Abcana Capital Inc. Announces Proposed Qualifying Transaction
July 10, 2014 - Vancouver, British Columbia. ABCANA CAPITAL INC. (“Abcana”) (TSX-V: ABQ.H), a capital pool company, is pleased to announce that it has entered into a business combination agreement dated July 10, 2014 (the “Agreement”) with CASA MINERALS INC. (“Casa”) whereby Abcana has agreed to acquire all of the issued and outstanding shares of Casa (the “Transaction”). Abcana is a capital pool company (“CPC”) and intends the Transaction to constitute a Qualifying Transaction under the TSX Venture Exchange (the “Exchange”) Policy 2.4 – Capital Pool Companies. Upon successful completion of the Transaction, Abcana will be a Tier 2 mining issuer.
About Casa and its Mineral Properties
Casa Minerals Inc. (“Casa”) was incorporated in British Columbia on December 20, 2007. To date, Casa has been engaged in the acquisition, exploration and development of its mineral property located in Canada. Casa owns a one hundred percent (100%) interest in the Pitman Property and has an option to acquire a seventy-five percent (75%) interest in the Arsenault Property.
The Pitman Property is comprised of six mineral claims covering approximately 7,083.36 hectares and is located 27 kilometres from Terrace, British Columbia. The mineral claims of the Pitman Property cover several areas of historical prospecting, including the Pitman molybdenum prospect and the Gold Dome, WoMo, Lynda, and Paddy Mac gold and base metal prospects. Casa’s exploration program for the Pitman Property will be primarily focused on the exploration for gold, copper, silver and molybdenum.
The Arsenault Property is comprised of three mineral claims covering approximately 2,751 hectares and is located in the Atlin Mining Division, British Columbia. The focus of Casa’s exploration program on the Arsenault Property will be to further define the sulphide-type gold-copper formation located within the Arsenault Property.
The following sets forth the selected annual financial information of Casa for the fiscal years ended December 31, 2013, 2012 and 2011.
| As at December 31, 2013 (unaudited) | As at December 31, 2012 (unaudited) | As at December 31, 2011 (audited) | |
|---|---|---|---|
| Total Assets | $ 546,430 | $ 497,772 | $ 915,351 |
| Total Liabilities | 476,136 | 450,855 | (470,592) |
| Net Loss | (22,941) | (200,248) | (171,085) |
Terms and Conditions of Proposed Qualifying Transaction
On July 10, 2014, Abcana entered into a business combination agreement (the “Agreement”) with Casa whereby Abcana has agreed to acquire all of the issued and outstanding shares of Casa (the “Transaction”).
Under the terms of the Agreement, Abcana will issue a total of 11,695,301 common shares of Abcana to the shareholders of Casa. Each shareholder of Casa will receive approximately one common share in exchange for each common share of Casa. The Transaction, if completed, will be structured as a threecornered amalgamation whereby Casa will amalgamate with a subsidiary of Abcana (the “Amalgamation”).
After completing the Transaction, Abcana plans to change its name to “Casa Minerals Inc.” and the common shares of Abcana will be listed on the Exchange under a new trading symbol.
The Transaction does not constitute a "Non-Arm's Length Qualifying Transaction" as defined in Exchange Policy 2.4 and consequently Abcana is not required to obtain shareholder approval for the Transaction.
Proposed Private Placement Financing
As a condition of the Transaction, Abcana will be required to complete a proposed private placement offering of a minimum of 4,666,666 common shares and up to a maximum of 6,666,666 common shares of Abcana at a price of $0.15 per share for minimum gross proceeds of $700,000 and up to a maximum of $1,000,000 (the “Financing”). The proceeds of the Financing will be used to fund the exploration programs on the mineral properties. Subject to Exchange approval, finder’s fees may be payable in connection with the Financing.
Conditions to Closing the Transaction
The Transaction is subject to the conditions set out in the Agreement, including the following: (i) approval of the Transaction by the Exchange; (ii) Casa shareholder approval of the Amalgamation; and (iii) completion of the Financing.
Directors, Officers and Insiders of Resulting Issuer
Upon completion of the Transaction, it is anticipated that the board of directors of Abcana will comprise of four individuals. As of the date of this news release, the following persons are anticipated to be the directors, officers and insiders of Abcana following completion of the Transaction:
Robert Hall, Chief Executive Officer, President and Director
Mr. Hall brings over 10 years of experience in management of both public and private companies. In addition to his role at Letho, he is the CFO and a director of Doubleview Capital Corp. Mr. Hall is also active as a director of Arctic Hunter Energy Inc. and Windfire Capital Corp. In his role, he will provide strategic and financial expertise to Stream’s future direction while representing Letho’s interests.
Farshad Shirvani, Chairman and Director
Farshad Shirvani has been director and President of Casa since December 20, 2007. Since December 1996, Mr. Shirvani has been the President of Terracad Geoscience Services Ltd., a company involved in assisting clients identifying mineral exploration targets and creating plans to explore such exploration targets. Mr. Shirvani is also CEO and President of Doubleview Capital Corp., a company listed on the TSX Venture Exchange and engaged in exploration and development of mineral properties in British Columbia. Mr. Shirvani previously served as a director of Barkerville Gold Mines Ltd. from May 2005 to June 2012, a director of Lions Gate Energy Inc. from August 2007 to June 2012, and CEO and a director of Big North Capital Inc. from May 2010 to March 2012.
Mr. Shirvani obtained a Masters in Science from Shiraz University in Iran in 1998, and a Bachelors of Science from Shiraz University in 1987.
Erik Ostensoe, Director
Erik Ostensoe has been a director of Casa since February 8, 2008. Mr. Ostensoe obtained a Bachelors of Science (Honors) from the University of British Columbia in 1960. Mr. Ostensoe has extensive geological experience in the management of exploration and development of mineral projects. Since 1980, Mr. Ostensoe has been a self-employed geological consultant and has provided his consulting services to mineral exploration, development and producing companies. Mr. Ostensoe has served as a director of Trijet Mining Corp. (TSX.V-TJT), a company engaged in the exploration of uranium, titanium and rare earth element properties in Canada, from September 2009 to April 2012 and a director of Baroyeca Gold and Silver Inc. (TSX.V-BGS), a company engaged in exploration and development gold and silver properties in Mexico, from February 2006 to April 2012 and a director of Big North Graphite Corp. (TSX.V-NRT), a company engaged in the exploration of graphite properties in Quebec, Ontario and Mexico, since June 2012.
Jevin Werbes, Director
Jevin Werbes has been a director of Casa since January 14, 2011. Mr. Werbes is Chief Executive Officer, President and director of Carmax Mining Corp., a company exploring and developing gold and silver mineral projects in British Columbia and Ontario. In addition, Mr. Werbes is currently and has been a director and officer on a number of junior companies including Ansell Capital Corp. and Plicit Capital Corp. Mr. Werbes also provides prospecting services and capital market exposure to junior resource companies through his personal holding company, Calico Management Corp.
Sponsorship
Sponsorship of a Qualifying Transaction of a capital pool company is required by the Exchange unless an exemption from the sponsorship requirement is available. Abcana intends to apply to the Exchange for an exemption from the sponsorship requirement. There is no assurance that Abcana will be able to obtain such exemption.
About Abcana
Abcana was incorporated April 19, 2010 under the Business Corporations Act (British Columbia). Abcana is a CPC as defined by the CPC Policy. On November 9, 2011, Abcana completed its initial public offering and its common shares were listed for trading on the Exchange on November 10, 2011. As disclosed in its final prospectus dated October 21, 2011, Abcana’s business has been restricted to the identification and evaluation of businesses or assets for the purpose of completing its Qualifying Transaction.
For further information please contact:
Abcana Capital Inc.
Robert Hall, CEO and CFO (604) 999-5554
Information set forth in this news release contains forward-looking statements. These statements reflect management’s current estimates, beliefs, intentions and expectations; they are not guarantees of future performance. Abcana cautions that all forward looking statements are inherently uncertain and that actual performance may be affected by a number of material factors, many of which are beyond Abcana’s control. Such factors include, among other things: risks and uncertainties relating to Abcana’s ability to complete the proposed Qualifying Transaction; and other risks and uncertainties, including those described in Abcana’s Prospectus dated October 21, 2011 filed with the Canadian Securities Administrators and available on www.sedar.com. Accordingly, actual and future events, conditions and results may differ materially form the estimates, beliefs, intentions and expectations expressed or implied in the forward looking information. Except as required under applicable securities legislation, Abcana undertakes no obligation to publicly update or revise forward-looking information.
Completion of the transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable pursuant to Exchange Requirements, majority of the minority shareholder approval. 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 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.
The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.
A halt in trading shall remain in place until after the Qualifying Transaction is completed or such time that acceptable documentation is filed with the TSX Venture Exchange.
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.