TOKYO, JAPAN & VANCOUVER,
CANADA / ACCESSWIRE / April
16, 2014 / Kaizen Discovery Inc. (TSXV: KZD) and
West Cirque Resources Ltd. (TSXV: WCQ) are pleased to announce the
signing of a definitive agreement that would see Kaizen acquire all
of the common shares of West Cirque in an all-share
transaction.
Under the terms of the planned acquisition, each West
Cirque shareholder would receive one-half of one Kaizen common
share for each West Cirque common share.
West Cirque is a Vancouver-based mineral exploration
company with seven highly prospective copper-gold porphyry
exploration projects in British Columbia, Canada - three of which
are subject to an earn-in agreement with
Freeport-McMoRan of Canada Limited.
Matthew Hornor, President and Chief Executive Officer of
Kaizen, said the planned acquisition of West Cirque is a
significant step in the strategy of positioning Kaizen for future
growth, and is expected to gain the
support of its strategic financing partner, ITOCHU, in pursuit of
Kaizen's objective of delivering minerals to Japan's industrial
sector.
"The combination of Kaizen's existing portfolio of
exploration projects in Australia and Africa, and West Cirque's
portfolio in Canada, will establish a stronger company with an
impressive and diverse pipeline of projects," Mr. Hornor
added.
West Cirque President and Chief Executive Officer Steve
Vanry added: "Our transaction with Kaizen is truly complementary,
as it combines our strong technical expertise with a group that has
a long-established track record of exploration success and mine
financing. The combined entity offers shareholders early-stage
ownership in a uniquely positioned enterprise focused on rapidly
becoming a dominant player in the minerals discovery and
development industry."
Expected support from strategic
partner ITOCHU
ITOCHU Corporation, a leading Japanese trading house,
holds a 6.3% stake in Kaizen. An earlier
framework agreement entered into between Kaizen and ITOCHU in
January 2014 established a collaborative working arrangement under
which both companies can evaluate opportunities to explore and
develop selected, high-quality, international mineral
projects. Based on the signed framework agreement,
ITOCHU has the right of first offer to
enter into projects introduced by Kaizen. After completing the
planned acquisition of West Cirque, Kaizen expects ITOCHU to
participate in West Cirque's exploration projects.
The details of the framework
agreement were provided in Kaizen's January 30, 2014,
news release available at
http://www.kaizendiscovery.com/i/pdf/news/NR-1-30-2014.pdf.
Highlights of the West Cirque
transaction
-
-- New opportunities would be provided to apply
proprietary geophysical and exploration technologies available to
Kaizen under licence from its controlling shareholder, HPX TechCo,
to the exploration of West Cirque's projects.
Outline of the West Cirque
portfolio
Since 2011, West Cirque has been focused on advancing
porphyry copper-gold prospects in British Columbia's main porphyry
belts, the Early Mesozoic arcs of the Stikine and Quesnel terranes.
In 2013, West Cirque partnered with Freeport-McMoRan
of Canada Limited to explore three projects in
northern Stikine terrane -- Castle, Tanzilla and Pliny. West Cirque
and Freeport are planning to initiate the first drill test of the
large lithocap-associated porphyry target at Tanzilla in July 2014.
In southern Quesnel terrane, West Cirque has acquired a large land
position in the Aspen Grove copper belt, located halfway between
the Highland Valley and Copper Mountain mines. Initial exploration
of the Aspen Grove project in 2013 resulted in discovery of a
significant porphyry copper-gold target at the Par prospect. West
Cirque's projects are shown in the accompanying map.
Freeport can earn an initial 51% interest in the Castle,
Tanzilla and Pliny projects by funding expenditures of
C$8 million over a four-year period. Kaizen
expects to continue West Cirque's close working
relationship with Freeport.
Acquisition terms
Full details of the planned acquisition will be included
in a West Cirque management information circular
expected to be mailed to its shareholders in May 2014
in advance of a special meeting of shareholders and option holders
to be held on or before July 15, 2014. The circular will be
available for download at
http://www.sedar.com/.
Holders of West Cirque options on the effective date of
the acquisition will receive replacement Kaizen options in exchange
for their existing West Cirque options. The number of replacement
options and the exercise price of those options will be determined
and adjusted based on the exchange ratio of Kaizen and West Cirque
common shares. Following completion of the
transaction, West Cirque shareholders would hold approximately 9.8%
of the outstanding common shares of Kaizen.
Approvals required
The transaction will be subject to approval by 66.66% of
the votes cast by West Cirque shareholders and option holders
voting together as a single class.
Kaizen's controlling shareholder, HPX TechCo, supports the
transaction. To the extent required by the TSX Venture Exchange
(TSXV), Kaizen intends to satisfy any shareholder meeting
requirement through a written resolution of HPX TechCo.
The transaction also is subject to the satisfaction of
other customary closing conditions and deliveries, including the
approval of the Supreme Court of British Columbia; required TSXV
approvals; that there is no material adverse change to West Cirque
prior to completion of the arrangement; and a due diligence
condition in favour of Kaizen. A copy of the arrangement agreement
will be filed on SEDAR at
http://www.sedar.com/.
Pursuant to the transaction, Kaizen expects to issue
approximately 14.5 million common shares to
West Cirque shareholders on an undiluted basis. Kaizen will have
approximately 148.3 million common shares
and 11.6 million
options outstanding, pro forma after the transaction. These
figures include West Cirque options adjusted as to number and
exercise price, based on the exchange ratio of Kaizen and West
Cirque common shares.
Deal protections
The arrangement agreement includes customary
deal-protection provisions in favour of Kaizen, including a
customary non-solicitation covenant from West Cirque (except for
certain unsolicited approaches) and a break fee of
C$400,000 if, following an unsolicited superior
proposal, West Cirque wishes to terminate the arrangement agreement
and pursue that proposal. However, if an unsolicited, superior
proposal is to be pursued by West Cirque, Kaizen has a customary
five-day right to match such a proposal. The arrangement agreement
also provides for mutual limited expense reimbursements of
C$150,000 in certain circumstances.
Voting lock-up
agreements
Officers and directors of West Cirque have entered into
voting-support and lock-up agreements, totalling approximately
21.3% of the West Cirque common shares, by which they have agreed
to certain lock-up provisions in respect of their shares and to
vote their West Cirque shares and options in favour of the proposed
transaction. In addition, a shareholder of West Cirque owning
approximately 5.5% of the West Cirque common shares has agreed to
vote in favour of the transaction.
Board approvals
The Boards of Directors of both companies have determined
that the proposed transaction is in the best interests of their
respective companies based on a number of factors, including, in
the case of West Cirque, a fairness opinion, which concludes that
the consideration to be received by West Cirque shareholders is
fair, from a financial point of view. Each
company's Board of Directors also has unanimously approved the
terms of the transaction and West Cirque's directors will recommend
that their shareholders vote in favor of the transaction at its
shareholder meeting.
In the United States, the issuance of Kaizen securities
under the transaction will be conducted in reliance on the
exemption from registration requirements found in section 3(a) (10)
of the Securities Act of 1933.
Conference call on Tuesday,
April 22, 2014
Kaizen and West Cirque executives will host a telephone
conference call on Tuesday, April 22, at 12:00 p.m. Eastern time
(9:00 a.m. Pacific) to discuss the transaction and answer
questions.
The conference call may be accessed by dialling toll-free
+1-866-225-0198 in North America and toll-free +1-800-9559-6849
internationally. An operator will register participants.
About Kaizen
Discovery
Kaizen is a Canadian technology-focused, mineral exploration
company that was formed in late 2013 through a combination of
Concordia Resource Corp. and assets acquired from HPX TechCo Inc.,
a 100%-owned subsidiary of High Power Exploration Inc. With its
collaboration agreement with ITOCHU Corporation of Japan and access
to HPX TechCo's proprietary geophysical technology, Kaizen's
long-term growth strategy is to work with Japanese partners to
identify, explore and develop high-quality mineral projects that
have the potential to produce and deliver minerals to Japan's
industrial sector.
More information on Kaizen is available at
http://www.kaizendiscovery.com/
KAIZEN CONTACT INFORMATION
Matthew Hornor
President and CEO
+1-604-669-6446
matthew@kaizendiscovery.com
Bill Trenaman
VP, Investor Relations
+1-604-669-6446
bill@kaizendiscovery.com
About West
Cirque Resources
West Cirque is a mineral exploration company focused on
creating shareholder wealth by identifying, acquiring and defining
resources in world-class precious and base-metal projects in the
North American Cordillera.
More information on West Cirque is available at
http://www.westcirqueresources.com/
WEST CIRQUE CONTACT INFORMATION
Steve Vanry, CFA
President and CEO
+1-604-558-4604
svanry@westcirqueresources.com
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.
FORWARD-LOOKING STATEMENTS
Statements in this press release that are forward-looking
statements are subject to various risks and uncertainties
concerning the specific factors disclosed here and elsewhere in
both Kaizen's and West Cirque's periodic filings with Canadian
securities regulators. When used in this press release, words such
as "will, could, plan, estimate, expect, intend, may, potential,
should," and similar expressions, are forward-looking statements.
Information provided in this document is necessarily summarized and
may not contain all available material information. The terms of
the arrangement are subject to the Arrangement Agreement, the full
text of which will be made available on the SEDAR website at
www.sedar.com.
Forward-looking statements may include, without
limitation, statements regarding the completion and expected
benefits of the proposed transaction and other statements that are
not historical facts. Forward-looking statements are based on a
number of assumptions and estimates that, while considered
reasonable by management based on the business and markets in which
Kaizen and West Cirque operate, are inherently subject to
significant operational, economic and competitive uncertainties and
contingencies. Assumptions upon which forward looking statements
relating to the transaction have been made include that Kaizen and
West Cirque will be able to satisfy the conditions in the
Arrangement Agreement; that ongoing due diligence investigations of
Kaizen will not identify any materially adverse facts or
circumstances; that the required approvals will be obtained from
the shareholders of West Cirque; and that all required third party,
regulatory, stock exchange, court and government approvals will be
obtained. In addition, the factors described or referred to in the
section entitled "Risk Factors" in the MD&A of both companies
and which are available on the SEDAR website at www.sedar.com,
should be reviewed in conjunction with the information found in
this press release.
Although Kaizen and West Cirque have attempted to identify
important factors that could cause actual results, performance or
achievements to differ materially from those contained in the
forward-looking statements, there can be other factors that cause
results, performance or achievements not to be as anticipated,
estimated or intended. There can be no assurance that such
information will prove to be accurate or that management's
expectations or estimates of future developments, circumstances or
results will materialize. As a result of these risks and
uncertainties, the proposed transaction could be modified,
restricted or not completed, and the results or events predicted in
these forward looking statements may differ materially from actual
results or events.
Accordingly, readers should not place undue reliance on
forward-looking statements. The forward-looking statements in this
press release are made as of the date of this press release, and
Kaizen and West Cirque disclaim any intention or obligation to
update or revise such information, except as required by applicable
law, and neither Kaizen or West Cirque assume any liability for
disclosure relating to the other company herein.
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