African Queen to Acquire XORTX Pharma Corp.

Vancouver, British Columbia / March 4 2014 / AFRICAN QUEEN MINES LTD. (the "Company") is pleased to announce that it has entered into a letter agreement dated March 2, 2014 with XORTX Pharma Corp. ("XORTX") relating to a transaction (the "XORTX Transaction") pursuant to which the Company proposes to acquire all of the issued and outstanding securities of XORTX in exchange for the issuance of securities of the Company. Trading in the shares of the Company has been halted in accordance with the policies of the TSX Venture Exchange (the "Exchange") and will remain halted until such time as all required documentation has been filed with and accepted by the Exchange and permission to resume trading has been obtained from the Exchange.

XORTX Pharma Corp.

XORTX is a Calgary-based, bio-pharmaceutical company, incorporated August 2012 and is dedicated to innovation, discovery, development and commercialization of therapies that will improve patient health throughout the world. XORTX is founded on patents and patent applications that include US and worldwide rights for the development of uric acid lowering agents to treat diabetic nephropathy, hypertension, insulin resistance, metabolic syndrome and diabetes. Basic and clinical science underpinning XORTX patent applications and innovative technology has recently been confirmed by successful phase II pilot trials in adolescent hypertension and chronic kidney injury showing that when uric acid levels are decreased, clinically meaningful benefit reduction in hypertension occurs. XORTX is a phase II clinical stage company focused on developing treatments for hypertension and diabetic nephropathy.

XORTX is a private CBCA company with approximately 38 shareholders, of which Dr. Allen Davidoff is the only significant shareholder. Following the merger, it is anticipated that Dr. Allen Davidoff - current Director, President and CEO of XORTX, Irwin Olian - current Chairman of the Company and Jennifer Todhunter - current CFO of the Company, will constitute principals of the resulting company, with no individual or entity holding greater than 10% of the outstanding shares.

Transaction Summary

The XORTX Transaction is expected to be effected by way of a share exchange agreement where the holders of all of the issued and outstanding securities of XORTX will receive securities in the Company. XORTX will become a wholly-owned subsidiary of the Company, which will change its name to reflect its new business (the "Resulting Issuer"). Under the terms of the XORTX Transaction:

  1. 1.Prior to the completion of the XORTX Transaction (the "Closing"), the Company will effect a consolidation of its common shares, with each 10 common shares being consolidated into one common share (the post-consolidation shares are called the "Resulting Issuer Shares"), and all outstanding options and warrants to purchase common shares of the Company will be adjusted accordingly;

  2. 2.Prior to the Closing, members of the Company's management may purchase from existing shareholders of XORTX up to 2,500,000 but not less than 1,750,000 XORTX shares ("Seed Shares"), of which 1,000,000 Seed Shares will be deposited into a voluntary escrow for a period of 24 months following the Closing;

  3. 3.On the Closing, each XORTX shareholder will receive one Resulting Issuer Share for every common share of XORTX (the "XORTX Shares") held, which after completion of certain pre-closing transactions is expected to result in the issuance of 21,100,000 Resulting Issuer Shares at the deemed price of $0.30 per Resulting Issuer Share for total deemed consideration of $6,330,000;

  4. 4.On the Closing, members of the Company's management will be granted options exercisable for one year to purchase up to 2,500,000 but not less than 1,750,000 Resulting Issuer Shares issued under paragraph 3 above at the price of $0.18 per Resulting Issuer Share; and

  5. 5.Incentive stock options to purchase Resulting Issuer Shares at the lowest price permitted by the Exchange will be granted to management, directors, officers, employees and advisors of the Resulting Issuer, entitling such persons to purchase such aggregate number of shares of the Company as does not exceed 10% of the number of common shares of the Company then issued and outstanding.

Following the Closing, the Resulting Issuer will carry on the business of XORTX described above. Management believes the XORTX Transaction will be deemed to be a Change of Business (COB) under the policies of the Exchange.

The XORTX Transaction is an arm's length transaction.

The Company is required to obtain the approval of the Exchange, which in turn may require the approval of the Company's shareholders, in order to complete the XORTX Transaction.

Private Placement

In connection with or prior to the Closing, the Company will complete a brokered private placement (the "Private Placement") to raise not less than CDN$3,000,000 and not more than CDN$6,000,000 through the issuance of units of the Resulting Issuer (the "Units") at an approximate price of $0.50 per Unit. Each Unit will be comprised of one Resulting Issuer Share and one-half of one Resulting Issuer share purchase warrant entitling the holder to purchase one additional Resulting Issuer Share at an exercise price and for a term to be agreed upon by the Company and XORTX. In connection with the Private Placement, the Company may pay to finders a cash commission equal to 7% of the gross proceeds of the Private Placement, and may also issue warrants to the finders.

The use of proceeds from the Private Placement, along with the existing working capital in the Company (which is expected to be approximately $5,400,000 at the Closing of the XORTX Transaction, assuming the maximum Private Placement) is currently intended to be allocated as follows:

Manufacturing $550,000

Clinical Trials $4,000,000

Working capital$850,000

Directors and Officers of the Resulting Issuer

The board of directors of the Resulting Issuer will initially be comprised of Irwin Olian, Dr. Allen Davidoff, Robert Rieder, Dr. Alan Moore and one more person to be agreed upon by the Company and XORTX. The Company will procure duly executed resignations and releases in favour of the Resulting Issuer, effective at the Closing, from each director and officer of the Company who will no longer be serving in such capacities. On the Closing, Irwin Olian will continue as the Resulting Issuer's Chairman, Jennifer Todhunter will continue as its Chief Financial Officer and Dr. Allen Davidoff will be appointed Chief Executive Officer of the Resulting Issuer.

The nominees of XORTX that will initially comprise the board of directors and management of the Resulting Issuer are:

Dr. Allen Davidoff - Chief Executive Officer and Director of XORTX Pharma Corp., was formerly the Chief Scientific Officer, VP Product Development and co-founder of Stem Cell Therapeutics Corp. (seven yrs). Prior to that, he was Senior Scientist and Head of Pharmacology at Cardiome Pharma Corp. ("Cardiome"). His overall experience includes over 10 years of drug development experience with broad clinical and regulatory leadership experience. Senior management experience in pharmaceutical R&D includes two investigational new drug ("IND") applications or supplemental IND's, two phase I studies (four multi-country), seven phase II studies, and one NDA. Dr. Davidoff has previously served as Director of Neurogenesis (predecessor of Stem Cell Therapeutics Corp.), and is currently a Director of Patient Stem Cell Resource Inc.

Robert Rieder - Director of XORTX Pharma Corp. is an experienced C-level executive in the pharmaceutical industry. Mr. Rieder is currently the CEO of ESSA Pharma Inc. and Chairman of the Board for Cardiome. From 1998 to 2009, Mr. Rieder was the CEO of Cardiome, a NASDAQ-traded public pharmaceutical company. Under his leadership, Cardiome negotiated partnerships with two leading pharmaceutical companies, Merck Frost & Co and Estella's Pharmaceuticals, and raised over $250 million from public capital markets. Mr. Rieder led that company from the pre-clinical research stage to NDA submission. He has been a Director for nine public and private technology companies. In 2009, he was recognized as "Executive of the Year" by Life Sciences BC and in 2007 was named Ernst and Young "Entrepreneur of the Year" for the Medical Products area in the Pacific Region.

Dr. Alan Moore, Ph.D. - Director of XORTX Parma Corp. has extensive clinical development, regulatory and leadership experience and 23 years of senior management experience in pharmaceutical R&D with Procter and Gamble. Dr. Moore served as Chief Clinical and Regulatory Officer with Cardiome, then President and CEO of Stem Cell Therapeutics Corp. and subsequently CEO of Beta Stem Therapeutics and Charge Therapeutics. During his career, he has completed 11 IND applications or supplemental IND's, 15 phase I studies, 12 phase II studies, seven phase III studies and two new drug applications.

Dr. Grace Jung, Ph.D. - Management - Chemistry and Manufacturing
has 21 years of experience in drug discovery and development. She was formerly Senior Director of Research (Chemistry) at Cardiome. During her 14 years at Cardiome, she led the chemistry team in the discovery of antiarrhythmic vernakalant and in process research efforts to devise a
scalable manufacturing route for vernakalant. Before joining Cardiome, Grace spent seven years at Boehringer Ingelheim (Laval, QC, Canada), where she was a medicinal chemist working on renin inhibitors as antihypertensive drugs.

Brian Mangal, MSc. Biostatistics - Management - Business Development and Product Development has 12 years of clinical development experience. He was formerly Director of Biostatistics for Cardiome and responsible for all biometric activities related to the advancement of Cardiome's clinical programs. His clinical development experience includes design, analysis and reporting on over 50 clinical trials, three FDA submissions, one TPD submission and a successful EMEA submission. Prior to Cardiome, he worked on building a CRO - Everest Clinical Research, specializing in dealings with NIH in the US, and as a Biostatistician at Pharmacia/Pfizer, working on the successful sundae for Linezolid and numerous successful trials with Celecoxib. Mr. Mangal brings extensive industry contacts to the XORTX team.

Selected Financial Information of XORTX

The following unaudited financial information for the period ended December 31, 2013 has been provided by XORTX. Such information is subject to all other information contained in the relevant financial statements disclosed in the disclosure document to be prepared in connection with the XORTX Transaction.

During the period from incorporation through February 28, 2014, XORTX raised cash net proceeds of approximately CDN$821,000 from the issuance of XORTX Shares and debt and used these funds for aggregation of intellectual property, pre-clinical studies, and activities supporting future clinical studies on behalf of XORTX. As at December 31, 2013, XORTX had approximately $174,000 of cash.

Capitalization of XORTX

Currently, there are:

  1. 1.20,060,667 XORTX Shares issued and outstanding;

  2. 2.warrants issued and outstanding which are exercisable for two years from the date of issue to purchase an aggregate of 29,760 XORTX Shares at $0.50 per XORTX Share; and

  3. 3.options issued and outstanding to purchase an aggregate of 1,500,000 XORTX Shares at $0.10 per share.

Other than the above, no other stock options, warrants or other securities entitling holders to acquire XORTX Shares are outstanding. XORTX is not a reporting issuer and its securities are not listed or posted for trading on any stock exchange.

Capitalization of the Resulting Issue

Assuming the completion of the share consolidation and the maximum amount of the Private Placement, the Resulting Issuer is expected to have at Closing approximately 41,000,000 issued common shares, 8,800,000 warrants and 1,750,000 options outstanding.


The Company does not intend to retain a sponsor unless it is required to do so by the Exchange.

Conditions Precedent to Completing the XORTX Transaction

The parties' obligations to complete the XORTX Transaction are subject to the satisfaction of a number of conditions including, but not limited to, completion of satisfactory due diligence reviews, completion of the Private Placement, Exchange approval, any required approval of the shareholders of the Company, and other conditions customary for a transaction of this type.

About African-Queen

The Company is an exploratory resource company with diversified mineral properties in East and West Africa. It is exploring its properties in Ghana and Kenya for gold and other metals. In Ghana it has 30.23 sq. km. under license for gold under an agreement with another company. In Kenya it has approximately 850 sq. km. under license for gold and metals, and a further 737 sq. km. of gold and other minerals licenses under agreements with two other companies. The Company's operations in Ghana are carried out through its subsidiary AQ Ghana Gold Limited. Its operations in Kenya are carried out through its operating subsidiary AQ Kenya Gold Limited. The Company has its executive offices in Vancouver, Canada. The Company was incorporated under the laws of the Province of British Columbia, Canada on April 30, 2008, and received certain southern African assets in a spin off transaction related to the acquisition of Pan African Mining Corp. by Asia Thai Mining Co., Ltd.


"Irwin Olian"
Irwin Olian
Chairman & CEO

For more information, contact:


|Irwin Olian, President and CEO |Carrie Howes, Corporate CommunicationsEmail: carrie@africanqueenmines.comPhone:Germany -|

|E-mail:|+49 (0) 21141 7404U.K.- +44 (0) 870 490 5443Canada - +1 416 900 3634Dubai - +971 55 997 |

|Phone: (604) 899-0100 |0427 |

|Fax: (604) 899-0200 | |


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Completion of the transaction is subject to a number of conditions, including Exchange acceptance. The transaction cannot close until any 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 Filing Statement or Information Circular 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 securities of the Company should be considered highly speculative.

The TSX Venture Exchange has in no way passed upon the merits of the proposed transaction described herein 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 news release.

All information contained in this news release with respect to XORTX was supplied by XORTX for inclusion herein.

The securities of the Company being offered have not been, nor will be, registered under the U.S. Securities Act and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons absent U.S. registration or an applicable exemption from U.S. registration requirements. This news release does not constitute an offer or sale of securities in the United States.

Forward-Looking Information

This news release contains "forward-looking information", which may include, but is not limited to, statements with respect to the XORTX Transaction and the future financial or operating performance of the Company, XORTX and their subsidiaries. Often, but not always, forward-looking information can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or believes" or variations (including negative variations) of such words and phrases, or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking information is based on a number of assumptions management believes to be reasonable and involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company and XORTX to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information. Forward-looking information is subject to risks associated with our business, including but not limited to the risk that the XORTX Transaction may not be completed on the terms expected or at all. Forward-looking statements contained herein are made as of the date of this news release and the Company and XORTX disclaim, other than as required by law, any obligation to update any forward-looking information whether as a result of new information, results, future events, circumstances, or if management's estimates or opinions should change, or otherwise. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated. Accordingly, the reader is cautioned not to place undue reliance on forward-looking information.

Not for distribution to United States wire services or dissemination in the United States. This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

Release ID: 34965