Cavan Enters LOI for Acquisition of Quebec Rare Earth Project, Proposed $1.5 Million and $1.0 Million Flow-Through Financing
May 10 2011 - 2:38PM
Marketwired
Cavan Ventures Inc. (TSX VENTURE: CVN),
(http://www.cavanventures.com) (the "Company") is pleased to
announce it has entered into a non-binding Letter Of Intent ("LOI")
with Investissements Horizon Inc. ("IHI") of Quebec, to acquire
from IHI up to one hundred percent (100%) interest in the Pythonga
Lake Rare Earth project ("Pythonga") in the Maniwaki region in the
province of Quebec. The 8.3km2 Pythonga lake project is comprised
of 14 mining claims and is situated 180km northwest of Montreal in
the Maniwaki region. The Maniwaki region has recently seen a great
deal of exploration activity associated with rare earth elements
discoveries.
Cavan will immediately commence a due diligence review of the
project. Upon successful completion of the due diligence review the
parties will proceed to enter into and execute a definitive
agreement with respect to the acquisition by Cavan of up to 100%
interest in the Pythonga project. Cavan will issue a news release
to provide an update to its shareholders in connection with the
execution of the definitive agreement. The proposed terms to
purchase a seventy percent (70%) interest of the property is cash
payment of $50,000 and 2,000,000 common shares of Company stock to
IHI. Cavan also agrees to spend $500,000 for an exploration program
on the property over 2 years. Cavan can issue an additional
3,000,000 shares of Company stock to purchase the remaining thirty
percent (30%) of the Pythonga project for a total one hundred
percent (100%) interest.
Completion of the transaction is subject to a number of
conditions, including TSX Venture Exchange acceptance and, if
required, shareholder approval. There can be no assurance that the
transaction will be completed as proposed or at all.
Cavan intends to complete a non-brokered private placement of up
to 7.5 million units to subscribers to residents in Canada and
certain offshore jurisdictions at a price of 20 cents ($0.20) per
unit for gross proceeds of up to $1,500,000. Each unit will
comprise one common share of the company and one-half of one
non-transferable warrant of the company. Each whole warrant will
entitle the holder thereof to acquire one common share of the
company at an exercise price of 25 cents ($0.25) per common share
for a period of 18 months after the closing date of the private
placement.
Cavan also intends to complete a non-brokered private placement
of up to 4 million flow-through units at a price of 25 cents
($0.25) per unit for gross proceeds of up to $1,000,000. Each unit
will comprise one flow-through common share of the company and
one-half of one non-transferable warrant of the company. Each whole
warrant will entitle the holder thereof to acquire one non
flow-though common share of the company at an exercise price of 30
cents ($0.30) per common share for a period of 18 months after the
closing date of the private placement.
In connection with the private placement, The Company may pay a
finder's fee, payable in cash or shares, to certain arm's-length
parties in an amount equal to 8 per cent of the total gross
proceeds raised under the private placement from subscribers
introduced to the company by such parties.
The securities issued under the private placement will be
subject to a statutory hold period which will expire four months
and one day from the date of the closing of the private placement.
The private placement is subject to acceptance by the TSX Venture
Exchange and other customary conditions for a transaction of this
nature. The proceeds of the private placement will be used for
mineral exploration activities of the company and for general
working capital purposes.
On behalf of the Board of Directors:
Andrew Mah, President & Director
Patrick Brandreth, Director, Corporate communication
This news release contains certain forward-looking statements
that reflect the current views and/or expectations of Cavan with
respect to its performance, business and future events. Such
statements are subject to a number of risks, uncertainties and
assumptions. Actual results and events may vary significantly.
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 release.
Contacts: Cavan Ventures Inc. Andrew Mah President &
Director (604)783 5328 (cell) or (604)288 2756
andrew.mah@cavanventures.com Cavan Ventures Inc. Patrick Brandreth
Director, Corporate Communication (604) 808 3527
patrick@cavanventures.com www.cavanventures.com