White Hydrogen: QNB Metals and ReSolve Energy Join Forces in a Significant Move for the Energy and Technology Sectors
Montréal, Québec – TheNewswire – September 19, 2024 – QNB Metals Inc. (CSE:TIM.X) is pleased to announce that it has executed an agreement with RéSolve Energy to create a jointly owned subsidiary in which RéSolve will transfer all rights to patentable technologies for the exploration and production of white hydrogen from geological sources.
The Subsidiary will focus on hydrogen exploration, research, and related intellectual property development, including further development and commercialization of the White Hydrogen Technology. All intellectual property related to the White Hydrogen Technology will be transferred to the Subsidiary from RéSolve. RéSolve will, among other items, provide ongoing management support, expertise, and equipment required to conduct research and development (“R&D”) and commercialize the White Hydrogen Technology (the business and operations of the Subsidiary referred to as the “Joint Venture”).
The Agreement
RéSolve will issue to QNB Metals a number of common shares in the capital of the Subsidiary (the “Subsidiary Shares”) representing a 49.09% equity stake in the Subsidiary in consideration for:
- $375,000 to be paid via the issuance of common shares in the capital of QNB Metals (the “QNB Shares”) at a deemed price of $0.05 per QNB Share for a total of 7,500,000 shares, and
- a commitment by QNB Metals to invest $750,000 in R&D and hydrogen exploration into the Subsidiary over the next twelve (12) months, with $250,000 of such amount to be provided within the first sixty (60) days following the execution of a definitive agreement required in connection with the Joint Venture.
In connection with the Joint Venture, RéSolve will grant QNB Metals the exclusive right and option (the “Option”) to acquire all the issued and outstanding common shares of RéSolve (the “RéSolve Shares”) until the earlier of: (i) the termination of the Agreement, (ii) March 31, 2025, and (iii) sixty (60) days after all documentation which might be required by the Canadian Securities Exchange (“CSE”) to approve the exercise of the Option by QNB Metals (the “RéSolve Share Purchase”). In consideration for the RéSolve Share Purchase, QNB Metals shall:
- make a payment of $4,500,000 to RéSolve via the issuance of QNB Shares at a deemed price of $0.10 per QNB Share,
- make bonus milestone payments to be determined upon entry into a definitive agreement with respect to the RéSolve Share Purchase (the “éSolve Definitive Agreement”) and that will be satisfied via the issuance of QNB Shares, issued over five (5) years based on:
- milestones currently in place within RéSolve, and
- new milestones to be negotiated prior to the entry of the RéSolve Definitive Agreement, and
- the satisfaction of the R&D Commitment.
The Subsidiary’s board of directors will be comprised of two members nominated by RéSolve and one member nominated by QNB Metals.
The closing of the Joint Venture is expected to take place on or around October 2024, conditional on, amongst other items: (i) QNB Metals providing a National Instrument 43-101 Technical Report (“NI 43-101”) for its project located in Nova Scotia, Canada; (ii) completion of a best-efforts private placement by QNB Metals for minimum gross proceeds of $500,000 through the issuance of QNB Shares at a deemed price of $0.05 per QNB Share; and (iii) receipt of all necessary regulatory, corporate, and/or shareholder approvals for the Joint Venture (as applicable).
RéSolve is expected to nominate these two members to the joint-venture management committee:
Bernard Granger: M.Sc. specializing in geology, was chief geologist for SOQUIP (20), PAREX (Terra Nova discovery), ONAREP (Morocco), Hydro-Québec’s Oil and Gas Division and Pétrolia.
André Proulx: Founding President of three TSX-listed public companies, including a petroleum company (Pétrolia), two mining exploration companies (Puma and Appalaches), a geological consulting firm (Géominex) and CEO of RéSolve Énergie.
Private Placement
In connection with the Joint Venture, QNB will undertake a best efforts non-brokered private placement (the “Offering”) for minimum aggregate gross proceeds in the amount of $500,000 through the issuance of units of the Company (the “Units”) at a price of $0.05 per Unit. Each Unit will be comprised of one QNB Share and one share purchase warrant (a “Warrant”) entitling the holder thereof to purchase one QNB Share at an exercise price of $0.075 per QNB Share for a period of eighteen (18) months from the date of issuance, subject to an Acceleration Event (as defined below).
The Warrants will be subject to an accelerated expiry provision such that if the volume-weighted average trading price of the QNB Shares is equal to or greater than $0.10 for a period of ten (10) consecutive trading days (an “Acceleration Event”), QNB may accelerate the expiry date of the Warrants to a date that is not less than 30 days following notice to the Warrant holders of the occurrence of an Acceleration Event via news release.
QNB may pay a finder’s fee to arm’s length finders in connection with the Offering and in accordance with the policies of the CSE.
QNB intends to use the net proceeds from the Offering for the Joint Venture and for general corporate and working capital purposes. Closing of the Offering is subject to a number of conditions, including, without limitation, approval of the CSE and receipt of all necessary corporate and regulatory approvals.
The Offering replaces the previously announced private placement offering of the Company as disclosed in the Company’s press release dated August 15, 2024.
The securities to be issued under the Offering will be offered by way of private placement in such provinces and/or territories of Canada as may be determined by the Company, in each case, pursuant to applicable exemptions from the prospectus requirements under applicable securities laws. Securities issued under the Offering will be subject to a hold period which will expire four months and one day from the date of the applicable closing of the Offering.
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White Hydrogen: QNB Metals and ReSolve Energy Join Forces in a Significant Move for the Energy and Technology Sectors, source
