African Queen Updates Status of Acquisition of XORTX Pharma Corp.

African Queen Mines Ltd.

Metals & Mining

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African Queen Updates Status of Acquisition of XORTX Pharma Corp.

Vancouver, British Columbia / ACCESSWIRE / July 7 2014 / AFRICAN QUEEN MINES LTD. (the "Company" or "African Queen") is pleased to announce that it has now finalized and is mailing to its shareholders the Information Circular (the "Circular") in relation to its Special Meeting of Shareholders (the "Meeting") to be held to seek their approval of its acquisition of XORTX Pharma Corp. ("XORTX") and related transactions (the "XORTX Transaction"). The date of the Meeting has been set for August 1, 2014. All shareholders of the Company of record on June 2, 2014 (the "Record Date") will be entitled to vote in person or by proxy at the Meeting. The XORTX Transaction is anticipated to close shortly thereafter, concurrent with closing of the related Private Placement (as defined below).

The Company entered into a letter agreement dated March 2, 2014, as amended, with XORTX relating to the XORTX Transaction, pursuant to which the Company proposes to acquire all of the issued and outstanding shares of XORTX in exchange for the issuance of shares of the Company. Trading in the shares of the Company has been halted in accordance with the policies of the TSX Venture Exchange (the "Exchange") and will remain halted until such time as all required documentation has been filed with and accepted by the Exchange and permission to resume trading has been obtained from the Exchange.

XORTX Pharma Corp.

XORTX is a Calgary-based, bio-pharmaceutical company, incorporated in August 2012 and is dedicated to innovation, discovery, development and commercialization of therapies that will improve patient health throughout the world. XORTX is founded on patents and patent applications that include US and worldwide rights for the development of uric acid lowering agents to treat hypertension, diabetic nephropathy, insulin resistance, metabolic syndrome and diabetes. Basic and clinical science underpinning XORTX patent applications and innovative technology has recently been strongly supported by successful phase II pilot clinical trials where uric acid lowering was used in adolescents with hypertension and in adults with chronic kidney injury. Specifically, the hypertension trials showed that when uric acid levels are decreased to within the normal range, a beneficial and clinically meaningful, statistically significant reduction in hypertension occurs.

XORTX is a private CBCA company with approximately 38 shareholders. Following the XORTX Transaction, it is anticipated that Dr. Allen Davidoff - current Director, President and CEO of XORTX, Irwin Olian - current Chairman of the Company, and Jennifer Todhunter - current CFO of the Company, will constitute principals of the resulting company, with no individual or entity holding greater than 10% of the outstanding shares.

Transaction Summary

The XORTX Transaction is expected to be effected by way of a share exchange agreement where the holders of all of the issued and outstanding securities of XORTX will receive securities in the Company. XORTX will become a wholly-owned subsidiary of the Company, which will change its name to reflect its new business (the "Resulting Issuer"). Under the terms of the XORTX Transaction:

  1. 1.Prior to the completion of the XORTX Transaction (the "Closing"), the Company will effect a consolidation of its common shares (the "Consolidation"), with each 10 common shares being consolidated into one common share (the post-Consolidation shares are called the "Resulting Issuer Shares"), and all outstanding warrants to purchase common shares of the Company will be adjusted accordingly, and all outstanding options to purchase common shares of the Company are expected to be terminated;

  2. 2.Prior to the Closing, certain persons, including members of the Company's management, may purchase from existing shareholders of XORTX up to 2,500,000 but not less than 1,750,000 XORTX shares;

  3. 3.On or before the Closing and as a condition to Closing, the Company will complete the Private Placement (as defined below) to raise not less than $3,000,000 and not more than $6,000,000, subject to a 15% over-allotment option;

  4. 4.On the Closing and after the Consolidation, each XORTX shareholder will receive one Resulting Issuer Share for every common share of XORTX (the "XORTX Shares") held, which after completion of certain pre-Closing transactions is expected to result in the issuance of 21,367,787 Resulting Issuer Shares at the deemed price of $0.37 per Resulting Issuer Share for total deemed consideration of approximately $7,900,000;

  5. 5.On the Closing, certain persons, including members of the Company's management, will be granted options from existing shareholders of XORTX exercisable for one year to purchase up to 2,500,000 but not less than 1,750,000 Resulting Issuer Shares issued under paragraph 4 above;

  6. 6.Incentive stock options to purchase Resulting Issuer Shares at the lowest price permitted by the Exchange, but not less than $0.50, will be granted to management, directors, officers, employees and advisors of the Resulting Issuer, entitling such persons to purchase such aggregate number of shares of the Resulting Issuer as does not exceed 10% of the number of common shares of the Resulting Issuer then issued and outstanding; and

  7. 7.On or after the Closing, the name of the Resulting Issuer will be changed to "XORTX Pharma Ltd." or such other name as may be approved by the directors of the Company and acceptable to the applicable regulatory authorities.

Following the Closing, the Resulting Issuer will carry on the business of XORTX described above. The XORTX Transaction is being treated as a Reverse Take-Over (RTO) under the policies of the Exchange.

The XORTX Transaction is an arm's length transaction.

The Company is required to obtain the approval of the Exchange, as well as approval of the Company's shareholders, in order to complete the XORTX Transaction.

Private Placement

On or before the Closing and as a condition to Closing, the Company will complete a brokered private placement (the "Private Placement") to be co-managed by Pope & Company and Global Securities Inc. to raise not less than $3,000,000 and not more than $6,000,000, subject to a 15% overallotment option, through the issuance of units of the Resulting Issuer (the "Units") at the price of $0.50 per Unit. Each Unit will be comprised of one Resulting Issuer Share and one-half of one share purchase warrant (a "Resulting Issuer Warrant"), with each whole Resulting Issuer Warrant entitling the holder to purchase one additional Resulting Issuer Share for $0.75 for a term of two years from the Closing. In connection with the Private Placement, the Company will pay a cash commission equal to 7% of the gross proceeds of the Private Placement plus agents' warrants (the "Agents' Warrants") entitling the holders to purchase up to such number of Resulting Issuer Shares as is equal to 10% of the number of Units sold in the Private Placement.

The use of proceeds from the Private Placement, along with the existing working capital, is currently intended to be allocated as follows:

 |                                     |Estimated Amount|Estimated Amount|
 |                                     |(Minimum Private|(Maximum Private|
 |                                     |Placement)      |Placement)      |
 |                  |Sources of Funds:                                   |
 |Estimated pro forma working capital  |$50,000         |$50,000         |
 |Gross Proceeds from Private Placement|$3,000,000      |$6,900,000      |
 |Total Sources                        |$3,050,000      |$6,950,000      |
 |                  |Use of Funds:                                       |
 |Private Placement Commission         |$210,000        |$483,000        |
 |Estimated costs of Transactions      |$100,000        |$100,000        |
 |Development                          |$2,000,000      |$5,600,000      |
 |and                                  |                |                |
 |Manufacturing                        |                |                |
 |of XORLO                             |                |                |
 |General corporate purposes           |$740,000        |$767,000        |
 |Total Uses                           |$3,050,000      |$6,950,000      |

Directors and Officers of the Resulting Issuer

The board of directors of the Resulting Issuer will initially be comprised of Irwin Olian, Dr. Allen Davidoff, Robert Rieder and Dr. Alan Moore. The Company will procure duly executed resignations and releases in favour of the Resulting Issuer, effective at the Closing, from each director and officer of the Company who will no longer be serving in such capacities. On the Closing, Irwin Olian will continue as the Resulting Issuer's Chairman, Jennifer Todhunter will continue as its Chief Financial Officer and Dr. Allen Davidoff will be appointed Chief Executive Officer and President of the Resulting Issuer.

Capitalization of XORTX

Currently, there are:

  1. 1. 21,367,787 XORTX Shares issued and outstanding;

  2. 2.warrants issued and outstanding which are exercisable for two years from the date of issue to purchase an aggregate of 29,760 XORTX Shares at $0.50 per XORTX Share; and

  3. 3.options issued and outstanding to purchase an aggregate of 670,000 XORTX Shares at $0.10 per share, which will be exercised or terminated on or before Closing.

Other than the above, no other stock options, warrants or other securities entitling holders to acquire XORTX Shares are outstanding. XORTX is not a reporting issuer and its securities are not listed or posted for trading on any stock exchange.

Updated Capitalization of the Resulting Issuer

As at the Record Date of June 2, 2014, the Company had 80,134,343 common shares issued and outstanding. On June 4, 2014, the Company completed the first tranche of a financing to raise $50,000 through the issuance of 1,000,000 units, each consisting of one common share and one warrant. Accordingly, the Company currently has 81,134,343 common shares issued and outstanding, which will equate to 8,113,434 post-Consolidation shares. Assuming the completion of the Consolidation, the XORTX Transaction and the maximum amount of the Private Placement including the 15% over-allotment, the Resulting Issuer is expected to have at Closing approximately 43,281,221 issued common shares, 9,348,760 warrants and 2,950,000 options outstanding, for a total of 55,579,981 Resulting Issuer Shares outstanding on a fully diluted basis. The following table sets out the number and percentage of securities of the Resulting Issuer which will be issued on a fully diluted basis after giving effect to the Consolidation, the XORTX Transaction and the Private Placement. The information above and the following table are provided in order to update the information contained in the Circular to reflect the issuance of the 1,000,000 units referenced above:

 |                                                                                                                  |Number Assuming Closing|                             |Number Assuming Closing|Percentage Assuming Closing|
 |                                                                                                                  |and Minimum Private    |                             |and Maximum Private    |and Maximum Private        |
 |                                                                                                                  |Placement              |Percentage Assuming Closing  |Placement              |Placement                  |
 |                                                                                                                  |                       |and Minimum Private Placement|                       |                           |
 |African Queen Shares issued as at the date of the Circular (on a post-Consolidation basis)                        |8,113,434              |18.8%                        |8,113,434              |14.6%                      |
 |Resulting Issuer Shares to be issued for existing XORTX Shares                                                    |21,367,787             |49.6%                        |21,367,787             |38.5%                      |
 |Resulting Issuer Shares to be issued on Closing of the Private Placement                                          |6,000,000              |13.9%                        |13,800,000             |24.8%                      |
 |Resulting Issuer Shares issuable on exercise of Resulting Issuer Warrants                                         |3,000,000              |7.0%                         |6,900,000              |12.4%                      |
 |Resulting Issuer Shares issuable on exercise of Agents’ Warrants                                                  |600,000                |1.4%                         |1,380,000              |2.5%                       |
 |Resulting Issuer Shares issuable on exercise of outstanding African Queen warrants (on a post-Consolidation basis)|1,068,760              |2.5%                         |1,068,760              |1.9%                       |
 |Resulting Issuer Shares issuable on exercise of new options to Resulting Issuer                                   |2,950,000              |6.8%                         |2,950,000              |5.3%                       |
 |directors, consultants, key management personnel and staff to purchase Resulting Issuer                           |                       |                             |                       |                           |
 |Shares                                                                                                            |                       |                             |                       |                           |
 |Total Resulting Issuer Shares outstanding ona fully diluted basis                                                 |43,099,981             |100%                         |55,579,981             |100%                       |

Selected Pro Forma Consolidated Financial Information

The following table contains certain financial information regarding the Resulting Issuer which also updates the information contained in the Circular to correct a typographical error in the pro forma total assets figure. This table should be read in conjunction with the unaudited pro forma consolidated statement of financial position of the Resulting Issuer as of March 31, 2014 included in the Circular as Appendix C.

 |                                     |Pro Forma Balance Sheet|
 |Total assets                         |$10,677,523            |
 |Total long and short term liabilities|$440,893               |

Conditions Precedent to Completing the XORTX Transaction

The parties' obligations to complete the XORTX Transaction are subject to the satisfaction of a number of conditions including, but not limited to completion of the Private Placement to raise not less than $3,000,000, Exchange approval, approval of the shareholders of the Company, approval of the shareholders of XORTX to the share exchange agreement, and other conditions customary for a transaction of this type.

About African-Queen

The Company is an exploratory resource company with diversified mineral properties in East and West Africa. It is exploring its properties in Ghana and Kenya for gold and other metals. In Ghana it has 30.23 sq. km. under license for gold under an agreement with another company. In Kenya it has approximately 850 sq. km. under license for gold and metals, and a further 737 sq. km. of gold and other minerals licenses under agreements with two other companies. The Company's operations in Ghana are carried out through its subsidiary AQ Ghana Gold Limited. Its operations in Kenya are carried out through its operating subsidiary AQ Kenya Gold Limited. The Company has its executive offices in Vancouver, Canada. The Company is currently undertaking strategies to sell or enter into joint ventures or partnerships with respect to its properties in Africa. The Company was incorporated under the laws of the Province of British Columbia, Canada on April 30, 2008, and received certain southern African assets in a spin off transaction related to the acquisition of Pan African Mining Corp. by Asia Thai Mining Co., Ltd.


"Irwin Olian"
Irwin Olian, Chairman & CEO

For more information, contact:

 |Irwin Olian, President and CEO         |Carrie Howes, Corporate CommunicationsEmail: [email protected]:Germany -|
 |E-mail: [email protected]|+49 (0) 21141 7404U.K.- +44 (0) 870 490 5443Canada - +1 416 900 3634Dubai - +971 55 997 |
 |Phone: (604) 899-0100                  |0427                                                                                    |
 |Fax: (604) 899-0200                    |                                                                                        |

Completion of the transaction is subject to a number of conditions, including Exchange acceptance. The transaction cannot close until any required shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the Filing Statement or Information Circular to be prepared in connection with the transaction, any information released or received with respect to the transaction may not be accurate or complete and should not be relied upon. Trading in securities of the Company should be considered highly speculative.

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

Neither 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.

All information contained in this news release with respect to XORTX was supplied by XORTX for inclusion herein.

The securities of the Company being offered have not been, nor will be, registered under the U.S. Securities Act and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons absent U.S. registration or an applicable exemption from U.S. registration requirements. This news release does not constitute an offer or sale of securities in the United States.

Forward-Looking Information

This news release contains "forward-looking information", which may include, but is not limited to, statements with respect to the XORTX Transaction and the future financial or operating performance of the Company, XORTX and their subsidiaries. Often, but not always, forward-looking information can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or believes" or variations (including negative variations) of such words and phrases, or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking information is based on a number of assumptions management believes to be reasonable and involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company and XORTX to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information. Forward-looking information is subject to risks associated with our business, including but not limited to the risk that the XORTX Transaction may not be completed on the terms expected or at all. Forward-looking statements contained herein are made as of the date of this news release and the Company and XORTX disclaim, other than as required by law, any obligation to update any forward-looking information whether as a result of new information, results, future events, circumstances, or if management's estimates or opinions should change, or otherwise. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated. Accordingly, the reader is cautioned not to place undue reliance on forward-looking information.

Not for distribution to United States wire services or dissemination in the United States. This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.