Southern Sun Minerals (SSI.P-V) Hmmmmm interesting for next cycle.....
July 5, 2013 - News Release
Southern Sun Minerals Inc. has entered into a letter of agreement dated July 2, 2013, with Rock Star Resources Inc. The acquisition
Southern Sun was incorporated on June 2, 2011, and completed its initial public offering on April 18, 2013. Since the listing of its common shares on the TSX Venture Exchange on April 22, 2013, Southern Sun's business has been restricted to the identification and evaluation of businesses for the purpose of completing its qualifying transaction.
The LOA sets out by mutual agreement, whereby Southern Sun will purchase all of the common shares of Rock Star. Rock Star is a private company incorporated under the laws of British Columbia. Rock Star wholly owns its subsidiary, Rock Star Resources U.S. Inc., a private company incorporated under the laws of the state of Alaska that owns an option to acquire 100 per cent of the Galleon property claims in the state of Alaska. Southern Sun will pay for the purchase of all of the common shares of Rock Star by issuing 1.74 million Southern Sun shares proportionately to the shareholders of Rock Star.
The acquisition, if completed, will constitute Southern Sun's qualifying transaction under Exchange Policy 2.4 -- Capital Pool Companies. The acquisition is a non-arm's-length transaction as both Southern Sun and Rock Star have common directors and shareholders, who are Harry Barr, John Oness and Kevin Lawrence. As a result, shareholder approval to the acquisition is required for this acquisition. Upon completion of acquisition, Southern Sun expects to be listed as a Tier 2 mining issuer on the exchange.
The Galleon property
The Galleon property is 36 quarter-section mining claims located in the Bonnifield mining district of Alaska comprising a total of approximately 2,331 hectares. All claims are 160 acres, and located in the Fairbanks and Nenana recording districts in Alaska. Southern Sun has undertaken to commission an updated National Instrument 43-101-compliant geological report on the property.
Exploration including mapping, rock and soil sampling, trenching, and limited drilling has been conducted on the property intermittently since its discovery in 1975 by Resource Associates of Alaska. In 2011, Rock Star conducted dipole-dipole complex resistivity induced polarization geophysics over 3.91 line kilometres. Known mineralization on the property occurs at three prospects; however, this observation must be qualified by stating that much of the property is virtually unexplored.
The option, as granted pursuant to an amended mineral property option agreement, requires the following cash payments to be made to the Anglo Alaska Gold Corp.:
Pay to the optionor a total of $165,000 in the following manner:
- $35,000 by Nov. 30, 2013;
- An additional $40,000 by Nov. 30, 2014;
- An additional $45,000 by Nov. 30, 2015;
- An additional $45,000 by Nov. 30, 2016.
Share issuances to the optionor:
- Issue to the optionor a total of 600,000 non-assessable common shares in the capital stock of the optionee as follows:
- 500,000 common shares by Nov. 30, 2013;
- An additional 100,000 common shares by Aug. 30, 2014.
Further, to maintain the option, the optionor must make a minimum of $400,000 (U.S.) cumulative expenditures for exploration and development work in the following manner:
- Provide financing of minimum cumulative expenditures for exploration and development work on the claims under the direction of a qualified geologist or project engineer in the following manner:
- $100,000 of expenditures to be incurred, or caused to be incurred, by the optionee on the claims by Dec. 31, 2011 (paid);
- No less than a further $100,000 of cumulative expenditures to be incurred, or caused to be incurred, by the optionee on the claims by Dec. 31, 2013;
- No less than a further $200,000 of expenditures to be incurred, or caused to be incurred, by the optionee on the claims by Dec. 31, 2014.
In addition, the optionor will retain a 1-per-cent net smelter royalty. Southern Sun may purchase the 1-per-cent net smelter return royalty at any time for a one-time payment of $1-million.
SSI will not complete a concurrent private placement in connection with the acquisition.
Conditions precedent
The parties' obligations to complete the acquisition are subject to the satisfaction of customary conditions precedent including:
- Majority approval of the minority shareholders of Southern Sun, as well as majority approval of the shareholders of each of Rock Star and Anglo Alaska Gold;
- If necessary, a revised option agreement between Southern Sun and Anglo Alaska;
- All necessary approvals of the exchange, and all other regulatory authorities and third parties to the acquisition being obtained;
- The parties being satisfied with the results of their respective due diligence reviews in connection with the acquisition.
Directors, officers and insiders
Upon completion of the acquisition, the directors, officers and insiders of the resulting issuer are anticipated to be the following.
Mr. Barr, chief executive officer, chairman and director
Mr. Barr is currently the chief executive officer, corporate secretary, chairman of the board of directors and a director of Southern Sun. He is currently the president and a director of Rock Star. Mr. Barr has over 30 years experience in the mining industry, founding Freegold Ventures Ltd., CanAlaska Uranium Ltd., Pacific North West Capital Corp. and Fire River Gold Corp. Over the last 15 years, Mr. Barr has also acted in various capacities to restructure El Nino Ventures Inc. and Next Gen Metals Inc. Mr. Barr is also currently on the board of directors of Copper Reef Mining Corp.
Gordon Chunnett, president, chief financial officer, chief operating officer and director
Mr. Chunnett is currently the president, chief financial officer, chief operating officer and a director of Southern Sun. Mr. Chunnett was formerly head of geology from Anglo Platinum Ltd., where he worked for 28 years of the 31 years with Anglo-associated companies and supervised a large team on several continents. Mr. Chunnett qualified at Rhodes University, and has extensive experience in platinum mining, mine exploration and development, and exploration for platinum group elements in South Africa, Canada, China and Zimbabwe. He has been involved in resource evaluation, mine planning and platinum mine production scheduling. Mr. Chunnett is currently the owner of G. Chunnett Consulting, an international geological consulting firm.
Mr. Oness, director
Mr. Oness is currently a director of both Southern Sun and Rock Star. Mr. Oness has extensive expertise in all aspects of corporate management with strengths in strategic planning, business development and investor relations for public companies. He has served as a director, executive and consultant to public companies in the resource and non-resource fields over a 20-year career. Mr. Oness is a director and the chief operating officer of El Nino Ventures. He is currently the COO of Next Gen Metals; senior vice-president, business and corporate development, of Pacific North West Capital; and a past director of Alix Resources Corp. and Gatekeeper Systems Inc.
Mr. Lawrence, director
Mr. Lawrence is currently a director of each of Southern Sun and Rock Star. Mr. Lawrence is an adviser to chief executive officers and executive teams at SGI Synergy Group Inc., his wholly owned company assisting entrepreneurs and business leaders in increasing revenue, profitability and productivity in business, which was established in 1996. Mr. Lawrence is currently a director of Next Gen Metals, as well as the chairman of its audit committee.
Qualified persons statement
This news release has been reviewed and approved for technical content by Ali Hassanalizadeh, MSc, PGeo, a qualified person under the provisions of National Instrument 43-101.
General
Completion of the acquisition 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 acquisition cannot close until the required shareholder approval is obtained. There can be no assurance that the acquisition will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the management information circular to be prepared in connection with the acquisition, any information released or received with respect to the acquisition 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. |
