Majescor Resources (MJX-V) Nov 27, '14 is pleased to announce that it has entered into a non-binding letter of intent with Advantagewon Oil Corp., an arm's length private company, dated October 31, 2014 (the "Letter of Intent"), for a business combination between the Corporation and Advantagewon (the "Proposed Transaction"), pursuant to a share exchange, amalgamation, plan of arrangement or such other comparable form of transaction as determined by the Corporation and Advantagewon following a review of all relevant tax, corporate and securities law considerations.
The Proposed Transaction will constitute a reverse take-over of the Corporation under the policies of the TSX Venture Exchange ("TSX-V") and is intended to list Advantagewon on the TSX-V as a Tier 1, oil and gas issuer.
Proposed Transaction
Pursuant to the terms of the Letter of Intent, and subject to: (i) regulatory, shareholder, director and other approvals as may be required; (ii) the completion of satisfactory due diligence by both parties; (iii) the closing of the Financing (as defined below); (iv) the determination of the structure of the Proposed Transaction, and (v) other conditions contained in the Letter of Intent, the parties have agreed to negotiate and enter into a definitive agreement (the "Definitive Agreement") on or before December 15, 2014 (the "Termination Date"). Further details on the Proposed Transaction, including the proposed consideration and how such consideration will be paid, and on the terms of the Definitive Agreement will be press released once finalized. Pursuant to the Definitive Agreement and the Proposed Transaction, Advantagewon shareholders will become shareholders of the Corporation. However, there is no assurance that the parties will successfully negotiate or enter into the Definitive Agreement.
Majescor currently has approximately 13,021,109 common shares issued and outstanding. The Corporation intends to complete a consolidation of its common shares on a 4 for 1 basis with the result that there will be approximately 3,255,277 common shares issued and outstanding. The Corporation's outstanding warrants and options will also be consolidated on a 4 for 1 basis.
Unless all of the conditions precedent contained in the Letter of Intent are satisfied or waived before the Termination Date, the Letter of Intent will automatically terminate without further notice from the parties.
Further, the Letter of Intent may be terminated by written consent of both Majescor and Advantagewon at any time. There is no assurance that the transaction contemplated by the Letter of Intent will be completed.
Proposed Financing
The Proposed Transaction is also subject to Advantagewon completing a private placement financing (the "Financing"), raising in the aggregate not less than $2,000,000 and up to $4,000,000, with Majescor raising subscriptions of not less than $500,000 as part of the Financing, on terms and conditions to be mutually agreed by both parties. Further details regarding the Financing will be press released once finalized.
Sponsorship
Sponsorship of a reverse take-over is required by the TSX-V unless an exemption is granted in accordance with TSX-V policies. Majescor intends to apply for an exemption from the sponsorship requirements; however, there is no assurance that Majescor will obtain the exemption. Majescor intends to include any additional information regarding sponsorship in a subsequent press release.
Board of Directors of the Resulting Issuer
Upon completion of the Proposed Transaction, the board and management team of the resulting issuer will be reconstituted and the resulting issuer will be led by an experienced management team with a track record in developing and managing international start-up oil and gas companies. Upon completion of the Proposed Transaction, the board of directors of the resulting issuer will include the following individuals:
Paul Haber, C.A., C.P.A., Chairman of the Board - Paul has significant amount of public company experience. He is the Chairman and Managing Director of BlackBirch Capital Inc., a private merchant bank with a focus on developing public companies.
Stan Dimakos, Director - Stan is a principal in the Rockford Group, a real estate investment company with holdings in commercial and residential investment properties. He is also the founder and owner of the iconic Champ Burger restaurant in Primrose, Ontario. Currently, Stan serves on the board of PACE credit union and savings, with over $800 million in assets. Stan holds a business degree from Ryerson University.
André Audet, B.Comm, B.S.Geo, CIM, Director - André serves as the President of Pan Caribbean Minerals Inc. He has been the Chairman of the Board and President and Chief Executive Officer of Everton Resources Inc. since December 8, 2003. He has more than 25 years of experience in the stock brokerage industry, in the financing of public companies and in corporate management/directorships of public mineral exploration companies.
A further press release will be issued in due course providing further details with respect to the proposed board of directors of the resulting issuer.
About Advantagewon
Advantagewon was incorporated under the Business Corporations Act (Ontario) on July 10, 2013, and is a widely-held privately owned, Toronto-based oil and gas company with a focus on development opportunities in Texas, U.S.A. The assets to be acquired in connection with the Proposed Transaction are owned by Advantagewon Oil US Corp. incorporated under the laws of the State of Texas, U.S.A. Advantagewon currently owns two properties in Texas: (i) the Saratoga property located in Hardin County, Texas (the "Saratoga Property"); and (ii) the La Vernia property located in Guadalupe County, Texas (the "La Vernia Property").
Saratoga Property
The Saratoga Property contains 260 acres and is located near the Spindletop oil discovery of 1901. A National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities ("NI 51-101") reserves report, dated November 1, 2013 (the "Saratoga Reserve Report"), indicates gross proved plus probable reserves of 1.61 million barrels of oil and net proved plus probable reserves of 1.20 million barrels of oil on the Saratoga Property.
A well drilled by Advantagewon on the Saratoga Property in May 2014, resulted in an initial production of 100 barrels of oil per day ("bbls/d") from the Cook Mountain Formation Yegua Group. The total current production of that well as of November 17, 2014 is approximately 105 bbls/d. The Saratoga Reserve Report indicates that additional oil reserves are present in other locations updip to wells that watered-out in previous years. Due to the strong water drive flow and pressures of the Cook Mountain formation updip oil from prior oil well producers in this formation was not recovered, leaving several potential drilling locations.
Advantagewon anticipates drilling two to three additional wells on the Saratoga Property. Advantagewon's management expects that Caswell # 12 will spud on November 29, 2014.
La Vernia Property
The La Vernia Property is a low-risk, low-cost infill drilling development project. Advantagewon is currently acquiring additional land in the area, with a goal of acquiring 6,000 acres. This project is currently not producing.
A NI 51-101 reserves report, dated November 1, 2013 (the "La Vernia Reserve Report"), indicates gross proved plus probable reserves of approximately six million barrels of oil equivalent ("MMBoe") and net proved plus probable reserves of 4.7 MMBoe on all available leases, with potential production coming from shallow (i.e. less than 1100 feet) Cretaceous and Tertiary strata. In addition, potential reservoirs are present at a depth of approximately 1,000 to 3,500 feet. This area is in the heart of the South Texas oil fields (25 miles southeast of San Antonio). Roads and pipeline infrastructure and service companies are excellent, allowing for easy development of the field.
C. Tucker Barrie, President and Interim CEO of Majescor states: "The transaction with Advantagewon Oil Corp. will provide a successful conclusion to Majescor's effort to restructure, and it is an important step forward to realize Advantagewon's full development potential as an emerging junior oil and gas company."
Mr. Barrie continued: "It is important to emphasize the quality of the opportunity Advantagewon brings to Majescor shareholders with its focus on small yet profitable oil and gas opportunities in Texas. Advantagewon has one producing oil well at its Saratoga Salt Dome area property, a second project under development in Guadalupe County, and a technical team with a strong background in the development of Texas oil and gas properties. Advantagewon is poised to deliver significant results and generate new shareholder value."
About Majescor
Majescor was incorporated under the Canada Business Corporations Act on February 23, 1996 and is a TSX-V listed junior resource (mining) company. Majescor, through SIMACT Alliance Copper-Gold Inc., a wholly-owned subsidiary of the Corporation, holds a majority interest in SOMINE SA, a registered Haitian Company. SOMINE SA in turn holds 100% mineral rights to the Douvray porphyry copper-gold project ("Douvray Project") and the Faille B vein gold project ("Faille B Project") located in the Northeast mineral district of the Republic of Haiti, near the port-city of Cap-Haitian. In addition, Majescor holds a 0.5% gross operating royalty for the Brauna #3 kimberlite diamond project, currently being developed by Lipari Mineração Ltda. a private Brazilian mining company in Bahia, Brazil (the "Royalty"). Pursuant to the Letter of Intent, it is proposed that the Majescor will divest itself of all of its mining and other assets, with the exception of the Royalty, and settle or discharge all liabilities prior to completion of the Proposed Transaction.
Additional Information
In accordance with the policies of the TSX-V, the Corporation's shares are currently halted from trading and will remain so until such time as the TSX-V determines.
If and when a Definitive Agreement between the Corporation and Advantagewon is executed, the Corporation will issue a subsequent press release in accordance with the policies of the TSX-V containing the details of the Definitive Agreement and additional terms of the Proposed Transaction.
Completion of the Proposed Transaction is subject to a number of conditions, including, but not limited to, TSX-V acceptance and disinterested shareholder approval. The Proposed Transaction cannot close until the required shareholder approval 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 management information circular or 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 Majescor should be considered highly speculative.
The TSX-V has in no way passed upon the merits of the Proposed Transaction and has neither approved nor disapproved the contents of this press release.
The reserves information in this news release has been reviewed and approved by John Thibeaux, P.E. (Texas), a qualified reserves evaluator under NI 51-101.
The technical information in this news release has been reviewed and approved by C. Tucker Barrie, Ph.D., P. Geo. (Ontario), a qualified person under National Instrument 43-101 Standards of Disclosure for Mineral Properties. Mineral resources are not mineral reserves and do not have demonstrated economic viability.
Legal Advisories
Additional information about the Corporation is available under Majescor's profile on SEDAR at www.sedar.com.
Certain natural gas volumes have been converted to barrels of oil equivalent (BOE) on the basis of one barrel to six thousand cubic feet. Any figure presented in BOEs may be misleading, particularly if used in isolation. The calculation of BOEs is based on a conversion ratio of six thousand cubic feet of natural gas to one barrel of oil based on an energy equivalency conversion primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. In addition, given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of six to one, utilizing a BOE conversion ratio of 6 thousand cubic feet: 1 barrel may be misleading as an indication of value.
Majescor Resources Inc.
C. Tucker Barrie, Ph.D., P. Geo.
President and Interim CEO
613-241-5333
613-424-5682 (FAX)
barriect@sympatico.ca
www.majescor.com
Advantagewon Oil Corp.
Paul Haber
President
416-318-6501
phaber@blackbirchcap.com
www.advantagewonoilcorp.com |
