VANCOUVER, Jan. 6,
2015 /CNW/ - Montan Capital Corp. (TSXv: MO.P)
("Montan") and Strait Minerals Inc. (TSXv: SRD)
("Strait") are pleased to announce that further to the joint
news release of December 3, 2014,
Montan, Strait, and 1023174 B.C. LTD. ("Newco"), a newly
incorporated subsidiary of Strait, have entered into an
amalgamation agreement dated January 6,
2015 (the "Amalgamation Agreement"), in respect of
the proposed qualifying transaction for Montan and reverse
take-over of Strait (the "Transaction").
The resulting company will be named "Montan
Mining Corp." and be a new, strong Peru-focused exploration and mine development
company. The company will be led by a combined management team,
with a track record of success in project and mine development in
Peru as well as other
jurisdictions, and a local Peruvian shareholder support base and
capital markets team. The company anticipates it will advance the
Alicia Project for its high-grade copper potential and provide a
platform to build from and to seek further opportunities in the
Peruvian mining sector presented by the current malaise in the
mining and resource market.
Terms of the Agreement
Upon the closing of the Transaction (the
"Closing"), and at the effective time of the amalgamation,
Newco and Montan will amalgamate to form a single subsidiary of
Strait and Strait will acquire all of the issued and outstanding
securities of Montan from the shareholders of Montan in exchange
for the issuance of 8,000,000 post-Consolidation (as defined below)
Strait common shares (the "Consideration Shares") at the
rate of one Strait common share for each one Montan common share.
In connection with the Transaction, Strait shall, prior to issuing
the Consideration Shares, complete a consolidation of its common
shares on a 10:1 basis (the "Consolidation") reducing its
capital to 6,203,249 post-Consolidation common shares and change
its name to "Montan Mining Corp." (the "Change of
Name"). The Consideration Shares are anticipated to
represent approximately 56% of the total issued and outstanding
Strait common shares as of the Closing.
The Agreement provides that the Closing is
subject to several conditions including, among other things:
(a)
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the shareholders of
each of Montan and Strait shall have approved the Transaction in
accordance with corporate law and the requirements of applicable
regulatory authorities;
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(b)
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each of the board of
directors of Montan and Strait shall have approved the
Transaction;
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(c)
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the Exchange shall
have accepted notice for filing of and approved all transactions of
Montan and Strait necessary to complete the Transaction;
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(d)
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the Strait directors
shall consist of Ian Graham, Michel Robert, Luis Zapata, Ryan
Fletcher and James S. Borland.
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The officers of Strait shall be determined by
Montan and approved by the directors of Strait after the
Closing.
Either party may terminate the Amalgamation
Agreement if the Closing has not occurred by March 5, 2015.
In addition, the parties have agreed that Strait
will pay Montan a break fee of up to CDN$250,000 if Strait terminates the Amalgamation
Agreement as a result of Strait completing an alternative
transaction, including but not limited to a merger, amalgamation,
share exchange, business combination, take-over bid, sale or other
disposition of material assets, recapitalization, reorganization,
liquidation, sale or issuance of a material number of treasury
securities (except upon the due exercise of convertible securities
outstanding on the date of this press release) or rights or
interests therein or thereto or rights or options to acquire any
material number of treasury securities or any type of similar
transaction involving Strait which is a Superior Proposal (as
defined in the Amalgamation Agreement).
Montan has agreed to pay a finder's fee to
Longford Exploration Services Ltd. of 250,000 common shares of
Strait on the Closing, which will be subject to a voluntary escrow
agreement with the same release schedule as other insiders of
Strait post closing.
Strait's Peru Properties
Strait's focus is on copper, gold, silver and
molybdenum at three active projects in Peru. Strait holds a 100% interest in the
26-sq-km Alicia Property located in the Andahuaylas-Yauri
metallogenic belt of southeastern Peru, a Tertiary-aged belt of porphyry and
skarn deposits extending for over 300 km in a northwest-southeast
direction. The belt contains more than 30 porphyry and skarn
deposits and prospects, several of which are being mined or are
under development including Tintaya (Xstrata), Las Bambas
(Minmetal), Antapaccay (Glencore), Haquira (First Quantum) and
Constancia (Hudbay), and has emerged as one of the most active
copper exploration and development regions of Peru, and on a global basis. Alicia is
Strait's principal property.
The Alicia Property consists of a multi-phase
porphyry intrusion surrounded by copper-bearing skarns. The
property is relatively advanced having seen over $1.5 million in exploration by Strait and over
$3 million from recent joint-venture
partner Teck Resources. Teck financed a 10-hole, 4,000-metre drill
program completed in December, 2013.
While much of the recent effort at Alicia has
focused on porphyry-style mineralization, at least nine
copper-bearing skarn zones surrounding the intrusion have also been
identified. Exploration on some of the skarns, consisting of
surface trenching (28 trenches totalling 1466m.), identified
high-grade (0.5% to 4.9% Cu) copper zones. These have attracted the
Montan technical team, and will be the focus of exploration and, if
warranted, development moving forward.
Strait's Letra Rumi
South base metals property and Culebrilla precious metals
property, both 100% owned, subject to a 3% net smelter return
royalty, are about 250 km north of Lima.
An updated, independent geological report of the
Alicia Property prepared in accordance with National Instrument
43-101 – Standards of Disclosure for Mineral Projects
("NI 43-101") will be completed in conjunction with the
Transaction. Upon its receipt, Montan intends to issue a press
release announcing the results of the geological report.
Proposed Directors
The proposed board of Strait following the
closing (the "Resulting Issuer") will comprise Ian Graham, Michel
Robert, Luis Zapata,
Ryan Fletcher and James S. Borland. The following is a brief
biography of each of the proposed directors:
Mr. Ian Graham,
B.Sc. (Hons), Geology
Mr. Graham is an accomplished mining professional
with over 20 years of experience in the development and exploration
of mineral deposits, mostly gained with the major mining companies
Rio Tinto and Anglo American.
Formerly Chief Geologist with the Project Generation Group at Rio
Tinto located in Vancouver, Mr.
Graham has been involved with evaluation and pre-development work
on several projects in Canada and
abroad including the Diavik Diamond Mine (Northwest Territories, Canada), Resolution
Copper (Arizona, USA), Eagle
Nickel (Michigan, USA),
Lakeview Nickel (Minnesota, USA) and Bunder Diamonds
(India). Prior to his work with
Rio Tinto, Ian held exploration geologist roles with Anglo American. Ian graduated from the
University of Natal (now Kwa-Zulu Natal) in Durban, South Africa with a B.Sc. in Geology
and Applied Geology (1984) and B.Sc. (Hons) in Geology (1985).
Mr. Luis F.
Zapata
Mr. Zapata was previously Partner and Head of
Capital Markets at Seminario SAB, Peru's largest independent brokerage firm.
Prior to that, he was Head of Latin America Institutional Equity
Sales at Canaccord Genuity. Mr. Zapata has structured, financed or
participated in over $500M of equity
raises for natural resources companies with a focus on connecting
Latin American assets with Canadian and global public market
financing and listing vehicles. Mr. Zapata is a frequent media
commentator on the resource sector in Peru and a dual Canadian/Peruvian citizen
fluent in English and Spanish.
Mr. Michel
Robert, B.A., B.A.Sc. (Hons), M.A.Sc. (Hons)
Mr. Michel Robert
has over 40 years of professional experience in the mining
industry. He previously served for nine years at Teck Corporation
as corporate metallurgist, lead engineer and start-up manager. Mr.
Robert was also a director of SNC, one of three founders of Simons
Mining Group (now Amec) and Senior Vice President for Pan American
Silver Corp. (TSX: PAA) from 1995 to 2001, where he was responsible
for the management of operation in Latin
America and the expansion of the company in Peru, Mexico,
and Bolivia.
More recently, Mr. Robert was Vice President of
Quinto Mining Corp. which was acquired by Consolidated Thompson
Iron Mines for C$150 million in 2008
for the Peppler Lake and Lamelee iron deposits. The resources on
these two contiguous grass root projects were advanced to a level
of slightly more than a billion tonnes in the span of two seasons
for less than $5M, by Mr. Robert's
team.
Mr. Ryan
Fletcher, B.A. (Econ)
Mr. Ryan Fletcher
is an entrepreneur and financier with a focus on the mining and
mineral exploration space. Mr. Fletcher co-founded Montan Capital
Corp. in 2012 with the goal and mandate to identify a strong
Qualifying Transaction in the resource and mining space, with a
focus on Peru. Most recently, Mr.
Fletcher was a Director of Zimtu Capital Corp., a resource
investment issuer listed on the Exchange. Mr. Fletcher brings
extensive knowledge and experience in public company management,
corporate compliance and governance, financing, marketing, and
communications and shareholder relations, as well as an energetic
and entrepreneurial spirit and a passion for the industry. He is a
graduate of the University of British
Columbia Okanagan with a Bachelor of Arts degree in
Economics.
James S.
Borland, B.A.
Mr. James Borland
has been involved in the mining industry for more than 25 years. He
founded Borland, Levand & Associates in 1998, a firm that has
provided management services to clients in the mineral resources
sector including Anvil Mining (acquired by China Minmetals), Blue
Pearl Mining (now Thompson Creek Metals) and Glencairn Gold Corp.
(acquired by B2Gold). Previously, he was Manager of Research
Communications for BMO Nesbitt Burns Inc. and Vice-President
Investor Relations for Boliden Ltd. He is a graduate of the
University of Western Ontario.
Concurrent Financing
Montan and Strait agreed that if required,
Canaccord Genuity Corp. or another brokerage firm may be engaged to
act as agent for a financing. The parties may raise up to
$1,500,000 (the "Concurrent
Financing") but such funds will not be a requirement of
Closing. The parties may pay finder's fees as negotiated with
finders respecting the Concurrent Financing.
All securities issued in the Concurrent Financing
will be subject to a statutory hold period expiring four months and
one day after closing.
Sponsorship
Montan intends to make an application to the
Exchange to have the requirement for sponsorship of the Qualifying
Transaction waived. There can be no assurance that the waiver
will be granted. In any event, an agreement to sponsor should
not be construed as any assurance with respect to the merits of the
Transaction or the likelihood of its completion.
Selected Financial Information of
Strait
Strait was incorporated on March 7, 2003 and has a fiscal year end of
December 31. The following table
presents certain selected financial data of Strait for the years
ended December 31, 2013, 2012 and
2011 and of Strait for the nine month period ended September 30, 2014. The selected financial
information has been derived from Strait's audited consolidated
financial statements for the years ended December 31, 2013, December 31, 2012 and December 31, 2011 and from Strait's unaudited
consolidated interim financial statements for the nine months ended
September 30, 2014. Strait's
financial statements, copies of which are available on SEDAR, were
prepared in accordance with International Financial Reporting
Standards as issued by the International Accounting Standards
Board.
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Nine month
period ended
September 30, 2014
($)
(unaudited)
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Year Ended
December 31, 2013
($)
(audited)
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Year Ended
December 31, 2012
($)
(audited)
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Year Ended
December 31, 2011
($)
(audited)
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Net sales or total
revenues
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31,478
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154,706
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91,934
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Nil
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Net income
(loss)
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(284,978)
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(490,571)
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(972,754)
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(824,472)
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Cash flow from (used
in) operations
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93,063
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(499,376)
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(865,751)
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(594,908)
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As at
September 30, 2014
($)
(unaudited)
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As at
December 31 2013
($)
(audited)
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As at
December 31, 2012
($)
(audited)
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As at
December 31, 2011
($)
(audited)
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Total
assets
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3,223,416
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3,969,732
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3,439,428
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3,768,716
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Total long term
financial liabilities
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Nil
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Nil
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Nil
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Nil
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Total
liabilities
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53,990
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519,841
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115,869
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116,761
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Cash dividends
declared
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Nil
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Nil
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Nil
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Nil
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Accumulated
deficit
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(6,335,171)
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(6,088,605)
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(5,598,034)
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(5,019,626)
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Trading Halt
In accordance with Exchange policies, the common
shares of Montan are currently halted for trading. The Montan
common shares may remain halted until completion of the Qualifying
Transaction. The Transaction is scheduled to be completed no later
than March 5, 2015, unless otherwise
agreed by the parties.
Other Matters Concerning the
Transaction
The Transaction is arm's length as Montan and
Strait deal at arm's length with one another. However, under
section 15.4(e) of the Policy, Montan will be required to obtain
minority shareholder approval because it is completing its
Qualifying Transaction with an existing public company.
Montan is incorporated under the British Columbia Business Corporations
Act and Strait is incorporated under the Ontario Business Corporation Act.
The Resulting Issuer will be classified as a Tier
2 mining issuer.
An annual and special meeting of the shareholders
of Montan (the "Montan Meeting") and a special meeting of
the shareholders of Strait (the "Strait Meeting") have been
called for Tuesday, February 24,
2015.
The Transaction will be submitted to the
shareholders of Montan for consideration and approval by a special
resolution of the minority shareholders of Montan at the Montan
Meeting. The Transaction will be submitted to the shareholders of
Strait for consideration and approval by an ordinary resolution of
shareholders of Strait at the Strait Meeting. The
Consolidation and the Change of Name require approval by special
resolutions of the shareholders of Strait.
An Information Circular in respect of the
Transaction will be prepared and filed in accordance with the
Policy 2.4 and Policy 5.2 on SEDAR at www.sedar.com at the time the
Information Circular is mailed to shareholders of each of Montan
and Strait prior to the closing of the proposed Transaction. A
press release will be issued once the Information Circular has been
filed as required pursuant to Exchange policies.
The completion of the Transaction is subject to
the approval of the Exchange and all other necessary regulatory
approval. The completion of the Transaction is also subject to
additional conditions.
Each party will pay its own costs and expenses
(including all legal, accounting and financial advisory fees and
expenses) in connection with the Transaction, including expenses
related to the preparation, execution and delivery of the
Amalgamation Agreement and such other required documents.
All of Strait's exploration programs were
prepared by, or prepared under the supervision of, Dr. Roger Moss, P.Geo., who serves as the Qualified
Person as defined by NI 43-101 and is a director of Strait.
Dr. Moss has reviewed and approved the technical content of
this press release.
Completion of the Transaction is subject to a
number of conditions, including, but not limited to, Exchange
acceptance.
Investors are cautioned that, except as
disclosed in the management information circular or 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.
Neither the 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.
Cautionary Note Regarding Forward-Looking
Statements
Certain statements herein may contain
forward-looking statements and forward-looking information within
the meaning of applicable securities laws. Forward-looking
statements or information appear in a number of places and can be
identified by the use of words such as "plans", "expects",
"budget", "scheduled", "estimates", "forecasts", "intends",
"anticipates" or "believes" or variations of such words and phrases
or statements that certain actions, events or results "may",
"could", "would", "might" or "will" be taken, occur or be achieved.
Forward-looking statements and information include statements
regarding the Transaction, the Concurrent Financings, the timing of
exploration programs and filing of technical reports and the
Resulting Issuer's exploration plans and exploration results with
respect to the properties. With respect to forward looking
statements and information contained herein, we have made numerous
assumptions, including assumptions about mineral prices, cut-off
grades, metallurgical recoveries, operating and other costs and
technical assumptions used in the estimate. Such forward-looking
statements and information are subject to risks, uncertainties and
other factors which may cause the Resulting Issuer's actual
results, performance or achievements, or industry results, to be
materially different from any future results, performance or
achievements expressed or implied by such forward-looking statement
or information. Such risks include discrepancies between actual and
estimated mineral resources, subjectivity of estimating mineral
resources and the reliance on available data and assumptions and
judgments used in the interpretation of such data, speculative and
uncertain nature of gold exploration, exploration costs, capital
requirements and the ability to obtain financing, volatility of
global and local economic climate, share price volatility, estimate
commodity price volatility, changes in equity markets, increases in
costs, exchange rate fluctuations and other risks involved in the
mineral exploration industry. There can be no assurance that a
forward-looking statement or information referenced herein will
prove to be accurate, as actual results and future events could
differ materially from those anticipated in such statements or
information. Also, many of the factors are beyond the control of
the Resulting Issuer. Accordingly, readers should not place undue
reliance on forward-looking statements or information. We undertake
no obligation to reissue or update any forward-looking statements
or information except as required by law. All forward-looking
statements and information herein are qualified by this cautionary
statement.
SOURCE Montan Capital Corp.