chief Executive Officer, Stephen Shefsky at +1-416-366-4200 or Cerrado’s Co-Chairman and CEO, Mark Brennan at +1-647-796-0023.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/61069