Vancouver, British Columbia, Canada, July 31,
2013 - Rock Tech Lithium Inc. (TSX-V: RCK; Frankfurt: RJIA) (the "Company" or "Rock Tech")
announces that, effective July 23, 2013, it entered into a letter
of intent ("LOI") with Brainworks Capital Management (Private)
Limited ("Brainworks"), a company incorporated in Zimbabwe, to
purchase all of the issued and outstanding shares of Brainworks
(the "Transaction").
The Transaction is
intended to take the form of a corporate combination whereby,
subject to regulatory and shareholder approval, Rock Tech will
acquire all of the issued and outstanding shares of Brainworks in
exchange for common shares in the capital of Rock Tech. The
Transaction will constitute a reverse takeover ("RTO") pursuant to
the policies of the TSX Venture Exchange (the
"Exchange").
Rock Tech is a
Canadian exploration company focused on developing its lithium and
graphite projects located in Canada. In 2009, the Company acquired
the Georgia Lake lithium property located near Thunder Bay,
Ontario. Since acquiring the property, the Company has completed
over 12,000 metres of drilling, conducted metallurgical testing and
confirmed a significant portion of the historic resource estimate
to NI 43-101 standards. In 2012, the Company entered into an option
agreement to acquire a 100% interest in the Lochaber graphite
property near Gatineau, Quebec. Since acquiring the property, the
Company completed geophysical surveys, over 7,000 metres of
drilling and has begun initial metallurgical testing. In May, 2013,
based on the results of exploration activities, the Company
exercised its option to acquire 100% of the Lochaber graphite
property.
Brainworks is
Zimbabwe's pre-eminent private equity investment and advisory
company primarily focused on investing in the financial services,
mining, tourism, real estate and energy sectors in the Republic of
Zimbabwe. Brainworks, through the companies in its investment
portfolio, currently offers a range of banking and consumer finance
products. In its energy portfolio, Brainworks is active in
petroleum products logistics and bulk trading markets, while in its
tourism and real estate portfolio it is active in the hotel
operating and real estate business. Brainworks is also involved in
gold mining activities through properties in Zimbabwe which are
currently undergoing exploration. As at June 30, 2013, Brainworks
had total assets of approximately US$ 35.6 million, of which US$
3.8 million was cash, while its total invested capital or equity
was US$26.7 million. Upon the Completion Date of the Transaction,
the Resulting Issuer will be involved in the investment
sector. Brainworks currently has 456,924,869 shares issued and
outstanding and no other classes of shares or convertible
securities have been issued. Brainworks has thirty shareholders of
which none hold a controlling interest.
Rock Tech currently
has an issued and outstanding share capital of 99,845,108 common
shares. Prior to the closing of the Transaction, this outstanding
share capital will be consolidated on the basis of 10 old shares
for one new share, resulting in 9,984,511 common shares. The
aggregate consideration for the Brainworks shares will be satisfied
by the issuance of approximately 228,462,435 post-consolidation
shares of Rock Tech at a deemed price of CAD$0.20 per share, for an
aggregate purchase price of CAD$45.7 million on the basis of one
(1) Rock Tech share for each two (2) Brainworks shares.
On closing, the
certain officers and certain directors of Rock Tech will resign and
the board of directors of Rock Tech will be reconstituted. Details
on the constitution of the new board and management will be
released once finalized.
The parties to the
Transaction are at arm's length. Following the completion of the
Transaction, it is anticipated that the Resulting Issuer will be a
Tier 1 Issuer on the TSX Venture Exchange and will carry on the
business of private equity investment and advisory
services.
In connection with
the RTO, Rock Tech will complete a non-brokered private placement
of debt or equity for at least CAD$500,000 at a price or conversion
price of not less than CAD$0.20 per post-consolidation share. The
parties are currently negotiating the final terms of the financing
and the Company will announce further details once they have been
finalized. The proceeds of the financing will be used to meet existing commitments. Any securities issued in
connection with this financing will be subject to four month
statutory hold.
Rock Tech expects to
appoint a sponsor in connection with the Transaction; however a
sponsor has not yet been retained.
Completion of the
Transaction is subject to a number of conditions, including due
diligence, execution of definitive documentation including a formal
agreement, regulatory approval including TSX Venture Exchange
acceptance and Shareholder approval. The Transaction cannot close
until the required Shareholder approvals are obtained. There can be
no assurance that the Transaction will be completed as proposed or
at all.
In connection with
the Transaction, a Finder's Fee of 4% of the total Transaction
value will be payable in shares of Rock Tech to BTI International
Limited.
Investors are
cautioned that, except as disclosed in the disclosure document to
be prepared in connection with the Transaction, any information
released or received with respect to the reverse takeover may not
be accurate or complete and should not be relied upon. Trading in
the securities of Rock Tech Lithium Inc. should be considered
highly speculative.
Trading in the common
shares of Rock Tech will remain halted pending further filings with
the Exchange. Additional information will be provided in subsequent
news releases and prior to any resumption in trading.
The TSX Venture
Exchange has in no way verified the merits of the proposed
transaction and has neither approved nor disapproved the contents
of this press release.
On behalf of the Board of
Directors,
"Afzaal
Pirzada"
Afzaal Pirzada, P.Geo.
Director, Vice President of Exploration
and interim CEO
For more information, please contact:
Brad Barnett
Vice President of Corporate Finance and Development
Rock Tech Lithium Inc.
789 West Pender Street, Suite 1205
Vancouver, B.C., V6C 1H2
Telephone: (604) 688-1140
Facsimile: (604) 688-1173
Email:
bbarnett@rocktechlithium.com
Disclaimer and Cautionary Statement Regarding Forward-Looking
Information
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 press release. This news release
shall not constitute an offer to sell or the solicitation of an
offer to buy securities in any jurisdiction.
All
statements, trend analysis and other information contained in this
press release relative to markets about anticipated future events
or results constitute forward-looking statements. Forward-looking
statements are often, but not always, identified by the use of
words such as "seek", "anticipate", "believe", "plan", "estimate",
"expect" and "intend" and statements that an event or result "may",
"will", "should", "could" or "might" occur or be achieved and other
similar expressions. Forward-looking statements are subject to
business and economic risks and uncertainties and other factors
that could cause actual results of operations to differ materially
from those contained in the forward-looking statements.
Forward-looking statements are based on estimates and opinions of management at the
date the statements are made. The Company does not undertake any
obligation to update forward-looking statements even if
circumstances or management's estimates or opinions should change
except as required by applicable laws. Investors should not place
undue reliance on forward-looking statements.
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