FLK Falkirk Resources Corp.

Falkirk Resources Corp. (TSX VENTURE:FLK) ("Falkirk" or the "Resulting Issuer")
is pleased to announce that it has entered into a non-binding letter of intent
(the "LOI") dated August 9, 2012 with Dual Enterprises Ltd. ("Dual") pursuant to
which Falkirk will acquire all of the issued and outstanding shares of Dual in
exchange for common shares in Falkirk's capital (the "Transaction"), with the
effect that Dual will become a wholly-owned subsidiary of Falkirk. 


The Transaction will constitute a "reverse takeover" and a "change of business"
as contemplated by the policies of the TSX Venture Exchange (the "Exchange"),
and this news release has been prepared to fulfill certain disclosure
requirements contained within those policies.


Each of Falkirk and Dual is dealing at arm's length to each other and therefore
the Transaction will not be a "non-arm's length qualifying transaction", as that
term is defined in Exchange Policy 2.4. 


A Falkirk shareholder meeting is expected to be held in November 2012 to approve
the Transaction and the Share Consolidation (as defined below). Closing of the
Transaction is anticipated to occur in and around November 30, 2012.


Business of Dual

Dual is an established logging company located in British Columbia. The company
is part of the Jemi Group of Companies started over 25 years ago. Dual began as
a "stump to dump" contractor, annually logging approximately 250,000 cubic
meters of Crown timber plus constructing approximately 65-70 km of roads. The
Jemi Group of Companies gradually moved from this model to acquiring, logging
and developing private timber land in British Columbia and Ontario. Through its
history, the Jemi Group has logged hundreds of thousands of acres of private
timber land and developed and sold thousands of acres of its land for
recreational use.


Over the past two years, Dual has acquired significant logging contracts on
Crown land in and around Mackenzie, British Columbia and Midway, British
Columbia resulting in anticipated annual logging of over 400,000 cubic metres of
timber. Full production of Dual's current logging contracts commenced in the
last quarter of its year ended April 30, 2012. Dual's gross revenue for its year
ended April 30, 2012 period was approximately $7.9 million and its net income
for that period was approximately $144,000. Dual anticipates expansion through
the acquisition of further Crown and private timber supply. 


Details of the Transaction

Falkirk is a Tier 2 mining company listed on the Exchange. There are currently
24,553,044 common shares of Falkirk issued and outstanding. There are no issued
and outstanding options or warrants to purchase shares of Falkirk.


Pursuant to the terms of the LOI, Falkirk will acquire all of the issued and
outstanding shares of Dual in exchange for approximately 17,800,000 common
shares in Falkirk's capital on a post Share Consolidation basis.


Upon completion of the Transaction, the RTO Financing (as defined below)
(assuming the financing has been fully subscribed for), and the Share
Consolidation, Falkirk will have a total of approximately 22,300,000 shares
issued and outstanding of which approximately 2,455,304 shares will be held by
the current shareholders of Falkirk, 2,000,000 will be held by new investors
under the RTO Financing and 17,800,000 shares will be held by the Dual
shareholders, Mike Jenks and Georgina Martin, all of which will result in a
change of control of the Company and the creation of Mike Jenks and Georgina
Martin as insiders of Falkirk. 


Following the completion of the Transaction, Falkirk will be involved in the
timber and logging industry sector carrying out the business currently conducted
by Dual as described above under the heading "Business of Dual". 


Conditions to Completion

The LOI provides that the Transaction is subject to the following conditions,
among others:




--  Prior to the closing of the Transaction and the Share Consolidation, the
    completion of a non-brokered, private placement by Falkirk (the "RTO
    Financing") of a minimum of 20,000,000 pre-consolidation common shares
    at a price of $0.05 per share for aggregate minimum proceeds of
    $1,000,000. The RTO Financing is expected to close in two tranches with
    the first tranche (the "First Tranche") closing approximately 14 days
    following issuance of this news release and the second tranche (the
    "Second Tranche") closing concurrently with the closing of the
    Transaction. The proceeds of the First Tranche and will be used to fund
    Falkirk's ongoing operations through closing of the Transaction and
    ongoing working capital requirements. The proceeds of the Second Tranche
    will be used to fund Falkirk's operations following the closing of the
    Transaction.
      
--  The current shareholders of Dual will exchange their shareholders' loans
    of up to $6,000,000 due from Dual, or related parties, for a five year,
    redeemable, convertible, subordinated debenture of Falkirk. The
    debenture is redeemable at any time by Falkirk, and is convertible into
    common shares of Falkirk at the option of the debenture holders, at a
    conversion price of $1.00 per Falkirk share. Prior to maturity, Falkirk
    will make annual instalment payments equal to 25% of its annual
    consolidated EBITDA.
      
--  The completion of due diligence investigations.
      
--  Falkirk and Dual obtaining all required shareholders' and regulatory
    consents for the Transaction, including approval of the Exchange.
      
--  Concurrently with the close of the Transaction (and after completion of
    the First Tranche, the Second Tranche and the issuance of all shares to
    be issued to the shareholders of Dual under the Transaction), Falkirk
    will complete a share consolidation on the basis of one (1) new share
    for each ten (10) old shares (the "Share Consolidation"). 



Proposed Management of Falkirk

Following the close of the Transaction, it is anticipated that the directors and
officers of Falkirk will be as follows:


Mike Jenks - President, Chief Executive Officer, Director

Mr. Jenks is currently the President of Dual and is expected that he will be the
President, and Chief Executive Officer of the Falkirk following completion of
the Transaction. Mr. Jenks has over 30 years experience in the timber and
logging industry and is the founder and majority shareholder of the Jemi Group
of Companies, which includes Dual. Over the course of Mr. Jenks involvement in
the industry, he has acquired and logged over 150,000 acres of private timber
land and has developed and sold thousands of acres of that land for residential
and recreational use. In addition, through the Jemi Group of Companies, which
includes Dual, Mr. Jenks has owned and managed logging operations which has
logged over millions of cubic metres of private and crown timber and built
thousands of kilometres of logging roads. At the completion of the Transaction,
Mr. Jenks will beneficially own voting shares of Falkirk carrying more the 10%
of the voting rights attached to all outstanding shares of Falkirk.


Karl Kottmeier - Chairman, Director

Mr. Kottmeier is currently the President and Chief Executive Officer of Rockgate
Capital Corp., Rockridge Capital Corp. Falkirk Resources Corp. and Bama Gold
Corp. Mr. Kottmeier is a principal of Pemgroup. A former Investment Advisor and
member of the McDermid St. Lawrence and Raymond James Corporate Finance teams,
Mr. Kottmeier has 20 years of practical experience in listing, financing and
administering junior exploration and development companies listed on the TSX and
TSX Venture Exchanges. He holds a Bachelor of Arts degree from the University of
British Columbia.


Douglas Ford - Chief Financial Officer

Mr. Ford is the Chief Financial Officer of Rockgate Capital Corp., Rockridge
Capital Corp. Falkirk Resource Corp. and Bama Gold Corp. Since 1987, he has been
the General Manager of Dockside Capital Group Inc., a private merchant banking
and venture capital firm specializing in providing services to, and arranging
funding for, emerging growth companies. Mr. Ford is a principal of Pemgroup. Mr.
Ford has been a director of a number of public companies and he holds a Bachelor
of Arts degree from the University of British Columbia.


Georgina Martin - Vice President - Finance, Director

Ms. Martin is currently the Vice President - Finance of Dual and it is expected
that she will continue in that role with Falkirk in addition to being a director
of Falkirk following completion of the Transaction. Ms. Martin is a Certified
General Accountant and has been in the private sector for over 35 years. Since
1988, she has been the Comptroller/Chief Financial Officer of the Jemi Group of
Companies, which includes Dual.


Brent Lokash - Secretary, Director

It is expected that Mr. Lokash will be the Secretary and a director of Falkirk
following completion of the Transaction. Mr. Lokash graduated in 1990 with a
Hon. B.A. from McGill University and earned his L.L.B. (Law) degree from the
University of British Columbia in 1994. Since 1996, Mr. Lokash has practiced
administrative and commercial law. Mr. Lokash was a director of The Neptune
Society, Inc., then publically listed on the OTCBB and one of the largest
cremation companies in the U.S., from 2003 until 2006. From October 2005 to
February 2008, Mr. Lokash was President/CEO of Clearly Canadian Beverage
Corporation, then publically listed on the OTCBB. From October 2009 to April
2011, Mr. Lokash was President of Strata Minerals Inc. (formerly JBZ Capital
Inc.) and he remains the Chief Financial Officer and a director of Strata. Mr.
Lokash is also President and Chief Executive Officer of Overlord Capital Ltd.


Edward Ford - Director

It is expected that Mr. Ford will be an independent director of Falkirk
following completion of the Transaction. Mr. Edward D. Ford is a Canadian
Chartered Accountant. He has held this professional qualification since 1961.
During his career Mr. Ford has been an associate, manager and partner of several
Canadian professional accounting firms that specialized in audit/assurance,
taxation, insolvency and independent business consulting. In 1987 he founded
Dockside Capital Group Inc. a private merchant banking and venture capital firm
specializing in providing services to, and arranging funding for, emerging
growth companies; he remains President of Dockside Capital. Additionally he has
served as a Chief Financial Officer of several public companies. He is currently
Chief Financial Officer and director of North American Nickel Inc; and serves as
a director and audit committee chair of Rockgate Capital Corp; Bama Gold Corp;
Rockridge Capital Corp; and Falkirk Resources Corp.


Gregory Cameron - Director

It is expected that Mr. Cameron will be an independent director of Falkirk
following completion of the Transaction. Gregory M. Cameron has worked in the
finance industry for more than 16 years focused on small and mid capitalization
companies in North America and abroad. Mr. Cameron has held senior positions in
investment banking at Canaccord Capital (SVP Investment Banking), MGI Securities
(Founder) and Macquarie Capital Markets Canada formerly Orion Securities (SVP
Investment Banking). Over a successful 13 year career in banking, Mr. Cameron
has worked on hundreds of equity, debt, merger, acquisitions and restructurings.
Mr. Cameron is the former Chairman/Founder of Cub Energy Inc. a Canadian listed
energy company focused on developing significant oil and gas reserves in
Ukraine. Mr. Cameron is also a member of the board of directors of EastCoal
Inc., Voyageur Oil and Gas and Mega Graphite Inc. Mr. Cameron is a graduate of
Saint Mary's University in Halifax, Nova Scotia, Canada with a Bachelor of
Commerce in Finance and Accounting and holds numerous financial industry
designations.


Sponsorship of Qualifying Transaction

The Company does not intend to engage a sponsor in connection with the
Qualifying Transaction and will rely on an exemption from sponsorship
requirements under the policies of the Exchange.


Trading Halted

In accordance with Exchange policies, Falkirk's common shares are currently
halted from trading and will remain so until such time as the Exchange
determines otherwise, which, depending on the policies of the Exchange, may not
occur until the completion of the Transaction.


Name Change

Upon completion of the Transaction, subject to shareholder and regulatory
approval, if required, Falkirk intends to change its name to such name as may be
then determined by the directors of Falkirk upon, or following, the closing of
the Transaction.


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 on the merits of the proposed
Transaction and has neither approved nor disapproved the contents of this news
release. 


ON BEHALF OF THE BOARD OF DIRECTORS

FALKIRK RESOURCES CORP.

Karl Kottmeier, President and Director

Disclaimer for Forward-Looking Information 

Certain statements in this news release are forward-looking statements, which
reflect the expectations of management regarding the Transaction.
Forward-looking statements consist of statements that are not purely historical,
including any statements regarding beliefs, plans, expectations or intentions
regarding the future. Such statements are subject to risks and uncertainties
that may cause actual results, performance or developments to differ materially
from those contained in the statements. No assurance can be given that any of
the events anticipated by the forward-looking statements will occur or, if they
do occur, what benefits Falkirk will obtain from them.

Falkirk Resources Corp. (TSXV:FLK)
Historical Stock Chart
From Oct 2024 to Nov 2024

Falkirk Resources Corp. (TSXV:FLK)
Historical Stock Chart
From Nov 2023 to Nov 2024