Tilting Capital Corp. Announces Proposed Transaction with Gold Line Resources Ltd.

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

VANCOUVER, May 26, 2020 /CNW/ - Tilting Capital Corp. ("TLL" or the "Corporation") (NEX: TLL.H) is pleased to announce that it has entered into a letter of intent dated May 12^th, 2020 (the "LOI") with Gold Line Resources Ltd. ("GLR"), in respect of a proposed reverse takeover transaction (the "Proposed Transaction") pursuant to which TLL will acquire all of the issued and outstanding common shares in the capital of GLR.  The Proposed Transaction will be an Arm's Length Transaction (as that term is defined under TSXV Policy 1.1).

Background on Gold Line Resources Ltd.

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.  Technical information with respect to the projects is available as a result of work done by previous operators, as well as work conducted by GLR, and will be disclosed in a future news release once it has been reviewed, approved and, in some cases, verified, by Michael Dufresne, M.Sc., P.Geol., P.Geo. of APEX Geoscience Ltd., a consultant to the Company and a Qualified Person for the purposes of NI 43-101.   

GLR was incorporated on October 11, 2018 under the Business Corporations Act (British Columbia). No person directly or indirectly holds a controlling interest in GLR. Summary financial information of GLR, including total assets/liabilities and net profits/losses, will be disclosed in a subsequent news release when it becomes available.

Transaction Structure

The Proposed Transaction is expected to be completed by way of a share exchange, three-cornered amalgamation or other form of business combination determined by the legal and tax advisors to each of TLL and GLR, acting reasonably, which will result in GLR becoming a wholly-owned subsidiary of TLL or otherwise combining its corporate existence with that of a TLL entity (the "Resulting Issuer"). Upon completion of the Proposed Transaction, it is expected that the Resulting Issuer will carry on the business previously carried on by GLR.

Pursuant to the Proposed 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.

Completion of the Proposed Transaction will be subject to a number of conditions precedent set forth in the LOI, including: (i) satisfactory completion of due diligence investigations by each of TLL and GLR on or before May 25, 2020; (ii) the negotiation and execution of a definitive agreement (the "Definitive Agreement") on or before June 15, 2020; (iii) approval by the directors of TLL and GLR; (iv) approval by the securityholders of GLR and, if applicable, of TLL; (v) completion of the Financing (as described below); (vi) filing of technical report(s) in respect of the projects that are compliant with NI 43-101; (vii) receipt of all requisite regulatory (including TSX Venture Exchange ("TSXV")) and third party approvals; (viii) immediately prior to closing, TLL having cash of not less than C$620,000 and indebtedness of not more than C$40,000; (ix) immediately prior to closing, TLL having issued and outstanding not more than approximately 18,323,191 TLL Shares (not including TLL Shares issued pursuant to the Financing) and 7,600,000 warrants to purchase TLL Shares.  There can be no assurance that the Proposed Transaction will be completed on the terms proposed in the Letter of Intent or at all.

In connection with the Proposed Transaction, TLL and GLR will enter into a pooling agreement under which TLL Shares issued pursuant to the C$0.05 unit financing disclosed in TLL's news release dated May 6, 2020, and all GLR Shares will be held in escrow and released as follows (subject to any longer hold periods required under applicable securities laws or TSXV policies): 40% of the applicable TLL Shares and 40% of the applicable GLR Shares will be released on closing of the Proposed Transaction, with the remaining 60% of each released in tranches of 30% at 6 and 12 months after closing of the Proposed Transaction.

It is anticipated that TLL will not be required to obtain shareholder approval of the Proposed Transaction because: (1) the Proposed Transaction is not a Related Party Transaction (as that term is defined under TSXV Policy 1.1) and no other circumstances exist which may compromise the independence of TLL or other interested parties with respect to the Proposed Transaction; (2) TLL is without active operations; (3) TLL is not and is not expected to be subject to a cease trade order or otherwise be suspended from trading on completion of the Proposed Transaction; and (4) the anticipated structure of the Proposed Transaction does not require shareholder approval under applicable corporate or securities laws. However, depending on the ultimate structuring of the Proposed Transaction, TLL may be required to obtain shareholder approval of the Proposed Transaction or of certain matters ancillary thereto, in which case TLL will update the markets accordingly.

On closing of the Proposed Transaction, TLL anticipates graduating from the NEX to the TSXV as a "Tier 2" Mining Issuer that will meet the TSXV's initial listing requirements applicable therefor. A finder's fee of 1,800,000 TLL Shares and an administration fee of 340,000 TLL Shares will be payable in connection with closing of the Proposed Transaction.

Proposed Advances and Private Placement Financing

TLL has advanced a non-refundable deposit of C$25,000 to GLR. TLL anticipates completing a private placement of TLL shares (the "Financing") at a price of not less than C$0.20 per TLL share for gross proceeds C$3 million, to fund the operations of the Resulting Issuer. The size of the Financing and the issue price will be determined by TLL in the context of the market. The proposed Financing may be completed on a non-brokered or brokered basis. In the event that the Financing is brokered, the agent retained by TLL may be paid customary compensation for such agency services. The Financing is subject to TSXV approval.

Proposed Management and Directors

Subject to TSXV approval, on completion of the Proposed Transaction, the board of the Resulting Issuer will be comprised of five directors: three representatives from TLL; one representative from GLR; and one representative from EMX Royalty Corp., GLR's largest shareholder. It is expected that the board will include Henrik Lundin (who will also be appointed as Chairman), Adam Cegielski (who will also be appointed as CEO), Dr. Eric Jensen, and Joel Shacker – background details of these individuals are set out below. Background details of the remaining board member and the CFO will be set out in a future news release, once the parties have determined which individuals will fill those roles.

Henrik Lundin, Director and Chairman

Mr. Henrik Lundin has considerable global experience in the natural resource sector.  He has a strong understanding of the technical and business side of the oil and gas industry and most recently held the position of COO of TAG Oil Ltd. (TSX: TAO). At TAG Oil, Mr. Lundin was responsible for the global operations of TAG Oil and led the farm-in/farm-out processes in Australia and New Zealand. Mr. Lundin is a Swedish citizen and has a B.Sc. Petroleum Engineering degree from the Colorado School of Mines in Golden, Colorado.

Adam Cegielski, Chief Executive Officer and Director

Mr. Cegielski has over 20 years of experience in the venture capital industry ranging from mineral exploration, technology, health care and education. He started his career developing an industrial mineral project in Uganda that he later sold to Rio Tinto PLC in 2007. Mr. Cegielski was then founding director of Cayden Resources Inc., which was sold to Agnico Eagle Mines Ltd. for $205 million in November, 2014. He is currently founder, chief executive officer and director of Eyecarrot Innovations Corp., a neurotechnology company focused on driving higher levels of human performance through its Binovi technology. Eyecarrot was founded in 2014 and has developed and commercialized the Binovi platform, which is now used in over 20 counties and by elite athletes globally.

Dr. Eric Jensen, Director

Dr. Jensen has over 26 years of industry experience and is the General Manager of Exploration at EMX Royalty Corporation. Dr. Jensen is a co-founder of Bronco Creek Exploration and has extensive experience in the planning and implementation of regional- to project-scale exploration programs. He has relevant exploration, research and academic experience in mineral deposits related to alkaline magmatism, "high- and low-sulfidation" epithermal gold deposits, porphyry-style deposits, mesothermal lode gold systems, and iron-oxide-copper-gold (IOCG) systems. Dr. Jensen graduated from Carleton College in Northfield, Minnesota in 1993 with a B.A. in Geology, and received his Ph.D. in Economic Geology at the University of Arizona in 2003.

Joel Shacker, Director

Mr. Shacker has acted as both a director and officer of various public and private companies. Mr. Shacker is currently President of Mota Ventures Corp. (CSE:MOTA). He has overseen the expansion of Mota throughout Latin America, Europe and North America. Under his leadership the company has become a global ecommerce retailer with sales of over $29,000,000 in 2019, and over $10,000,000 already in 2020. Mr. Shacker is currently the CEO of RewardStream Solutions Inc. Mr. Shacker served as a director of Weekend Unlimited Inc., while overseeing overseas developments and leading the company's expansion into international markets. Mr. Shacker holds an Honors Business Administration degree from Ivey Business School, specializing in finance, and has also served as Chief Operating Officer of CanPac Investment Corp. and as an Associate at Stadnyk and Partners.

Filing Statement and Information Circular

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

Sponsorship

Sponsorship of the Proposed Transaction is required by the TSXV unless an exemption from the sponsorship requirement is available. The parties will be seeking a waiver of any requirement for a sponsor, but in the event a waiver is not obtained, the parties will update the markets accordingly.

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 Proposed Transaction by the TSXV.

General

TLL will issue additional news releases relating to the Proposed Transaction if and when the parties enter into a Definitive Agreement.

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 Proposed Transaction is subject to a number of conditions, including but not limited to, TSXV acceptance and if applicable, disinterested shareholder approval. Where applicable, the Proposed Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Proposed 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 Proposed Transaction, any information released or received with respect to the Proposed 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 Proposed 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 Proposed Transaction, the terms of the Financing and the composition of the board of directors of the Resulting Issuer upon completion of the Proposed 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 Proposed Transaction; the expected timing and terms of the Proposed 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 Proposed 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.

Tilting Capital Corp., Adam Cegielski, Chief Executive Officer, Tel: [phone]; Gold Line Resources Ltd. contact: Jordan Trimble, Director, Tel: [phone]; Toby Pierce, Director, Tel: [phone]