Black Birch Acquisition II Corp. Announces Signing of Agreement in Principle with GS International Mining Co. Ltd.

/NOT FOR DISSEMINATION IN THE UNITED STATES OF AMERICA/

VANCOUVER, Jan. 7, 2013 /CNW/ - Black Birch Acquisition II Corp. (the "Corporation"), a Capital Pool Company listed on the TSX Venture Exchange (the "Exchange") (symbol: BBT.P), is pleased to announce that it has entered into a letter of intent (the "Letter of Intent") effective January 4, 2013 with GS International Mining Co., Ltd. ("GSI") to acquire Mineral Guangshou Ecuador S.A. of Ecuador (the "Acquisition").  Mineral Guangshou Ecuador S.A. ("Guangshou") holds a 70% interest in the Ecuador company, JVChinapintza Mining S.A. ("JV Chinapintza"), which holds a 100% interest in and title to an Ecuador gold mineral property located in the Viche Conguime I Concession of the Condor Gold Project in the Zamora Province of Ecuador (the "Chinapintza Property").

The Acquisition, if completed, will constitute the Corporation's "Qualifying Transaction" (as defined in Exchange Policy 2.4).  GSI is an arm's-length party and, as such, the Acquisition will not be subject to shareholder approval. GSI is owned and controlled by Mr. Guoqing Huang and Mr. Huang will become a control person of the Corporation upon completion of the Acquisition.

The Letter of Intent will be followed by the negotiation of a definitive agreement (the "Definitive Agreement") setting forth the detailed terms of the Acquisition and containing the terms and conditions set out in the Letter of Intent and such other terms and conditions as are customary for transactions of the nature and magnitude contemplated in the Letter of Intent.

Proposed Acquisition

Pursuant to the terms of the Letter of Intent, it is currently contemplated that the Acquisition will be effected by way of a three cornered amalgamation, whereby a new wholly-owned subsidiary of the Corporation to be incorporated under the laws of British Columbia ("BB Subco") will amalgamate with a new subsidiary of GSI to be incorporated under the laws of British Columbia ("GSI Subco") as the new holder of 100% of Guangshou immediately prior to completion of the Acquisition. Under the amalgamation, the Corporation will acquire, in exchange for 35,000,000 common shares of the Corporation issued to GSI (95%) and to another minority shareholder (5%) together with such other common shares exchanged on a one-for-one basis under the Private Placement (described below), all of the issued and outstanding shares of GSI Subco being amalgamated with the Corporation's BB Subco to form an amalgamated company ("Amalco") holding 100% of Guangshou.

As a result of the Acquisition, Amalco will become a wholly-owned subsidiary of the Corporation, which will have indirectly acquired a 70% interest in the Chinapintza Property. Upon the completion of the Acquisition, Guangshou will become a wholly owned subsidiary of the Corporation and the Corporation will carry on the business of Guangshou, and the Corporation will change its name to "Chinapintza Mining Corp." or such other name as determined by the Corporation (the "Name Change").

The Acquisition is subject to the payment of a finder's fee in accordance with and subject to the policies and approval of the Exchange.

Proposed Private Placement

The parties intend that the Corporation will, concurrently with the closing of the Acquisition and subject to Exchange approval, complete a private placement for minimum gross aggregate proceeds of up to $500,000 (the "Private Placement"). The price per security will be determined by the Corporation and the lead agent, and is anticipated to be not be less than $0.10 per security. The parties anticipate the Private Placement will involve an offering of common shares.  The Private Placement may be brokered by a syndicate of investment dealers or non-brokered.  The Corporation is currently involved in discussions with prospective agents with the intention of settling the terms of an engagement letter in connection with the Private Placement. The parties anticipate that the agents will be paid customary compensation for their services. If required, the Corporation will obtain sponsorship for the Transaction.

The proceeds of the Private Placement will be used to fund the business plan of the Corporation on closing of the Acquisition and for general working capital purposes.

Conditions to Entering into the Definitive Agreement

The conditions to entering into the Definitive Agreement will include the following:

  1. the approvals from each of the boards of directors of the Corporation and GSI;

  2. the completion of due diligence review by each of the Corporation and GSI other than confirmatory due diligence; and

  3. the engagement of a sponsor or an agent in connection with the Acquisition and  the Private Placement, unless exempt pursuant to the policies of the Exchange.

Conditions to Closing the Acquisition

The closing of the Acquisition will be subject to several conditions, including, but not limited to the following:

  1. the execution of the Definitive Agreement;

  2. waiver from Condormining Corporation S.A. ("Condormining") of its rights of first refusal pursuant to the Shareholders Agreement between Condormining and Guangshou dated November 2, 2012 in respect of the Corporation's acquisition of a 70% interest in JV Chinapintza by the acquisition of Guangshou;

  3. the receipt of all regulatory, corporate and third party approvals, including the approval of the Exchange and compliance with all applicable regulatory requirements and conditions necessary to complete the Acquisition;

  4. the completion of the Private Placement (unless waived by the Corporation);

  5. the completion of the Name Change;

  6. the maintenance of the Corporation's listing on the Exchange;

  7. minimum valuation of the Chinapinza Property of at least $3.5 million;

  8. the confirmation of the representations and warranties of each party to the Definitive Agreement as set out in such agreement;

  9. the absence of any material adverse effect on the financial and operational condition of the assets of each of the parties to the Definitive Agreement;

  10. the delivery of standard completion documentation including, but not limited to legal opinions, officers' certificates and certificates of good standing or compliance; and

  11. other mutual conditions precedent customary for a transaction such as the Acquisition.

Directors, Officers and Other Insiders

On completion of the Acquisition it is anticipated that the board of the Resulting Issuer (as defined in Exchange Policy 2.4) will be increased from three to at least four members and that the directors, senior officers and insiders of the Resulting Issuer will be:

Mr. Guoqing Huang, Chief Executive Officer and Director

Mr. Huang was a founder and has been the Chairman since 1991 of the Guangshou Group Co., Ltd. of China, which is a trans-regional and multi-industry group enterprise existing under the laws of China. It has many Chinese domestic and international subsidiaries and engages mainly in the industries of mining development, engineering, construction. Mr. Huang was General Manager of Wenzhou Ouhai Huaye Industrial Ltd. from 1993 to 1998 and was Associate Director of Wenzhou Exploration and Engineering Institute from 1991 to 1993. Previously, Mr. Huang worked as a Geologist in No. 11 Geology Team of Zhejiang Province, China from 194 to 1990. Mr. Huang holds a Bachelor of Geology degree from Chengdu Geology College, China.

Mr. Dong Sheng Li, President, Chief Operating Officer and Director

Mr. Li is currently and has been a director of the Corporation since November 2009. Mr. Li has held a position of technologist at AMEC Earth and Environmental Limited (a provider or environmental, geotechnical and project management services) since July 2003. Prior thereto, Mr. Li worked as an engineer at Fujian Geological Engineering Company in China. Mr. Li holds a Bachelor of Engineering from China University of Geology.

James Xiang, Director

Mr. Xiang is currently and has been a director of the Corporation since November 2009. Mr. Xiang is the President of CNX Consulting Inc. which provides accounting and financial advisory services to Chinese companies that are seeking listing, financing and M&A opportunities in North America. Since April 2011, Mr. Xiang has been a director of Plains Creek Phosphate Corporation (TSXV: PCP). From December 2008 to April 2010, Mr. Xiang served as the CFO of IND DairyTech Limited (TSXV: IND). Since August 2010, Mr. Xiang has been a Director of Black Birch Capital Acquisition II Corp. (TSXV: BBT.P) a capital pool company. From January 2006 to May 2009, Mr. Xiang served as CFO of GobiMin Inc. (TSXV: GMN). Prior to that, Mr. Xiang worked in corporate finance management with a few TSX Venture Exchange listed companies, including COM DEV International Ltd., ATS Automation Tooling Systems Inc. and CFM Corporation. Mr. Xiang holds a Bachelor of Arts from Huazhong University of Science & Technology in China and a Masters of Business Administration from York University. Mr. Xiang is a Certified Management Accountant (Ontario) and a Certified Public Accountant (Delaware).

Paul Haber, Director

Mr. Haber is currently and has been a director of the Corporation since November 2009. Mr. Haber is the Managing Director of Haber and Co. Ltd. which provides corporate finance and capital market advisory services to small and medium sized businesses. Mr. Haber was most recently  Chief Financial Officer of New Sage Energy Corp. (TSXV:NSG), CFO of Oremex Silver  Inc. (TSXV:OAG), and CFO of Oremex Gold Inc. (TSXV:OAU) which was the qualifying transaction  of Black Birch Capital Acquisition I Corp. (TSXV: BBT.P) of which Mr. Haber was the President, CEO, CFO and Secretary.  Mr Haber has also been the  Interim CFO of CRS Electronics Inc. (TSXV:LED), and he previously served as interim CFO at Nesscap Energy Inc. (TSXV:NCE), Migao Corporation (TSX:MGO) and Silverbirch Inc. (TSXV:SVB). Currently, Mr. Haber is a director of China Health & Diagnostic Inc.  (TSXV:CHO), High Desert Gold Corp. (TSX:HDG), South American Silver Corporation (TSX:SAC). From 2004 through March 2007, Mr. Haber was Vice President, Chief Financial Officer and Corporate Secretary of QuStream Corporation. From 2001 to 2004, Mr. Haber was Senior Vice President and Chief Financial Officer at Protana Inc. Mr. Haber was a founder and director of  Capital Pool Companies named Penfold Capital Acquisition Corporation,  China One Corporation and Black Birch Capital Acquisition I Corp. Each of these Capital Pool Companies successfully completed a Qualifying Transaction. Mr. Haber holds an honours BA from the University of Toronto and is a Chartered Accountant, Certified Public Accountant and Chartered Director.

In addition to the directors and senior officers referred to above, GS International Mining Co., Ltd., which is owned and controlled by Mr. Huang will also be an insider of the Resulting Issuer. The Corporation is finalizing arrangements for the Chief Financial Officer and Corporate Secretary for the Resulting Issuer who will have experience and qualifications suitable for a Exchange-listed junior mining company and more information will be provided once the arrangements are finalized.

General

In accordance with Exchange policies, the Corporation's common shares have been halted from trading and will remain so until the documentation required by the Exchange for the Qualifying Transaction can be provided to the Exchange.  The Corporation's common shares may remain halted until completion of the Qualifying 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.

The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.

Neither the TSX Venture Exchange Inc. nor its Regulation Services Provide (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Except for statements of historical fact, this news release contains certain "forward-looking information" within the meaning of applicable securities law. Forward-looking information is frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those anticipated in the forward-looking statements.  The Corporation undertakes no obligation to update forward-looking information if circumstances or management's estimates or opinions should change except as required by law. The reader is cautioned not to place undue reliance on forward-looking statements.  More detailed information about potential factors that could affect financial results is included in the documents filed from time to time with the Canadian securities regulatory authorities by the Corporation.


SOURCE: Black Birch Capital Acquisition II Corp.

For further information:

For further information concerning the Acquisition and this press release, please contact Paul Haber, President, Chief Executive Officer and a director of Black Birch Acquisition II Corp. at:

Telephone:  (416) 318-6501
Email:  phaber@blackbirchcap.com