Federal Gold completes $8M RTO subscription receipts financing


September 30, 2020 – Vancouver, British Columbia – ZTR Acquisition Corp. (TSXV: ZTR.H) (the “Company”) is pleased to announce that Federal Gold Corp. (“Federal Gold”) has closed its previously announced non-brokered private placement financing (the “Financing”) of 20,000,000 subscription receipts (the “Subscription Receipts”) at a price of $0.40 per Subscription Receipt, for gross proceeds of $8,000,000. The closing of the Financing is a condition to completing the previously announced amalgamation of Federal Gold with a wholly-owned subsidiary of the Company (the “Business Combination”) pursuant to the terms of the definitive amalgamation agreement entered into with Federal Gold (the “Definitive Agreement”) (see news release of the Company dated September 28, 2020).

The proceeds of the Financing (the “Escrowed Funds”) have been deposited in escrow, pending the Company receiving all applicable regulatory approvals and completing the Business Combination (the “Escrow Conditions”). Upon satisfaction of the Escrow Conditions, immediately prior to the completion of the Business Combination, each Subscription Receipt will automatically convert into one common share of Federal Gold (the “Conversion Shares”) for no additional consideration and the Conversion Shares will be exchanged for common shares of the Company (the “Consideration Shares”) on a one-for-one basis pursuant to the terms of the Definitive Agreement. If the Business Combination is not completed on or before December 31, 2020, the Escrowed Funds will be returned to the subscribers and the Subscription Receipts will be void and be of no further effect or value.

In consideration for their services in connection with the Financing, upon satisfaction of the Escrow Conditions, certain arms-length finders will be paid aggregate cash commissions of $402,390. In addition, as further consideration, upon satisfaction of the Escrow Conditions, Federal Gold has agreed to issue to the finders an aggregate of 1,005,975 finder warrants (the “Finders Warrants”). Upon completion of the Business Combination, each Finders Warrant will entitle the holder thereof to acquire one common share in the capital of the Company (the “Common Shares”) at an exercise price of $0.40 for a period of 12 months following the satisfaction of the Escrow Conditions.

The Subscription Receipts are subject to an indefinite hold period, which commences on the date of the issuance of the Subscription Receipts, in accordance with applicable securities laws. Subject to TSX Venture Exchange approval, any Consideration Shares issued in exchange for the Conversion Shares, as well as the Finders Warrants and any Common Shares issuable on conversion of the Finders Warrants, are not expected to be subject to restrictions on resale.

The net proceeds of the Financing, once released from Escrow upon satisfaction of the Escrow Conditions (and completion of the Business Combination), are intended to be used by the Company for the exploration of the mineral properties currently controlled by Federal Gold, expansion of the Company’s operations and for general corporate purposes.

On Behalf of the Board of Directors,
Martin Bajic, President, Chief Executive Officer and Chief Financial Officer
Phone: 604.628.5621
Fax: 604.662.7950

Completion of the Business Combination is subject to a number of conditions, including Exchange acceptance. There can be no assurance that the Business Combination will be completed as proposed or at all. Investors are cautioned that, except as disclosed in the filing statement to be prepared in connection with the Business Combination, any information released or received with respect to the Business Combination may not be accurate or complete and should not be relied upon. Trading in the securities of the Company should be considered highly speculative.

The TSX Venture Exchange has in no way passed upon the merits of the Business Combination and has neither approved nor disapproved the contents of this press release. Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

This news release may include forward-looking statements that are subject to risks and uncertainties. All statements within, other than statements of historical fact, are to be considered forward looking. Generally, forward-looking information can frequently, but not always, be identified by use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or statements that certain actions, events, conditions or results “will”, “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved” or the negative connotations thereof. All statements other than statements of historical fact may be forward-looking statements. Forward looking-information in this news release includes, but is not limited to, statements with respect to the satisfaction of the Escrow Conditions in a timely manner or at all, the completion of the Business Combination, the use of the proceeds of the Financing and the receipt of all applicable regulatory approval in a timely manner or at all. Such forward-looking information is subject to risks and uncertainties that may cause actual results, performance and developments to differ materially from those contemplated by the forward-looking information, such as the risk that the Escrow Conditions will not be satisfied in a timely manner or at all, that the Company will not be able to complete the Business Combination, that the Company will not be able to use the proceeds of the Financing in the manner set out herein and that the Company will not receive all applicable regulatory approvals in a timely manner or at all. Although the Company has attempted to identify important factors that would cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated, or intended. Except as required by law, the Company expressly disclaims any obligation and does not intend, to update any forward-looking information in this news release. Although the Company believes that the expectations reflected in the forward-looking information are reasonable, there can be no assurance that such expectations will prove to be correct and makes no reference to profitability based on sales reported. We do not assume any obligation to update any forward-looking statements except as required under the applicable laws. The statements in this news release are made as of the date of this release.