Noa Lithium Brines Inc. press release

Navion Capital Announces Proposed Qualifying Transaction With NOA Lithium

2022-06-16

TSXV - TSX Venture Exchange · Lithium · Boron · Sodium · Potash · Canada · M&A / Asset Transactions

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

CALGARY, AB / ACCESSWIRE / June 16, 2022 /Navion Capital Inc. (TSXV:NAVN.P)(the "Company" or "Navion"), a capital pool company listed on the TSX Venture Exchange (the "TSXV"), is pleased to announce that it has entered into a letter of intent dated June 15, 2022 (the "LOI") with NOA Lithium Brines S.A. ("NOA"), with regard to the acquisition by the Company of all of the issued and outstanding securities of NOA (the "Transaction").

The Transaction is intended to constitute the Company's qualifying transaction (the "Qualifying Transaction") pursuant to Policy 2.4 - _Capital Pool Companies_("Policy 2.4") of the TSXV Corporate Finance Manual (the "TSXV Manual"). The Transaction is subject to due diligence reviews, the approval of the TSXV, execution of a definitive agreement and other closing conditions customary for a transaction of this nature. The resulting issuer of the Transaction will carry on the business of NOA ("Resulting Issuer") and it is anticipated that the common shares of the Resulting Issuer (the "Resulting Issuer Shares") will be listed for trading on the TSXV.

About Navion Capital Inc.

Navion is a capital pool company listed on the TSXV (TSX.V:NAVN.P). The Company's principal business activity is to identify and evaluate opportunities for the acquisition of assets or businesses. The Company was incorporated on October 18, 2017 and has its registered office in Calgary, Alberta.

About NOA Lithium Brines S.A.

NOA is a limited liability company (formerly Explormin S.A) that was incorporated in Argentina and registered with the Public Register of Commerce on February 2, 2015. NOA has its registered office in Buenos Aires, Argentina. From incorporation until Q4, 2021, NOA was a company with no active business. Since Q4, 2021, NOA changed its name to NOA Lithium Brines S.A. and began to actively identify and acquire lithium projects for future exploration and development.

NOA's core project, Rio Grande, is located in the Salar de Rio Grande basin (the salar) in the Salta province in the Puna Region of northwest Argentina (the "Project"). The salar is an evaporite basin with demonstrated brine in the subsurface that is enriched with lithium. Salar de Rio Grande is in the Central Andes of Argentina and within the area referred to as the "Lithium Triangle" of Argentina, Bolivia and Chile. As part of the current surface exploration activities at the Project, camp facilities with a capacity of 50 to 60 people were acquired to cover tasks related to exploration on the Project. The Project area has excellent infrastructure, including access to a natural gas pipeline, water, all-weather roads and local communities. The Project has been subject to exploration by previous owners and, more recently, by NOA, who conducted certain geophysics and sampling in some of the mining properties composing the Project. A NI 43-101 report (technical report) on the Project is in progress and is estimated to be finished by the end of June 2022. The Project is currently composed of 15 mining properties (including mines, vacant mines and discovery claims) which in the aggregate covers approximately 22,809 hectares in the salar and its surroundings. NOA has acquired certain of these mining properties, while others of these mining properties, NOA has entered into option to purchase agreements.

NOA has also entered into option to purchase agreements for three other non-core properties, totaling approximately 30,223 hectares, in three Salta salars. These properties include approximately 20,423 hectares in Arizaro Salar, approximately 7,200 hectares in Salinas Grandes Salar and approximately 2,600 hectares in Pocitos Salar. The non-core properties are at an early stage of exploration and are not a material focus of NOA at this time.

In Q1 2022, NOA was recapitalized by its founders and in Q2 2022 the completion of a seed round financing took place. The founders capital round raised approximately CDN $500,000 and the seed round raised approximately CDN $2,500,000. This capital has been primarily used to pay acquisition costs (in some cases full purchase prices and in other cases, option payments) for the Project and the non-core properties described above. Additionally, the capital raised to date has been used for exploration and general and administrative costs. NOA currently has approximately CDN $1,000,000 in cash on hand. NOA's capital expenditure for the remainder of 2022 are estimated to be approximately CDN $1,000,000, which it anticipates will be used to pay the annual option payments on certain properties acquired and the exploration costs of the Project.

NOA plans to have financial statements prepared for the years ended December 31, 2021 and interim financial statements for the period ended June 30, 2022.

NOA's current share structure consists of 5,179,673 outstanding registered non-endorsable common shares in the capital of NOA (each a "NOA Share"). Upon subscription of the NOA Shares, the NOA shareholders were also granted 51,796,730 units of NOA ("NOAUnits"), with each NOA Share entitling the holder to acquire 10 NOA Units. Each NOA Unit was acquired at a price of CDN $0.10 per NOA Unit and each NOA Unit consists of one NOA Share and one NOA Share purchase warrant ("NOA Unit Warrant"). Each NOA Unit Warrant entitles the holder to purchase one NOA Share at a price of CDN $0.20 per NOA Share and is exercisable at anytime within twenty-four (24) months from the date the shares of the Resulting Issuer are listed on the TSXV. The NOA Units will be issued to the NOA shareholders upon completion of the Transaction and will be exchanged for securities with the same economic terms, subject to adjustments in the Resulting Issuer.

Terms of the Transaction

The Transaction is expected to be effected pursuant to a business combination agreement (the "Business Combination Agreement") to be entered into between the Company, the shareholders of NOA (the "NOA Shareholders"), and a wholly-owned subsidiary of the Company ("SubCo"), to be incorporated under the laws of Argentina in connection with the Transaction. The Business Combination Agreement is expected to include the terms of the Amalgamation (as defined below) and the Share Exchange (as defined below), as well as other terms and conditions customary for a transaction of this nature.

Three-Cornered Amalgamation

Pursuant to the Business Combination Agreement, it is anticipated that the Company and NOA will combine their businesses by way of the Amalgamation and the Share Exchange. At the effective time of the closing of the Transaction and pursuant to the amalgamation agreement to be entered into between the Company, NOA and SubCo: (i) SubCo will amalgamate with NOA to form one corporation ("AmalCo") (the "Amalgamation"); (ii) SubCo and NOA will both cease to exist as separate entities from AmalCo; (iii) the property of SubCo and NOA will continue to be the property of AmalCo; (iv) AmalCo will continue to be liable for the obligations of SubCo and NOA; (v) each shareholder of NOA will receive one Resulting Issuer Share in exchange for each NOA Share held by such holder and the NOA Shares will be cancelled; (vi) the Company will receive one share in AmalCo in exchange for the one share in the capital of SubCo held by the Company and the shares in the capital of SubCo will be cancelled. On closing, AmalCo will be a wholly owned subsidiary of the Resulting Issuer and it is anticipated that AmalCo will continue as the operating company of the lithium mining properties in Argentina for the Resulting Issuer.

Share Exchange

Pursuant to the Business Combination Agreement, the Company will acquire all of the issued and outstanding securities of NOA ("Company Shares") so as to maintain a share proportion of ten (10) NOA Shares to one (1) Company Share held in the Resulting Issuer by the respective shareholders (the "Share Exchange") at a deemed price of $0.25per share, being 51,796,730 NOA Shares (assuming the 10 for 1 NOA Unit issuance on completion of the Transaction) and 51,796,730 share purchase warrants (the "Company Share Purchase Warrants") where each Company Share Purchase Warrant shall entitle the holder to purchase one Company Share at a price of CDN $0.20 per Company Share and shall be exercisable at anytime that is twenty-four (24) months from the date the shares of the Resulting Issuer are listed on the TSXV. If the Concurrent Financings (as defined below) modify this Share Exchange proportion, the parties hereto have agreed to further adjust the share exchange ratio in order to ensure that a final ten (10) to one (1) proportion for NOA and Company shareholders exists in the Resulting Issuer.

Name Change

In connection with the closing of the Transaction, it is anticipated that the Company (Resulting Issuer) will change its name to "NOA Lithium Brines" (the "Name Change"), or such other name as determined by NOA and the Resulting Issuer Shares will be listed on the TSX, subject to the approval of the applicable regulatory authorities and the TSXV. On closing of the Transaction, the Resulting Issuer anticipates meeting the TSXV's initial listing requirements for a Tier 2 mining company.

Filing Statement

A filing statement in respect of the proposed Qualifying Transaction will be prepared and filed in accordance with Policy 2.4 of the TSXV on SEDAR at www.sedar.comprior to the closing of the Qualifying Transaction. A press release will also be issued once the filing statement has been filed as required pursuant to the TSXV Policies.

Summary of Concurrent Financings

NOA Private Financing

NOA is currently carrying out and plans to complete, prior to completion of the Share Exchange, a non-brokered private placement (the "NOAPrivate Financing") of approximately 320,327 NOA Shares, which represent 3,203,270 units of NOA ("NOA Private Unit") at a price of CDN $0.10 per NOA Private Unit for gross proceeds of approximately CDN $320,327. Each NOA Private Unit will consist of one common share of the Resulting Issuer and one common share purchase warrant of the Resulting Issuer ("NOA Private Warrant"), with each NOA Private Warrant being exercisable into one common share of the Resulting Issuer at a price of CDN $0.20 at anytime within 24 months from the date of issuance. If the NOA Private Financing is fully subscribed for, NOA will have 5,500,000 NOA Shares and 55,000,000 NOA Units issued and outstanding.

NOA Subscription Receipt Financing

In connection with the Transaction, the parties anticipate completing a brokered and/or non-brokered private placement of between 20,000,000 and 30,000,000 subscription receipts of NOA (the "NOA Subscription Receipts") at a price of CDN $0.25 per NOA Subscription Receipt, subject to market conditions, for aggregate gross proceeds of between CDN $5,000,000 and CDN $7,500,000. Each NOA Subscription Receipt is anticipated to be comprised of one NOA Share and one NOA share purchase warrant (the "NOASubscription Receipt Warrant"), with each NOA Subscription Receipt Warrant being exercisable at a price of CDN $0.50 at any time with twenty-four (24) from the date of issuance (the "NOA Subscription Receipt Financing" and collectively with the NOA Private Financing, the "NOA Private Placements"). Upon completion of the Transaction and satisfaction of the escrow release conditions in accordance with the terms of a subscription receipt agreement, and without any further action on the part of the holder or payment of any additional consideration, each NOA Subscription Receipt will automatically convert and be exchanged for one Resulting Issuer Share and one Resulting Issuer share purchase warrant with the same economic terms as set forth above, subject to adjustments.

In connection with the NOA Subscription Receipt Financing, it is anticipated that compensation may be provided (i) as a cash commission to be negotiated on a percentage of the aggregate gross proceeds raised under the NOA Subscription Receipt Financing, and/or (ii) the issuance of such number of broker warrants of NOA (each, a "NOA Broker Warrant") to be negotiated on the basis of the number of NOA Subscription Receipts issued pursuant to the NOA Subscription Receipt Financing. Upon completion of the Transaction, the NOA Broker Warrants will be exchanged for broker warrants of the Resulting Issuer (the "Resulting Issuer Broker Warrants").

In connection with the NOA Subscription Receipt Financing, it is anticipated that certain finders may receive a cash commission to be negotiated on a percentage of the aggregate gross proceeds raised and/or a number of securities to be negotiated on the basis of the number of NOA Subscription Receipts issued pursuant to the NOA Subscription Receipt Financing.

Company Subscription Receipt Financing

Concurrently with the NOA Private Placements, the Company anticipates completing a non-brokered private placement of up to 1,500,000 subscription receipt (the "Company Subscription Receipt Financing") of the Company (each, a "Company Subscription Receipt") at a price of CDN $0.10 per Company Subscription Receipt for aggregate proceeds of up to CDN $150,000, with each Company Subscription Receipt consisting of one Company Share and one common share purchase warrant ("Company Subscription Receipt Warrant") of the Company. Each Company Subscription Receipt Warrant is exercisable into one Company Share at a price of CDN $0.20 at anytime within 24 months from the date of issuance. Upon completion of the Transaction and satisfaction of the escrow release conditions in accordance with the terms of a subscription receipt agreement, and without any further action on the part of the holder or payment of any additional consideration, each Company Subscription Receipt will automatically convert and be exchanged for one Resulting Issuer Share and one Resulting Issuer share purchase warrant with the same economic terms as set forth above, subject to adjustments.

Use of Proceeds of the Concurrent Financings

The NOA Private Placements and the Company Subscription Receipt Financing (collectively, the "Concurrent Financings") are intended to raise aggregate gross proceeds of between CDN $5,520,000 and CDN $8,020,000.

Net proceeds of the NOA Subscription Receipt Financing and Company Subscription Receipt Financing will be held in escrow pending completion of the Transaction. Net proceeds from the NOA Private Financing will not be held in trust as it will be used by NOA to pay capital expenditures and certain property option payments.

It is anticipated that net proceeds of the Concurrent Financings will be used: (i) to fund the business plan of the Resulting Issuer; (ii) for expenses related to the Transaction; and (iii) for general corporate purposes and future working capital of the Resulting Issuer. Although the Resulting Issuer intends to use the net proceeds of the Concurrent Financings as described herein, the actual allocation of proceeds may vary from the uses set forth herein, depending on future operations or unforeseen events or opportunities.

Finders Fee for Transaction

In connection with the Transaction, a finder's fee is payable by the Company in the amount of $25,000 to a non-arm's length party. This finder's fee will be paid in securities of the Resulting Issuer on the same terms as the Company Subscription Receipt Financing, is subject to applicable laws and the Policies of the TSXV and shall only be provided if the Transaction is completed.

Capitalization of the Resulting Issuer

The following table summarizes the proposed pro forma capitalization of the Resulting Issuer following completion of the Transaction and the Concurrent Financings:

| | After Giving Effect to the Transaction | | | | Designation of Security | Number | Percentage (undiluted) | Percentage (fully-diluted) | | Resulting Issuer Shares | | | | | Shares Issued | | | | | Company Shares | 4,000,000 | 4.4% | 2.3% | | Company Subscription Receipts | 1,500,000(1) | 1.7% | 0.8% | | NOA Shares | 55,000,000(2) | 60.8% | 31% | | NOA Subscription Receipts | 30,000,000(3) | 33.1% | 16.9% | | Subtotal | 90,500,000 | 100% | 51% | | Dilutive Securities | | | | | Reserved for issuance: | | | | | Company Options | 400,000 | 0.5% | 0.3% | | Company IPO Agent Options | Nil(4) | Nil | Nil | | Company Subscription Receipt Warrants | 1,500,000(5) | 1.7% | 0.9% | | NOA Unit Warrants | 51,796,730(6) | 59.6% | 29.1% | | NOA Private Warrants | 3,203,270(7) | 3.7% | 1.8% | | NOA Subscription Receipt Warrants | 30,000,000(8) | 34.5% | 16.9% | | Subtotal | 86,900,000 | 100% | 49% | | Total | 177,400,000 | 100% | 100% | | Notes:

(1) Assuming the issuance of an aggregate of 1,500,000 Company Shares as part of the Company Subscription Receipt Financing.

(2) Assuming the issuance of an aggregate of 3,203,270 NOA Shares as part of the NOA Private Financing for an aggregate of 55,000,000 NOA Units on completion of the Transaction.

(3) Assuming the issuance of an aggregate of 30,000,000 NOA Shares as part of the NOA Subscription Receipt Financing

(4) 200,000 Agent Options were issued by the Company to Canaccord Genuity Corp. as part of the Company's initial public offering but these Agent Options have now expired and been terminated.

(5) Assuming the issuance of an aggregate of 1,500,000 Company Subscription Receipt Warrants as part of the Company Subscription Receipt Financing.

(6) Assuming the issuance of an aggregate of51,796,730 NOA Unit Warrants on completion of the Transaction, excluding those 3,203,270 NOA Units granted in relation with the NOA Private Financing.

(7) Assuming the issuance of an aggregate of 3,203,270 NOA Private Warrants as part of the NOA Private Financing.

(8) Assuming the issuance of 30,000,000 NOA Subscription Receipts Warrants as part of the NOA Subscription Receipt Financing. | | | |

To the knowledge of the directors and executive officers of the Company and NOA, the only persons who currently beneficially owns, directly or indirectly, or exercises control or direction over more than 10% of the NOA Shares are as follows: (i) Hernán Miguel Zaballa, an individual resident in Argentina who currently owns approximately 20% of the outstanding NOA Shares; (ii) Manuel César Benítez, an individual resident in Argentina who currently owns approximately 12% of the outstanding NOA Shares; (iii) Carlos Eugenio Ponte, an individual resident in Argentina who currently owns approximately 12% of the outstanding NOA Shares; and (iv) Simón Pérez Alsina, an individual resident in Argentina who currently owns approximately 12% of the outstanding NOA Shares.

Proposed Management and Directors of the Resulting Issuer

It is the intention of the Company and NOA to establish and maintain a board of directors of the Resulting Issuer with a combination of appropriate skill sets that is in compliance with all regulatory and corporate governance requirements, including any applicable independence requirements. Upon completion of the Transaction, the board of the Resulting Issuer is expected to be comprised of four individuals. The following are brief descriptions of the proposed management and directors of the Resulting Issuer.

Hernán Miguel Zaballa_- Chairman of the Board of Directors_

Hernan Zaballa is a senior partner at Zaballa Carchio Abogados in Buenos Aires, Argentina, with over 30 years of legal experience focused primarily on the mining industry. Mr. Zaballa has served on the local Board of Directors for companies such as Barrick Gold, Pan American Silver, Northern Orion, and Penoles. Over the past 5 years, he has successfully co-founded Huayra Minerals Corp. and Abrasilver Resource Corp. Mr. Zaballa is the former Executive Chairman and currently a Board member at AbraSilver Resource Corp., and is currently a Vice-President and Board member at Minera Exar SA.

John Miniotis_- Director and Interim Chief Executive Officer_

John Miniotis is a mining executive with approximately 20 years of experience in various roles focused primarily on mergers & acquisitions, equity capital markets, investor relations and corporate finance. He is currently the President and CEO of AbraSilver Resource Corp. which is an advanced-stage silver and gold exploration company with assets in Argentina. Mr. Miniotis holds the designation of Chartered Financial Analyst and received a Bachelor of Business Administration degree, with high distinction, from the University of Toronto.