Vancouver, British Columbia–(August 18, 2020) – Phoenix Gold Resources Corp. (the
“Company”) (TSXV: PXA) is pleased to announce that further to its news release dated August
6, 2020, it has closed a debt settlement of indebtedness of the Company in the aggregate amount
of $917,339 (the “Debt”) by way of a shares for debt transaction at a price of $0.05 per common
share of the Company (a “Share”) for a total aggregate of 18,346,780 Shares (the “Debt
The Debt Settlement was approved by the TSX Venture Exchange (the “Exchange”), and all
Shares issued pursuant to the Debt Settlement will be subject to a four month hold period from
the date of issue.
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 press release.
Multilateral Instrument 61-101
The Company negotiated the Debt Settlement with non-arm’s length creditors. Pursuant to the
Debt Settlement certain directors and officers of the Company participated in the Debt
Settlement. Accordingly, the Debt Settlement is considered as a “related party transaction” under
Multilateral Instrument 61-101—Protection of Minority Security Holders in Special Transaction
(“MI 61-101”). The Company is exempt from the requirements to obtain formal valuation and
minority shareholder approval in connection with the Debt Settlement in reliance, respectively, on
Section 5.5(b) of MI 61-101 as the Company is not listed on a “specified market” and on Section
5.7(1)(c) of MI 61-101 as a transaction supported by an arm’s length control person. A material
change report will be filed less than 21 days before the closing date of the transactions
contemplated by this news release. The Company believes this shorter period is reasonable and
necessary in the circumstances as the Company wishes to improve its financial position by
reducing its accrued liabilities as soon as possible. It is anticipated that the Debt Settlement will
result in the creation of a new control person of the Company, and the Company anticipates
obtaining disinterested shareholder approval in writing approving of the Debt Settlement and the
resulting creation of a new control person.
Early Warning Disclosure
Mr. Andrew Lee acquired 14,596,780 Shares under the Debt Settlement. Prior to the Debt
Settlement, Mr. Lee, directly or indirectly, held 200,000 Shares of the Company, which
represented 2.21% of the issued and outstanding shares of the Company. After giving effect to the
Debt Settlement, Mr. Lee, directly or indirectly, beneficially owns and controls a total of
14,796,780 Shares, which represents 54.03% of the Company’s issued and outstanding Shares on
a non-diluted and fully diluted basis as there are currently no outstanding convertible securities of
the Company. Mr. Lee acquired the Shares for investment purposes. Mr. Lee intends to evaluate
his investment in the Company and to increase or decrease his shareholdings from time to time as
he may determine appropriate. A copy of the early warning report being filed by Mr. Lee may be
obtained by contacting the Company at 778-302-2257.
Jun Hyouk (Sean) Choi acquired 3,750,000 Shares under the Debt Settlement. Prior to the Debt
Settlement, Mr. Choi, directly or indirectly, held 73,469 Shares of the Company, which
represented 0.81% of the issued and outstanding shares of the Company. After giving effect to the
Debt Settlement, Mr. Choi, directly or indirectly, beneficially owns and controls a total of
3,823,469 Shares, which represents 13.96% of the Company’s issued and outstanding Shares on a
non-diluted and fully diluted basis as there are currently no outstanding convertible securities of
the Company. Mr. Choi, acquired the Shares for investment purposes. Mr. Choi intends to
evaluate his investment in the Company and to increase or decrease his shareholdings from time
to time as he may determine appropriate. A copy of the early warning report being filed by Mr.
Choi may be obtained by contacting the Company at 778-302-2257.
Cautionary Statement Regarding Forward-Looking Information
This news release may contain “forward-looking information” and “forward-looking
statements” within the meaning of applicable Canadian securities legislation. All information
contained herein that is not historical in nature may constitute forward-looking information.
Forward-looking statements herein include but are not limited to statements relating to the
expected completion of the Debt Settlement, and are necessarily based upon a number of
assumptions that, while considered reasonable by management, are inherently subject to
business, market and economic risks, uncertainties and contingencies that may cause actual
results, performance or achievements to be materially different from those expressed or implied
by forward-looking statements. Except as required by law, the Company disclaims any obligation
to update or revise any forward-looking statements. Readers are cautioned not to put undue
reliance on these forward-looking statements.
For further information:
Chief Financial Officer
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