Aintree Resources Inc. Announces Signing of a Letter Agreement for Its Qualifying Transaction with Four Rivers Resources Inc.
Suite 125A, 1030 Denman Street Vancouver, British Columbia V6G 2M6
NEWS RELEASE
AINTREE RESOURCES INC. ANNOUNCES SIGNING OF A LETTER AGREEMENT FOR ITS QUALIFYING TRANSACTION WITH FOUR RIVERS RESOURCES INC.
Toronto, Ontario, February 17, 2012 – Aintree Resources Inc. (TSX-V: AIN.P) (the “Company”), is pleased to announce that it has entered into a letter of intent dated February 16, 2012 (the “Letter Agreement”) with Four Rivers Resources Inc. (“Four Rivers”), an arm’s length private corporation incorporated and existing under the laws of British Columbia, with respect to the reverse takeover of the Company by Four Rivers (the “Transaction”). It is expected that the Transaction will constitute the qualifying transaction for the Company in accordance with the policies of the TSX Venture Exchange (the “Exchange”). The Company has determined to not proceed with the previously announced qualifying transaction with Western Energy Holding Co., Limited as disclosed in the Company’s news release on December 9, 2010.
Pursuant to the terms of the Letter Agreement, it is anticipated that the Transaction will be structured as a three-cornered amalgamation between Four Rivers and a wholly owned subsidiary of the Company (the “Amalgamation”), whereby on the closing date of the Transaction each of the issued and outstanding securities in the capital of Four Rivers will be exchanged on a one-for-one basis for like securities of the Company. The outstanding convertible securities of Four Rivers, including warrants and options, will be exchanged for like corresponding convertible securities of the Company on the same terms as are set out in the documentation of the corresponding convertible securities of the Company. In connection with the closing of the Transaction, the Company will change its name to such name as determined by Four Rivers (the “Name Change”).
It is anticipated that the Transaction will also include a brokered concurrent financing (the “Financing”) pursuant to which Four Rivers will, immediately prior to the Amalgamation, issue up to 20,000,000 common shares in the capital of Four Rivers (“Common Shares”) at a price of $0.30 per Common Share, for gross proceeds of up to approximately $6 million. Four Rivers expects to retain an agent for the Financing shortly and will provide the details of the engagement at that time.
In connection with the completion of the Transaction, the Company will pay a finder’s fee of up to 200,000 common shares of the Company to a certain third party in consideration for introducing Four Rivers to the Company, subject to and in accordance with the policies of the Exchange.
Upon completion of the Transaction, the Company will have acquired 100% ownership of Four Rivers and the business of Four Rivers will become the business of Aintree Resources Inc. (the “Resulting Issuer”). Upon completion of the Transaction and subject to regulatory and shareholder approval, the number of directors of the Resulting Issuer is expected to be increased from four to five, and the directors of the Resulting Issuer will be comprised entirely of new nominees of Four Rivers.
Upon closing of the Transaction, it is anticipated that the following persons will become Insiders of the Resulting Issuer:
Andrew Lee – It is anticipated that Mr. Lee will be the President, Chief Executive Officer and a director of the Resulting Issuer. He is currently the President, Secretary and a director of Four Rivers, and has been a self-employed consultant to public companies for the past 6 years, assisting with financings and corporate development. He is VP and director of Megastar Development Corp. (TSX-V: MDV) and a director of Eloro Resources Ltd. (TSX-V: ELO) and Changyu Medtech Ltd. (TSX-V: CYQ));
Robin Metcalfe – It is anticipated that Mr. Metcalfe will be the Chief Operating Officer and a director of the Resulting Issuer. He is currently the Chief Executive Officer and a director of Four Rivers, and has been an executive or owner of several medium sized forestry related businesses for over 30 years. He is experienced in road construction, harvesting, sawmilling, shake milling, forest license bidding, camp operations, logistics, pellet manufacture, and torrefied wood product development; and
Zara Kanji-Aquino – It is anticipated that Ms. Kanji-Aquino will be the Chief Financial Officer of the Resulting Issuer. She is currently the Chief Financial Officer of Four Rivers, and has held several Chief Financial Officer positions and is the founder of Zahara Kanji-Aquino & Co., which was established in 2004. She is also a member of the Certified General Accountants Society of British Columbia and Canada.
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In addition to the above Insiders, Four Rivers intends to nominate certain other individuals as its appointments to the board of the Resulting Issuer, the details of which will be provided once appropriate arrangements have been finalized.
It is expected that the parties will enter into a definitive agreement (the “Definitive Agreement”) on or before March 31, 2012 or such other date as mutually agreed by the parties. The Definitive Agreement will contain representations and warranties between the parties that are customary for transactions of a similar nature to the Transaction. The Company and Four Rivers expect that the Transaction will close on or before June 30, 2012 or such other date as mutually agree by the parties.
Description of the Company’s Business
The Company is a Capital Pool Company as defined in Policy 2.4 of the Exchange, and accordingly, its principal purpose is to use its capital to investigate and find active businesses to acquire in order to qualify the Company for a listing, at a minimum, on Tier 2 of the Exchange.
Four Rivers is a private British Columbia company focused on the development of a lumber mill business, currently comprised of the pending acquisition and operation of a 86.6 acre industrial site, including a lumber mill and auxiliary facilities in the Malakwa area in the British Columbia interior, located approximately 160 kilometres east of Kamloops, and 53 kilometres west of Revelstoke and near the Trans-Canada highway (the “Malakwa Lumber Mill”). The Malakwa Lumber Mill is currently owned by an arm’s length private British Columbia corporation Microline Veneer & Forest Products Corp. (“Microline”), but is subject to an Asset Purchase Agreement, dated August 2011, between Four Rivers and Microline, pursuant to which Four Rivers intends to acquire a 100% interest in the Malakwa Lumber Mill.
Four Rivers intends to pursue the commercial operation of the Malakwa Lumber Mill with a view to developing export markets in Asia, utilizing the excellent operational infrastructure and the available supply of superior fibre resources in the North Okanagan, British Columbia.
Conditions to Entering the Definitive Agreement
The execution of the Definitive Agreement is subject to the satisfaction of a number of conditions, including, but not limited to:
(i) the receipt of the approval of the board of directors of each of Four Rivers and the Company;
(ii) the completion of a due diligence review by each of the Company and Four Rivers other than confirmatory due diligence;
(iii) the engagement of a sponsor or agent in connection with the Transaction and the Financing, unless exempt pursuant to the policies of the Exchange.
Conditions to Closing of the Transaction
The completion of the Transaction is subject to the satisfaction of a number of conditions, including, but not limited to:
(i) that the Company obtains a written waiver of the right of first refusal granted to Canaccord Corporation (“Canaccord”) pursuant to an Agency Agreement between the Company and Canaccord dated February 1, 2010;
(ii) the execution of the Definitive Agreement;
(iii) receipt of shareholder approval of the Transaction by a special majority of shareholders of each of Four Rivers and the Company;
(iv) receipt of all required regulatory, corporate and third party approvals, consents, waivers and compliance with all other applicable regulatory requirements and conditions, including the conditional approval of the Transaction by the Exchange;
(v) the completion of the Financing;
(vi) completion of the Name Change;
the maintenance of the Company’s listing on the Exchange;
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(viii) the confirmation of the representations and warranties of each party to the Definitive Agreement as set out in such agreement;
(ix) the absence of any material adverse effect on the financial and operational conditions or the assets of the Company and Four Rivers;
(x) delivery of legal opinions and other standard closing documentation; and other conditions precedent customary for a transaction such as the Transaction.
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Other Information and Updates
The Company’s shares are currently listed for trading on the Exchange. In accordance with Exchange Policy, however, the Company’s shares have been halted from trading and will remain halted until such time as determined by the Exchange, which, depending on the policies of the Exchange, may not occur until the completion of the Transaction.
The Company will provide further details in respect of the Transaction in due course by way of press release. However, the Company will in due course make available to the Exchange all financial information as required by the Exchange, and will disclose at a later date summary financial information derived from such statements, in accordance with the policies of the Exchange.
ON BEHALF OF THE BOARD
(signed) “Walter Brenner”
Walter Brenner President, CEO & Director
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, such as the Company, should be considered highly speculative.
The 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 the Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Exchange) accepts responsibility for the adequacy or accuracy of this release.
This news release includes forward-looking statements regarding the Company, Four Rivers and their respective businesses. Such statements are based on the current expectations of the management of each entity. The forward-looking events and circumstances discussed in this news release, including completion of the Transaction, the Amalgamation and the Financing, may not occur and could differ materially as a result of known and unknown risk factors and uncertainties affecting the companies, including risks regarding the forestry industry, economic factors and the equity markets generally. No forward- looking statement can be guaranteed. Except as required by applicable securities laws, forward-looking statements speak only as of the date on which they are made and the Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.