Prelim Capital Inc. ("Prelim" or the "Company") (TSX VENTURE:PLM.P), a capital
pool company, is pleased to announce it has entered into an arm's length letter
of intent (the "LOI") dated May 1, 2009, with Green Bull Energy Inc. ("GBE"),
pursuant to which Prelim will, subject to a number of conditions, acquire all of
the issued and outstanding securities of GBE. The transaction will constitute
the Company's qualifying transaction (the "Qualifying Transaction") under the
policies of the TSX Venture Exchange (the "Exchange").
Under the LOI, shares of GBE will be exchanged for shares of Prelim on the basis
of 0.7805 Prelim shares for each GBE share, after giving effect to the stock
split referred to below, such that following the exchange, current holders of
Prelim shares with hold approximately 54.5% (4,800,000 shares) of the post-split
Prelim shares and current holders of GBE shares will hold approximately 45.5%
(4,000,000 shares) of the post-split Prelim shares (the "Proposed Acquisition")
before giving effect to the private placement described below.
QT FINANCING
Concurrent with the Proposed Acquisition, Prelim will undertake a non-brokered
private placement for gross proceeds of up to $600,000 to fund exploration
programs on GBE's mineral properties. The Proposed Acquisition is conditional
upon Prelim raising, within thirty (30) days, a minimum of $300,000 and a
maximum of $600,000 through the sale of a minimum of 3,000,000 post-split Prelim
shares and a maximum of 6,000,000 post-split Prelim shares at $0.10 per share
(the "QT Financing"). The QT Financing may include warrants and may provide for
finders fees to be paid.
STOCK SPLIT
Prelim has called an annual and special meeting (the "ASM") of its shareholders
for June 19, 2009, for the purpose, among other things, of obtaining shareholder
approval to the split of the current issued and outstanding capital of Prelim on
the basis of two (2) new shares for each one (1) currently issued and
outstanding share of Prelim (the "Stock Split"). Prelim will also seek
shareholder approval for a change of name of the corporation to Green Bull
Energy Corp., or such other name as deemed appropriate (the "Change of Name").
Prelim will proceed with the ASM whether or not the financing condition referred
to above is satisfied and whether or not the Qualifying Transaction proceeds.
The Qualifying Transaction will be conditional upon shareholder approval being
obtained to the Stock Split and the Change of Name, and the Qualifying
Transaction will not close until after such shareholder approval has been
obtained. If the Qualifying Transaction is consummated, the Stock Split and the
Change of Name to Green Bull will be effected immediately prior to the closing
of the Qualifying Transaction. If the conditions to the closing of the
Qualifying Transaction have not been satisfied and the Qualifying Transaction is
abandoned, the Stock Split will be effected by Prelim but the Change of Name may
be deferred until another qualifying transaction is identified and closed. The
Qualifying Transaction itself is not conditional upon the approval of
shareholders of Prelim.
CONDITION TO CLOSING OF QUALIFYING TRANSACTION
The closing of the Qualifying Transaction with GBE is subject to a number of
conditions, including, but not limited to the following:
- receipt of gross proceeds of not less than $300,000 pursuant to the QT
Financing within thirty (30) days;
- completion or waiver of sponsorship;
- receipt of all required regulatory approvals, including the approval of the
Exchange, of the Qualifying Transaction;
- completion of all due diligence reviews;
- receipt of all director and shareholder approvals as may be required under
applicable laws or regulatory policies; and
- execution of a formal Transaction Agreement.
Sponsorship of a qualifying transaction of a capital pool company is required by
the Exchange unless exempt in accordance with Exchange policies. Prelim intends
to apply for an exemption from sponsorship requirements, however, there is no
assurance that Prelim will obtain this exemption.
A filing statement in respect of the proposed Qualifying Transaction will be
prepared and filed in accordance with Policy 2.4 of the Exchange on SEDAR at
www.sedar.com no less than seven business days prior to the closing of the
proposed Qualifying Transaction. A press release will be issued once the filing
statement has been filed as required pursuant to Exchange policies.
Trading in the common shares of Prelim will remain halted pending the release of
further disclosure regarding this Qualifying Transaction and the satisfaction of
the initial filing requirements of the Exchange and a preliminary review by the
Exchange.
GBE URANIUM PROJECTS
GBE had previously entered into two option agreements (the "Option Agreements")
with RJK Explorations Ltd. to earn a 60% interest in the On Strike North and the
On Strike South claim groups.
On Strike North Claim Group
The On Strike North claim group consists of 2,226 hectares located in the
Sherbrooke North, Lavant and Palmerston townships in the east Bancroft area,
approximately 77 kilometres southwest of Ottawa, Ontario. The claims were
acquired due to the increased uranium exploration activity in the area and the
area's historic uranium production totalling 14,862,653 lbs of U3O8 between 1956
and 1982.
Terms of Option Agreement
GBE made an initial $25,000 cash payment, will incur up to $905,000 in
expenditures, and issue up to 400,000 shares of GBE over a 42-month period.
1. 100,000 shares and expenditures totalling $75,000 on the property from June
16, 2007 to August 31, 2008 (which has been completed)
2. 150,000 shares and expenditures totalling $230,000 on the property from June
16, 2008 to August 31, 2009 (to be assumed by Prelim)
3. 150,000 shares and expenditures totalling $600,000 on the property from June
16, 2009 to August 31, 2010 (to be assumed by Prelim)
RJK Explorations Ltd. will retain a 1% net smelter royalty return subject to a
buy-back by GBE of up to 0.5% with payments of $600,000.
On Strike South Claim Group
The On Strike South claim group consists of 1,600 hectares and is located 18
kilometres southwest of the On Strike North claims.
Terms of Option Agreement
GBE made an initial $15,000 cash payment, will incur up to $400,000 in
expenditures, and issue up to 225,000 shares of GBE over a three-year period.
1. Year One - 75,000 shares and expenditures totalling $30,000 on the property
from October 11, 2007 to October 11, 2008 (which have been completed)
2. Year Two - 75,000 shares and expenditures totalling $100,000 on the property
from October 11, 2008 to October 11, 2009 (to be assumed by Prelim)
3. Year Three - 75,000 shares and expenditures totalling $270,000 on the
property from October 11, 2009 to October 11, 2010 (to be assumed by Prelim)
RJK Explorations Ltd. will retain a 1% net smelter royalty return subject to a
buy-back by GBE of up to 0.5% with payments of $600,000.
Work Program Completed by GBE To Date:
GBE retained MPX Geophysics Ltd. of Richmond Hill, Ontario, to conduct a
helicopter-borne radiometric survey on the On Strike North and On Strike South
claim blocks. The survey has identified in excess of 6 high priority target
anomalies on the North claim blocks and GBE is currently evaluating recent
geophysical survey data on the South claim blocks.
GBE has completed $130,000 in expenditures on the claim blocks. GBE is current
and ahead of schedule on its first year commitments.
Interpretations and Conclusions
The On Strike North and On Strike South claim blocks lie within a region known
to host uranium mineralization. Historic work has revealed many uranium showings
and radiometric anomalies in the area of the claims. GBE intends to conduct a
further exploration program to meet the Year 2 terms of the Option Agreements.
Board of Directors and Management of the Resulting Issuer
Concurrently with the completion of the Proposed Acquisition, it is currently
contemplated that at least two of the current five directors and officers of
Prelim will resign and the board will be comprised of three (3) nominees from
Prelim and three (3) nominees from GBE.
James Borland will remain a Director and be appointed Chairman. William R.
Johnstone will remain as Corporate Secretary and will be joined by the following
current directors and officers of GBE.
Jerry L. Bulman - President and Director
Mr. Bulman is currently a director and President of GBE. He is the CEO and
founder of Parkvalley Consulting Ltd., a private company based in Calgary, AB
that provides consulting services to the resource sector. With over 30 years of
senior management experience, Mr. Bulman has been involved with the exploration
and development of a diverse range of projects. These include oil & gas, coal
bed methane and oil sands developments, as well as several projects in the
mining sector. In addition to his duties as CEO of Parkvalley Consulting Ltd.,
Mr. Bulman is a Director of Bold Ventures Inc., Molystar Resources Inc., Major
Gold Ltd., and Kernow Resources & Developments Ltd. Mr. Bulman currently
provides Senior Consulting services to two major international energy companies
in support of their Arctic and North American frontier exploration operations.
Kenneth C. Phillippe - CFO
Mr. Phillippe is currently a director of GBE and is responsible for the
accounting of GBE. Mr. Phillippe has been a self-employed Chartered Accountant
since 1981. He was a Director of MDX Medical Inc. (2004-2005), an Exchange
listed company. He is the Chief Financial Officer of Exchequer Resource Corp.
and Bold Ventures Inc., Exchange listed companies, and Amazon Goldsands Ltd. and
Constitutional Mining Corp., whose shares trade on the Over-the-Counter Board in
the U.S. He was the Chief Financial Officer of Columbia Goldfields Ltd. from
January to October, 2006. He has a Bachelor of Commerce Degree from the
University of British Columbia.
Gary F. Zak - Director
Mr. Zak is currently a director of GBE. He has been active for the past 28 years
providing Business Development management to public resource companies. He has
extensive experience in funding early stage companies, organizing management,
corporate and investor relations groups and has successfully completed several
mergers and acquisitions. Mr. Zak is currently President and CEO of Bold
Ventures Inc. and has occupied senior management and/or Directorship positions
in various companies, including: Bold Ventures Inc., Passport Metals Inc., Forum
Uranium Corp., Alto Ventures Ltd., Beaufield Resources Inc. and TAC Capital
Corp.
William E. Schmidt - Director
Mr. Schmidt is currently a director of GBE. Mr. Schmidt has been a Barrister and
Solicitor with the firm of Hemsworth, Schmidt since 1971 (his principal
business). He is a director of Academy Ventures Inc., Bold Ventures Ltd.,
Devonshire Resources Ltd., Exchequer Resource Corporation, Lignol Energy
Corporation (formerly Santa Cruz Ventures Inc.), and San Marco Resources Inc. He
is the Secretary of Equus Energy Corp. and CFO of Carat Exploration Inc. He is a
former director of Artina Resources Ltd., Clifton Star Resources Inc., San Telmo
Energy Ltd., Storm Cat Energy Ltd., Unbridled Energy Corp. and Vault Systems
Inc. He has been a former director and officer of several other public companies
since 1971. He has a Bachelor of Arts Degree (1966) and Bachelor of Law Degree
(1969) from the University of British Columbia.
Significant GBE Shareholders
GBE is a closely held private B. C. corporation consisting of 28 shareholders.
The following individuals own 10% or more of the company:
- Jerry Bulman, President - 1,208,000 for 24% ownership
- Gary F. Zak, Chairman and Director - 831,000 for 16% ownership
Material Financial Summary of GBE
To date GBE has been capitalized with private funding of approximately $317,000.
The company has completed exploration expenditures of approximately $135,000 on
the claim groups and has advanced a one-time cash payment of $40,000 according
to the Option Agreements. GBE has expended $83,000 on consulting, general and
administrative expenses. GBE has approximately $10,000 of working capital at
this time.
A press release with further particulars relating to the Qualifying Transaction
will follow in accordance with the policies of the Exchange.
Derrick Strickland, P.Geo., is the Qualified Person who has reviewed the
technical information in this news release.
About Green Bull Energy Inc.
GBE was incorporated in April 2007 in the Province of British Columbia under the
name of Atomic Uranium Inc. and changed its name to Green Bull Energy Inc. on
July 22, 2008. As of this date GBE has 5,124,800 shares issued and outstanding.
Completion of the transaction is subject to a number of conditions, including
but not limited to, Exchange acceptance. Where applicable, the transaction
cannot close until the 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 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 the securities of a capital pool company
should be considered highly speculative.
Forward Looking Statement
Some of the statements contained herein may be forward-looking statements which
involve known and unknown risks and uncertainties. Without limitation,
statements regarding potential mineralization and resources, exploration
results, and future plans and objectives of the Company are forward looking
statements that involve various risks. The following are important factors that
could cause the Company's actual results to differ materially from those
expressed or implied by such forward looking statements: changes in the world
wide price of mineral commodities, general market conditions, risks inherent in
mineral exploration, risks associated with development, construction and mining
operations, the uncertainty of future profitability and the uncertainty of
access to additional capital. There can be no assurance that forward-looking
statements will prove to be accurate as actual results and future events may
differ materially from those anticipated in such statements. Prelim undertakes
no obligation to update such forward-looking statements if circumstances or
management's estimates or opinions should change, except as required by law. The
reader is cautioned not to place undue reliance on such forward-looking
statements.
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 release.
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