Dawson Gold Enters Into Letter of Intent to Acquire FluidOil Limited

Vancouver, British Columbia – April 12, 2017 – Dawson Gold Corp. (TSX – NEX: DYU.H) (the “Company” or “AIS”) is pleased to announce that it has entered into a letter of intent dated April 11, 2017 with FluidOil Limited for the acquisition by Dawson of 100% of FluidOil.

FluidOil is an independent, international oil services technology company that is commercializing the “Viscositor Heavy to Light” (“VHTL”) oil upgrading technology. VHTL is a proprietary and patented technology that  provides  a  cost  efficient  and  environmentally  sound  way to increase the  economic viability  of  heavy  oil  production  by  upgrading  close  to  source.  The  VHTL  process  improves  the properties of heavy oil by reducing viscosity, reducing density, and removing undesired contaminants, resulting in a higher value synthetic crude oil which can be transported as easily as conventional crude oil. FluidOil was incorporated under the laws of England and Wales on February 3, 2012 and has its headquarters in Basingstoke, England.

The proposed acquisition of FluidOil by Dawson was negotiated at arm’s length and will on closing constitute a reverse takeover of Dawson pursuant to the policies of the TSX Venture Exchange.

John Anderson, Interim Chief Executive Officer of Dawson Gold, said: “With FluidOil, we are excited to have a significant technology stake in upgrading heavy oil. The worldwide production of heavy oil has been constrained because conventional methods of extraction, transportation and refining are extremely expensive. VHTL is a new solution to this heavy oil challenge and capable of being deployed  at commercial scales. This transformative transaction, under the leadership of Charles Parker, will add significant value for all shareholders”.

Charles  Parker,  Chief  Executive  Officer  of  FluidOil,  commented:  “This  transaction  provides  the necessary access to the public market and capital to allow us to complete the development of VHTL, through the engineering and construction of a commercial-scale demonstration plant.  Funding also allows us to execute on the next stage of our strategy, which is to partner with heavy oil projects globally that will benefit from the technology.”

Transaction Summary

Consideration
Pursuant to the letter of intent, Dawson will issue common shares to FluidOil equal in value to C$25 million at a deemed price of C$0.25 per share.  Dawson will also pay to FluidOil a refundable deposit of US$200,000 in cash to be secured against the assets of FluidOil, subject stock exchange approval of the payment. The deposit will be refundable in the event the transaction does not complete.

Concurrent Private Placement
In  connection  with  the  proposed  acquisition  of  FluidOil,  Dawson  proposes  to  undertake  a  private placement of its common shares for gross minimum proceeds of C$5,000,000 and gross maximum

proceeds of C$10,000,000, at a price of C$0.25 per share. The Company may pay a finder’s fee in connection with the private placement.   The net proceeds from the private placement will provide additional capital to support the ongoing commercialization of VHTL.

The terms of the transaction will be included in a definitive agreement to be entered into among the parties that will replace the letter of intent.

Proposed Management
Upon completion of the acquisition of FluidOil, the board and management of Dawson is proposed to be as follows:

  • Charles Parker, director, President and CEO Olav Ellingsen, director and CTO
  • Gerald Malone, director and Chairman, John Anderson, director
  • Bijay Singh, director
  • Simon Anderson, CFO

Mr. Charles Parker has been Chief Executive Officer of FluidOil since founding the business in 2012. Mr Parker has been instrumental in the growth and financing of the company, drawing on significant international experience in strategic consultancy, venture capital and corporate finance. Prior to FluidOil, Mr. Parker spent three years in Private Equity before co-founding a renewable energy focused advisory business, Wellstone Partners. He has also worked as a strategy consultant for Boston Consulting Group and The Parthenon Group, advising FTSE 100 and Fortune 500 companies with a specialisation in Renewable Energy, Engineering, Financial Services, Fast Moving Consumer Goods, Software and Telecoms. Mr. Parker has a Masters degree in Engineering from Oxford University.

Mr. Olav Ellingsen is a founder of FluidOil and the inventor of the original technology behind VHTL. He has served as the Chief Technology Officer since 2012. With a background as an inventor and technical expert, Mr. Ellingsen has over 40 years of international experience in the oil industry. Prior to FluidOil, Mr. Ellingsen founded Thermtech A/S, an oil technology company which developed an award-winning technology to clean oil-polluted drill cuttings. In 2007, Thermtech was ranked number one in Deloitte’s Fast Track list of fastest growing revenue technology companies in Norway and in 1994, Mr. Ellingsen received Norway’s NITO Technology Prize. He has participated in the Norwegian government’s “Forum for Value Creation” under the leadership of the former prime minister Gro Harlem Brundtland, together with the ministers of oil, energy and finance.

Mr. Gerald Malone (Peter Gerald Malone) is Chairman of FluidOil and brings significant executive and investment expertise. A solicitor by profession, Mr. Malone served two terms as a Member of Parliament from 1983 to 1987 and 1992 to 1997, including time as a member of the House of Commons Energy Select Committee, a Parliamentary Private Secretary (PPS) at the Department of Energy, PPS to the Secretary of State for Trade and industry, a Government whip from 1986 to 1987 in Margaret Thatcher’s government and Minister for Health in John Major’s government. He has been Scottish editor of The Sunday Times, a presenter of business and current affairs programmes on the BBC and commercial radio and from 1988 to 1991 he was Director of European Affairs at the Energy and Environmental Policy Center at the John F Kennedy School of Government, Harvard. Mr. Malone is currently Chairman of Aberdeen Global Income Fund, Inc., (FCO); Aberdeen Asia-Pacific Income Fund, Inc., (FAX) and the “Aberdeen Funds”; he is on the board of Aberdeen Australia Equity Fund Inc. (IAF) and Aberdeen Asia- Pacific Investment Co. Ltd. He is also on the board of Rejuvenan Global Health, a US healthcare company and Crescent Pharma Ltd, a UK generic drug supplier.

Mr. John D. Anderson is Interim Chief Executive Officer & Director at Dawson Gold Corp.

Mr. Bijay R. Singh is Independent Director at Dawson Gold Corp.  He has extensive experience working with  both  public  and  private  companies  helping  with  capital  raising,  corporate  finance,  go  public strategies and business development.

Simon  Anderson  has  been  Dawson’s  CFO  since  2010.  He  has  extensive  experience  with  public companies, having been a director or senior officer of companies listed on the TSX Venture Exchange, TSX and Nasdaq stock market. He is a member of the Chartered Professional Accountants of British Columbia, having qualified as a Chartered Accountant in 1986. Mr. Anderson currently serves on the boards of IBC Advanced Alloys Corp., which manufactures and processes alloys and Sinovac Biotech Ltd., a Beijing-based vaccine manufacturer.

Shareholder and Exchange Approval
Completion of the acquisition of FluidOil is subject to a number of conditions, including, but not limited to, receipt of gross proceeds of a minimum of $5 million pursuant to the concurrent private placement, stock exchange approval, and if required under Exchange requirements, the approval of the shareholders of Dawson. FluidOil and Dawson will prepare a disclosure document in the form required under stock exchange policies.  Dawson intends to seek a waiver from sponsorship.

For more investor information, contact:
John Anderson, Director
T:  +1-604-218-7400
E:  john@purplefish.ca

Bijay Singh, Director
T:  +1-604-897-0132
E:  bijay@shaw.ca

 

Media Enquiries
Celicourt Communications
Ian Middleton / Jimmy Lea
E:  fluidoil@celicourt.uk
T:  +44 20 7520 9272
M: +44 7885 508 527

Cautionary Statement:
Completion of the transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable, disinterested shareholder approval. Where applicable, the transaction cannot close until the 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 management information circular or filing statement 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 the securities of Dawson 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.

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 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. Although Dawson believes the expectations expressed in such  forward-looking  statements  are  based  on  reasonable  assumptions,  such  statements  are  not  guarantees  of  future performance and actual results or developments may differ materially from those in forward-looking statements. Factors that could cause actual results to differ materially from those in forward-looking statements include market prices, exploration successes, continued availability of capital and financing, and general economic, market or business conditions. There can be no assurances that such statements will prove accurate and, therefore, readers are advised to rely on their own evaluation of such uncertainties.  We  do  not  assume  any  obligation  to  update  any  forward-looking  statements  except  as  required  under  the applicable laws.

The securities referenced in this press release have not and will not be registered under the U.S. Securities Act of 1933, and may not be offered or sold in the United States or to a U.S. Person unless so registered, or an exemption from registration is relied upon.