TDG GOLD CORP.

Unlocking World-Class Gold-Silver-Copper Exploration Potential in the Toodoggone District, British Columbia

TSX.V:TDG

October 5th 2020

Kismet Enters Into Amalgamation Agreement

VANCOUVER, October 5th, 2020

Kismet Resources Corp. has entered into an amalgamation agreement with TDG Gold Corp. and 1266834 B.C. Ltd. (Subco; a wholly owned subsidiary of Kismet) dated Sept. 28, 2020, pursuant to which the company proposes to acquire all of the issued and outstanding securities of TDG by way of a three-cornered amalgamation, as more particularly described in its news release dated July 29, 2020.

Under the terms of the amalgamation agreement, TDG will amalgamate with Subco, and the company will acquire all of the outstanding common shares of TDG in exchange for postconsolidation common shares of the company on the basis of one resulting issuer share for every three common shares of TDG. Outstanding convertible securities of TDG will be exchanged for convertible securities of the company, with the number of resulting issuer shares issuable and the exercise price of such convertible securities to be adjusted based on the share exchange ratio. The deemed price of the transaction is 30 cents.

It is anticipated that the company will change its name to TDG Gold upon the completion of the transaction.

The name of the amalgamated entity will be either TDG Assets B.C. Corp. or TDG B.C. Assets Corp., and it will continue to subsist under the Business Corporations Act (British Columbia).

Prior to or concurrently with completion of the transaction, TDG intends to complete a non-brokered private placement equity financing to raise gross proceeds of a minimum of $4-million and a maximum of up to $5-million through the issuance, on a private placement basis, of up to 6,666,666 non-flow-through units at a price of 30 cents per non-flow-through unit and up to 7,058,823 flow-through units at a price of 42.5 cents per flow-through unit. Each non-flow-through unit will consist of common shares and common share purchase warrants of TDG that, when exchanged for securities of the company, shall comprise one resulting issuer share and one-half of one resulting issuer share purchase warrant. Each flow-through unit will consist of common shares and common share purchase warrants of TDG that, when exchanged for securities of the company, shall comprise one resulting issuer share, that will qualify as a flow-through share under the Income Tax Act and one-half of one resulting issuer warrant. Each whole resulting issuer warrant will be exercisable by the holder thereof to acquire one resulting issuer share at an exercise price of 45 cents for a period of three years from issuance.

TDG currently has 75,734,904 common shares issued and outstanding and has no options, warrants or other classes of securities outstanding.

The completion of the amalgamation is subject to certain conditions precedent, including, but not limited to, the following:

  • The shareholders of TDG shall have duly approved the transaction and the amalgamation agreement at TDG’s special shareholder meeting, to be held on Oct. 21, 2020.
  • The company shall have completed a 1:2 share consolidation.
  • The name of the company shall have been changed to TDG Gold Corp., or such other name as is agreed to by the company and TDG.
  • The acceptance of the TSX Venture Exchange of the transaction as Kismet’s qualifying transaction (as such term is defined in Policy 2.4, Capital Pool Companies, of the TSX-V corporate finance manual).
  • TDG shall have completed of the concurrent financing.
  • Receipt by TDG of a written resignation effective as at the time of the closing of the transaction from each of the current directors and officers of the company who will not be serving as directors or officers of the resulting issuer.
  • The company shall have cash of at least $25,000 net of all liabilities, including payables accrued in connection with the completion of the transaction.
  • TDG shall have completed the acquisition of the former-producing Baker and Shasta mines from Talisker Resources Ltd., as more particularly described in the company’s news release dated July 29, 2020.
  • Dissenting shareholders of TDG shall not have validly exercised dissent rights in respect of more than 5 per cent of the outstanding common shares of TDG.

The company is a capital pool company and intends for the transaction to constitute its qualifying transaction, as such terms are defined in the policies of the TSX-V. In connection with the company’s previous announcement of entry into a letter of intent in connection with the transaction, trading in the Kismet shares was halted pursuant to the policies of the TSX-V. Trading will remain halted until, among other things, Kismet completes certain regulatory filings in connection with the qualifying transaction with the TSX-V and the TSX-V has completed certain matters it considers necessary or advisable.

It is anticipated that the resulting issuer will qualify as a Tier 2 mining issuer pursuant to the requirements of the TSX-V.

The company intends to issue a subsequent press release in accordance with the policies of the TSX-V providing further details in respect of the transaction, including information relating to the descriptions of the proposed directors and insiders (as such term is defined in the policies of the TSX-V) of the resulting issuer, as well as a summary of TDG Gold’s financial information.

About Kismet Resources Corp.

The company is a capital pool company (CPC) within the meaning of the policies of the TSX-V that has not commenced commercial operations and has no assets other than cash. The current directors and officers of the company are: Evandra Nakano (chief executive officer, chief financial officer, corporate secretary and director), Shervin Teymouri (director) and David Hladky (director). Except as specifically contemplated in the CPC policies of the TSX-V, until the completion of its qualifying transaction (as defined therein), the company will not carry on business, other than the identification and evaluation of companies, business or assets with a view to completing a proposed qualifying transaction.

Completion of the transaction is subject to a number of conditions, including but not limited to, TSX-V acceptance and, if applicable pursuant to TSX-V requirements, majority of the minority shareholder approval. Where applicable, the transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all.

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 release 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.

We seek Safe Harbor.