Q-Gold Announces Letter of Intent
VANCOUVER, July 10, 2014 /CNW/ - Q-Gold Resources Ltd. (the "Company") (TSX VENTURE: QGR) (http://www.qgoldresources.com) is pleased to announce that it has executed a Letter of Intent (the "LOI") to potentially acquire two private agricultural supply companies that specialize in sales of growing equipment to the international medicinal cannabis industry (the "Target Companies"). The vendor is a private British Columbia company, and is - along with the Target Companies, at arm's length to the Company. Pursuant to the terms of the LOI, and subject to various closing conditions (including but not limited to the negotiation and execution of a formal purchase and sale agreement), Q-Gold can acquire 100% of the issued and outstanding shares of the Target Companies in consideration for $2.2 million, to be paid through the issuance of Q-Gold shares and cash payments to the vendor.
The Target Companies had combined gross sales of $6.6 million during their most recently completed year-ends and have established strong business relationships over the past 7 years with its suppliers and customers. Although initially focused on retail sales in the Canadian market, the Target Companies have entered into the United States market in the past 2 years as more US states have legalized medicinal marijuana, increasing the market for growing equipment. Currently 23 US states, plus the District of Columbia, have legalized medicinal marijuana.
According to "The State of Legal Marijuana Markets", published by ArcView Market Research, the United States national legal marijuana market value was assessed at $1.53 billion in 2013 and has the potential to reach $10.2 billion over the next five years.
The Company acknowledges that, at this time, there can be no assurance or guarantee that it will complete the acquisition of the Target Companies, which will also be subject to the approval of the TSX Venture Exchange. The Company will provide further updates as they become available.
About Q-Gold Resources Ltd.
Q-Gold is a publicly traded Canadian-based mineral exploration company currently holds over 10,000 contiguous acres of mining and patented claims containing 5 historic gold mines in the Kenora Mining District of Ontario. The Company also holds 13 U.S. Bureau of Land Management mining claims near Crown King, Arizona, which contain a number of geophysical anomalies under investigation as potential drilling targets.
Certain statements in this release are forward-looking statements, including with respect to the proposed acquisition of the Target Companies, and with respect to the legal/medical marijuana market in the United States. Forward-looking statements consist of statements that are not purely historical, including any statements regarding beliefs, plans, expectations or intentions regarding the future. Such statements are subject to risks and uncertainties that may cause actual results, performance or developments to differ materially from those contained in the statements. No assurance can be given that any of the events anticipated by the forward-looking statements will occur or, if they do occur, what benefits the Company will obtain from them. In particular, the company cautions that the completion of the proposed acquisitions cannot be predicted with certainty, and that there can be no assurance at this time that the proposed acquisitions will be completed in the manner noted above or at all. These forward-looking statements reflect management's current views and are based on certain expectations, estimates and assumptions which may prove to be incorrect. A number of risks and uncertainties could cause our actual results to differ materially from those expressed or implied by the forward-looking statements, as well as other factors beyond the Company's control. In addition, the projected information regarding the legal marijuana market in the United States has not been independently verified by the Company, and the Company does not represent nor warrant that the actual results achieved during the projected period will be the same in whole or in part as that projected.
The forward-looking statements made by the Company are made as of the date of this news release.
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 release.
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