NOT FOR DISSEMINATION IN THE UNITED STATES OF AMERICA
Himalayan Capital Corp. (TSX VENTURE:HIM.P) ("Himalayan" or the "Company"), a
Capital Pool Company, is pleased to announce that further to its press release
dated September 23, 2011, it has executed a definitive agreement with Minera
Azul Ventures Limitada, a private Chilean limited liability partnership company,
("Minera Azul"), and holders of partnership interests therein as provided below
dated December 22, 2011 (the "Definitive Agreement") pursuant to which Himalayan
will acquire 99% of the issued and outstanding registered securities (and 100%
of the beneficial securities) of Minera Azul (the "Transaction").
Following the execution of the previously announced letter of intent between
Himalayan and Minera Azul, Minera Azul completed a private placement financing
through the issuance of $1,500,000 in debentures (the "Azul Debt") on October
14, 2011. Subsequently, effective as of October 15, 2011, each of Himalayan and
Minera Azul waived their respective due diligence conditions.
The Transaction is expected to constitute Himalayan's Qualifying Transaction
under the policies of the TSX Venture Exchange (the "Exchange") and on
completion thereof, it is expected that the Company will be a Tier 2 Mining
Issuer. The Transaction is an arm's length transaction and therefore will not be
subject to approval of the shareholders of Himalayan. Himalayan has not yet
received Exchange approval for the Transaction as a Qualifying Transaction and
there can be no assurance that the Transaction will be completed as proposed or
at all.
As consideration for the Transaction, Himalayan has agreed to issue to the
current partners of Minera Azul an aggregate of 10,000,000 common shares in the
capital of Himalayan ("Himalayan Shares") at a deemed price of $0.25 per
Himalayan Share, for a total acquisition price of $2,500,000. The current
ownership structure of Minera Azul is as set out in the table below:
----------------------------------------------------------------------------
Jurisdiction of
Partner Partnership Ownership Residence of Partner
----------------------------------------------------------------------------
David O'Connor 23.75% Bolivia
----------------------------------------------------------------------------
Francisco Schubert Seiffert 23.75% Chile
----------------------------------------------------------------------------
Tony Wonnacott 15.00% Ontario, Canada
----------------------------------------------------------------------------
Kirsten Nicolson 12.50% Ontario, Canada
----------------------------------------------------------------------------
Susana Etienne Solares 10.00% Chile
----------------------------------------------------------------------------
Elizabeth Bowles 10.00% Bolivia
----------------------------------------------------------------------------
Michael Schuler 5.00% Chile
----------------------------------------------------------------------------
In addition, Himalayan has also agreed to assume the Azul Debt and upon closing
of the Transaction, Himalayan will settle the Azul Debt for Himalayan Shares at
a deemed price of $0.25 per share for an aggregate issuance of 6,000,000
Himalayan Shares.
Through six option agreements (the "Option Agreements") with six different arm's
length property owners, Minera Azul has the rights to acquire a 100% interest in
the prospective copper-gold property in La Higuera, Chile (the "La Higuera
Property"). A breakdown of the timing of the payments to complete the earn-in
requirements of the Option Agreements follows:
-- On signing agreements - Cash payments totalling US$230,000 - Paid.
-- On completion of Transaction - Issuance of 1,000,000 Himalayan Shares
and 300,000 warrants to purchase Himalayan Shares (at an exercise price
of $0.30 and valid for a period of 5 years from the closing of the
Transaction (the "Himalayan Warrants")).
-- January 2012 - Issuance of 250,000 Himalayan Shares.
-- June/July 2012 - Cash Payments totalling US$640,000 and the issuance of
250,000 Himalayan Shares.
-- June/July 2013 - Cash Payments totalling US$1,130,000 and the issuance
of 250,000 Himalayan Shares.
-- January 2014 - Cash Payments totalling US$100,000; and
-- June/July 2014 - Cash Payments totalling US$2,330,000 and the issuance
of 250,000 Himalayan Shares.
The Himalayan Shares and Himalayan Warrants to be issued pursuant to the Option
Agreements are to be issued to the following parties: 1,000,000 Himalayan Shares
and 300,000 Himalayan Warrants are to be issued to Mr. Gerado Findel of Chile
and the remaining 1,000,000 Himalayan Shares are to be issued to Inversiones y
Mineria Andale Limitada (100% beneficially owned by an arm's length party).
In addition, under one of the Option Agreements, the respective property owner
will retain a net smelter return royalty of 1% (the "NSR") over that portion of
the La Higuera Property, to be paid on a quarterly basis from the beginning of
commercial production from those claims. The NSR may be acquired by Minera Azul
through either a cash payment of US$500,000 or the equivalent in Himalayan
Shares, at the election of the current owner.
The filing statement ("Filing Statement") of the Company dated December 22,
2011, which describes the terms of the Option Agreements and includes audited
financial statements of Minera Azul, along with the National Instrument 43-101
technical report with respect to the La Higuera Property, have been filed with
the Exchange and applicable securities commissions and are available on SEDAR
under the Company's profile at www.sedar.com.
In connection with the Transaction, it is expected that the members of
Himalayan's current board of directors will be replaced with nominees of Minera
Azul, being David O'Connor, Mike Hoffman and Tony Wonnacott. It is expected that
David O'Connor will also become the President and Chief Executive Officer, Brad
Boland will become the Chief Financial Officer and Corporate Secretary, and
Francisco Schubert Seiffert will become Country Manager, with Himalayan
post-Transaction.
As part of the Transaction, the existing holders of escrow shares of the Company
have agreed to transfer within escrow, subject to Exchange approval, 750,000
Himalayan Shares currently held in escrow to the proposed new directors and
officers of the Company on completion of the Transaction.
Currently, there are 2,350,000 Himalayan Shares outstanding. Upon completion of
the Transaction, the settlement of the Azul Debt and the issuance of the initial
Himalayan Shares pursuant to the Option Agreement with Mr. Gerado Findel, it is
anticipated that the resulting issuer will have 19,350,000 common shares
outstanding. The current holders of Himalayan Shares will own approximately 8.3%
of the issued and outstanding common shares of the resulting issuer. Securities
holders of Minera Azul (including those who receive Himalayan Shares as a result
of the settlement of the Azul Debt) will own approximately 91.7% of the combined
entity. The Himalayan Shares to be issued pursuant to the proposed Transaction
(excluding those shares issued in settlement of the Azul Debt) will be subject
to the surplus escrow requirements of the Exchange.
Upon completion of the Transaction and the conversion of the Azul Debt, it is
expected that only David O'Connor and Francisco Schubert Seiffert will own 10%
or more of the issued and outstanding common shares of the Company on a fully
diluted basis.
Each party has agreed to pay for their own costs in connection with the Transaction.
Completion of the Transaction is subject to the terms and conditions of the
Definitive Agreement, including the approval of the Exchange and all other
necessary regulatory and third party approvals and consents, as more fully
described in the Filing Statement. Pursuant to the Definitive Agreement, the
closing of the Transaction shall occur no later than January 15, 2012 unless
otherwise agreed by the parties in writing.
The shares of Himalayan are currently halted from trading and shall remain so
until completion of the Transaction, or until satisfactory documentation to
allow a resumption of trading is filed with and reviewed by the Exchange.
Himalayan and Azul entered into a sponsorship agreement on December 22, 2011
with Haywood Securities Inc. (the "Sponsor"), pursuant to which the Sponsor will
act as a sponsor in connection with the Transaction pursuant to the policies of
the Exchange. An agreement to sponsor should not be construed as any assurance
with respect to the merits of the Transaction or the likelihood of its
completion.
About Minera Azul Ventures Limitada
Minera Azul Ventures Limitada is a mineral exploration company with the rights
to acquire a prospective copper-gold property in La Higuera, Chile (about 600
kilometres north of Santiago). The La Higuera Property was assembled as a result
of the first-time consolidation of mining rights in a historical copper-gold
mining center and is located in a prolific I.O.C.G. belt surrounded by excellent
infrastructure in a mining friendly jurisdiction.
The La Higuera Property covers a historic copper mining district with mining
activity dating back to at least the late 18th century; however, there has been
no known modern exploration conducted on the property. Since the consolidation
of the mining rights in June 2011, Minera Azul has initiated a rock sampling
program and completed geophysical work. Part of the proceeds from the Financing
would be used to fund an initial drill program currently being developed by
Minera Azul.
It is expected that upon completion of the Transaction, the management of
Himalayan would be reconstituted with David O'Connor being appointed as
President and Chief Executive Office, Brad Boland being appointed as Chief
Financial Officer and Corporate Secretary, and Francisco Schubert Seiffert would
be appointed as Country Manager. Similarly, following the Transaction, the Board
of Directors of Himalayan would be reconstituted with the appointment of Mike
Hoffman, David O'Connor and Tony Wonnacott (with Tony Wonnacott being appointed
as non-executive chairman).
David O'Connor is a geologist with a master's degree in Mineral Exploration from
the Imperial College in London, England. He has over 30 years' experience in
mineral exploration in various countries, including 19 years in South America.
He has held senior positions in major companies, including Officer in Charge of
the Olympic Dam I.O.C.G. deposit in its discovery phase, as well as Chief
Geologist of Geopeko (Peko-Wallsend), both in Australia. Additionally, he has
been involved with several junior Exchange listed exploration companies in South
America, with the most recent being Explorator Resources Inc., with its 230
million tonne I.O.C.G. deposit in Chile which was acquired by Sociedad Punta del
Cobre in May 2011.
Brad Boland has over 15 years' experience in the mining industry. He was the
Chief Financial Officer of Crocodile Gold Corp. from July 2009 until February
2011. Mr. Boland was the Chief Financial Officer of Consolidated Thompson Iron
Mines Limited from September 2007 until July 2009. From May 2005 to September
2007, he was at Kinross Gold Corp., most recently serving in the position of
Vice President, Corporate Controller. Prior to that, from August 1998 to
February 2005, Mr. Boland was at Goldcorp Inc., as Corporate Controller and the
Vice President, Finance. Mr. Boland is a Certified Management Accountant.
Francisco Schubert is a Mechanical Engineer who graduated from the Technical
University in Santiago, Chile. He has over 30 years' experience working for a
number of industrial contractors and mines in South America (primarily Chile).
Additionally, he has worked as Country Manager for a number of Exchange listed
exploration companies in Chile.
Mike Hoffman is a professional mining engineer with over 25 years' of experience
in mine operations, projects, engineering and corporate development. He has held
senior executive positions at Crocodile Gold Corp., Crowflight Minerals Inc.,
Goldcorp Inc., Desert Sun Mining Corp. and Yamana Gold Inc. He also serves on
the Board of Directors of Crocodile Gold Corp., Castillian Resources Inc.,
Trevali Mining Corporation, Aberdeen International Inc. and Largo Resources Inc.
Tony Wonnacott is a corporate securities lawyer in Toronto, Ontario with over 15
years' of experience. He is a member of the Law Society of Upper Canada and
holds a B.Comm (cum laude) from Saint Mary's University and an LL.B. from
Dalhousie University. He began his career working at a major Toronto law firm in
the banking and securities field before moving to work as a legal consultant to
a number of companies, primarily in the mining and resource industry. As a
consultant, officer and director of several of these companies, Tony has been
involved with the successful listings of private companies, the outright sale of
a company for approximately $750 million and capital raisings in excess of $3
billion.
Cautionary Statements
Certain statements contained in this press release constitute forward-looking
information. These statements relate to future events or future performance. The
use of any of the words "could", "intend", "expect", "believe", "will",
"projected", "estimated" and similar expressions and statements relating to
matters that are not historical facts are intended to identify forward-looking
information and are based on the Company's current belief or assumptions as to
the outcome and timing of such future events. Actual future results and
developments may differ materially from those contemplated by these statements
depending on, among other things, the risks that the parties will not proceed
with the proposed Qualifying Transaction and associated transactions, that the
ultimate terms of the proposed Qualifying Transaction and associated
transactions will differ from those that currently are contemplated, and that
the proposed Qualifying Transaction and associated transactions will not be
successfully completed for any reason. Various assumptions or factors are
typically applied in drawing conclusions or making the forecasts or projections
set out in forward-looking information. Those assumptions and factors are based
on information currently available to the Company. The material factors and
assumptions include the parties to the Transaction and agreements thereto; being
able to obtain the necessary approvals, including Exchange approval for the
Transaction as a Qualifying Transaction and the approval of all other necessary
regulatory and third party approvals and consents; TSX-V policies not changing;
and the satisfaction of the conditions to the Transaction as contained in the
Definitive Agreement, Option Agreements and associated Transaction documents.
Other risk factors that could cause actual results or outcomes to differ
materially from the results expressed or implied by forward-looking information
include, among other things: conditions imposed by the Exchange; changes in tax
laws, general economic and business conditions; and changes in the regulatory
environment. The Company cautions the reader that the above list of risk factors
is not exhaustive. The forward-looking information contained in this release is
made as of the date hereof and the Company is not obligated to update or revise
any forward-looking information, whether as a result of new information, future
events or otherwise, except as required by applicable securities laws. Because
of the risks, uncertainties and assumptions contained herein, investors should
not place undue reliance on forward-looking information. The foregoing
statements expressly qualify any forward-looking information contained herein.
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 Filing Statement
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.
Himalayan Capital Corp (TSXV:HIM.P)
Historical Stock Chart
From May 2024 to Jun 2024
Himalayan Capital Corp (TSXV:HIM.P)
Historical Stock Chart
From Jun 2023 to Jun 2024
