EMERGING GOLDFIELDS

Margaret Lake enters into LOI to purchase Emerging Goldfields

Maragret Lake Diamonds

Vancouver, British Columbia -TheNewswire -July 12, 2023 -Margaret Lake Diamonds Inc.(TSXV:DIA) (OTC:DDIAF) (FSE:M85A) (“DIA” or the “Company”)is pleased to announce that it has signed a non-binding letter of intent dated June 26th, 2023 (the “LOI”) with Emerging Goldfields Resources Ltd. (“Emerging”), an arm’s length private company incorporated under the Business Corporations Act (Alberta) (the “ABCA”), which sets forth the general terms and conditions of a proposed reverse takeover transaction (the “Proposed Transaction”). In addition, and in connection with the Proposed Transaction, the parties have agreed to use their “commercially reasonable efforts” to cause Emerging to complete a private placement of units of Emerging (“Units”) (the “Proposed Private Placement”).

The Proposed Transaction will, pursuant to the policies of the Exchange, constitute a ‘reverse takeover’ of the Company. The corporation resulting from the Proposed Transaction (the “Resulting Issuer”) will carry on the business of Emerging as currently constituted and be listed for trading on the Exchange as a Tier 2 mining issuer and the Frankfurt Stock Exchange under the name “Emerging Goldfields Resources Ltd.”, or such other name as the parties may agree.

Pursuant to the terms of the LOI, it is intended that DIA and Emerging will enter into a business combination by way of a share exchange, merger, amalgamation, arrangement, or other similar form of transaction. The final structure of the business combination is subject to receipt by the parties of tax, corporate, and securities law advice and will be agreed to and superseded by a definitive agreement (the “Definitive Agreement”) between DIA and Emerging with such agreement to include representations, warranties, conditions and covenants typical for a transaction of this nature.

Overview of Emerging

Emerging is a private corporation incorporated under the ABCA carrying on business as a mineral exploration company focused on the acquisition, exploration, and development of mineral properties in Armenia.  Emerging, through its UK wholly owned subsidiary, Goldfield Holdings Ltd., holds a 80% working interest in Armenian companies Vayk Gold LLC, Geghi Gold LLC and Copper Plus LLC.

Emerging has an 80% interest in aportfolio of gold-silver deposits having a combined 43-101-compliant M&I attributable Au resources of 2.37 M ounces of Au and 15.82 million ounces Ag consisting of three polymetallic gold-silver deposits in Armenia, all with significant resource growth potential.  

Capitalization of DIA

Eachissued and outstanding common share the capital of DIA (the “Margaret Common Shares”) at the time of closing, will be exchanged into one common share of the resulting issuer (each a “Newco Common Share”) on a 1:1 basis, such that all of the issued and outstanding Margaret Common Shares will be exchanged for4,741,230Newco Common Shares and the outstanding warrants to purchase Margaret Common Shares (the “MargaretWarrants”)shall each be exchanged for one replacement warrant(“Newco Warrant”),exercisable on a 1:1 basis so that all of the issued and outstanding Margaret Shares will be exchanged for4,741,230Newco Common Shares,the outstanding Margaret Warrantswill be exchanged for4,157,313 Newco Warrants.

Capitalization of Emerging

Eachissued and outstanding common shares in the capital of Emerging (each an “Emerging Share”) at the time of closing will be exchanged into one Newco Common Share on a 1:1 basis and the outstanding warrants to purchase Emerging Shares (the “Emerging Warrants”)shall each be exchanged for one Newco Warrant,exercisable on a 1:1 basis so that all of the issued and outstanding Emerging Shares will be exchanged for59,800,000 Newco CommonShares,each outstanding Emerging Warrantwill be exchanged for600,000 Newco Warrants.

Additionally, eachissued and outstandingcommonshare and warrant issued pursuant to the Proposed Private Placementshall beexchanged into one Newco Common Share and one Newco Warrant on a 1:1 basis.

Terms of the Proposed Transaction

The LOI serves as an agreement in principle concerning a business combination between DIA and Emerging that will result in a reverse takeover of DIA. The Proposed Transaction will take the form of a business combination between DIA and Emerging whereby the DIA Securities and Emerging Securities will be exchanged on a 1:1 basis for an equivalent security of the Resulting Issuer (other than Emerging Shares or Margaret Common Shares held by shareholders who exercise their dissent rights, if applicable.

Pursuant to the rules of the TSXV, a halt in trading is expected to continue until the completion of the Proposed Transaction. Sponsorship pursuant torulesof the TSXV may be required and Margaret may apply for a waiver. Margaret has not yet engaged a sponsor.

The completion of the Proposed Transaction is also subject to several other conditions set out in the LOI, including approval by the directors of theCompanyand Emerging, satisfactory completion of due diligence, applicable regulatory approvals, and applicable shareholder approvals. A more comprehensive news release will be issued by DIA disclosing details of the Proposed Transaction, including financial information respecting Emerging, the names and backgrounds of all persons who will constitute insiders of the Resulting Issuer, and information respecting sponsorship, once an agreement has been finalized and certain conditions have been met, including:

i.satisfactory completion of due diligence; and

ii.execution of the Definitive Agreement.

The Exchange may require some or all of the Newco Common Shares issued to the holders of the Emerging Shares to be held in escrow pursuant to the requirements of the Exchange.  The Proposed Transaction is subject to, satisfactory completion of due diligence, the execution of a Definitive Agreement, among other details, final approval of the Exchange and standard closing conditions.

Proposed Private Placement

Pursuant to the LOI, the parties have agreed to use their “commercially reasonable efforts” to cause Emerging to complete the Proposed Private Placement at a price per Unit of $0.30 to raise gross proceeds of up to CAD $1,500,000 or such other amount as the Parties may agree to. The Parties may engage an agent or syndicate of agents (the “Agents”) for the Proposed Private Placement. A commission may be paid to the Agents or to individual registrants (including selling group members). The Agents may also be granted broker warrants of the number of Private Placement Common Shares sold by the Agents (including selling group members) in the Proposed Private Placement, with each broker warrant entitling the holder thereof to purchase one common share of the Resulting Issuer at a price equal to the price paid per Private Placement Common Share. Further particulars of the Proposed Private Placement will be disseminated in a news release to be issued upon finalization of its terms.

Each Unit is expected to have a subscription price of CAD$0.30 per Unit and is expected to be comprised of one (1) common share in the capital of Emerging (an “Emerging Share”), and one Common Share purchase warrant of Emerging (a “Emerging Warrant”).  Each Emerging Warrant entitles the holder thereof to purchase one (1) Emerging Share (a “Warrant Share”, together with the Emerging Shares, the Emerging Warrants, and the Bonus Emerging Shares (defined below), the “Securities”) at a price of CAD$0.60 per Emerging Share expiring three (3) years from the completion of a going public transaction.  In the event that Emerging has not completed a going public transaction within four (4) months following the closing date (the “Bonus Deadline”), the subscriber shall have the right to be issued by Emerging, and Emerging shall issue to the subscriber, for no additional consideration from the subscriber, such number of additional Emerging Shares as is equal to 10% of the number of Emerging Shares comprising the Units purchased by and issued to the subscriber pursuant to the subscribers subscription agreement at the closing time (such additional Emerging Shares, the “Bonus Shares”)

On behalf of the Board

Margaret Lake Diamonds Inc.

“Yari Nieken”

President, Chief Executive Officer, Chairman

Tel: 604.328.0425 | Email: ynieken@gmail.com

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