Catalina Gold Corp. Announces Entry into Letter of Intent, Consolidation and Shares for Debt Transaction

Vancouver, British Columbia–(Newsfile Corp. – December 23, 2019) – Catalina Gold Corp. (NEX: CA.H) (“Catalina” or the “Company“)  announces that it has entered into a non-binding letter of intent dated December 20, 2019 (the “LOI“) with Clive Brookes and David Heyman (collectively the “Vendors“) with respect to the acquisition of a platinum group element (PGE) mining project known as the “Dobbin Claim Group” (the “Claims“) representing an area of approximately 2,517 hectares situated North West of Kelowna, B.C. and 17 km North East of the Brenda Cu-Mo Mine (the “Transaction“).

Pursuant to the terms of the LOI, the Company has the right to acquire a 100% undivided interest in the Claims in consideration of the aggregate payment of $500,000 in cash and the aggregate issuance of up to 2,000,000 Units (as defined herein) on a post-Consolidated basis to the Vendors and grant to the Vendors of a 2.5% net smelter royalty on all products derived from the Claims as further described in the net smelter return royalty agreement to be entered into by the parties. Catalina will issue up to 1,000,000 units (each a “Unit“) to each Vendor, with each Unit consisting of one common share of Catalina and one warrant to acquire an additional common share of Catalina at a price of $0.10 for period of three years from the closing date of the Transaction.

The Company is required to pay each Vendor $20,000 on or before January 3, 2020 and is required to make a cash payment of $25,000 to each Vendor upon entry into the Definitive Agreement and receipt of all required approvals for the Transaction from the TSXV or such other stock exchange that the common shares of Catalina are principally traded on (the “Exchange“). The remainder of the consideration is payable in traches for a period of up to four years from the Closing Date. During the period commencing on the Closing Date and ending on the date of execution of the LOI until such time as Catalina resigns as operator, Catalina will be the operator of all exploration programs on the Claims. Catalina has the option to accelerate payment of the consideration at any time after execution of the LOI and acquire 100% title to the Claims. The Company intends to file materials with the Exchange requesting reactivation as a Tier 2 Mining Issuer on the Exchange upon completion of the Transaction (the “Reactivation“). The proposed Transaction is not a “non-arm’s length transaction” and, as such, shareholder approval is not expected to be required.

Prior to or concurrently with closing of the Transaction, the Company will complete an equity bridge financing of up to $500,000 for costs associated with completing the Transaction and preparation of a technical report pursuant to National Instrument 43-101 and initial work program on the Claims consisting of post-Consolidated common shares of Catalina offered to investors on a flow through basis at a price of $0.15 per share and on a non-flow through basis at a price of $0.10 per share (the “Bridge Financing“) and an equity financing to raise gross proceeds of up to $1,000,000 for funding the acquisition of the Claims an further work programs on the Claims or such other amount as may be determined by the Company in its sole discretion consisting of post-Consolidated common shares of the Company at a price of $0.10 per share (the “Concurrent Financing“) and subject to approval by of the Exchange.

The completion of the Transaction is subject to, among other things, the parties entry into a definitive agreement respecting the Transaction, completion of the Consolidation, the Company obtaining all consents, waivers and approvals necessary in connection with the Transaction, the Bridge Financing and the Concurrent Financing, including the conditional approval of the Exchange for the Reactivation or a principal listing of the Shares on any other recognized stock exchange in Canada. There is no assurance that the Transaction will be completed as planned or at all.

Further announcements will be made once the terms of the Bridge Financing and Concurrent Financing for the Transaction are established, and upon execution of the definitive agreement. In connection with the Transaction a finders fee of 80,000 post-Consolidated common shares (aggregate 240,000 post-Consolidated Shares) will be issued to each of Nick Horsley, Hani El Rayess and Dan Terrett upon closing of the Transaction subject to approval of the Exchange.

The Company further announces a proposed consolidation (the “Consolidation“) of its common shares (the “Shares”) on the basis of up to three (3) existing Shares for one (1) new Share. Currently, a total of 13,500,000 Shares are issued and outstanding. Accordingly, if put into effect on the basis of three existing Shares for one new Share, a total of 4,500,000 Shares would be issued and outstanding following the Consolidation (excluding any Shares in connection with the proposed debt settlement, the Transaction and the proposed financings) assuming no other change in the issued capital.

According to the Company’s Articles, the board of directors of the Company has the ability to approve the Consolidation and the board of directors believes it is in the best interest of the Company to approve the Consolidation. The Consolidation will increase the Company’s flexibility and competitiveness in the market place and make the Company’s securities more attractive to a wider audience of potential investors, thereby resulting in a more efficient market for its Shares.

The Consolidation will affect all shareholders of the Company uniformly and affect all of the Company’s stock options and warrants issued and outstanding at the effective date. At the time of the Consolidation, the number, exchange basis or exercise price of all stock options and warrants issued and outstanding will be adjusted to reflect the Consolidation. The actual adjustment will be made by the Company in consultation with its advisors. The Consolidation is subject to the acceptance of the Exchange.

The Company also intends to enter into debt settlement agreements with certain creditors of the Company. Pursuant to these agreements, the Company intends to issue up to an aggregate of 1,647,206 post-Consolidation common shares in the capital of the Company at a deemed price of $0.05 per Common Share to settle $247,081 of outstanding debt (collectively, the “Debt Settlement“).

The completion of the Debt Settlement is subject to a number of conditions, including the approval from the Exchange. All securities issued pursuant to the Debt Settlement will be subject to a hold period of four months and one day from the date of issuance, in accordance with applicable securities legislation.


Marc Branson
Catalina Gold Corp.
Tel: (604) 816-2555
[email protected]

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.

Forward Looking Statements

This press release contains “forward-looking information” within the meaning of applicable Canadian securities legislation. Forward-looking information includes, without limitation, that the parties will enter into a Definitive Agreement respecting the Transaction, that the Company will complete the Consolidation, Bridge Financing and Concurrent Financing, that the Company will receive all required regulatory and exchange approvals, that the Company will complete the Transaction, the reactivation of the Company as a Tier 2 Mining Issuer on the Exchange and the completion of the all proposed financing on terms acceptable to the Company. Generally, forward-looking information can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved”. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. Such forward-looking statements and information are subject to risks, uncertainties and other factors which may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statement. Specific risks included that we may not obtain regulatory approval. General risks include the reliance on available data and assumptions and judgments used in the interpretation of such data, the speculative and uncertain nature of exploration and development, exploration and development costs, capital requirements and the ability to obtain financing, volatility of global and local economic climates, share price volatility, estimate price volatility, changes in equity markets, increases in costs, exchange rate fluctuations and other risks involved in the mineral exploration and development industry. There can be no assurance that a forward-looking statement or information referenced herein will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements or information. Also, many of the factors are beyond our control. Accordingly, readers should not place undue reliance on forward-looking statements or information. Other factors which could materially affect such forward-looking information are described in the risk factors in the Company’s most recent annual management’s discussion and analysis that is available on the Company’s profile on SEDAR at The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws.

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.

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