9 Capital Corp. (the “Company”) announces that it has entered into
a binding agreement dated December 23, 2020 (the “Letter
Agreement”) with Churchill Diamond Corporation (“Churchill”), an
arm’s length, Ontario based mineral exploration company which
currently holds three mineral exploration projects in Canada, to
effect a business combination of the two companies (the “Proposed
Transaction”). The Proposed Transaction will be a reverse takeover
of the Company by Churchill and its shareholders.
Churchill is a private Ontario company managed
by career mining industry professionals which currently holds three
exploration projects, namely Taylor Brook in Newfoundland, Pelly
Bay in Nunavut and White River in Ontario. All three projects are
at the evaluation stage, with known mineralized Ni-Cu-Co showings
at Taylor Brook and Pelly Bay, and diamondiferous kimberlitic
intrusives at White River.
The Company is a Capital Pool Company (“CPC”)
and intends the Proposed Transaction to constitute its Qualifying
Transaction (the “Qualifying Transaction”) under the policies of
the TSX Venture Exchange (the “Exchange”).
The Transaction
It is currently anticipated that the Proposed
Transaction will be effected by way of a three-cornered
amalgamation, share exchange, merger, amalgamation, arrangement or
other similar form of transaction as is acceptable to the
parties.
On or immediately prior to the completion of the
Proposed Transaction, it is anticipated that: (i) the Company will
effect a name change to such name as may be determined by
Churchill; and (ii) the Company will consolidate the issued and
outstanding common shares in the capital of the Company (the “9
Capital Shares”) on the basis of one “new” 9 Capital Share for
every 1.7 “old” 9 Capital Shares issued and outstanding (the
“Consolidation”).
Pursuant to the Proposed Transaction, holders of
the issued and outstanding common shares of Churchill (the
“Churchill Shares”) will receive one 9 Capital Share (as they exist
on a post-Consolidation basis) for each Churchill Share held (the
“Exchange Ratio”). Pursuant to the Proposed Transaction, all
existing securities convertible into Churchill Shares shall be
exchanged, based on the Exchange Ratio, for similar securities to
purchase 9 Capital Shares on substantially similar terms and
conditions.
There are currently an aggregate of 11,920,501 9
Capital Shares issued and outstanding, as well as 1,192,050 stock
options, each exercisable to acquire one 9 Capital Share at an
exercise price of $0.10 per share. As at the date hereof there are
currently 24,576,550 Churchill Shares issued and outstanding, as
well as 1,800,000 stock options, each exercisable at a price $0.25
to acquire one Churchill Share.
If the Proposed Transaction is completed, it is
anticipated that the board of directors of the Company shall be
reconstituted to consist of such directors as Churchill shall
determine, subject to the minimum residency requirements of the
Business Corporations Act (Ontario), and all existing officers of
the Company shall resign and be replaced with officers appointed by
the new slate of board of directors.
It is expected that following the completion of
the Proposed Transaction, shareholders of the Company will hold
approximately 20.4% of the 9 Capital Shares, the current
shareholders of Churchill will hold approximately 65.4% of the 9
Capital Shares, and purchases in the Offering (as defined below)
will hold approximately 14.2% of the 9 Capital Shares (assuming the
minimum amount of the Offering is raised).
The Proposed Transaction is conditional upon the
completion of the Offering, as further described below.
Taylor Brook and Other
Properties
The Taylor Brook Property is located 60 km north
of Deer Lake, Newfoundland, and is comprised of two contiguous
map-staked licenses containing 226 claims totalling 56.5 km2, which
has known high grade Ni-Cu-Co mineralization at surface and shallow
drilled depths from work carried out between 1999-2012. The
property is under option from Altius Resources Inc. to acquire an
undivided 100% interest.
Other Properties
The Pelly Bay Property consists of 153 mineral
claims totalling 170.75 km2 on tidewater near the town of Kugaaruk
in central Nunavut, covers the entire diamondiferous Pelly Bay
kimberlite field, as well as areas prospective for Ni-Cu-Co and
gold mineralization. The White River Property is located
approximately 30 km east of the Hemlo Gold Mine along the
Trans-Canada Highway and consists of 1,355 claims totalling
approximately 28.9 km2 covering the White River diamondiferous
melnoitic kimberlite intrusive field.
Officers and Directors
Subject to applicable shareholder and Exchange
approval, it is anticipated that the officers and directors of
the combined company will be:
Paul Sobie, President and Chief Executive
Officer and Director
Mr. Sobie has over 30 years of discovery and
evaluation experience with MPH Consulting Limited, an internal
exploration and mining consultancy, for major, mid-tier and junior
mining companies in Canada, Africa, South America and Russia. Mr.
Sobie is an economic geologist specializing in the design and
management of exploration and evaluation programmes. He has
extensive project development experience, including several gold,
diamond and base metal ventures that have attained advanced and/or
achieved production status. Mr. Sobie has also held senior
managerial positions in the past with diamond, base metal and iron
ore junior exploration issuers.
Paul Robertson, Chief Financial Officer and
Corporate Secretary
Mr. Robertson is a Certified Professional
Accountant (CPA) and is based in Vancouver, British Columbia, is
the founding partner of Quantum Advisory Partners LLP and has over
20 years of accounting, auditing and tax experience. He has
developed extensive experience in the mining sector and provides
financial reporting, regulatory compliance, internal controls and
taxation advisory services to a number of junior resource
companies. Prior to founding Quantum Advisory Partners LLP, he was
a tax manager with Ernst & Young LLP in Vancouver providing tax
consulting and compliance services primarily to corporate clients
in the high-technology and biotechnology industries as well as
several multi-national mining companies. He is currently the Chief
Financial Officer of GoldQuest Mining Corp. (TSXV: GQC), and
previously served as Chief Financial Officer of Grayd Resource
Corporation (until its acquisition by Agnico Eagle Mines Limited in
2011) and Orla Mining Ltd. (TSX: OLA) from 2015 to 2019. Mr.
Robertson holds a BA from the University of Western Ontario (1993)
and obtained his Chartered Accountant designation from the British
Columbian Institute of Chartered Accountants in 1997.
Bill Fisher, Director
Mr. Fisher is a trained geologist and has
extensive industry experience including a number of residential
posts in Africa, Australia, Europe and Canada in both exploration
and mining positions. Under his leadership, Karmin Exploration
discovered the Aripuanã base metal massive sulphide deposits in
Brazil. From 1997 to 2001 Mr. Fisher was Vice President,
Exploration for Boliden AB, a major European mining and smelting
company where he was responsible for 35 projects in nine countries.
From 2001 to 2008 Mr. Fisher led GlobeStar Mining Corp. from an
exploration company to an emerging precious and base metal producer
in the Dominican Republic, developing and operating the Cerro de
Maimon copper/gold mine until it was sold to Perilya for $186
million. Mr. Fisher was also Chairman of Aurelian Resources which
was sold to Kinross Gold in 2008 for $1.2 Billion after the
discovery of the Fruta del Norte gold deposit in Ecuador. Mr.
Fisher currently serves as Executive Chairman of GoldQuest Mining
Corp. (TSXV: GQC), and an independent director of Horizonte
Minerals (AIM: HZM), Treasury Metals Inc. (TSX: TML) and London, UK
based firms Andiamo Exploration and RAME Energy.
Alec Rowlands, Director
Mr. Rowlands has over 25 years of experience in
mining finance. He is the former managing director of First
Marathon Securities (London) and former Head of Sales for Gordon
Capital (NYC). Since 1999, Mr. Rowlands has held several senior
finance positions, including with Yorkton Securities, Westwind
Partners, Jennings Capital and PowerOne Capital Markets Ltd. Mr.
Rowlands has been an active investor and founding shareholder in
several mining ventures, notably Auryx Gold, which was acquired by
B2Gold for its Otjikoto project in Namibia in 2011. He is currently
Vice-President, Investor Relations and Corporate Development for
Cardinal Resources Inc. (TSX: CDV).
Financing Matters
In connection with the Proposed Transaction,
Churchill proposes to issue and sell, on a non-brokered private
placement basis, Churchill Shares at a price per share of $0.25 for
aggregate gross proceeds of a minimum of $1,000,000 and a maximum
of $1,500,000 (the “Offering”). Completion of the
proposed Offering is a condition to the closing of the Proposed
Transaction.
Arm’s Length Transaction
The Proposed Transaction is an arm’s length
transaction in accordance with the policies of the Exchange and is
not subject to the approval of the shareholders of the Company,
except as required by applicable corporate law.
No Control Persons
All 24,576,550 Churchill Shares are widely held
an no individual or entity owns, nor will any entity or individual
own on completion of the Offering or immediately prior the
completion of the Proposed Transaction, more than 10% of the issued
and outstanding Churchill Shares.
Selected Financial
Information
The following selected financial information is
taken from the financial statements of Churchill for the year ended
August 30, 2020, which are expected to be included in the filing
statement being prepared in connection with the Proposed
Transaction:
Total Assets |
$1,102,223 |
Total Liabilities |
$310,000 |
Net Loss |
$(558,688) |
Readers are cautioned that the above figures
have not been audited and are based on calculations prepared
by management. Actual results may differ from those reported in
this release once these figures have been audited.
Sponsorship
Sponsorship of a Qualifying Transaction of a CPC
is required by the Exchange, unless exempt in accordance with
Exchange policies or waived by the Exchange. The Proposed
Transaction may require sponsorship and the Company plans to
provide a news release update should a sponsor be retained. Trading
in the 9 Capital Shares was suspended on September 28, 2020 as a
result of the Company not completing its Qualifying Transaction
within 24 months following its original date of listing on the
Exchange. 9 Capital expects that trading in the 9 Capital Shares
will remain suspended pending closing of the Proposed Transaction,
subject to the earlier re-commencement of trading only upon
Exchange approval and the filing of required materials with the
Exchange as contemplated by Exchange policies.
Filing Statement
In connection with the Proposed Transaction and
pursuant to the requirements of the Exchange, the Company will file
a filing statement on its issuer profile on SEDAR (www.sedar.com),
which will contain details regarding the Proposed Transaction, any
financing completed prior to closing of the Proposed Transaction,
the Company, Churchill and the resulting issuer company following
completion of the Proposed Transaction.
The obligations of the Company and Churchill
pursuant to the Letter Agreement shall terminate in certain
specified circumstances, including in the event that a definitive
business combination agreement with respect to the Proposed
Transaction is not entered into among the parties by January 31,
2021.
About the Company
The Company is a CPC within the meaning of the
policies of the Exchange that has not commenced commercial
operations and has no assets other than cash. Except as
specifically contemplated in the CPC policies of the Exchange,
until the completion of its Qualifying Transaction, the Company
will not carry on business, other than the identification and
evaluation of companies, business or assets with a view to
completing a proposed Qualifying Transaction.
For further information please
contact:
9 Capital Corp.Mr. Ben Cubitt, President and
Chief Executive Officer Tel. (416) 479-5048
Completion of the Proposed Transaction is
subject to a number of conditions including, but not limited to,
Exchange acceptance and shareholder approval. The Proposed
Transaction cannot close until all required shareholder approvals
are is obtained. There can be no assurance that the Proposed
Transaction will be completed as proposed or at all. Investors are
cautioned that, except as disclosed in the filing statement to be
prepared in connection with the Proposed Transaction, any
information released or received with respect to the Proposed
Transaction may not be accurate or complete and should not be
relied upon. Trading in the securities of a CPC should be
considered highly speculative. A comprehensive press release with
further particulars relating to the Proposed Transaction will
follow in accordance with the policies of the Exchange.
The Exchange has in no way passed upon the
merits of the Proposed Transaction and has neither approved nor
disapproved the contents of this news release.
Cautionary Note Regarding Forward
Looking Information
This news release contains statements about the
Company’s expectations regarding any proposed future Qualifying
Transaction of the Company which are forward-looking in nature and,
as a result, are subject to certain risks and uncertainties.
Although the Company believes that the expectations reflected in
these forward-looking statements are reasonable, undue reliance
should not be placed on them as actual results may differ
materially from the forward-looking statements. Factors that could
cause the actual results to differ materially from those in
forward-looking statements include general business, economic,
competitive, political and social uncertainties; and the delay or
failure to receive board, shareholder or regulatory approvals. The
forward-looking statements contained in this press release are made
as of the date hereof, and the Company undertakes no obligation to
update publicly or revise any forward-looking statements or
information, except as required by law.
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.
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