Daura Capital Corp. Signs Definitive Agreement for Proposed Qualifying Transaction

Vancouver, British Columbia–(Newsfile Corp. – March 30, 2021) – Daura Capital Corp. (TSXV: DUR.P) (the “Company” or “Daura“), a capital pool company under the policies of the TSX Venture Exchange (the “TSXV“), is pleased to announce that it has entered into a definitive agreement dated March 30, 2021 with Estrella Gold S.A.C. (“Estrella“) and the shareholders of Estrella (the “Estrella Shareholders“), whereby the Daura will acquire all of the outstanding shares of Estrella. The acquisition of Estrella will constitute Daura’s qualifying transaction (the “Qualifying Transaction“) under the policies of the TSXV.

As previously announced, Daura has made its initial filings with the TSXV for conditional approval of the proposed Qualifying Transaction. Daura is continuing to work diligently towards the completion of the proposed Qualifying Transaction under the policies of the TSXV.

About Estrella Gold S.A,C. and the Cochabamba Project

Estrella is a closely held corporation (S.A.C.) formed under the laws of Peru, engaged in the acquisition and exploration of mineral resource properties. Estrella was formed in August 2018 for the purpose of engaging in the business of acquiring, exploring and developing mineral resource properties. Estrella’s principal focus to date has been on the acquisition of the mining concessions and applications making up the Cochabamba Project.

The Cochabamba Project consists of a 100% undivided interest in 15 mining concessions and mining applications covering 9,927.113 Ha, and an option (the “Antonella Option“) to acquire a mining concession (the “Antonella Daniela I Concession“) covering an additional 900 Ha, all located in the Ancash Region of north-central Peru. The Cochabamba Project is an exploration stage project prospective for gold, silver, copper, lead and zinc. The Antonella Daniela 1 Concession forms the main area of exploration activity for the Cochabamba Project.

Pursuant to the terms of the Antonella Option, as amended, Estrella has the right to acquire 100% of the Antonella Daniela I mining concession, exercisable by payment of the following amounts:

• US$15,000 on signing of the option agreement (which amount has been paid);
• US$40,000 30 days after the signing date (which amount has been paid);
• US$25,000 on August 15, 2020 (which amount has been paid);
• US$115,000 on the December 15, 2020 (which amount has been paid);
• US$170,000 on September 26, 2021; and,
• US$80,000 on September 26, 2022.

The Antonella Daniela I Concession is currently the main area of exploration on the Cochabamba Project, and was most recently explored and drilled by Minera Silex Peru SRL (“Minera Silex”) from 2006 to 2012.

Minera Silex drilled a total of 11 holes located within the current Antonella Daniela 1 Concession. Drilling totalled 2461 meters in 11 diamond drill holes, from which 360 meters of core yielded 314 samples. All holes intercepted veining and mineralized intervals with the best results coming from CBD11001, CBD11002, CBD11003, CBD11004, CBD11004A, CBD11004B, CBD11006, CBD11007, and CBD11008. Holes CBD11005, CBD11009 CBD11010, and CBD11011 intercepted veining and low grade mineralization.

Interpreted sections and mineralized intervals presented below for holes CBD11002 and CBD11004B are representative of the style of mineralization and grades reported by Minera Silex.

Mineralized Intervals for CDB11002

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Mineralized Intervals for CDB11004B

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The technical information in this news release has been reviewed and approved by Owen D.W. Miller, the author of the Technical Report on the Cochabamba Project, and a qualified person within the meaning of National Instrument 43-101 – Standards of Disclosure for Mineral Projects.

Financial Information

The following table represents selected financial information regarding the financial condition and results of operation for Estrella. The following is derived from Estrella’s financial statements for the years ended December 31, 2019 (audited) and 2018 (unaudited). The following information should be read in conjunction with Estrella’s audited and unaudited financial statements for the periods presented, which financial statements will be included in the filing statement to be filed by Daura on SEDAR in connection with the Qualifying Transaction.

* Presented in Peruvian soles (“S/”)

About the Qualifying Transaction

Daura entered into a definitive share exchange agreement dated March 30, 2021 (the “Share Exchange Agreement“) with Estrella and the Estrella Shareholders, whereby Daura has agreed to acquire all of the outstanding shares of Estrella from the Estrella Shareholders in exchange for an aggregate of 3,000,000 common shares in the capital of Daura (the “Daura Shares“). Dr. Raul Ernesto Lima Osorio, a resident of Uruguay, is the owner of 95% of the outstanding shares of Estrella, with Lara Exploration Ltd., a mineral resource exploration company listed on the TSXV, owning the remaining 5% of Estrella’s outstanding shares. It is expected that, upon completion of the proposed Qualifying Transaction, the Company will change its name to Daura Gold Corp. (the “Resulting Issuer“), with Estrella being a wholly owned subsidiary of the Resulting Issuer.

The Qualifying Transaction will be an arm’s length transaction and approval from the shareholders of Daura is not expected to be required.

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Closing of the Qualifying Transaction remains subject to the satisfaction of certain conditions precedent, including but not limited to, closing of the Concurrent Financing (see “Concurrent Financing“, below), satisfactory completion by Daura of its due diligence investigations, and the receipt of all required third party consents, waivers or approvals, including the approval of the TSXV.

Daura has advanced to Estrella the sum of $25,000 as a non-refundable deposit, and loaned to Estrella $75,000, plus an additional US$115,000 (collectively, the “Loans“). The Loans are secured by the assets of Estrella and bear interest at a rate of 10% per annum. The Loans were advanced to fund exploration work by Estrella and to make option payments on the Cochabamba Project.

Upon completion of the Qualifying Transaction, the resulting entity (the “Resulting Issuer“) will be engaged in the business of exploring and developing the Cochabamba Project. In addition, the Resulting Issuer may explore and develop such other properties and interests as may be subsequently acquired by the Resulting Issuer.

Proposed Directors and Officers of the Resulting Issuer

Upon completion of the Qualifying Transaction, it is currently anticipated that Daura’s existing board of directors, consisting of Mark Sumner, Nicholas Lindsay, Duncan Quinn-Smith, and Christina Cepeliauskas will remain with the Resulting Issuer, with Dr. Lima, the majority shareholder of Estrella, also expected to join the Resulting Issuer’s board of directors. Luis Saenz is expected to be appointed as the Chief Executive Officer of the Company, with William Tsang continuing as the Chief Financial Officer and Corporate Secretary of the Resulting Issuer.

The following provides a brief background of each person who is expected to be a director or officer of the Resulting Issuer upon completion of the Qualifying Transaction.

Luis Saenz, Chief Executive Officer

Mr. Sáenz is a finance executive with nearly 30 years of experience in corporate finance, strategic consulting, and metal trading with a focus on Latin America. He was recently CEO of Compañía Minera Quiruvilca (Peru) and Director of Business Development for Latin America at the engineering multinational Ausenco (Australia). Mr. Sáenz is founder and former CEO of Li3 Energy and now Director of Bearing Lithium Corp., which has a stake in the Maricunga lithium project in Chile. In addition, he is a Director of Atico Mining Corporation, which operates the El Roble mine in Colombia and develops the La Plata polymetallic project in Ecuador. Throughout his career, Mr. Sáenz has held senior executive positions at Standard Bank of South Africa, Merrill Lynch and Pechiney World Trade. He has a BA in Economics and International Affairs from Franklin & Marshall College in Lancaster, PA.

William Tsang, Chief Financial Officer and Corporate Secretary

Mr. Tsang is a Chartered Professional Accountant with a Bachelor of Commerce from the University of British Columbia with more than 10 years of financial accounting and auditing experience in the mineral exploration and mining industry. He had worked in public practice providing professional services and advice to publicly traded companies on the NYSE, TSX-V, and OTC markets on various public reporting services, such as Qualifying Transactions for Reverse Take-Over, mergers and acquisitions, and financing transactions. Mr. Tsang was the Corporate Controller of Atico Mining Corporation for 4 years and now holds the position of Chief Financial Officer at Atico. Mr. Tsang also holds the position of Chief Financial Officer of Nova Royalty Corp.

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Mark Sumner, Director

Mr. Sumner is the founder and managing director of Kiwanda Group LLC (the “Kiwanda Group”), a US-based resources venture capital business. Founded in 2007, Kiwanda Group has financed mining and exploration projects across a range of commodities and regions, with a particular focus on metals in South America. Prior to founding Kiwanda Group, Mr. Sumner was an investment specialist at Madison Avenue Financial Group, a private wealth boutique based in Portland, OR. Mr. Sumner is also on the board of BiFox Ltd., an unlisted Chilean phosphate rock development company. Mr. Sumner previously held the position of Executive Chairman for Valor Resources Ltd.

Nicholas Mark Lindsay, Director

Dr. Lindsay is an experienced mining executive with about 30 years of experience in the exploration and development of projects in Australia and South America, specifically Chile and Peru. Dr. Lindsay is a geologist by profession, specialized in applied mineralogy and geometallurgy, and has a BSC (Hons Geology) and MBA from the University of Otago, and a PhD from the University of the Witwatersrand; and is an experienced Director of ASX-listed junior exploration companies. Dr. Lindsay is a member of the Australasian Institute of Mining and Metallurgy and the Australian Institute of Geoscientists.

Duncan Quinn-Smith, Director

Mr. Quinn-Smith has law degrees from the University of Bristol (LL.B), Bristol, England, and Columbia University (LL.M), New York, USA. Mr Quinn-Smith was formerly an attorney at the offices of Kirkland & Ellis LLP in New York City, specializing in all aspects of private equity transactions. He founded DQ, LLC, a luxury lifestyle brand, in 2003 where he holds the position of Chief Executive Officer.

Christina Cepeliauskas, Director

Ms. Cepeliauskas is a CPA, CGA professional accountant with more than 25 years of financial accounting and treasury experience in the mineral exploration and mining industry. Ms. Cepeliauskas was the Chief Financial Officer of EMX Royalty Corp. for 12 years from September 2008 until July 2020 wherein she assumed the role of Chief Administrative Officer. Additionally, Ms. Cepeliauskas is currently the Chief Financial Officer of Pan Global Resources Inc. Ms. Cepeliauskas also holds the volunteer position of Treasurer and Board member of Fraserside Community Services Society, an organization committed to helping people overcome challenges. Ms. Cepeliauskas has been a member of the Institute of Corporate Directors since May 2015 since she completed the comprehensive Corporate Directors Program.

Raul Ernesto Lima Osorio

Dr. Lima is the majority shareholder of Estrella. Dr. Lima has over 20 years of experience in the mining and exploration business across South America. Dr. Lima has been responsible for numerous mining development and construction projects throughout Uruguay, Brazil, Chile, Venezuela, Argentina and Peru. Dr. Lima’s notable engineering and construction experience in South America includes engineering and development of the San Grigorio gold mine in Uruguay for Rea Gold Corporation (now operated by Orosur), construction and engineering of the $450 million Pirquitas open pit silver mine in Argentina for Silver Standard Resources and engineering and construction of the Tucano Gold-Iron Mining Project in Brazil for Beadell Resources Ltd. Dr. Lima was previously Chief Operating Officer for Valor Resources Limited, an ASX-listed metals company focused on the development of the Berenguela Polymetallic Project in the Puno Department of Peru.

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Dr. Lima holds an engineering degree from the University of the Republic in Montevideo, Uruguay, an MBA from ORT University in Montevideo and a Doctorate in Management with a focus on mining projects from University of Phoenix. Dr. Lima is a resident of Montevideo, Uruguay and speaks fluent English, Portuguese and native Spanish.

Concurrent Financing

In conjunction with closing of the proposed Qualifying Transaction, Daura intends to complete a non-brokered private placement financing of a minimum of 12,500,000 units (each a “Unit”) and a maximum of up to 15,000,000 Units at a price of $0.20 per Unit for gross proceeds of between $2,500,000 and $3,000,000. Each Unit will consist of one Daura Share and one-half of one share purchase warrant (each a “Warrant“), with each whole Warrant entitling the holder to purchase one additional Daura Share at a price of $0.30 per share for a period of two years from the date of issuance. Net proceeds from the Concurrent Financing will be used to fund exploration of the Cochabamba Project, expenses related to the Qualifying Transaction and for general working capital purposes.

Subject to the approval of the TSXV, Daura may pay eligible finders a fee equal to 7% of the Concurrent Financing in cash, and 7% in share purchase warrants under the QT Financing.

All securities issued under the Concurrent Financing will be subject to hold periods expiring four months and one day after the date of issuance. Additional restrictions may apply under the rules of the TSXV and applicable securities laws.

This news release does not constitute an offer to sell, or solicitation of an offer to buy, nor will there be any sale of any of the securities offered in any jurisdiction where such offer, solicitation or sale would be unlawful, including the United States of America. The securities being offered as part of the QT Financing 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 accordingly may not be offered or sold in the United States except in compliance with the registration requirements of the U.S. Securities Act and any applicable state securities laws, or pursuant to available exemptions therefrom.

Closing of the Concurrent Financing is subject to the approval of the TSXV.

Sponsorship of the Qualifying Transaction

Sponsorship of a Qualifying Transaction of a capital pool company is required by the TSXV unless waived in accordance with TSXV policies. Daura intends to apply for a waiver from the sponsorship requirements, however there is no assurance that a waiver will be granted.

Adoption of Changes in New CPC Policy

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The Company intends to implement certain amendments permitted by the TSXV pursuant to amended Policy 2.4 – Capital Pool Companies, which became effective January 1, 2021 (the “New CPC Policy“). As permitted under the New CPC Policy, the Company intends to rely on Section 7.1 and 7.2 of the New CPC Policy. Section 7.1 and 7.2 of the New CPC Policy pertain to the permitted use of proceeds, and prohibitions on certain payments, by a capital pool company. Under the provisions of Section 7.1 and 7.2 of the New Policy, capital pool companies are no longer subject to a limitation on the amount of non-qualifying transaction related expenses of the lesser of: (i) $210,000, and (ii) 30% of the gross proceeds raised by the capital pool company.

Additional Information

In accordance with the policies of the TSXV, the Daura Shares are currently halted from trading and will remain halted until further notice.

Daura and Estrella will provide further details in respect of the Qualifying Transaction, in due course once available, by way of press releases.

All information provided in this press release related to Estrella has been provided by management of Estrella and has not been independently verified by management of Daura.

Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the Qualifying Transaction, any information released or received with respect to the Qualifying 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.

For further information please contact:

Daura Capital Corp.
543 Granville, Suite 501
Vancouver BC V6C 1X8
William T.P. Tsang CFO and Secretary
(604) 669-0660
btsang@seabordservices.com

Mark D. Sumner CEO and Director
mark@kiwandagroup.com

NEITHER 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.

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Information set forth in this news release contains forward-looking statements. These statements reflect management’s current estimates, beliefs, intentions and expectations; they are not guarantees of future performance. Daura cautions that all forward-looking statements are inherently uncertain and that actual performance may be affected by a number of material factors, many of which are beyond Daura’s control. Such factors include, among other things: risks and uncertainties relating to Daura’s ability to complete the proposed Qualifying Transaction; and other risks and uncertainties. Accordingly, actual and future events, conditions and results may differ materially from the estimates, beliefs, intentions and expectations expressed or implied in the forward-looking information. Except as required under applicable securities legislation, Daura undertakes no obligation to publicly update or revise forward-looking information.

Completion of the transaction is subject to 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 has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.

A halt in trading shall remain in place until after the Qualifying Transaction is completed or such time that acceptable documentation is filed with the TSX Venture Exchange.

Not for Distribution to US Newswire Services or Dissemination in the United States

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/78985