X-Terra Resources Corporation provides an update on its proposed reverse take-over and "spin-out"

ROUYN-NORANDA, QC, March 5, 2014 /CNW Telbec/ - X-Terra Resources Corporation ("X-Terra") (TSXV: XT) is pleased to provide an update on its previously-announced proposed reverse take-over involving Norvista Capital Corporation ("Norvista Capital"), an arm's-length Toronto-based private company, and the "spin-out" of X-Terra's resource properties in a new public company.

On March 4, 2014, X-Terra amended the terms of a letter of intent with Norvista Capital dated October 3, 2013, as amended on November 29, 2013.  The letter of intent, as amended, provides for a proposed "spin-out" (the "Spin-Out") of substantially all of the assets and all of the liabilities of X-Terra to a new corporation called X-Terra Resources Inc. ("New X-Terra") and the distribution of the shares of New X-Terra to the shareholders of X-Terra, as well as for a reverse take-over of X-Terra involving Norvista Capital (the "Reverse Take-Over"), following which the name of X-Terra will be changed to "Norvista Capital Corporation" ("New Norvista").  After the Spin-Out and Reverse Take-Over, current shareholders of X-Terra will become shareholders of New X-Terra, which will carry on X-Terra's current mining exploration business, as well as shareholders of New Norvista, which will be a natural resources merchant bank.

Proposed Spin-Out

Pursuant to an Asset Transfer Agreement to be entered into between X-Terra and New X-Terra, X-Terra will transfer all of its assets (except for 2 million shares of Brownstone Energy Inc. held by X-Terra and approximately $1.85 million in cash) and all of its liabilities to New X-Terra.  In consideration for such transfer, New X-Terra will issue to X-Terra a number of New X-Terra common shares equal to one-third of the number of issued and outstanding X-Terra common shares.  Based on the number of X-Terra common shares currently issued and outstanding (11,783,069), New X-Terra will issue 3,927,690 New X-Terra common shares to X-Terra.

X-Terra will distribute 75% of the foregoing New X-Terra common shares to X-Terra shareholders, on the basis of one-quarter of a New X-Terra common share for each X-Terra common share held on the record date for such distribution.  The balance of 25% of the New X-Terra common shares held by X-Terra will be retained by it.  Based on the number of X-Terra common shares currently issued and outstanding (11,783,069), X-Terra will distribute an aggregate of 2,945,767 New X-Terra common shares to X-Terra shareholders and will retain 981,923 New X-Terra common shares.

Concurrent with the closing of the Spin-Out, New X-Terra will effect a private placement of a minimum of 2 million and a maximum of 3 million New X-Terra common shares at a price of $0.10 per share, for gross proceeds to New X-Terra of a minimum of $200,000 and a maximum of $300,000 (the "New X-Terra Private Placement").  Assuming a New X-Terra Private Placement of a minimum of 2 million New X-Terra common shares, there will be 5,927,690 New X-Terra common shares issued and outstanding after the closing (6,927,690 shares in the event of a maximum private placement), of which: (i) X-Terra shareholders will hold 2,945,767 shares (49.7% for the minimum private placement and 42.5% for the maximum private placement), (ii) new investors will hold 2 million shares (3 million shares in the event of a maximum private placement) (33.7% for the minimum private placement and 43.3% for the maximum private placement); and (iii) New Norvista will hold 981,923 shares (16.6% for the minimum private placement and 14.2% for the maximum private placement).  New X-Terra will use the proceeds from the New X-Terra Private Placement for exploration on its properties, including the Lindsay Property, and for working capital purposes.

At the closing of the Spin-Out and Reverse Take-Over, all X-Terra stock options then outstanding will be cancelled, except for 525,000 X-Terra stock options granted on July 4, 2013 to the current directors of X-Terra.  The 525,000 X-Terra stock options will be amended by increasing their exercise price from $0.10 to $0.25 per share and setting their expiry date at one year following the closing date of the Reverse Take-Over.

As the Spin-Out constitutes a sale or exchange of all or substantially all the property of X-Terra, X-Terra shareholder approval for the Spin-Out will be required under section 189 of the Canada Business Corporations Act by way of special resolution.

If the Spin-Out is successfully completed, it is expected that the Board of Directors of New X-Terra will consist of Martin Dallaire, Sylvain Champagne, Gerry Feldman, Michael F. Ferreira, Jean-François Madore and Sébastien Bellefleur, and it is expected that the officers of New X-Terra will consist of Martin Dallaire (Chairman, President and Chief Executive Officer) and Sylvain Champagne (Chief Financial Officer and Secretary).

Upon completion of the Spin-Out, New X-Terra intends to be listed on the TSX Venture Exchange as a Tier-2 Mining Issuer and will carry on the business currently conducted by X-Terra, that is, acquiring and exploring rare earth elements (REE) and energy properties in Canada.

Proposed Reverse Take-Over

Norvista Capital is a privately-owned, Ontario-based natural resources merchant bank formed in 2011. Norvista Capital is currently owned by Norvista Resources Corporation ("Norvista Resources").  Upon completion of the Reverse Take-Over, New Norvista's business will be that of a natural resources merchant bank.

In order to effect the Reverse Take-Over, X-Terra, Norvista Capital and Norvista Resources will enter into a Share Exchange Agreement.  The Share Exchange Agreement will provide that prior to the closing of the Reverse Take-Over, Norvista Resources will subscribe for 20 million common shares of Norvista Capital at a price of $0.25 per share, for proceeds to Norvista Capital of $5 million.  The 20 million common shares will represent the only shares of Norvista Capital then issued and outstanding.

The Share Exchange Agreement will also provide that at the closing of the Reverse Take-Over, (i) X-Terra will acquire all of the foregoing 20 million shares in exchange for 20 million X-Terra common shares, as a result of which Norvista Capital will be a wholly-owned subsidiary of X-Terra, and Norvista Resources will hold 20 million X-Terra Shares; (ii) X-Terra and Norvista Capital will amalgamate by way of "vertical short-form amalgamation" pursuant to the Canada Business Corporations Act under the name "Norvista Capital Corporation" the corporation resulting from the amalgamation is referred to in this press release as "New Norvista" and (iii) Norvista Resources will retain a portion of the 20 million New Norvista Shares that it will hold and will distribute the balance to its approximately 150 shareholders, each of whom is an "accredited investor" within the meaning of applicable Canadian securities laws.

Concurrent with the closing of the Reverse Take-Over, New Norvista will effect a private placement of a minimum of 6 million and a maximum of 32 million New Norvista common shares at a price of $0.25 per share, for gross proceeds to New Norvista of a minimum of $1.5 million and a maximum of $8 million (the "New Norvista Private Placement").  Assuming a New Norvista Private Placement of a minimum of 6 million and a maximum of 32 million New Norvista common shares and based on the number of X-Terra common shares currently issued and outstanding (11,783,069), there will be a minimum of 37,783,069 and a maximum of 63,783,069 New Norvista common shares issued and outstanding after the closing of the New Norvista Private Placement, of which: (i) the current shareholders of Norvista Resources will hold 20 million shares (52.9% for the minimum private placement and 31.36% for the maximum private placement), (ii) X-Terra shareholders will hold 11,783,069 shares (31.2% for the minimum private placement and 18.47% for the maximum private placement), and (iii) new investors will hold a minimum of 6 million shares (15.9%) and maximum of 32 million shares (50.2%).  On that basis, New Norvista will have cash of a minimum of $8.35 million and a maximum of $14.85 million, 2 million common shares of Brownstone Energy Inc. and 981,923 New X-Terra common shares.  New Norvista will use the proceeds from the New Norvista Private Placement for working capital and to carry out its business plan of investing in both public and private junior resource companies in the mining sector and other resource sectors such as oil and gas, and timber.

If the Reverse Take-Over is successfully completed, it is expected that the Board of Directors and executive management of New Norvista will consist primarily of the current executive management and Board of Directors of Norvista Resources Corporation.  It is expected that the Board of Directors of New Norvista will be comprised of Gerald P. McCarvill, Donald H. Christie, Bruce Durham, Hon. Scott Brison and G. Edmund King, and that the officers of New Norvista will be Gerald P. McCarvill (Chairman and Chief Executive Officer), Donald H. Christie (President and Chief Operating Officer), Carmelo Marrelli (Chief Financial Officer), and Paul Crath, Bruce Durham and John Eansor, each of whom will be a Managing Director.

Pursuant to the policies of the TSX Venture Exchange, the Reverse Take-Over will be subject to X-Terra shareholder approval.  Upon completion of the Reverse Take-Over, New Norvista intends to be listed on the TSX Venture Exchange as a Tier-2 Investment Issuer and will carry on business as a natural resources merchant bank.

Completion of the Spin-Out and Reverse Take-Over is subject to a number of conditions, including but not limited to, the entering into by the parties of definitive agreements with respect to the Spin-Out and Reverse Take-Over (such agreements to include representations, warranties, conditions and covenants typical for transactions of this nature), regulatory approval, including that of the TSX Venture Exchange, shareholder approval and financing.  The Spin-Out and Reverse Take-Over cannot be completed unless the required shareholder approval is obtained.  There can be no assurance that the Spin-Out and Reverse Take-Over will be completed as proposed or at all.

Submission and Acceptance of NI 43-101 Technical Report

X-Terra and New X-Terra are also pleased to announce that the TSX Venture Exchange has reviewed and accepted a technical report pursuant to National Instrument 43-101 - Standards of Disclosure for Mineral Projects in relation to the Lindsay rare earth elements (REE) property located approximately 125 kilometres south of Rouyn-Noranda, Québec and 70 kilometres east-northeast of North Bay, Ontario, along the provincial border, halfway between the Elliot Lake uranium camp and the Abitibi gold belt.  The NI 43-101 technical report will be filed on SEDAR when X-Terra files its Management Information Circular with respect to the proposed Reverse Take-Over and Spin-Out.

About X-Terra Resources

X-Terra is a resource company focused on acquiring and exploring energy properties in Canada.  X-Terra has 11,783,069 shares outstanding, a cash position of $2.12 million and an investment of 2 million shares of Brownstone Energy Inc.

Forward-looking Statements

This news release contains certain forward-looking statements.  These forward-looking statements are subject to a variety of risks and uncertainties beyond the ability of X-Terra to control or predict, which could cause actual events or results to differ materially from those anticipated in such forward-looking statements, including risks disclosed in filings with the Canadian securities regulators made by X-Terra.  No assurance can be given that any events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits that X-Terra will derive therefrom.  In particular, no assurance can be given as to whether the proposed Spin-Out and Reverse Take-Over described in this news release will be completed.  Accordingly, readers should not place undue reliance on forward-looking statements.

Completion of the transaction described in this news release is subject to a number of conditions, including TSX Venture Exchange acceptance and shareholder approval.  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 to be prepared in connection with the transaction, any information released or received with respect to the Reverse Take-Over and Spin-Out may not be accurate or complete and should not be relied upon.  Trading in the securities of X-Terra should be considered highly speculative.

The TSX Venture Exchange 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 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 X-Terra Resources Corporation

For further information:

X-Terra Resources Corporation
Martin Dallaire, P. Eng. President and Chief Executive Officer
Telephone: 819-762-0609 | Fax: 819-762-0097
E-mail: info@xterraresources.com
Website: www.xterraresources.com

Norvista Capital Corporation
Donald H. Christie, President and Chief Operating Officer
Telephone: 416-504-4171
E-mail: dchristie@solvistagold.com