Green Panda Announces Proposed Qualifying Transaction

Toronto, Ontario–(Newsfile Corp. – April 1, 2022) – Green Panda Capital Corp. (TSXV: GPCC.P) (“Green Panda” or the “Company“) is pleased to announce that it has entered into a non-binding letter of intent dated March 15, 2022 (the “LOI“) with 1301666 B.C. Ltd. (“BC Company“), a private company that holds the rights to acquire an interest in two mineral exploration properties in Nevada. The LOI outlines the principal terms and conditions of a business combination by way of a share exchange, merger, amalgamation, arrangement, takeover bid, or other similar form of transaction (the “Proposed Transaction“), which will result in BC Company becoming a wholly-owned subsidiary of Green Panda, or otherwise combining its corporate existence with a wholly-owned subsidiary of Green Panda.

Green Panda is a Capital Pool Company and intends for the Proposed Transaction to constitute its Qualifying Transaction pursuant to the policies of the TSX Venture Exchange (the “TSXV“). In connection with the announcement of the LOI, the trading in the common shares of Green Panda (“Green Panda Shares“) has been halted pursuant to the policies of the TSXV. It is anticipated that Trading will remain halted until the completion of the Proposed Transaction. It is anticipated that the reporting issuer resulting from the Proposed Transaction (the “Resulting Issuer“) will qualify as a Tier 2 Mining Issuer pursuant to the requirements of the TSXV. Unless otherwise indicated, any capitalized term contained in this press release that is not defined herein has the meaning ascribed to such term in the policies of the TSXV.

Proposed Transaction Summary

Upon completion of the Proposed Transaction, the Resulting Issuer will carry on the business of BC Company. Pursuant to the Proposed Transaction, holders of the issued and outstanding common shares of BC Company (“BC Company Shares“) will exchange their BC Company Shares for common shares of the Resulting Issuer (“Resulting Issuer Shares“) on a one-for-one basis (the “Exchange Ratio“). Convertible securities of BC Company will be exercisable to acquire Resulting Issuer Shares at the Exchange Ratio. The final structure of the Proposed Transaction is subject to the receipt of tax, corporate and securities law advice for both Green Panda and BC Company.

As per the LOI, it is anticipated that concurrently with the closing of the Proposed Transaction, Green Panda or BC Company, as the case may be, will complete an equity financing (the “Concurrent Financing“) to raise gross proceeds of $2,000,000, or such other amount as is sufficient to meet the initial listing requirements of the TSXV, at a price to be determined in the context of the market, anticipated to be $0.50 per share after reflecting the Consolidation (as defined below).

Immediately prior to the closing of the Proposed Transaction, and subject to Green Panda shareholder approval, it is anticipated that Green Panda will undertake a share consolidation (the “Consolidation“) of the Green Panda Shares at a ratio to be based on the Concurrent Financing pricing, such that the outstanding common shares of Green Panda will have an aggregate deemed value of at least $1,000,000.

On closing of the Proposed Transaction, the board of the Resulting Issuer will be comprised of nominees of BC Company, and the Resulting Issuer is expected to change its name to “Falcon Butte Minerals Corp.” subject to Green Panda shareholder approval, or such other name as is determined by BC Company (the “Name Change“).

Closing of the Proposed Transaction will be subject to a number of conditions precedent, including, without limitation:

• receipt of all required regulatory, corporate and third-party approvals, including TSXV approval, and compliance with all applicable regulatory requirements and conditions necessary to complete the Proposed Transaction;
• completion of satisfactory results from due diligence investigations for each of the parties;
• completion of BC Company’s acquisition of the Properties (as defined below);
• completion of the Concurrent Financing; and
• other mutual conditions precedent customary for a transaction such as the Proposed Transaction.

The Proposed Transaction is not a Non-Arm’s Length Qualifying Transaction, is not subject to TSXV Policy 5.9, and it is not expected that the Proposed Transaction will be subject to approval by Green Panda’s shareholders. There are no Non-Arm’s Length Parties of Green Panda that are Insiders of BC Company.

About BC Company

BC Company was incorporated pursuant to the Business Corporations Act (British Columbia) on April 22, 2021. Since incorporation, BC Company has focused its efforts on acquiring interests in mineral exploration properties in Nevada and obtaining a listing on a Canadian stock exchange.

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BC Company’s share capital consists of an unlimited number of BC Company Shares without par value. BC Company currently has a total of 46,801,131 BC Company Shares and 15,531,130 common share purchase warrants (the “BC Company Warrants“) outstanding. Each BC Company Warrant entitles the holder thereof to acquire a BC Company Share at an exercise price of $0.30 per BC Company Share until March 17, 2024. There are currently no Control Persons of BC Company; however, it is anticipated that Lion Copper and Gold Corp. (“Lion CG“), a British Columbia company listed on the TSXV will become a Control Person of BC Company upon the closing of the Butte Valley Agreement (as defined and as further described below).

BC Company holds the rights to acquire from TUVERA Exploration Inc. (“TUVERA“) its majority interest of 65% in the Island Mountain property, a Carlin-style gold deposit located in Elko County, Nevada (the “Island Mountain Property“) and from Lion CG its 100% option interest in the Butte Valley property, a porphyry-skarn copper prospect, located in eastern Nevada about 40 miles north of Ely in north-central White Pine County (the “Butte Valley Property” and collectively with the Island Mountain Property, the “Properties“).

Island Mountain Agreement BC Company entered into an asset purchase and sale agreement dated August 21, 2021, as amended on January 2, 2022 (the “Island Mountain Agreement“), with TUVERA and TUVERA’s subsidiary, pursuant to which TUVERA agreed to sell its interest in the Island Mountain Property to BC Company or its designated nominee in consideration for BC Company agreeing to:

a. pay TUVERA the following cash consideration;

• $170,000 (the “Closing Cash Payment“) on the closing date of the asset purchase (the “Island Mountain Closing“);
• $100,000 on or before the 12 and 24 month anniversaries of the date of the Island Mountain Agreement; and
• $150,000 on or before the 36, 48 and 60 month anniversaries of the date of the Island Mountain Agreement.

b. issue TUVERA the following Resulting Issuer Shares:

• $750,000 of Resulting Issuer Shares (the “Closing Share Issuance“) on the Island Mountain Closing, subject to adjustment, with a deemed price per Resulting Issuer Share equal to the issue price of the Resulting Issuer Shares issued in the Concurrent Financing;
• $200,000 of Resulting Issuer Shares upon completion of a preliminary economic assessment technical report on the Island Mountain Property, with a deemed price per Resulting Issuer Share equal to the volume-weighted average price of the Resulting Issuer Shares on the TSXV for a 10-day trading period ending two trading days before the date of issuance, subject to the minimum pricing requirements of the TSXV (the “VWAP“); and
• $400,000 of Resulting Issuer Shares upon completion of a feasibility study technical report on the Island Mountain Property, with a deemed price equal to the VWAP; and

c. on the Island Mountain Closing, reserve a 2% net smelter returns royalty (the “NSR“) on the unpatented mining claims of the Island Mountain Property, subject to BC Company’s right to repurchase the NSR as follows: (i) $1,300,000 for each 1% of the NSR, or (ii) $2,400,000 for the entire NSR, payable in cash or Resulting Issuer Shares, or a combination of both, with a deemed price equal to the VWAP.

To date, BC Company has made advance cash payments to TUVERA in the aggregate amount of $45,000, which will be credited against the Closing Cash Payment on the Island Mountain Closing. BC Company has agreed to complete the following additional advance cash payments to TUVERA, which will also be credited against the Closing Cash Payment:

• $15,000 to be paid on or before April 30, 2022; and
• $10,000 to be paid on or before May 31, 2022.

Subject to the terms and conditions in the Island Mountain Agreement including the completion of the obligations of BC Company set out above, on the Island Mountain Closing, BC Company will acquire TUVERA’s majority interest in the Island Mountain Property upon the exchange of closing documents, including the delivery of the balance of the Closing Cash Payment and the Closing Share Issuance to TUVERA.

Pursuant to the terms of the Island Mountain Agreement, BC Company has agreed to complete the following cash payments and issuances of Resulting Issuer Shares calculated based on the then-applicable VWAP to TUVERA, for achieving the following mineral resource milestones on the Island Mountain Property after the Island Mountain Closing:

• $900,000 cash and $200,000 of Resulting Issuer Shares for completion of a technical report estimating at least 750,000 ounces of gold or gold equivalent mineral resources on the Island Mountain Property;
• $200,000 cash and $200,000 of Resulting Issuer Shares for completion of a technical report estimating at least 1,000,000 ounces of gold or gold equivalent mineral resources on the Island Mountain Property;
• $200,000 cash and $500,000 of Resulting Issuer Shares for completion of a technical report estimating at least 1,500,000 ounces of gold or gold equivalent mineral resources on the Island Mountain Property;
• $700,000 cash and $1,000,000 of Resulting Issuer Shares for completion of a technical report estimating at least 2,000,000 ounces of gold or gold equivalent mineral resources on the Island Mountain Property; and
• $1,200,000 cash and $1,500,000 of Resulting Issuer Shares for completion of a technical report estimating at least 3,000,000 ounces of gold or gold equivalent mineral resources on the Island Mountain Property.

The Island Mountain Closing is subject to a number of conditions precedent, including, but not limited to, BC Company meeting certain capital requirements, the concurrent closing of the Proposed Transaction and the Resulting Issuer entering into a consulting agreement with TUVERA for TUVERA to make available two directors and officers of TUVERA, to provide advice on the development of the Island Mountain Property in consideration for the payment $50,000 in cash and $300,000 in Resulting Issuer Shares on the Island Mountain Closing and an annual consulting fee of $50,000.

Asset Information Summary – Island Mountain Property

The Island Mountain Property is located in Elko County, Nevada, on the Independence Gold Trend and in close proximity to the Jerritt Canyon Trend, approximately 113 kilometres north of the city of Elko. The Island Mountain Property is composed of 78 unpatented lode mineral claims on public land plus 8 patented claims leased from private individuals, covering an aggregate of approximately 592 hectares.

The style of mineralization at the Island Mountain Property is a Carlin-type, commonly hosted by carbonate strata near normal and thrust faults that may have served as hydrothermal feeder conduits and/or as aquitards that channeled mineralization into favourable-structured prepared zones or receptive beds. There also is a common association with dikes of felsic to mafic composition. Carlin-type gold mineralization is generally accompanied by a characteristic suite of pathfinder elements (arsenic, antimony, bismuth, mercury, and in places barium, tungsten, and thallium). Both oxide and sulphide gold mineralization occur on the Property.

Initial drilling on the Island Mountain Property was conducted by Cordex Exploration Syndicate in 1982, and through the 1990s a number of property holders conducted further exploration programs, including 225 drill holes. A further exploration programs in 2003 and 2004 included 80 reverse circulation (“RC“) drill holes and 10 diamond drill holes. Exploration programs in 2012 and 2013 included 26 RC holes and six diamond drill holes. Total past drilling on the Island Mountain Property includes 348 holes covers 8,094 metres. The Company has commissioned a technical report on the Island Mountain Property, that the Company anticipates will include a current mineral resource estimate.

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Butte Valley Agreement

BC Company entered into a property acquisition agreement dated January 26, 2022 (the “Butte Valley Agreement“) with a subsidiary of Lion CG (“Lion Subco“) pursuant to which Lion Subco agreed to sell to BC Company its interest in the Butte Valley Property, which consists of two options to acquire a 100% interest in: (a) 78 unpatented mining claims located in White Pine County, Nevada and certain data, subject to an underlying 2% NSR (the “NS Property“); and (b) 600 mining claims located in White Pine County, Nevada, subject to an underlying 2.5% NSR (the “NorthEx Property“), in consideration for BC Company agreeing to:

• pay a cash payment of US$500,000 as reimbursement of explorations costs payable on the closing date of the Proposed Transaction, or earlier in certain circumstances;
• issue 15,750,000 BC Company Shares to Lion Subco or Lion CG, at a deemed price of $0.20 per BC Company Share, subject to adjustment; and
• grant a 1.5% NSR on each of the NS Property and NorthEx Property, subject to a buy-down to a 1% NSR with payment of US$7,500,000 per property.

Lion Subco’s interest in the underlying agreements with respect to the NS Property and the NorthEx Property, as described below, will be assigned to BC Company on the closing of the Butte Valley Agreement. Upon the closing of the Butte Valley Agreement, BC Company may acquire a 100% interest in the NS Property and the NorthEx Property by completing the option payments described below.

The closing of the Butte Valley Agreement is subject to LCG obtaining the approval of the TSXV, and completion of a private placement by BC Company for gross proceeds of not less than $2,000,000.

NS Agreement

Lion Subco entered into an option agreement dated December 3, 2019 (the “NS Agreement“) with Nevada Select Royalty, Inc. (“Nevada Select“), whereby Nevada Select granted to Lion Subco an option to purchase a 100% interest in the NS Property, for a five-year option period, in consideration for the following cash payments to Nevada Select:

• US$15,000 on December 3, 2019 (complete);
• US$24,711.61 reimbursement for 2020 claim fees and staking costs on December 3, 2019 (complete);
• US$35,000 on or before December 3, 2020 (complete);
• US$50,000 on or before December 3, 2021 (complete);
• US$50,000 on or before December 3, 2022;
• US$50,000 on or before December 3, 2023; and
• US$50,000 on or before December 3, 2024.

Upon exercise of the option to acquire the NS Property, Nevada Select will be granted a 2% NSR on the NS Property, with a buyback right to reduce the NSR to 1% for the payment of US$10,000,000 to Nevada Select.

NorthEx Agreement

Lion Subco entered into a mining lease with an option to purchase agreement dated August 22, 2019, as amended on December 6, 2019 and July 30, 2021 (the “NorthEx Agreement“) with North Exploration, LLC (“NorthEx“) pursuant to which: (i) NorthEx leased the NorthEx Property to Lion Subco for aggregate lease payments of up to US$605,000 to maintain the lease up to August 1, 2025; and (ii) NorthEx granted an option to Lion Subco to purchase a 100% interest in the NorthEx Property at any time during the term of the lease for an amount equal to US$600,000 less the sum of the amounts previously paid to maintain the lease. To date, US$55,000has been paid to NorthEx under the NorthEx Agreement to maintain the lease until August 1, 2022. Upon exercise of the option to acquire the NorthEx Property, NorthEx will be granted a 2.5% NSR on the NorthEx Property, with a buyback right to reduce the NSR to 1.5% for the payment of US$1,000,000 to NorthEx, and a right to further reduce the NSR to 1% for the payment of US$5,000,000 to NorthEx within 10 years after the exercise of the option.

Asset Information Summary – Butte Valley Property

The Butte Valley property is a porphyry copper-gold property located in White Pine County, near Ely, Nevada. Over its recent history, there have been seventeen holes drilled on the Butte Valley Property, and geophysical studies including heli-MAG and Induced Polarization (IP) have been completed. To date a mineral resource has not been established, however the Butte Valley Property has the potential to contain a magnetite-rich copper skarn deposit.

Sponsorship for the Proposed Transaction

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Sponsorship for the Qualifying Transaction of a Capital Pool Company is required by the TSXV, unless exempt in accordance with TSXV policies. The Company intends to apply for a waiver from the requirement to obtain a Sponsor for the Proposed Transaction, however, there can be no assurance that a waiver will be obtained. If a waiver from the sponsorship requirement is not obtained, a Sponsor will be identified at a later date. An agreement to act as Sponsor in respect of the Proposed Transaction should not be construed as any assurance with respect to the merits of the Proposed Transaction or the likelihood of its completion.

Filing Statement

In connection with the Proposed Transaction and pursuant to the requirements of the TSXV, Green Panda intends to file on SEDAR (www.sedar.com) a filing statement (or an information circular in the event that the Proposed Transaction requires approval by the shareholders of Green Panda), which will contain details regarding the Proposed Transaction, Green Panda, BC Company and the Resulting Issuer.

Further Information

Green Panda intends to issue a subsequent press release in accordance with the policies of the TSXV providing further details in respect of the Proposed Transaction, including information relating to the transaction structure, the definitive agreement, descriptions of the proposed Principals and Insiders of the Resulting Issuer, as well as the Concurrent Financing. In addition, a summary of BC Company’s financial information will be included in a subsequent news release.

For further information, please contact:

Green Panda Capital Corp.
Xin (Richard) Zhou
President and Chief Executive Officer
sukin21cn@hotmail.com

On behalf of the board of directors of BC Company:

Stephen Goodman, President

This news release does not constitute an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction. The securities of the Company and BC Company 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 (as defined in the U.S. Securities Act) unless registered under the U.S. Securities Act and applicable state securities laws unless pursuant to an exemption from such registration.

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Cautionary Note

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

C. Travis Naugle, QP-MMSA, a qualified person as defined by National Instrument 43-101 – Standards of Disclosure for Mineral Projects, is the Chairman and CEO of BC Company, and has reviewed and approved the scientific and technical disclosure in this press release.

Cautionary Statement Regarding Forward-Looking Information

This news release contains certain forward-looking statements, including statements relating to the Proposed Transaction and certain terms and conditions thereof, the ability of the parties to enter into a definitive agreement and complete the Proposed Transaction, the Consolidation, the Exchange Ratio, the Name Change, the Resulting Issuer’s ability to qualify as a Tier 2 Mining issuer, the TSXV sponsorship requirements, shareholder, director and regulatory approvals, obtaining TSXV approval, completion of the Concurrent Financing, BC Company’s acquisition of an interest in the Properties, the potential exercise of the options under the NS Agreement and the NorthEx Agreement, the duration of the halt in respect of the Green Panda Shares, planned future press releases and disclosure, and other statements that are not historical facts. Wherever possible, words such as “may”, “will”, “should”, “could”, “expect”, “plan”, “intend”, “anticipate”, “believe”, “estimate”, “predict” or “potential” or the negative or other variations of these words, or similar words or phrases, have been used to identify these forward-looking statements. These statements reflect management’s current beliefs and are based on information currently available to management as at the date hereof.

Forward-looking statements involve significant risk, uncertainties and assumptions. Many factors could cause actual results, performance or achievements to differ materially from the results discussed or implied in the forward-looking statements. These risks and uncertainties include, but are not limited to geological risks, risks associated with the effects of COVID-19, the financial markets generally, the ability of BC Company to acquire an interest in the Properties, the results of the due diligence investigations to be conducted in connection with the Proposed Transaction, the ability of the Company to complete the Proposed Transaction or obtain requisite TSXV acceptance and, if applicable, shareholder approvals. As a result, the Company cannot guarantee that the Proposed Transaction will be completed on the terms described herein or at all. These factors should be considered carefully and readers should not place undue reliance on the forward-looking statements. Although the forward-looking statements contained in this press release are based upon what management believes to be reasonable assumptions, the Company cannot assure readers that actual results will be consistent with these forward-looking statements. These forward-looking statements are made as of the date of this press release, and the Company assumes no obligation to update or revise them to reflect new events or circumstances, except as required by law.

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.

NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES.

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To view the source version of this press release, please visit https://www.newsfilecorp.com/release/118980