FSD Brazil Ltd. entered into a binding letter of intent to acquire Spirit Banner II Capital Corp. (TSXV:SBTC.P) from Matthew Wood and others in a reverse merger transaction on March 20, 2019. Under the terms of transaction, Spirit Banner II Capital Corp. will issue 100 million shares, pay CAD 0.25 million in cash, a 3% net smelter returns royalty over the Catalao Project, and a 1.5% net smelter returns royalty over all other diamond projects. Consideration shares will be subsequently distributed on a pro rata basis to the shareholders of Five Star Diamonds Limited (TSXV:STAR). Spirit Banner II has agreed to advance to Five Star a refundable deposit of CAD 0.23 million, which will be credited towards the cash portion of the purchase price on the closing of the transaction. The transaction will result in Spirit Banner II continuing the diamond business in Brazil currently carried on by Five Star. Five Star shareholders will hold a majority of the Spirit Banner II shares. Concurrent with the completion of the transaction, both Spirit Banner II and Five Star intend to complete a brokered and/or non-brokered private placement financing. The net proceeds of financing to be completed by Spirit Banner II will be used for obligations in connection with the completion of the transaction. Upon closing, Five Star intends to change its name to ‘Star Royalties Ltd.’ and the resulting issuer will be listed on the Exchange as a Tier 2 mining issuer. Existing Directors and officers of Five Star and Spirit Banner II will continue as the Directors and officers of Five Star and the resulting issuer following completion of the transaction. The final structure of the transaction is subject to receipt of tax, corporate and securities law advice for both Spirit Banner II and Five Star. The transaction is subject to third-party consents, approvals by all regulatory bodies including TSXV approval, completion of due diligence, delivery to Spirit Banner II of an independent geological report, approval from shareholders of Five Star, and completion of concurrent financings private placement. The deal does not require approval from shareholders of Spirit Banner II.