Foxpoint Capital Corp. Provides an Update on Qualifying Transaction

/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF U.S. SECURITIES LAWS./

TORONTO, March 8, 2013 /CNW/ - Foxpoint Capital Corp. ("Foxpoint") (NEX: FXC.H), a capital pool company listed on the NEX board (the "NEX") of the TSX Venture Exchange (the "Exchange") is pleased to announce that it has signed a consent and amending agreement (the "Amending Agreement") to reflect certain restructuring that was undertaken following the signing of the acquisition agreement (the "Acquisition Agreement") dated November 2, 2012. The Acquisition Agreement provides for Foxpoint to acquire by means of amalgamation involving 2308800 Ontario Inc. ("Foxpoint Subco", a wholly-owned subsidiary of Foxpoint), all of the issued and outstanding common shares (the "Telegraph Shares") in the capital of Telegraph Gold Inc. ("Telegraph") (the "Transaction").

Since the signing of the Acquisition Agreement, the following has occurred:

  • Telegraph completed its private placement offering (the "Financing") of an aggregate of 7,320,069 units (the "Financing Units") at an offering price of $0.75 per Financing Unit for gross proceeds of $5,490,051.75. The Financing was effected in two tranches, 2,840,000 Financing Units were issued on October 31, 2012 and 4,480,069 Financing Units were issued on November 28, 2012. Each Financing Unit consisted of one common shares of Telegraph (a "Telegraph Share") and one-half of one Telegraph Share purchase warrant (each whole warrant, a "Warrant").  Each Warrant entitles the holder thereof to acquire one Telegraph Share at a price of $1.00 until the date that is 18 months following the date of issuance.
  • Telegraph with the concurrence of Foxpoint has terminated the Telegraph option agreement dated January 26, 2011 and later amended on May 30, 2012.  This will result in Telegraph and the Resulting Issuer (as defined below) being able to better focus its resources on the exploration activities and other work to further advance the Castle Mountain Project (as defined below).
  • Kevin Bullock, the Chairman and a director of Telegraph, and Andrew Powers, the Corporate Secretary and director of Telegraph have resigned. These individuals will no longer be joining the board of the Resulting Issuer following the completion of the Transaction.
  • Mr. Robert Buchan proposes to join the Resulting Issuer as the Chairman and a director. Mr. Buchan has been in the mining industry for over 35 years and has a wealth of experience to offer the board of the Resulting Issuer. Please see his biography below for further details.

The Transaction, if completed, will be structured as a three-cornered amalgamation (the "Amalgamation") and is intended to constitute Foxpoint's "Qualifying Transaction", as such term is defined pursuant to Exchange Policy 2.4.  Upon completion of the Transaction, all of the issued and outstanding Telegraph Shares (including those issued pursuant to the Telegraph Financing) will be exchanged for common shares (the "Foxpoint Shares") in the capital of Foxpoint. Each shareholder of Telegraph (each, a "Telegraph Shareholder") will receive one Foxpoint Share in exchange for each Telegraph Share (the "Exchange Ratio"). All convertible securities in the capital of Telegraph, including common share purchase warrants and all outstanding options to purchase Telegraph Shares, will be exchanged for convertible securities of Foxpoint in accordance with the Exchange Ratio. The aggregate number of common shares to be issued by Foxpoint (assuming the exercise of all convertible securities of Telegraph) to acquire Telegraph is 55,700,102.  The foregoing reflects the recent cancellation of 2,500,000 Telegraph Shares held by certain founders for nil consideration.

Following the completion of the Amalgamation, it is expected that the Resulting Issuer will have an aggregate of 52,539,168 common shares issued and outstanding, 4,200,000 options to purchase common shares and 3,660,034 warrant to purchase commons shares (at a price of $1.00 per share until May 2014).  On a fully diluted basis, the Resulting Issuer would have 60,399,202 common shares issued and outstanding.

Assuming Foxpoint shareholder ("Foxpoint Shareholder") approval is obtained, upon or immediately prior to completion of the Transaction, Foxpoint's name will now be changed (the "Name Change") to "Castle Mounting Mining Company" (the "Resulting Issuer"), or such other name as determined by the board of Foxpoint. The entity resulting from the Amalgamation will be a wholly-owned subsidiary of the Resulting Issuer, which will own, directly or indirectly, all of the mining claims that comprise the Castle Mountain Project. In connection with the Transaction, Foxpoint will apply for the Resulting Issuer to be listed on the Exchange as a Tier 1 mining issuer.

Foxpoint will hold a special meeting of Foxpoint Shareholders (the "Meeting") to vote on, among other things, the Transaction (the "Transaction Resolution") and the Name Change. The Transaction Resolution must be approved by an affirmative vote of a simple majority of the votes cast by Foxpoint Shareholders present in person or by proxy in respect of the Transaction Resolution at the Meeting, excluding the votes of Fraser Buchan and Robert Buchan, who are related parties, and whose 1,450,000 common shares of Foxpoint will be excluded from the vote. Telegraph Shareholder approval of the Amalgamation will also be obtained at a special meeting of Telegraph Shareholders.

The Transaction remains subject to satisfaction or waiver of conditions set out in the Acquisition Agreement, including the following: (i) approval of the Transaction by Foxpoint Shareholders; (ii) approval of the Amalgamation by Telegraph Shareholders; (iii) conditional approval of the Transaction by the Exchange; (iv) receipt of all required or desirable regulatory approvals, consents and waivers; and (v) compliance with all other applicable regulatory requirements and conditions.

The Amending Agreement provides that if the Amalgamation has not occurred on or before April 30, 2013, the obligations of the parties pursuant to the Acquisition Agreement may be terminated.

About Foxpoint and Foxpoint Subco

Foxpoint was incorporated on December 16, 2009 under the laws of the Province of Ontario and is a capital pool company under the Exchange Policies.  Foxpoint's sole business since incorporation has been to investigate business opportunities with a view to completing a "Qualifying Transaction".

Foxpoint Subco was incorporated on December 8, 2011 under the laws of the Province of Ontario and is wholly-owned by Foxpoint. Foxpoint Subco has not carried on any business to date and was incorporated for the purpose of implementing the Transaction.

About Telegraph

Telegraph was incorporated on January 29, 2010 under the laws of the Province of Ontario.  Telegraph has 100% ownership of the Castle Mountain venture, a California general partnership, which owns the Castle Mountain property in San Bernardino County, California (the "Castle Mountain Project").  The Castle Mountain venture land holdings (7,458 acres total) include patented claims (1,298 acres), and unpatented claims (3,209 acres), covering approximately 4,507 acres, plus additional leased claims of approximately 2,951 acres.

Proposed Management and Board of Directors of the Resulting Issuer

The following individuals are expected to be Insiders (as defined in the Exchange Policies) of the Resulting Issuer:

Gordon McCreary (Toronto, Ontario), President, Chief Executive Officer and Director - Mr. McCreary currently serves as a Director of Northern Iron Corp., Probe Mines Limited and McChip Resources Inc. From May 2004 to March 2010, Mr. McCreary was Chief Executive Officer of Baffinland Iron Mines Corporation. From June 1993 to May 2004, Mr. McCreary was Vice President of Kinross Gold Corporation with responsibility for investor relations and corporate development. Before joining Kinross upon its formation in 1993, he was Vice President of Dundee Bancorp Inc. and Investment Analyst with its affiliate International Corona Corporation from 1989. Prior to 2004 when he joined Baffinland, Mr. McCreary has worked almost exclusively in the gold business for over 20 years with prior experience in the base metals, coal and industrial minerals. Mr. McCreary has a B.Sc. degree in Mining Engineering (1974) and an MBA (1978), both from Queen's University.

Robert Buchan (Toronto, Ontario, Chairman and Director - Mr Buchan has over 35 years of experience in the mining sector with a solid track record of identifying, acquiring and then subsequently managing the resource definition and development of international mineral resources. Mr. Buchan is currently the Executive Chairman of Allied Nevada Gold Corp., a mining company, which position he has held since June 2007. In addition, Mr. Buchan currently serves as Chairman of the board of directors of Polyus Gold International Limited, a large Russian gold company and in the same capacity on Touchstone Gold Limited, a gold-focused mineral exploration company with a property in Northern Colombia. From 1993 to 2005, he served as the CEO of Kinross, a mining company. Mr. Buchan founded Kinross in 1993 and as its CEO was instrumental in transforming Kinross from a newly formed company into one of the world's fastest growing gold producers. Mr. Buchan retired as President and CEO of Kinross in March 2005 to focus on mineral assets in the Democratic Republic of Congo. He was one of the founders, a director and non-executive Chairman of Katanga Mining Limited. Mr. Buchan holds a degree in Mining Engineering from Herriot-Watt University in Edinburgh (1969) and a Masters of Science in Mineral Economics from Queen's University (1971).

Brian Morales (Toronto, Ontario), Chief Financial Officer and Corporate Secretary - Mr. Morales currently serves as Chief Financial Officer of several publicly-traded exploration and development companies, including Touchstone Gold Limited and Angus Mining Inc. He previously served as Chief Financial Officer of Elgin Mining Inc. and also previously held a finance position with Kinross Gold Corporation and was employed in equity research with Credit Suisse Securities (Canada) Inc., covering the precious metals sector. Mr. Morales holds a Bachelor of Business Administration from York University and is a Canadian Chartered Accountant.

Fraser Buchan (Toronto, Ontario), Vice-President, Corporate Development and Director - Mr. Buchan is President and Chief Executive Officer of Angus Mining Inc., an exploration stage company, since September 2010, and is a director of Touchstone Gold Limited. He was previously Vice President Corporate Development at Elgin Mining Inc. (formerly Phoenix Coal Inc.), from February 2009 until April 2011.  Prior to that, he worked in institutional sales with GMP Europe LLP, an investment dealer from October 2007 to February 2009 and with GMP Securities LLP, an investment dealer from May 2006 to October 2007. Mr. Buchan earned a BA in Economics from McGill University in 2006.

Greg Lipton (Toronto, Ontario), DirectorMr. Lipton is a registered Professional Geoscientist with the Association of Professional Geoscientists of Ontario (APGO) and a long time member of the Prospectors and Developers Association of Canada. He has more than 33 years of field experience in international exploration for base metal, precious metal, diamond, and industrial mineral deposits, most of which was with BHP Billiton Plc and Utah International, Inc. as a Senior Geologist. Mr. Lipton has worked many and varied geologic environments including porphyry, epithermal, VMS, MVT, BHT, and Sedex types in North, Central, and South America, Africa, Australia, Southeast Asia, and the Middle East. Mr. Lipton has held his current position as President, Chief Executive Officer and a director of Metallum Resources Inc. (formerly Young-Shannon Gold Mines Limited) since 2004.

Peter Olander (Reno, Nevada), Vice President Exploration and Chief Operating Officer - Mr. Olander holds a Masters degree in Geology from Eastern Washington University, and has over 25 years of experience as a Geologist, Project Manager, and Exploration Consultant. Most recently, Mr. Olander was employed by a private U.S. Company in evaluating gold property acquisitions. Mr. Olander has also worked with Kinross Gold Corporation, Placer Dome Inc., Majestic Diamonds and Metals Inc., and FMC Gold Company.

Colin Sutherland (Hammond Plains, Nova Scotia), Director - Mr. Sutherland is a Chartered Accountant and has over 15 years experience in corporate finance, capital markets, and strategic initiatives. Mr. Sutherland has extensive experience in mergers and acquisitions and financing mineral exploration and development projects having been involved in mergers and acquisitions totalling approximately $1 billion and financings in excess of $500 million. Mr. Sutherland is currently Chief Financial Officer of Archipelago Resources plc. He was Chief Financial Officer for Timmins Gold Corporation (May 2011 to April 2012), President of Capital Gold Corp. (August 2010 to April 2011), President and Chief Executive Officer of Nayarit Gold Inc. (May 2007 to August 2010) and Chief Financial Officer of Aurico Gold Inc. (August 2004  to May 2007).

Darin Wagner (Toronto, Ontario), Director - Mr. Wagner is a Professional Geologist with 20 years of exploration and corporate development experience. Early in his career, Mr. Wagner was a project geologist and manager for Noranda Inc. (now Xstrata plc) and Cominco Ltd. (now Teck Resources Limited). In 1999 Mr. Wagner became Vice-President, Exploration for New Millennium Metals Corp. which was successfully merged with Platinum Group Metals Ltd. in 2002. Mr. Wagner served as Exploration Manager for Toronto Stock Exchange listed Platinum Group Metals Ltd. through the acquisition, discovery and initial delineation of the multi-million ounce West Bushveld PGE deposit in South Africa. Mr. Wagner became President of Sydney Resource Corp. in 2005 and helped engineer the successful merger with Band Ore Resources to form West Timmins Mining Inc. in 2006. He then served as a President, Chief Executive Officer, director and Qualified Person for West Timmins Mining Inc. until its acquisition by Lake Shore Gold Corp. in 2009. Mr. Wagner previously served as a director of Candente Gold Corp. (January 2010 to October 2011) and GTA Resources and Mining Inc. (January 2010 to July 2011) and currently acts as a technical and/or corporate advisor to several other publically listed resource companies including MAG Silver Corp. and Abzu Gold Ltd. Mr. Wagner is currently President, Chief Executive Officer and a Director of Balmoral Resources Ltd., a position he has held since April 2010. He has served as a Director of Druk Capital Partners Inc. since April 2010.

Mark Wayne (Toronto, Ontario), Director - After beginning his career practising corporate and securities law for seven years with Bennett Jones LLP, Mr. Wayne has been directly involved in the investment industry since 1987. Mr. Wayne founded and was President of AltaFund Investment Corp. from 1987 to 1991. He was Vice President of Altamira Management Ltd. for seven years from 1991 to 1998 and has played a key role in raising funds for a broad array of companies in several industries. Mr. Wayne has been involved with several other companies at either the officer or director level, including Antares Minerals Inc. (July 2004 to December 2010), Stem Cell Therapeutics Corp. (December 2004 to August 2010) and QGX Ltd. (August 2002 to September 2008). He is currently Chairman of the board of directors of Alamos Gold Inc., a position he has held since May 2005.

Effect of the Transaction

Following completion of the Transaction, the Resulting Issuer intends to carry on the business currently operated by Telegraph and its efforts will be directed at continuing to advance the exploration, development and future production activities at the Castle Mountain Project.

Interests of Related Parties - Related Party Transaction

Although the Transaction is not considered to be a Non Arm's Length Qualifying Transaction within the meaning of Exchange Policy 2.4, it is considered a "related party transaction" for the purposes of Multilateral Instrument 61-101 ("MI 61-101") since Fraser Buchan, currently the President, Chief Executive Officer and a director of Foxpoint, owns 2,333,333 Telegraph Shares (approximately 4.8% of the issued and outstanding Telegraph Shares) and Robert Buchan, a greater than 10% Foxpoint Shareholder, owns 833,400 Telegraph Shares  (approximately 1.7% of the issued and outstanding Telegraph Shares). Collectively, Fraser Buchan and Robert Buchan own approximately 3,166,733 Telegraph Shares.  Fraser Buchan and Robert Buchan also each own 725,000 Foxpoint Shares (approximately 17% of the issued and outstanding Foxpoint Shares, respectively). As such, Minority Approval of the Transaction is required by Foxpoint Shareholders. After giving effect to the Transaction and the Telegraph Financing, Fraser Buchan and Robert Buchan will collectively own 4,616,733 shares of the Resulting Issuer.

Since Fraser Buchan, a director and officer of Foxpoint, holds Telegraph Shares and will receive securities of the Resulting Issuer as a result of the Transaction, the Transaction was approved by all of the members of the Foxpoint board of directors, with the exclusion of Mr. Buchan, who has disclosed his conflicting interests in the Transaction and refrained from voting thereon.

MI 61-101 provides that an issuer involved in a related party transaction or business combination must obtain formal valuation unless an exemption from the valuation requirement can be relied upon, and must obtain minority approval, as described in MI 61-101 (the "Minority Approval"), for the transaction, unless an exemption from the Minority Approval requirements can be relied upon.  Pursuant to Exchange Policy 5.9 and paragraph 5.4(1)(b) of MI 61-101 an exemption from the valuation requirement for related party transactions is available to Foxpoint, as Foxpoint's securities are solely listed on the Exchange.

Following completion of the Transaction, to the best of the knowledge of the directors and executive officers of Foxpoint and Telegraph, there will be no persons or companies who will beneficially own, directly or indirectly, or exercise control or direction over, common shares in the capital of the Resulting Issuer Shares carrying more than 10% of the voting rights attached to the common shares in the capital of the Resulting Issuer after giving effect to the Transaction.

Sponsor

Foxpoint intends to rely upon an exemption in Section 3.4 of Exchange Policy 2.2 from the requirement to have an application for listing in connection with a Qualifying Transaction sponsored by a member of the Exchange. However, there can be no assurance that Foxpoint will be able to obtain an exemption.

Information Circular

Foxpoint has filed a draft information circular with the Exchange in conjunction with the Transaction, which is under review.  The circular will include, among other things, further information on Telegraph and a summary of the applicable National Instrument 43-101 - Standards of Disclosure for Mineral Projects report. Once the Exchange has completed its review the circular will be sent to shareholder and be made available at www.sedar.com.

Other Information and Updates

The Foxpoint Shares are currently listed for trading on the NEX; however, they have been halted from trading and will remain halted pending satisfaction of the Exchange's requirements. There can be no assurance that trading in the Foxpoint Shares will resume prior to the completion of the Transaction.

Cautionary Statements

This press release contains forward-looking statements and information that are based on the beliefs of management and reflect Foxpoint's current expectations. When used in this press release, the words "estimate", "project", "belief", "anticipate", "intend", "expect", "plan", "predict", "may" or "should" and the negative of these words or such variations thereon or comparable terminology are intended to identify forward-looking statements and information. The forward-looking statements and information in this press release include information relating to the business plans of Foxpoint, Foxpoint Subco, Telegraph and the Resulting Issuer, the Telegraph Financing, the Transaction (including Foxpoint Shareholder approval, Exchange approval, the change of Foxpoint's name, and completion or termination thereof), the Amalgamation (including Telegraph Shareholder approval) and the board of directors and management of the Resulting Issuer upon completion of the Transaction. Such statements and information reflect the current view of Foxpoint with respect to risks and uncertainties that may cause actual results to differ materially from those contemplated in those forward-looking statements and information.

By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.

Such factors include, among others, the following risks:

  • There can be no assurance that the Foxpoint Shareholders will vote in favour of the Transaction;
  • There can be no assurance that the Telegraph Shareholders will vote in favour of the Amalgamation;
  • There can be no assurance that the approval of the Exchange required to complete the Transaction will be obtained. Further, approval of the Exchange may be conditional upon amendments to the transactions disclosed herein; and
  • There can be no assurance that the conditions to closing required to complete the Transaction will be satisfied.

There are a number of important factors that could cause Foxpoint's actual results to differ materially from those indicated or implied by forward-looking statements and information. Such factors relating to the Telegraph claims include, among others, the timing and content of work programs, results of operation activities and development of mineral properties, the interpretation of drilling results and other geological data, the uncertainties of resource and reserve estimates, receipt and security of mineral property titles, receipt of licenses to conduct mining activities, project cost overruns or unanticipated costs and expenses, fluctuations in metal prices and general market and industry conditions.

Foxpoint cautions that the foregoing list of material factors is not exhaustive. When relying on Foxpoint's forward-looking statements and information to make decisions, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Foxpoint has assumed a certain progression, which may not be realized. It has also assumed that the material factors referred to in the previous paragraph will not cause such forward-looking statements and information to differ materially from actual results or events. However, the list of these factors is not exhaustive and is subject to change and there can be no assurance that such assumptions will reflect the actual outcome of such items or factors.

THE FORWARD-LOOKING INFORMATION CONTAINED IN THIS PRESS RELEASE REPRESENTS THE EXPECTATIONS OF FOXPOINT AS OF THE DATE OF THIS PRESS RELEASE AND, ACCORDINGLY, IS SUBJECT TO CHANGE AFTER SUCH DATE. READERS SHOULD NOT PLACE UNDUE IMPORTANCE ON FORWARD-LOOKING INFORMATION AND SHOULD NOT RELY UPON THIS INFORMATION AS OF ANY OTHER DATE. WHILE FOXPOINT MAY ELECT TO, IT DOES NOT UNDERTAKE TO UPDATE THIS INFORMATION AT ANY PARTICULAR TIME EXCEPT AS REQUIRED IN ACCORDANCE WITH APPLICABLE LAWS.

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 Transaction and associated transactions and has neither approved nor disapproved of the contents of this press release.

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.


SOURCE: Foxpoint Capital Corp.

For further information:

Foxpoint Capital Corp.
Fraser Buchan: President, CEO
(416) 640-1933