Ituna Capital (TUN.P-V) to merge with Clear Creek Resources (CCR-V) as Qualifying Transaction (QT).
Jan 17, 2014 - NR
Ituna Capital Corp. has entered into a letter of intent (LOI) with Clear Creek Resources Ltd. (CCR) executed on Jan. 16, 2014. CCR is a non-listed British Columbia mining exploration reporting issuer incorporated on March 21, 2011. It is anticipated the acquisition will be structured as a "three cornered" amalgamation between the Company, CCR and, a wholly-owned subsidiary of the Company ("Subco") whereby CCR will amalgamate with Subco (the "Transaction"). It is proposed that the amalgamated entity ("Amalco") will be named "Tarku Resources Ltd". Under the proposed Transaction, each outstanding CCR common share will be exchanged for one common share of the Company. In consideration, the Company will receive one common share of Amalco for every Ituna common share issued to the CCR shareholders. On Completion of the Transaction, Amalco will be a wholly-owned subsidiary of the Company. The Company has been advised that no party holds a controlling interest in CCR. It is expected that the Transaction will be considered the Company's Qualifying Transaction for a CPC under the rules of the TSX Venture Exchange (the "Exchange"). The Transaction will result in an aggregate of 11,375,000 Ituna common shares being issued to CCR shareholders. Upon completion of the Qualifying Transaction, Ituna's current shareholders will hold 25.4% and CCR shareholders will hold 74.6% of the issued and outstanding shares of the resulting Company (the "Resulting Issuer"). The Resulting Issuer will be a Tier 2 Issuer in the Mining Industry segment of the Exchange. At this time a sponsor has not yet been retained, and the Company will be seeking a waiver to sponsorship from the Exchange. The completion of the Transaction will include the following matters, terms and conditions:
The parties shall carry out due diligence on or before January 31, 2014 (the "Due Diligence Period") and close the Transaction on or before March 14, 2014, or such later dates as may be agreed to in writing by the parties;
on closing of the Transaction the proposed board will include Bernie Kennedy, Glen Diduck, Timothy Termuende and Jason Weber. Mr. Kennedy will be the President and CEO, Glen Diduck will be the Chief Financial Officer and Timothy Termuende will be the Chairman of the Board. Tim J. Termuende, B.Sc., P.Geo., is a professional geologist with over 35 years of experience in the mineral exploration industry and has worked on exploration projects throughout North, Central, and South America. He is a founder and is the President and Chief Executive Officer of Eagle Plains Resources Ltd. and Omineca Mining and Metals Ltd. and was formerly the President and CEO of Copper Canyon Resources Ltd., which successfully merged with NovaGold Canada Inc. Bernie Kennedy is a corporate communications professional and has over 17 years in the mineral exploration industry, including working with the Discovery Group of mining companies. In 2007, he started BMK Communications, a partnership focused on training investor relations personnel servicing mineral exploration companies. Glen John Diduck, CA, has over 30 years of experience in public accounting focusing on accounting, audit and taxation of small to medium sized businesses. He is a Director and the CFO of Eagle Plains Resources Ltd., Omineca Mining and Metals Ltd., and Northern Freegold Resources Ltd. and was also a prior director and the CFO of Copper Canyon Resources Ltd. Jason Weber, B.Sc., P.Geo. has over 20 years in the mineral exploration industry with his most recent position being the President and CEO of Kiska Metals Corporation. All individuals are based in British Columbia; CCR has entered into a binding option agreement (the "Option") with Eagle Plains Resources Ltd. ("Eagle Plains") to earn an undivided 60% interest in and to certain uranium mineral claims situated in Saskatchewan known as the Tarku Property (the "Property"). Eagle Plains has recently spent over $100,000 in exploration expenditures on the Property and it is expected to have sufficient geological merit to be designated a "Qualifying Property" under Exchange policies. A National Instrument 43-101 compliant report detailing 2013 exploration work is pending;
The terms of the Option include, in installments over five (5) years, cash payments totaling $500,000 ($10,000 of which was paid upon entering into the Option) and the issuance of a total of 1,200,000 shares to Eagle Plains, and the incurring of exploration expenditures totaling $5 million, to acquire a 60% interest in the Property. In addition, CCR will have the right to earn an additional 15% interest in the Property (for a total interest of 75%) by paying 100% of all exploration and development costs to complete a bankable feasibility study on the Property and by making an additional cash payment to Eagle Plains of $1 million; It is expected that of the 11,375,000 shares to be issued by the Company to shareholders of CCR, up to 7,030,000 shares will be made subject to escrow on terms similar to that which are imposed on all principals of the Company under the policies of the Exchange. The material terms of the escrow will allow for the phased time release of shares over a three (3) year period beginning from final Exchange approval of the Transaction, with an initial release of 10% at the time of such approval and 15% of the escrowed shares being released every 6 months thereafter; The LOI is intended to be a non-binding until the expiry of the Due Diligence Period. The parties will seek to negotiate definitive agreements generally consistent with the terms set out in the LOI, but intend that no significant legal rights or obligations between them will come into existence until the expiration of the Due Diligence Period, at which time the LOI shall be binding on the parties;
Although the parties have initially agreed that the Transaction will be in the form of a three- cornered amalgamation, it is possible that other corporate structures will be contemplated, based on pending tax and corporate legal advice. It is expected, but not certain, that approval of the Transaction by the shareholders of the Company will not be required; and Closing of the Transaction is subject satisfactory due diligence by both parties, the approval of both the Company and CCR's board of directors, CCR shareholder approval and the receipt of all necessary regulatory approvals and Exchange approval.
As of January 15, 2014 CCR had working capital of $589,800. Its fiscal year end is September 30, and its audited financial statements for the period ending September 30, 2013 have been completed and are filed on SEDAR. The Company may seek to settle a certain amount of outstanding debt at the same time as it seeks Exchange approval of the Transaction, at such prices as may be agreed by the debtor(s), the Company and the Exchange.
There are no non-arms length parties to Ituna that are insiders of CCR. The proposed Transaction does not constitute a non-arms length transaction.
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 management information circular or filing statement to be 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. |
