ROUYN-NORANDA,
QC, March 5, 2014 /CNW Telbec/
- X-Terra Resources Corporation ("X-Terra") (TSXV: XT) is
pleased to provide an update on its previously-announced proposed
reverse take-over involving Norvista Capital Corporation
("Norvista Capital"), an arm's-length Toronto-based private company, and the
"spin-out" of X-Terra's resource properties in a new public
company.
On March 4,
2014, X-Terra amended the terms of a letter of intent with
Norvista Capital dated October 3,
2013, as amended on November 29,
2013. The letter of intent, as amended, provides for a
proposed "spin-out" (the "Spin-Out") of substantially
all of the assets and all of the liabilities of X-Terra to a new
corporation called X-Terra Resources Inc. ("New X-Terra")
and the distribution of the shares of New X-Terra to the
shareholders of X-Terra, as well as for a reverse take-over of
X-Terra involving Norvista Capital
(the "Reverse Take-Over"), following which the
name of X-Terra will be changed to "Norvista Capital Corporation"
("New Norvista"). After the Spin-Out and Reverse
Take-Over, current shareholders of X-Terra will become shareholders
of New X-Terra, which will carry on X-Terra's current mining
exploration business, as well as shareholders of New Norvista,
which will be a natural resources merchant bank.
Proposed Spin-Out
Pursuant to an Asset Transfer Agreement to be entered into between
X-Terra and New X-Terra, X-Terra will transfer all of its assets
(except for 2 million shares of Brownstone Energy Inc. held by
X-Terra and approximately $1.85 million in cash) and all of its
liabilities to New X-Terra. In consideration for such
transfer, New X-Terra will issue to X-Terra a number of New X-Terra
common shares equal to one-third of the number of issued and
outstanding X-Terra common shares. Based on the number of
X-Terra common shares currently issued and outstanding
(11,783,069), New X-Terra will issue 3,927,690 New X-Terra common
shares to X-Terra.
X-Terra will distribute 75% of the foregoing New
X-Terra common shares to X-Terra shareholders, on the basis of
one-quarter of a New X-Terra common share for each X-Terra common
share held on the record date for such distribution. The
balance of 25% of the New X-Terra common shares held by X-Terra
will be retained by it. Based on the number of X-Terra common
shares currently issued and outstanding (11,783,069), X-Terra will
distribute an aggregate of 2,945,767 New X-Terra common shares to
X-Terra shareholders and will retain 981,923 New X-Terra common
shares.
Concurrent with the closing of the Spin-Out, New
X-Terra will effect a private placement of a minimum of
2 million and a maximum of 3 million New X-Terra common
shares at a price of $0.10 per share,
for gross proceeds to New X-Terra of a minimum of $200,000 and a maximum of $300,000 (the "New X-Terra Private
Placement"). Assuming a New X-Terra Private Placement of
a minimum of 2 million New X-Terra common shares, there will
be 5,927,690 New X-Terra common shares issued and outstanding after
the closing (6,927,690 shares in the event of a maximum private
placement), of which: (i) X-Terra shareholders will hold
2,945,767 shares (49.7% for the minimum private placement and 42.5%
for the maximum private placement), (ii) new investors will
hold 2 million shares (3 million shares in the event of a
maximum private placement) (33.7% for the minimum private placement
and 43.3% for the maximum private placement); and (iii) New
Norvista will hold 981,923 shares (16.6% for the minimum private
placement and 14.2% for the maximum private placement). New
X-Terra will use the proceeds from the New X-Terra Private
Placement for exploration on its properties, including the Lindsay
Property, and for working capital purposes.
At the closing of the Spin-Out and Reverse
Take-Over, all X-Terra stock options then outstanding will be
cancelled, except for 525,000 X-Terra stock options granted on
July 4, 2013 to the current
directors of X-Terra. The 525,000 X-Terra stock options will
be amended by increasing their exercise price from $0.10 to $0.25 per share and setting their expiry
date at one year following the closing date of the Reverse
Take-Over.
As the Spin-Out constitutes a sale or exchange
of all or substantially all the property of X-Terra, X-Terra
shareholder approval for the Spin-Out will be required under
section 189 of the Canada Business Corporations Act by
way of special resolution.
If the Spin-Out is successfully completed, it is
expected that the Board of Directors of New X-Terra will consist of
Martin Dallaire, Sylvain Champagne, Gerry Feldman,
Michael F. Ferreira,
Jean-François Madore and Sébastien Bellefleur, and it is
expected that the officers of New X-Terra will consist of
Martin Dallaire (Chairman, President and Chief Executive
Officer) and Sylvain Champagne (Chief Financial Officer and
Secretary).
Upon completion of the Spin-Out, New X-Terra
intends to be listed on the TSX Venture Exchange as a Tier-2 Mining
Issuer and will carry on the business currently conducted by
X-Terra, that is, acquiring and exploring rare earth elements (REE)
and energy properties in Canada.
Proposed Reverse Take-Over
Norvista Capital is a privately-owned,
Ontario-based natural resources
merchant bank formed in 2011. Norvista Capital is currently owned
by Norvista Resources Corporation
("Norvista Resources"). Upon completion of the
Reverse Take-Over, New Norvista's business will be that of a
natural resources merchant bank.
In order to effect the Reverse Take-Over,
X-Terra, Norvista Capital and Norvista Resources will enter into a
Share Exchange Agreement. The Share Exchange Agreement will
provide that prior to the closing of the Reverse Take-Over,
Norvista Resources will subscribe for 20 million common shares
of Norvista Capital at a price of $0.25 per share, for proceeds to Norvista Capital
of $5 million. The
20 million common shares will represent the only shares of
Norvista Capital then issued and outstanding.
The Share Exchange Agreement will also provide
that at the closing of the Reverse Take-Over, (i) X-Terra will
acquire all of the foregoing 20 million shares in exchange for
20 million X-Terra common shares, as a result of which
Norvista Capital will be a wholly-owned subsidiary of X-Terra, and
Norvista Resources will hold 20 million X-Terra Shares;
(ii) X-Terra and Norvista Capital will amalgamate by way of
"vertical short-form amalgamation" pursuant to the Canada
Business Corporations Act under the name "Norvista Capital
Corporation" the corporation resulting from the amalgamation is
referred to in this press release as "New Norvista" and
(iii) Norvista Resources will retain a portion of the
20 million New Norvista Shares that it will hold and will
distribute the balance to its approximately 150 shareholders, each
of whom is an "accredited investor" within the meaning of
applicable Canadian securities laws.
Concurrent with the closing of the Reverse
Take-Over, New Norvista will effect a private placement of a
minimum of 6 million and a maximum of 32 million New
Norvista common shares at a price of $0.25 per share, for gross proceeds to New
Norvista of a minimum of $1.5 million and a maximum of $8 million (the "New Norvista
Private Placement"). Assuming a New Norvista Private
Placement of a minimum of 6 million and a maximum of
32 million New Norvista common shares and based on the number
of X-Terra common shares currently issued and outstanding
(11,783,069), there will be a minimum of 37,783,069 and a maximum
of 63,783,069 New Norvista common shares issued and outstanding
after the closing of the New Norvista Private Placement, of which:
(i) the current shareholders of Norvista Resources will hold
20 million shares (52.9% for the minimum private placement and
31.36% for the maximum private placement), (ii) X-Terra
shareholders will hold 11,783,069 shares (31.2% for the minimum
private placement and 18.47% for the maximum private placement),
and (iii) new investors will hold a minimum of 6 million
shares (15.9%) and maximum of 32 million shares (50.2%).
On that basis, New Norvista will have cash of a minimum of
$8.35 million and a maximum of
$14.85 million, 2 million common
shares of Brownstone Energy Inc. and 981,923 New X-Terra common
shares. New Norvista will use the proceeds from the New
Norvista Private Placement for working capital and to carry out its
business plan of investing in both public and private junior
resource companies in the mining sector and other resource sectors
such as oil and gas, and timber.
If the Reverse Take-Over is successfully
completed, it is expected that the Board of Directors and executive
management of New Norvista will consist primarily of the current
executive management and Board of Directors of Norvista Resources
Corporation. It is expected that the Board of Directors of
New Norvista will be comprised of Gerald P. McCarvill,
Donald H. Christie, Bruce Durham, Hon. Scott Brison and G. Edmund King, and
that the officers of New Norvista will be Gerald P. McCarvill (Chairman and
Chief Executive Officer), Donald H. Christie (President
and Chief Operating Officer), Carmelo Marrelli (Chief
Financial Officer), and Paul Crath, Bruce Durham and John Eansor, each of whom will
be a Managing Director.
Pursuant to the policies of the TSX Venture
Exchange, the Reverse Take-Over will be subject to X-Terra
shareholder approval. Upon completion of the Reverse
Take-Over, New Norvista intends to be listed on the TSX Venture
Exchange as a Tier-2 Investment Issuer and will carry on business
as a natural resources merchant bank.
Completion of the Spin-Out and Reverse Take-Over
is subject to a number of conditions, including but not limited to,
the entering into by the parties of definitive agreements with
respect to the Spin-Out and Reverse Take-Over (such agreements to
include representations, warranties, conditions and covenants
typical for transactions of this nature), regulatory approval,
including that of the TSX Venture Exchange, shareholder approval
and financing. The Spin-Out and Reverse Take-Over cannot be
completed unless the required shareholder approval is
obtained. There can be no assurance that the Spin-Out and
Reverse Take-Over will be completed as proposed or at all.
Submission and Acceptance of NI 43-101
Technical Report
X-Terra and New X-Terra are also pleased to
announce that the TSX Venture Exchange has reviewed and accepted a
technical report pursuant to National Instrument 43-101 -
Standards of Disclosure for Mineral Projects in relation to the
Lindsay rare earth elements (REE) property located approximately
125 kilometres south of Rouyn-Noranda, Québec and 70 kilometres
east-northeast of North Bay,
Ontario, along the provincial border, halfway between the
Elliot Lake uranium camp and the
Abitibi gold belt. The NI 43-101 technical report will
be filed on SEDAR when X-Terra files its Management Information
Circular with respect to the proposed Reverse Take-Over and
Spin-Out.
About X-Terra Resources
X-Terra is a resource company focused on
acquiring and exploring energy properties in Canada. X-Terra has 11,783,069 shares
outstanding, a cash position of $2.12 million and an investment of
2 million shares of Brownstone Energy Inc.
Forward-looking Statements
This news release contains certain
forward-looking statements. These forward-looking statements
are subject to a variety of risks and uncertainties beyond the
ability of X-Terra to control or predict, which could cause actual
events or results to differ materially from those anticipated in
such forward-looking statements, including risks disclosed in
filings with the Canadian securities regulators made by
X-Terra. No assurance can be given that any events
anticipated by the forward-looking statements will transpire or
occur, or if any of them do so, what benefits that X-Terra will
derive therefrom. In particular, no assurance can be given as
to whether the proposed Spin-Out and Reverse Take-Over described in
this news release will be completed. Accordingly, readers
should not place undue reliance on forward-looking statements.
Completion of the transaction described in
this news release is subject to a number of conditions, including
TSX Venture Exchange acceptance and shareholder approval. 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 Management Information Circular to be prepared in
connection with the transaction, any information released or
received with respect to the Reverse Take-Over and Spin-Out may not
be accurate or complete and should not be relied upon.
Trading in the securities of X-Terra should be considered highly
speculative.
The TSX Venture Exchange has in no way passed
upon the merits of the proposed transaction and has neither
approved nor disapproved the contents of this press 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 release.
SOURCE X-Terra Resources Corporation