June 22, 2018

2018-06-21 09:58 ET – News Release

Mr. Carl Sheppard reports

DUCKWORTH CAPITAL CORP. ENTERS INTO DEFINITIVE AGREEMENT WITH GOLDSPOT DISCOVERIES INC. TO COMPLETE BUSINESS COMBINATION

Duckworth Capital Corp. has entered into an amalgamation agreement dated June 18, 2018, with Goldspot Discoveries Inc. and 2639781 Ontario Inc., a wholly owned subsidiary of Duckworth (Subco), whereby Duckworth will acquire all of the issued and outstanding shares of Goldspot, an arm’s-length party. Pursuant to the amalgamation agreement, Goldspot will amalgamate with Subco and all of the outstanding common shares of Goldspot will be exchanged for common shares of Duckworth on the basis of 82.73481801 Duckworth shares for each one Goldspot share held. As a result, approximately 138,950,893 Duckworth shares will be issued to former Goldspot shareholders on a preconsolidated basis and not including any Duckworth shares or Goldspot shares issuable pursuant to the offering (the particulars of which are set out herein). There are no finders’ fees payable in connection with the completion of the transaction.

The transaction will constitute Duckworth’s qualifying transaction, as defined in Policy 2.4 of the TSX Venture Exchange policy manual and is subject to the approval of the TSX-V.

About Goldspot Discoveries Inc.

Goldspot is a private company continued pursuant to the Business Corporations Act (Ontario). Goldspot is a technology company that leverages machine learning to reduce capital risk while working to increase efficiencies and success rates in resource exploration and investment. Goldspot combines proprietary technology with traditional domain expertise, offering a front-to-back service solution to its partners. Goldspot’s solutions target big-data problems, making full use of historically unutilized data to better comprehend resource property potential. Goldspot has developed a monetization strategy into multiple verticals of the mining and investment industry, including service offerings, staking and royalty acquisition, and the development of its own artificial-intelligence-driven trading platform.

Goldspot currently has an aggregate of 1,679,473 Goldspot shares issued and outstanding, of which 360,000 Goldspot shares are held by Palisade Global Investments Ltd., a corporation existing under the laws of Belize, representing a total of 21.4 per cent of the total issued and outstanding Goldspot shares. Palisade Global Investments constitutes the control person (as that term is defined in the TSX-V policies) of Goldspot.

Financial information of Goldspot

Goldspot’s financial statements for the year ended Dec. 31, 2017, and for period from incorporation (Nov. 9, 2016) to Dec. 31, 2016, are currently being audited and are expected to be completed by June 29, 2018. The financial statements have been prepared in accordance with international financial reporting standards as issued by the International Accounting Standards Board.

The following unaudited financial information has been prepared using accounting policies applicable to a going concern, which contemplates the realization of assets and settlement of liabilities in the normal course of business as they become due. Goldspot has operating losses since incorporation on Nov. 9, 2016, has incurred a loss for the year ended Dec. 31, 2017, of $493,729 (from incorporation on Nov. 9, 2016, to Dec. 31, 2016: $41,064) and has an accumulated deficit of $534,793. Goldspot is a start-up company and is subject to risks and challenges similar to other companies in a comparable stage. These risks include, but are not limited to, dependence on key individuals, investment risks, market risks, the ability to maintain adequate cash flows, exchange rate fluctuations and continuing as a going concern.

As at Dec. 31, 2017, Goldspot had total assets of $1,626,906, compared with $18,414 at Dec. 31, 2016. As at Dec. 31, 2017, total assets included cash of $1,428,323, receivables of $175,298 and exploration and evaluation assets of $23,285. As at Dec. 31, 2016, total assets included cash of $975 and exploration and evaluation assets of $17,439.

As at Dec. 31, 2017, Goldspot’s total liabilities were $57,830, compared with $59,377 as at Dec. 31, 2016. As at Dec. 31, 2017, total liabilities consisted of accounts payable and accrued liabilities. As at Dec. 31, 2016, total liabilities consisted of accounts payable and accrued liabilities of $8,907 and advances from a related party of $50,470 for start-up operating costs and were repaid in January, 2017.

The company continues to have no long-term debt.

Private placement of subscription receipts

Prior to completion of the transaction, either Goldspot or Duckworth, as determined by the parties, intend to complete a non-brokered private placement of subscription receipts for gross proceeds of not less than $4.85-million at a price per subscription receipt of not less than $16.25 in the event the offering is completed by Goldspot or 20 cents in the event the offering is completed by Duckworth, or such other amount and price as the parties shall agree. There is no assurance that the offering will be completed on the terms set out herein or at all.

The gross proceeds from the sale of the subscription receipts will be held in escrow by an escrow agent pending satisfaction of the escrow release condition (as hereinafter defined). Provided the escrow release condition has been satisfied on or prior to the release deadline to be determined, the escrowed proceeds (and accrued interest) will be released to the resulting issuer (as hereinafter defined) and the subscription receipts will be directly or indirectly automatically exchanged or converted into resulting issuer shares (as hereinafter defined). The escrow release condition means the satisfaction of all conditions precedent to the completion of the transaction, other than the filing of the articles of amalgamation giving effect to the amalgamation of Goldspot and Subco.

Definitive agreement

Pursuant to the amalgamation agreement, the transaction is to be completed by way of a three-cornered amalgamation where, as soon as reasonably practicable after receiving requisite approval, Subco and Goldspot will amalgamate pursuant to the provisions of the Business Corporations Act (Ontario) and continue as one corporation (Amalco). Amalco shall continue to do business under the name Goldspot Holdings Inc.

Upon completion of the transaction, each holder of a Goldspot share (other than any Goldspot shareholders who exercise dissent rights) will receive 82.73481801 Duckworth shares for each one Goldspot share held, following which all such Goldspot shares will be cancelled. Duckworth shall receive one common share of Amalco for each one common share of Subco held by Duckworth, following which all such Subco shares shall be cancelled. In consideration for the issuance of Duckworth shares, Amalco will issue to Duckworth one Amalco share for each Duckworth share issued.

In addition, the holders of all outstanding stock options to acquire Goldspot shares shall receive, upon the subsequent exercise thereof, Duckworth shares based on the exchange ratio and all other terms of the Goldspot options shall remain the same.

Shareholder approvals

In connection with the transaction, Duckworth shall hold a meeting of the Duckworth shareholders, which may occur before or after the effective time of the transaction in order to: (a) approve the change of its name to Goldspot Discoveries Corp. or such other name as may be approved by Goldspot and any regulatory authorities; and (b) approve the proposed consolidation of all of the outstanding Duckworth shares by changing each two Duckworth shares into one Duckworth share, the particulars of which shall be set out in the management information circular of Duckworth to be prepared and mailed in connection with the Duckworth meeting. The transaction will not be subject to the approval of the shareholders of Duckworth. The Duckworth name change and Duckworth share consolidation may occur before or after the effective time of the transaction. All figures in this press release are before any Duckworth share consolidation unless otherwise stated.

Goldspot intends to, as soon as possible, call and hold a meeting of the shareholders of Goldspot for the purpose of approving the transaction, the particulars of which shall be set out in the management information circular of Goldspot to be prepared and mailed in connection with the Goldspot meeting.

Non-arm’s-length parties

The attached table lists the non-arm’s-length parties (as that term is defined in the TSX-V policies) to Duckworth with a beneficial interest in Goldspot.

Name of holder          Number of shares held    % total shares held

Brigus Capital Corp.                   10,000                   0.6%        
Torrent Capital Corp.                  10,000                   0.6%        
Numus Financial Inc.                    5,000                   0.3%        
John St. Capital                        5,000                   0.3%        

Resulting issuer

At the effective time of the transaction, Amalco will become a wholly owned subsidiary of Duckworth (which, after completion of the transaction, will be the resulting issuer, as such term is defined in the TSX-V policies). The resulting issuer will be subject to the Canada Business Corporations Act, will have its head and registered offices in Toronto, Ont., and Montreal, Que., and will carry on business through its subsidiary, Goldspot.

Upon completion of the transaction, former Goldspot and Duckworth shareholders will continue as shareholders of the resulting issuer. The resulting issuer will have 151,000,893 issued and outstanding common shares after giving effect to the offering on a preconsolidation non-diluted basis (approximately 75,500,446 resulting issuer shares on a postconsolidation non-diluted basis). Prior to the Duckworth share consolidation, 138,950,893 resulting issuer shares will be held by former Goldspot shareholders and 12.05 million resulting issuer shares will be held by former Duckworth shareholders, which represent ownership of the resulting issuer of approximately 92 per cent by former Goldspot shareholders and approximately 8 per cent by former Duckworth shareholders, on an undiluted basis.

Upon receipt of approval of the Duckworth shareholders at the Duckworth meeting, which may occur before or after the effective time of the transaction, Duckworth, or the resulting issuer as applicable, will effect the Duckworth share consolidation and the Duckworth name change.

Upon completion of the transaction, all of the current officers and directors of Duckworth shall resign and the members of the executive management term and directors of the resulting issuer will be as follows.

Denis Laviolette — chief executive officer, president and director

Mr. Laviolette has over 10 years of experience in exploration, mine operations and capital markets. He has worked in Northern Ontario (Timmins, Kirkland Lake and Red Lake), Norway and Ghana, and he was responsible for a diverse array of responsibilities, including grassroots exploration, start-up mine management and advanced mine operations. Mr. Laviolette worked as a mining analyst with Pinetree Capital Ltd. and now serves as a mining analyst and vice-president of corporate development for ThreeD Capital Inc. He is also the president of New Found Gold Corp. and a director of Xtra-Gold Resources Corp., Northern Sphere Mining Corp. and Tartisan Resources Corp. Mr. Laviolette has a BSc in Earth sciences (geology) from Brock University.

Collin Kettell — chairman

Mr. Kettell is the principal and co-founder of Palisade Global Investments and is involved with AuEx Ventures Inc. and the Long Canyon deposit, a project ultimately acquired by Newmont Mining Corp. for $2.2-billion. Mr. Kettell is also co-founder and chief executive officer of New Found Gold, a gold-focused exploration company.

Vincent Dube-Bourgeois — chief operating officer and director

Mr. Dube-Bourgeois worked for the Ontario Geological Survey (OGS) and Noront Resources Ltd., wherein he led the MSc project, which consisted of describing and interpreting the geochemistry and geodynamic setting of the volcanic rocks hosting the gold-rich Lalor VMS (volcanogenic massive sulphide) deposit in Snow Lake, Man. Mr. Dube-Bourgeois holds a BSc in geology from the University of Ottawa.

Ramon Barua — director

Mr. Barua is currently the chief financial officer of Hochschild Mining PLC. He was previously the chief executive officer of Fosfatos del Pacifico, a mining project in northern Peru owned by Cementos Pacasmayo, an associate company of the Hochschild Group. During 2008, Mr. Barua was the general manager for Hochschild Mining’s Mexican operations, having previously worked as deputy chief executive officer and chief financial officer of Cementos Pacasmayo. Prior to joining Hochschild, Mr. Barua was a vice-president of debt capital markets with Deutsche Bank in New York for four years and a sales analyst with Banco Santander in Peru. Mr. Barua is an economics graduate from Universidad de Lima and holds an MBA from Columbia Business School.

Cejay Kim — vice-president, corporate development, and director

Mr. Kim is the chief investment officer of Palisade Global Investments. He previously served in a senior capacity at ReQuest Equities, a merchant bank in the junior resource sector supported by the KCR Fund, a $100-million venture backed by Marin Katusa, Doug Casey and Rick Rule. Mr. Kim holds a BA in economics from the University of Calgary and an MBA in global asset and wealth management from Simon Fraser University, is a CFA (chartered financial analyst) charterholder, and is a member of the Calgary CFA Society.

Binh Quach — chief financial officer

Mr. Quach is a chartered professional accountant with over 20 years experience working for both public and private companies. Mr. Quach was the controller of Pinetree Capital Ltd. for 14 years. He is currently the controller of ThreeD Capital and chief financial officer of New Found Gold.

Sheldon Inwentash — director

Mr. Inwentash has over 30 years of investing experience in the resource, biotech and technology sectors. Mr. Inwentash is the founder, chairman and chief executive officer of ThreeD Capital. Through two decades leading Pinetree Capital, Mr. Inwentash created significant shareholder value through early investments, including Queenston Mining Inc. (acquired by Osisko Mining Corp. for $550-million), Aurelian Resources Inc. (acquired by Kinross Gold Corp. for $1.2-billion) and Gold Eagle Mines Ltd. (acquired by Goldcorp Inc. for $1.5-billion). Mr. Inwentash holds a BComm from the University of Toronto and is a chartered professional accountant. He also holds an honorary doctor of laws (LLD) from the University of Toronto.

Conditions to transaction

Completion of the transaction will be subject to certain standard conditions, including, without limitation: (a) receipt of all necessary consents, waivers, permits, exemptions, orders and approvals, including the approval of the TSX-V for the listing of the resulting issuer shares to be issued pursuant to the transaction; (b) receipt of shareholder approval by Goldspot shareholders to the transaction; (c) completion of the offering; and (d) each of the current directors and officers of Duckworth shall have tendered their resignations and provided releases.

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. There can be no assurance that the transaction will be completed as proposed or at all.

Sponsorship

Sponsorship of a qualifying transaction of a capital pool company is required by the TSX-V unless an exemption from this requirement can be obtained in accordance with the policies of the TSX-V. Duckworth and Goldspot intend to apply to the TSX-V for an exemption from the sponsorship requirements, but there is no assurance that such an exemption will be granted.

About Duckworth Capital Corp.

Duckworth is a capital pool company listed on the TSX-V. Its principal business is the identification and evaluation of assets or businesses with a view to completing a qualifying transaction. Duckworth has not commenced commercial operations and has no assets other than cash.

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