News Release

Xplore Resources Enters into Definitive Agreement for Qualifying Transaction with VON Capital Corp.

October 3rd 2019

Toronto, Ontario - Xplore Resources Corp. (“Xplore”), a private mineral exploration company incorporated under the laws of the Province of Ontario is pleased announce further to the news release dated August 12th, 2019, Xplore has entered into an arm’s length business combination agreement (the "Definitive Agreement ")  dated September 27, 2019 with VON Capital Corp. (“VON” or the “Corporation”), a capital pool company as defined by the TSX Venture Exchange (“TSXV” or the “Exchange”). The proposed Transaction (as defined herein) will be a “qualifying transaction” for VON under TSXV Policy 2.4. 

Xplore has an interest in the Valk Project located in Province of British Columbia (the "Valk Project").

Upon completion of the Transaction, the Company expects that the resulting issuer (the “Resulting Issuer”) will be named Xplore Resources Corp. and will be listed as a Tier 2 Mining Issuer on the Exchange.

Summary of the Qualifying Transaction

The Definitive Agreement sets out certain binding terms between Xplore and VON concerning a proposed arm's length business combination transaction to occur by way of a three-cornered amalgamation among VON, Xplore and 2717915 Ontario Inc. (“Subco”; a newly formed wholly owned subsidiary of VON) whereby (i) Xplore and Subco will amalgamate to form a new amalgamated company; (ii) each shareholder of Xplore (the “Xplore Shareholders”) will receive Resulting Issuer Shares (as defined herein); and (iii) the amalgamated company will be a wholly owned subsidiary of VON (the “Transaction”).

The Transaction will not constitute a non-arm's length transaction, and as such will not require the approval of VON's shareholders. The common shares in the capital of Xplore (the “Xplore Shares”) outstanding immediately prior to the completion of the Transaction are expected to be exchanged for fully paid and non-assessable common shares in the capital of the Resulting Issuer (the “Resulting Issuer Shares”) on a one-for-one basis. It is expected that there will be approximately 18,300,000 Xplore Shares outstanding prior to closing the Transaction, although additional Xplore Shares may be issued as part of a pre-closing financing in Xplore.

The completion of the Transaction is subject to the satisfaction of various conditions that are standard for a transaction of this nature, including: (i) the completion of a concurrent financing for up to $1,000,000 (the “Financing”); (ii) the approval by the Xplore Shareholders in respect of the Transaction (iii) receipt of all requisite regulatory, TSXV, court or governmental authorizations and third party approvals or consents and (iv) the completion of satisfactory due diligence by each of the parties. Subject to satisfaction or waiver of the conditions precedent in the Definitive Agreement, Xplore and VON anticipate the Transaction will be completed on or before November 30, 2019

Additional Information

It is not expected that VON will be advancing any funds to Xplore prior to closing of the Transaction.  

The Financing is expected to be undertaken through the sale of up to 10,000,000 Xplore Shares; with closing contingent on closing of the Transaction.

Following the completion of the Transaction, existing Xplore Shareholders will own approximately 82.33% of the issued and outstanding Resulting Issuer Shares and existing VON shareholders will own approximately 17.67% of the issued and outstanding Resulting Issuer Shares.

About Xplore

Xplore a private mineral exploration company incorporated under the laws of the Province of Ontario, incorporated May 28, 2018, focused on the acquisition and development of gold and copper properties. Xplore's focus on copper is driven by the long-term view of increased demand from electrification with no new major copper deposit discoveries, leading to a future shortage of supply and increase in price. Xplore follows a lean management philosophy to maintain low operating costs to ensure capital raised is deployed directly to its exploration program to build out the asset base and increase shareholder value.

About the Valk Project

The Valk Project consists of 1,614 ha located within the Nanaimo Mining Division, British Columbia, approximately 20 km NW of Port Hardy. Xplore has a 100% interest in the project. The Project is road accessible via an extensive network of provincial highways, local roads and logging roads. The Project is dominated by Theoleiitic basalts of the Karmutsen Formation. The Valk Project is located 25 km north of the historic Island Copper Mine (345 Mt @ 0.41% Cu) and the North Island Copper and Gold Project (indicated resource of 305 Mt @ 0.21% Cu). Regional scale rock and soil geochemistry has identified widespread, anomalous copper and vanadium mineralization that is open along strike on a NW trend. Xplore contracted Longford Exploration Services Ltd. (“Longford”) and has completed follow up reconnaissance soil and rock sampling to confirm and expand the known anomalies on the Project. Longford completed the field work in July at a cost of $115,000. Longford has completed compiling the results and has summitted to Xplore a completed 43-101 Technical Report on the Valk Project.

Qualified Persons

The scientific and technical information contained in this news release has been reviewed and approved by Luke van der Meer, P.Geo, an independent consulting geologist who is a “Qualified Person” (QP) as such term is defined under National Instrument 43-101 - Standards of Disclosure for Mineral Projects.

About VON Capital Corp.

VON is a capital pool company. Its business activity is limited to identifying and evaluating assets or business for acquisition.  The Corporation is headquartered in Vancouver, British Columbia.

Cautionary Notes:

Completion of the transaction is subject to a number of conditions, including but not limited to, TSXV acceptance and Xplore Shareholder approval. 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.

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.

ON BEHALF OF THE BOARD

“Wesley C. Hanson”
President & CEO

For further information, please contact:
Phone: +1 647-362-9675
Email: info@xploreresources.com

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

Notice on forward-looking statements:

Information set forth in this news release contains forward-looking statements including those relating to completion of the Transaction, the timing of completion of the Transaction, TSXV approval with respect to the Transaction, Xplore Shareholder approval of the Transaction, completion of the Financing, and operations and plans of the Resulting Issuer. These statements reflect management's current estimates, beliefs, intentions and expectations; they are not guarantees of future performance. Xplore 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 Xplore's control. Such factors include, among other things: the Transaction may not close when anticipated or at all, necessary approvals including TSXV and Xplore Shareholder approval may not be obtained, the parties may not meet or waive necessary conditions precedent under the Definitive Agreement in order to complete the Transaction, and the operations of the Resulting Issuer and the Valk Project may not be as anticipated. 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, Xplore undertakes no obligation to publicly update or revise forward-looking information.