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GoldSpot Enters into Agreement for Business Combination of XCorp AI Ltd.

Newsfile Corp.
·6 min read

Toronto, Ontario--(Newsfile Corp. - November 11, 2020) - GoldSpot Discoveries Corp. (TSXV: SPOT) ("GoldSpot" or the "Company") is pleased to announce that it has entered into a binding agreement with its majority owned subsidiary, XCorp AI Ltd. ("XCorp") and Golden Planet Mining Corp. ("GPM") effective November 10, 2020, pursuant to which XCorp and GPM will effect a business combination (the "Proposed Transaction"). The Proposed Transaction shall be structured as an amalgamation, plan of arrangement or other similar business combination of XCorp and GPM to form a consolidated entity ("Amalco"), the final structure of which shall be based upon further legal and tax analysis to ensure the Proposed Transaction is as efficient as possible for all parties. The Proposed Transaction is arm's length, other than the fact that the parties share a significant shareholder which, together with its associates, holds a total of approximately 45.5% of the outstanding voting securities of GPM and approximately 16,223,107 common shares of GoldSpot (representing approximately 17.1% of the outstanding voting securities of GoldSpot as of the date hereof).

XCorp was formed as a joint initiative between the Company and Hanging Wall Metals Inc. ("Hanging Wall"), and it 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 (the "Option Agreement"). In order to earn its interest in the Rider Block Project, XCorp is required to (i) make cash payments aggregating $240,000 over two years, (ii) incur aggregate exploration expenditures of $3,000,000 on the property over three years, (iii) issue shares aggregating 15% of the issued and outstanding shares of XCorp (which have been issued) and (iv) issue stock options to acquire such number of shares of XCorp as are equal to 3% of the outstanding shares of XCorp after giving effect to an initial minimum financing of $2,500,000 (the "Option Issuances"). GoldSpot has invested an aggregate of $475,000 in XCorp to date, and currently holds approximately 80.7% of the outstanding shares of XCorp. GPM holds 146,000 ha of prospective property located south-east of La Ronge, Saskatchewan and will have a minimum net cash on hand of Cdn$400,000 as a condition of the closing of the Proposed Transaction.

As a condition precedent to the closing of the Proposed Transaction, GPM will complete a concurrent non-brokered private placement financing upon terms to be determined, to raise aggregate gross proceeds of Cdn$4,000,000 (the "Private Placement"). As the Private Placement is a condition to the closing of the Proposed Transaction, the Option Issuances will be triggered by the Proposed Transaction.

Amalco shall be a private company, 50% of the voting securities of which shall be held by the current shareholders of XCorp (in the aggregate) and 50% of the voting securities of which shall be held by the shareholders of GPM (in the aggregate), in each case prior to giving effect to the Private Placement and Option Issuances. Following the Private Placement and Option Issuances, it is accordingly anticipated that the current shareholders of XCorp (including GoldSpot) will hold an aggregate minority interest in Amalco. There shall be no other convertible securities of Amalco outstanding or issuable upon closing of the Proposed Transaction, other than pursuant to the Private Placement and Option Issuances. Upon closing of the Proposed Transaction: (i) the board of directors of Amalco shall consist of five members, two of which shall be nominated by XCorp, two of which shall be nominated by GPM and one of which shall be an independent member as agreed upon between XCorp and GPM; and (ii) the officers of Amalco shall include Denis Laviolette as Chief Executive Officer, Shawn Hood as Chief Operating Officer, and Michael Kanevsky as Chief Financial Officer.

The Proposed Transaction will be completed pursuant to a definitive agreement (the "Definitive Agreement") providing for, among other things, voting support for the Proposed Transaction by all directors, officers and majority shareholders of each of XCorp and GPM, customary representations and warranties, covenants, closing conditions, shareholder and regulatory approvals and deal protection provisions. The Proposed Transaction remains subject to the receipt of all applicable shareholder and regulatory approvals, including without limitation, the 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.

For further information please contact:

Denis Laviolette,
Executive Chairman and President
GoldSpot Discoveries Corp.
Tel: 647-992-9837
Email: denis@goldspot.ca

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 involve 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 terms and conditions of the Proposed Transaction and the Company's expectation that it will be completed as currently proposed or at all, the ability of GPM to complete the Private Placement, the ability of the parties to conclude the Definitive Agreement or to satisfy any other terms or conditions of the Proposed Transaction, and the receipt of applicable shareholder, regulatory, board and third party approvals. Factors that could cause actual results to differ materially from such forward‐looking information include, but are not limited to, failure to obtain shareholder, regulatory, board and third party approvals, unavailability of financing, and the inability of the parties to conclude the Proposed Transaction as currently proposed or at all, as well as 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.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/67994