TSX-V-listed companies Empress Resources and Alto Ventures have entered into a non-binding letter agreement (LoI) for a proposed business combination.

Pursuant to this, Alto will acquire all the issued and outstanding common shares of Empress from their holders on the basis of one common share of Alto being exchanged for each common share of Empress.

The combination of Alto and Empress is expected to create an exploration-focused company (New Alto) which will hold the mineral properties currently held by Alto.

Alto will undergo a 5:1 share consolidation effective upon closing of the transaction.

As part of the transaction, Empress will spin off a new company (New Empress) with each Empress shareholder receiving one share of New Empress for every Empress share held.

New Empress will acquire up to ten royalties and marketable securities from Alto and in exchange, Alto shareholders will receive one share of New Empress for every Alto share held.

It is intended that each of New Alto and New Empress will undertake a concurrent financing to provide them with funds to finance their respective operations and, in the case of New Empress, to fund potential future royalty acquisitions.

The concurrent financing will be offered to shareholders of Alto and Empress on a pro rata basis.

The New Alto Financing will be a unit offering at a post-consolidation price of $0.10 a unit with each unit consisting of one common share and one full warrant exercisable for one common share at a price of $0.20 for a term of two years.

Use of proceeds will be for exploration of New Alto's mineral exploration properties.

The transaction is subject to certain conditions.

The parties have targeted mid-February for the completion of diligence and the negotiation of the definitive agreement.

NEW ALTO

On completion of the transaction, it is expected that New Alto will have about $1.25-million in cash and will have debts which do not exceed $40 000.

New Alto will hold all of the mineral properties held by Alto, including the Oxford Lake property in Manitoba, the Empress and Beardmore area properties in Ontario and the Destiny property, in Quebec.

New Alto's board will consist of Duncan Gordon (chairperson), Richard Mazur, Jeremy Bond, David Rhodes, and Michael Bandrowski. Bandrowski will also serve as CEO of New Alto.

NEW EMPRESS

On completion of the transaction, it is expected that New Empress will have about $250 000 in cash and will have no debt.

New Empress will also acquire from Alto all of the royalties currently held by Alto plus some newly created royalties on Alto's properties and will hold a portfolio of up to ten royalties on properties in Ontario, Quebec and Manitoba.

New Empress will also acquire a portfolio of marketable securities from Alto with an approximate value of $250 000 as at today.

New Empress's board of directors will comprise Alexandra Woodyer Sherron, David Rhodes, Paul Mainwaring, Jeremy Bond, Richard Mazur, and an additional nominee of Alto. Sherron will be the CEO of New Empress.

“The proposed business combination with Empress will revitalise Alto by giving it the funds it requires to advance its key exploration properties and, by placing our royalty assets in New Empress, Alto shareholders will participate in the growth of a well-managed company dedicated to building a profitable royalty and streaming business,” commented Alto CEO Rick Mazur.