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Railtown II Capital Corp., an unlisted reporting issuer, has changed its corporate name to Kay Copper Corp. (“Kay Copper”) and entered into a non-binding letter of intent (the “LOI”) with Kodiak Copper Corp. (TSXV: KDK) (OTCQX: KDKCF) (FSE: 5DD1) (“Kodiak”) and Teck Resources Limited (collectively with its subsidiary Teck American Incorporated, “Teck”). The LOI outlines principal terms of a proposed transaction to be completed by way of a three-cornered amalgamation (the “Transaction”).
Under the Transaction, Kodiak would transfer its 100% owned Mohave project (“Mohave”), and Teck would transfer its 100% owned Copper Hill project (“Copper Hill”), both located in Arizona, into a subsidiary of Kay Copper. The goal is to create a new US-focused copper exploration company that would apply to list its shares on the TSX Venture Exchange (“TSXV”).
The Transaction is subject to ongoing negotiations, execution of definitive agreements, due diligence, consents and regulatory approvals, TSXV acceptance, and completion of the Newco Initial Financing and the Newco Concurrent Financing. There is no guarantee the Transaction will be completed.
Under the LOI, and subject to negotiation and execution of definitive agreements:
Further details will be provided as the process advances.
NewCo intends to complete a subscription receipt financing at $0.25 per share for minimum gross proceeds of C$4.0 million (the “NewCo Concurrent Financing”). Proceeds are intended to fund exploration work programs to materially advance both projects in 2026. Gross proceeds would be held in escrow and released concurrently with closing of the Transaction upon satisfaction of specified escrow release conditions, including completion of the asset acquisitions, amalgamation, and TSXV conditional approval, as well as required corporate and regulatory approvals. If escrow release conditions are not satisfied, subscription receipt holders would be entitled to a return of funds in accordance with the subscription receipt terms.
In addition to the NewCo Concurrent Financing, NewCo intends to complete a non-brokered initial financing to incoming management, board, and investors at $0.10 per share for gross proceeds of up to $830,000 (the “NewCo Initial Financing”), subject to negotiation, execution of definitive agreements and applicable approvals. The NewCo Initial Financing is expected to close prior to closing of the Transaction.
Following completion of the Transaction, the NewCo Concurrent Financing, and the NewCo Initial Financing, Kay Copper is expected to have approximately 70,300,000 common shares outstanding on an undiluted basis. Ownership is expected to be approximately:
Final capitalization will be determined upon negotiation and execution of definitive agreements and completion of the NewCo Concurrent Financing and NewCo Initial Financing.
Upon closing of the Transaction, Kay Copper’s management and board of directors will be reconstituted. The management team will be led by Adam Schatzker as Chief Executive Officer, and Claudia Tornquist will chair the Board of Directors. Other appointments will be named in due course. Chris Taylor, John Robins and Jim Paterson will serve as advisors, and the company will be part of Discovery GroupTM.
The company states Schatzker is a mining executive with over 25 years of experience spanning corporate development, capital markets, and project evaluation across base, battery, and precious metals. Most recently, he was Vice President, Corporate Development at Canada Nickel Company, where he led government funding initiatives for the Crawford Nickel Sulphide Project and corporate development activities for carbon-related businesses. His prior roles include RBC Capital Markets, Research Capital, Waterton Global, and Uranium One. The release also notes he is an independent director of Tiernan Gold Corp. He holds an MBA and B.Sc. (Geology) from the University of Toronto.
The release describes Tornquist as an experienced mining executive with background in business development, business evaluation, M&A and financing across multinational and junior sectors. It states she is CEO of Kodiak Copper and previously worked at Rio Tinto with Rio Tinto’s copper operations, and served as Executive Vice President Business Development for Sandstorm Gold. The release also notes she is a director of American Lithium and Silver One Resources and a former director of Kennady Diamonds, where she chaired the special committee for the $176m sale of the company to Mountain Province. She holds a Masters Degree in Mechanical Engineering from the Technical University of Munich and a Masters of Business Administration from INSEAD.
The release states Chris Taylor is the founder of Kodiak Copper and has more than 20 years of experience in structural and economic geology, including copper porphyry exploration. It also states he was founder and CEO & President of Great Bear Resources, which made a district-scale gold discovery in Canada and was acquired by Kinross Gold for $1.8b.
John Robins is described as having over 40 years of mining industry experience and being co-founder and principal of Discovery GroupTM. The release states his entrepreneurship has created over $2.6 billion in M&A activity and generated over C$1 billion in direct and indirect mineral expenditures.
Jim Paterson is described as co-founder and principal of Discovery GroupTM with 27 years of executive experience in the mining industry, including board roles at companies acquired by Goldcorp, Coeur Mining and Royal Gold. The release also states he is Chairman of ValOre Metals and serves as a director of K2 Gold.
The release states that, as of the date of the LOI, Teck and Kodiak do not own, directly or indirectly, nor exercise control or direction over, any shares of NewCo or Kay Copper. Upon closing of the Transaction (and assuming completion of the maximum offering amount under the NewCo Concurrent Financing), Teck and Kodiak are expected to each beneficially own, directly or indirectly, or exercise control or direction over, approximately 20,000,000 shares in Kay Copper, representing approximately 28% of the issued and outstanding shares of Kay Copper on a non-diluted basis, subject to negotiations and execution of definitive agreements.
Closing of the Transaction is expected in the third quarter of 2026, subject to customary closing conditions including due diligence, definitive agreements, consents and regulatory approvals, TSXV acceptance and satisfaction of listing requirements, completion of the Newco Initial Financing and Newco Concurrent Financing, and other conditions. There can be no assurance the Transaction or either financing will be completed as proposed, or at all.
Neither TSX Venture Exchange nor its Regulation Services Provider accepts responsibility for the adequacy or accuracy of the release.
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