VANCOUVER, British Columbia and TORONTO, July 21, 2022 (GLOBE NEWSWIRE) -- Fancamp Exploration Ltd. (“Fancamp”) (TSXV: FNC) and KWG Resources Inc. (“KWG”) (CSE: KWG, KWG.A; FSE: KW61) are pleased to announce that they have entered into a binding agreement dated July 20, 2022 with respect to a proposed transaction (the “Proposed Transaction”) involving the sale by Fancamp to KWG of all of the right, title and interests beneficially owned by Fancamp in and to the “Koper Lake-McFaulds” mineral properties, comprised of four (4) mining claims (the “Mining Claims”) located within the “Ring of Fire” in the Province of Ontario.

The consideration payable by KWG to Fancamp for the purchase of the Mining Claims and the Fancamp Closing Payment (as defined below) will consist of: (a) the issuance by KWG to Fancamp (or otherwise as Fancamp may direct to be held in trust for Fancamp) of a secured convertible promissory note (the “Secured Convertible Promissory Note”) in the principal amount of C$34.5 million (the “Principal Amount”), having the principal terms set out below; (b) the issuance by KWG to Fancamp of such number of warrants (the “Consideration Warrants”) to purchase multiple voting shares of KWG (“MVS”) equal to one-half (1/2) of the Principal Amount divided by the ten (10) day volume-weighted average trading price of the MVS and the subordinate voting shares of KWG ending on the trading day immediately prior to the date of the binding agreement (such volume-weighted average trading price, the “Base Conversion Price”); and (c) the grant by KWG to Fancamp of a 2.0% net smelter return royalty (one-quarter of which may be purchased by KWG at any time for C$5 million and the next one-quarter of which will be subject to a right of first refusal in favour of KWG) on any direct or indirect interest in the Mining Claims held by KWG on and after the closing date (the “Royalty”).

The Proposed Transaction is subject to a thirty (30) day right of first refusal (the “ROFR”) in favour of Bold Ventures Inc. (“Bold”) in connection with a joint venture agreement dated effective as of October 18, 2018 between Bold and Fancamp (the “JVA”).

Subject to any regulatory approvals or filings and subject to the ROFR, the Proposed Transaction is expected to close during the third quarter of 2022, or on such other date and time as is mutually agreed to between KWG and Fancamp, acting reasonably.

Rajesh Sharma, President and Chief Executive Officer of Fancamp, said, “The Proposed Transaction simplifies some of the existing joint venture arrangements and will enable KWG to be the clear leader in the advancement and development of the Mining Claims and, in due course, to help finance this initiative. The proposed consideration package allows Fancamp to monetize its investment into KWG with marketable securities while providing KWG with an immediate cash injection that will permit KWG to advance various initiatives relating to the Mining Claims and to assist with their working capital needs.”

Frank Smeenk, Chief Executive Officer of KWG, said: “We are very gratified to have Fancamp join us in investing in the ferrochrome and stainless-steel vision of the Ring of Fire’s enormous potential. Rajesh Sharma is a most accomplished mining executive with deep and long experience in the base metal mining and steel industry. We look forward to working with him and Fancamp should the Bold Ventures right of first refusal not be exercised. This transaction will facilitate fast tracking the development of this historic chromite discovery.”