GoldSpot Discoveries Completes Business Combination of XCorp AI Ltd.

  • Concurrent financing completed to raise $6,427,500
  • GoldSpot holds 31.3% of consolidated entity entailing fair value of $8,075,000

Toronto, Ontario–(Newsfile Corp. – January 4, 2021) – GoldSpot Discoveries Corp. (TSXV: SPOT) (“GoldSpot” or the “Company“) is pleased to announce that it has completed the previously announced business combination of its majority owned subsidiary, XCorp AI Ltd. (“XCorp“), with Golden Planet Mining Corp. (“GPM“) effective January 1, 2021 (the “Business Combination“). Pursuant to the Business Combination, (i) GoldSpot and each of the other shareholders of XCorp. exchanged their common shares of XCorp (“XCorp Shares“) on the basis of 1.6999431 common shares of GPM (“GPM Shares“) for each one (1) XCorp Share held; and (ii) XCorp became a wholly-owned subsidiary of GPM.

GPM currently holds 146,000 ha of prospective property located south-east of La Ronge, Saskatchewan. XCorp currently holds an option to acquire a 100% interest in the Rider Block Project located in central British Columbia, Canada pursuant to an option agreement dated October 9, 2020 with Hanging Wall Metals Ltd. (“Hanging Wall“). In order to earn its interest in the Rider Block Project, XCorp was previously required, amongst other matters, to issue stock options to acquire such number of XCorp Shares as were equal to 3% of the outstanding XCorp Shares after giving effect to an initial minimum financing of $2,500,000 (the “Option Requirement“). Pursuant to the Business Combination, an aggregate of 1,547,850 stock options of GPM were issued to Hanging Wall in full satisfaction of the Option Requirement, each exercisable to acquire one (1) GPM Share at an exercise price of $0.50 for a period of 5 years (the “GPM Options“).

Contemporaneously with the closing of the Business Combination, GPM closed a concurrent non-brokered private placement financing pursuant to which it issued an aggregate of 8,095,000 GPM Shares at $0.50 per share and 3,500,000 “flow-through” GPM Shares at $0.68 per share to raise aggregate gross proceeds of $6,427,500 (the “Private Placement“). Immediately following the Business Combination, GoldSpot holds an aggregate of 16,149,629 GPM Shares representing 31.3% of all issued and outstanding GPM Shares on a non-diluted basis (or 30.4% on a fully diluted basis assuming exercise of the GPM Options), entailing a fair value of approximately $8,075,000. Since the Company will be deemed to have significant influence over GPM, the Company will be required to consoldiate its GPM holdings using the equity method of accounting under International Financial Accounting Standards and the fair value of the holdings would not be included in its investment assets on the statement of financial position. The Company anticipates that further GPM financings will dilute its holdings in GPM below 20%, whereby the Company will be able to fair value its investment in GPM.

XCorp was initially formed as a joint initiative of the Company and Hanging Wall. On October 14, 2020, Envision Geoscience Inc. (“Envision“) acquired an aggregate of 500,000 XCorp Shares at a price of $0.05 per share for aggregate gross proceeds of $25,000. Envision is a private company controlled by Shawn Hood, who serves as an officer of the Company. As the Company was a significant shareholder of XCorp as at such date, such private placement was a related party transaction within the meaning of Multilateral Instrument 61-101 (“MI 61-101“). The fair market value of the XCorp Shares at the applicable time was $0.05 per share. Accordingly, such private placement was exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 pursuant to subsections 5.5(a) and 5.7(1)(a) of MI 61-101, as the fair market value of such private placement was less than 25% of the market capitalization of the Company at the applicable time.

Upon closing of the Business Combination: (i) the board of directors of GPM was reconstituted to consist of five members, two of which were nominated by XCorp, two of which were nominated by GPM and one of which is an independent member as agreed upon between XCorp and GPM; and (ii) the officers of GPM resigned and were replaced by Denis Laviolette as Chief Executive Officer, Shawn Hood as Chief Operating Officer, and Michael Kanevsky as Chief Financial Officer.

The Business Combination remains subject to the final approval of the TSX Venture Exchange.

About GoldSpot Discoveries Corp.

GoldSpot Discoveries Corp. (TSXV: SPOT) is a technology services company in mineral exploration. GoldSpot is a leading team of expert scientists who merge geoscience and data science to deliver bespoke solutions that transform the mineral discovery process. In the race to make discoveries, GoldSpot produces Smart Targets and advanced geological modelling that saves times, reduces costs and provides accurate results.

Denis Laviolette
Executive Chairman and President
GoldSpot Discoveries Corp.
Tel: 647-992-9837

Cautionary Statement on Forward -Looking Information

Neither the TSX Venture Exchange (“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.

No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein. This news release contains forward-looking information which involves risks, uncertainties and other factors that could cause actual events, results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking information. Forward-looking information in this news release includes, but is not limited to, the Company’s objectives, goals or future plans, the potential dilution of the Company’s holdings in GPM and statements regarding the final approval of the Business Combination by the TSX Venture Exchange and any future exploration activities of GPM and XCorp. Factors that could cause actual results to differ materially from such forward-looking information include, but are not limited to, capital and operating costs varying significantly from estimates, the preliminary nature of metallurgical test results, delays in obtaining or failures to obtain required regulatory, governmental, environmental or other approvals, uncertainties relating to the availability and costs of financing needed in the future, changes in equity markets, inflation, fluctuations in commodity prices, delays in the development of projects and the other risks involved in the mineral exploration and development industry, and those risks set out in the Company’s public documents filed on SEDAR. Although the Company believes that the assumptions and factors used in preparing the forward-looking information in this news release are reasonable, undue reliance should not be placed on such information, which only applies as of the date of this news release, and no assurance can be given that such events will occur in the disclosed time frames or at all. The Company disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, other than as required by law.