May 16, 2025 – TheNewswire - Toronto, Ontario – Florence One Capital Inc. (TSXV: FONC.P) (the "Company"), a capital pool company listed on the TSX Venture Exchange (the "TSXV") is pleased to announce that it has entered into a non-binding letter of intent dated May 15, 2025 (the "LOI") with Cautivo Mining Inc. ("Cautivo", and together with the Company, the "Parties"), an arm’s length privately held Peruvian mineral exploration company,  regarding a proposed transaction (the "Proposed Transaction"), as such term is defined in Policy 2.4 - Capital Pool Companies (the "Policy") of the TSX Venture Exchange (the "TSXV") Corporate Finance Manual. The Parties intend to enter into a definitive agreement (the "Proposed Definitive Agreement") in respect of the Proposed Transaction.

 

The Proposed Transaction

 

As will be set out in the Proposed Definitive Agreement, the Company is expected to acquire all of the issued and outstanding common shares of Cautivo (the "Cautivo Shares") pursuant to a business combination to be completed under the Business Corporations Act (Alberta) (the "ABCA") by the Company and Cautivo. The Proposed Transaction is expected to result in the issuance, to each shareholder of Cautivo (each, a "Cautivo Shareholder") a certain number of common share (to be finalized) for each one (1) Cautivo Share held by such holder immediately prior to the closing of the Proposed Transaction (the "Closing"). As part of the Proposed Transaction, any and all convertible securities of Cautivo outstanding immediately prior to the Closing are expected to be replaced with or exchanged for equivalent convertible securities of the Company entitling the holders thereof to acquire Common Shares in lieu of Cautivo Shares.

 

The Proposed Transaction will result in the reverse takeover of the Company by Cautivo Shareholders, and will constitute the Company's Qualifying Transaction (as defined by the TSXV). Following the completion of the Proposed Transaction, the Company, as the issuer resulting therefrom (the "Resulting Issuer"), is expected to carry on the current business of Cautivo under a name as may be determined by Cautivo and approved by the shareholders of the Company and which is acceptable to the applicable regulatory authorities, including the TSXV ("Name Change"). The business of the Resulting Issuer will be primarily focused on the mining operations of Cautivo in Peru.

 

Upon completion of the Proposed Transaction, it is anticipated that the Resulting Issuer will be listed as a Tier 2 Mining Issuer on the TSXV.

 

The completion of the Proposed Transaction will be subject to the entry into of the Proposed Definitive Agreement as well as a number of terms and conditions to be set forth in the Proposed Definitive Agreement, including, among other things (i) there being no material adverse change in respect of either of the Parties; (ii) the receipt of all necessary consents, orders and regulatory and shareholder approvals, including the conditional approval of the TSXV, subject only to customary conditions of closing; (iii) the completion of the Name Change and the Financing (defined below) (iv) the Company Consolidation (defined below); and (v) such other customary conditions of closing for a transaction in the nature of the Proposed Transaction. Accordingly, there can be no assurance that the Proposed Transaction will be completed on the terms proposed and described herein, or at all.

 

Finder fees will be payable in connection with the Proposed Transaction and the details of such will be disclosed once available.

 

Proposed Financing

 

Pursuant to the terms of the LOI, Cautivo and the Company anticipate completing an initial concurrent financing for gross proceeds of at least USD $3,000,000 (the "Financing"). The Parties may retain a broker or pay finder’s fees to certain registrants or eligible persons exempt from registration on any portion of the Financing. The net proceeds of the Financing will be used: (a) to fund the business plan of the Resulting Issuer; (b) for Proposed Transaction expenses; and (c) for general working

capital purposes. Terms of the Financing are subject to market conditions and will be disclosed once they become available.  Additional financing plans to further expand the business plan of the Resulting Issuer are contemplated and will be disclosed when complete.

 

Share Consolidation

 

Prior to completion of the Proposed Transaction, the Company proposes to effect a consolidation of the issued and outstanding common shares of the Company ("Company Shares"), on a fully diluted basis, on the basis of one (1) post-consolidation Company Share for every two (2) pre-consolidation Company Shares issued and outstanding (the "Company Consolidation").

 

Proposed Directors and Officers of the Resulting Issuer

 

Upon the completion of the Proposed Transaction, it is expected that the board of directors and officers of the Resulting Issuer will be reconstituted to be comprised of three individuals nominated by the Company, and two individuals nominated by ARCM (defined below) subject to compliance with the requirements of the TSXV, and applicable corporate and securities laws. Cautivo and the Company will make further announcements as appointments of its respective officers and director are made. Additional information regarding Insiders (as defined by the TSXV) of the Company upon completion of the Proposed Transaction and/or any financing(s) will also be disclosed, as required.

 

Sponsorship

 

The TSXV requires sponsorship of a Proposed Transaction of a capital pool company, unless exempt in accordance with the policies of the TSXV. The Parties are currently reviewing the requirements for sponsorship and may apply for an exemption from the sponsorship requirements pursuant to the policies of the TSXV. However, there can be no assurance that the Parties will ultimately obtain such exemption.

 

The Parties intend to provide any additional information regarding sponsorship at a later date, once determined by the Parties. In the event that the TSXV does not grant an exemption from the sponsorship requirements of the TSXV, the Parties would be required to engage a sponsor.

 

Trading Halt

 

In accordance with the policies of the TSXV, the Company has requested a trading halt of its Common Shares and such halt has been granted. It is expected that the Common Shares will remain halted until completion of the Proposed Transaction.

 

About Cautivo Mining Inc.

 

Cautivo is a private gold-producing company operating in Northern Peru. Backed by Arias Resource Capital Management ("ARCM"), a private equity fund focused on critical materials, Cautivo controls a 32,000-hectare land package in a high-potential gold-copper district and operates the Las Lomas processing plant, currently producing approximately 125–150 ounces of gold per month. The company maintains 35 commercial agreements with artisanal miners, securing a steady supply of ore and contributing to community-aligned economic development. Cautivo’s business model is environmental, social and governance-aligned and has been recognized for its environmental stewardship and small-scale miner formalization efforts.

 

About Florence One Capital Inc.

 

The Company is a capital pool company created pursuant to the policies of the TSXV. The Company has not commenced operations and has no assets other than cash. The Company’s principal business is the identification and evaluation of assets or businesses with a view to completing a "Qualifying Transaction" under the Policy.

 

Further Information

 

Further updates in respect of the Proposed Transaction will be provided in a subsequent news release. Also, additional information concerning the Proposed Transaction, the Company, Cautivo, and the Resulting Issuer will be provided in the requisite management information circular and/or filing statement to be filed by the Company and Cautivo in connection with the Proposed Transaction, which will be available in due course under the Company's SEDAR+ profile at www.sedarplus.ca.

 

Upon entering into the Proposed Definitive Agreement, the Company will issue a further comprehensive news release disclosing details of the Proposed Transaction disclosing including any financial information respecting Cautivo, the issued and outstanding securities of each of Parties and the definitive terms of the exchange of securities of the Company and Cautivo.

 

All information contained in this news release with respect to the Company and Cautivo was supplied by the respective Party for inclusion herein, and each Party and its directors and officers have relied on the other Party for any information concerning the other Party.

 

For further information please contact:

 

Florence One Capital Inc.                                               

Mohammad Fazil                                                       

President, Chief Executive Officer, Chief Financial Officer, Secretary-Treasury and Director                       

Email: mofazil@gmail.com                                                

Telephone: (403) 613-7310                                                       

Cautionary Statements

 

This news release contains forward-looking statements and forward-looking information (collectively, "forward-looking statements") within the meaning of applicable securities laws. Any statements that are contained in this news release that are not statements of historical fact may be deemed to be forward- looking statements. Forward-looking statements are often identified by terms such as "may", "should", "anticipate", "will", "estimates", "believes", "intends" "expects" and similar expressions which are intended to identify forward-looking statements. More particularly and without limitation, this news release contains forward- looking statements, including statements concerning the Proposed Transaction (including the Name Change), the Financing, the Proposed Definitive Agreement, and the proposed structure by which the Proposed Transaction is to be completed. Forward-looking statements are inherently uncertain, and the actual performance may be affected by a number of material factors, assumptions and expectations, many of which are beyond the control of the Parties, including expectations and assumptions concerning (i) the Company, Cautivo, the Resulting Issuer, the Company Consolidation and the Proposed Transaction, (ii) the ability of the Parties to negotiate and enter into the Proposed Definitive Agreement on satisfactory terms as proposed, (iii) the timely receipt of all required shareholder, court and regulatory approvals (as applicable), including the approval of the TSXV, (iv) if the Proposed Definitive Agreement is entered into, the satisfaction of other closing conditions in accordance with the terms of the Proposed Definitive Agreement, and (v) the ability of the Parties (as applicable) to complete the Financing and/or the Proposed Transaction on the terms outlined in this news release (or at all). Readers are cautioned that assumptions used in the preparation of any forward- looking statements may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted as a result of numerous known and unknown risks, uncertainties and other factors, many of which are beyond the control of the Parties. Readers are further cautioned not to place undue reliance on any forward-looking statements, as such information, although considered reasonable by the respective management of the Parties at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated.

 

The forward-looking statements contained in this news release are made as of the date of this news release, and are expressly qualified by the foregoing cautionary statement. Except as expressly required by securities law, neither Party undertakes any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise.

 

Completion of the Proposed Transaction is subject to a number of conditions, including but not limited to, TSXV acceptance and if applicable pursuant to the requirements of the TSXV, majority of the minority shareholder approval. Where applicable, the Proposed Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Proposed 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 Proposed Transaction, any information released or received with respect to the Proposed 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.

 

The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed Transaction and has neither approved nor disapproved the contents of this news release.

 

This news release shall not constitute an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction.

 

This news release does not constitute an offer to sell or a solicitation of an offer to buy the securities described herein in the United States or in any other jurisdiction, nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful. The securities have not been and will not be registered under the U.S. Securities Act, or any state securities laws, and accordingly, may not be offered or sold in the United States except in compliance with the registration requirements of the U.S. Securities Act and applicable state securities requirements or pursuant to exemptions therefrom.

 

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 news release. No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein.

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