Pacific Orient Capital Inc. Enters Into Share Exchange Agreement with Focus Gold Corporation in Respect of a Proposed Qualifying Transaction

/Not for distribution to United States newswire services or for release publication, distribution or dissemination directly, or indirectly, in whole or in part, in or into the United States./

TORONTO, March 29, 2012 /CNW/ - Pacific Orient Capital Inc. (TSXV: AAQ.P) ("POC") is pleased to announce that it has entered into a definitive share exchange agreement (the "Share Exchange Agreement") with Focus Gold Corporation ("Focus Gold") and its subsidiaries, Focus Celtic Gold Corporation ("Focus Celtic"), Metallum Resources PLC ("Metallum Resources") and Metallum Exploration Limited ("Metallum Exploration", and collectively with Focus Gold, Focus Celtic and Metallum Resources, the "Vending Parties"), which outlines the terms and conditions pursuant to which the parties would be willing to complete a transaction that will result in a reverse take-over of POC by Focus Gold (the "Transaction").  The Share Exchange Agreement was negotiated at arm's length and is effective as of February 28, 2012.

The Transaction is subject to requisite regulatory approval, including the approval of the TSX Venture Exchange (the "TSXV") and standard closing conditions, including the approval by the directors of each of POC and Focus Gold of the Share Exchange Agreement and completion of due diligence investigations to the satisfaction of each of POC and Focus Gold, as well as the conditions described below.  The Transaction is expected to be structured as a securities exchange pursuant to the Share Exchange Agreement.

POC is incorporated under the provisions of the Business Corporations Act (Ontario) with its registered and head office in Toronto, Ontario.  It is a capital pool company and intends for the Transaction to constitute its "Qualifying Transaction" as such term is defined in the policies of the TSXV.  POC is a "reporting issuer" in the provinces of Ontario, British Columbia and Alberta.

Since the Transaction is not a non-arm's length transaction, POC is not required to obtain shareholder approval for the Transaction.

Trading in the common shares of POC (the "POC Shares") has been halted.  It is unlikely that the POC Shares will resume trading until the Transaction is completed and approved by the TSXV.

Conditions to Transaction

Prior to completion of the Transaction (and as conditions of closing):

  • The Parties shall raise sufficient financing in order to meet TSXV initial listing requirements.
  • The Parties will prepare a filing statement in accordance with the rules of the TSXV, outlining the terms of the Transaction.
  • POC shall have engaged a sponsor in accordance with TSXV Policy 2.2 Sponsorship and Sponsorship Requirements, and the TSXV shall have accepted the sponsor's report in respect of the Transaction, or POC shall have obtained an appropriate exemption from the TSXV in respect of compliance with such obligations.
  • Focus Gold will obtain the requisite shareholder approvals for the Transaction and any ancillary matters contemplated in the Share Exchange Agreement.
  • All requisite regulatory approvals relating to the Transaction, including, without limitation, TSXV approval, will have been obtained.

The Proposed Transaction

Pre-Closing Capitalization of POC

As of the date hereof, POC has 5,010,000 existing POC Shares outstanding and securities exercisable or exchangeable for, or convertible into, or other rights to acquire, an aggregate of 290,000 POC Shares at an exercise price of $0.20 per POC Share.

Pre-Closing Capitalization of Focus Gold

As of the date hereof, Focus Gold has 99,025,044 shares of common stock (the "Focus Shares") issued and outstanding.  The Focus Shares are listed for trading in the United States of America on the OTC BB under the ticker symbol "FGLD".

Pre-Closing Capitalization of Focus Celtic

As of the date hereof, Focus Celtic has 26,500,500 common shares (the "Celtic Shares") issued and outstanding, all of which are held by Focus Gold.  Focus Celtic is expected to complete a private placement offering for gross proceeds of a minimum of $1,000,000 to a maximum of $3,000,000 (the "Offering"), details of which are set out below under "Terms of the Proposed Offering".

Pre-Closing Capitalization of Metallum Resources

As of the date hereof, Metallum Resources has 75,107,915 Class A common shares (the "Metallum Resources Shares") issued and outstanding, of which 74,107,915 are held by Focus Celtic and securities exercisable or exchangeable for, or convertible into, or other rights to acquire, an aggregate of 65,454,669 Metallum Resources Shares (the "Metallum Resources Options"), of which Focus Celtic holds the rights to acquire 65,129,669 of such Metallum Resources Options.

Pre-Closing Capitalization of Metallum Exploration

As of the date hereof, Metallum Exploration has two shares issued and outstanding, both of which are held by Metallum Resources.

Terms of the Transaction

POC proposes to acquire all of the Celtic Shares from Focus Gold in exchange for 26.5 million POC Shares in a reverse-takeover transaction pursuant to the Share Exchange Agreement.  It is expected that following completion of the Transaction, but prior to taking into account the Offering, Focus Gold will own approximately 84.1% of the resulting issuer (the "Resulting Issuer"), with the existing POC shareholders retaining an approximately 15.9% interest in the Resulting Issuer.

Terms of the Proposed Offering

In conjunction with the proposed Transaction, Focus Celtic will also complete the Offering of the subscription receipts (the "Subscription Receipts") at a price of $0.30 per Subscription Receipt, or as otherwise agreed by the parties, for minimum gross proceeds of $1,000,000 and maximum gross proceeds of up to $3,000,000, or such other amount as may be required by the TSXV to meet initial listing requirements.  Each Subscription Receipt shall be convertible into units of Focus Celtic (each, a "Focus Celtic Unit").  On completion of the Transaction, each Focus Celtic Unit shall be exchanged into a unit of the Resulting Issuer (each, a "Resulting Issuer Unit"), comprised of one common share of the Resulting Issuer (each, a "Resulting Issuer Share") and one-half of one Resulting Issuer Share purchase warrant (each, a "Warrant"), each Warrant entitling the holder thereof to purchase, subject to adjustments, one Resulting Issuer Share at a price of $0.45 per Resulting Issuer Share until 5:00 p.m. (Toronto time) on the date that is 18 months following the closing of the Transaction.

The net proceeds from the Offering will be placed in escrow and released upon satisfaction of certain conditions, including the completion of the Transaction.  Once released, the net proceeds of the Offering are expected to be used to further exploration on Focus Celtic's Irish and Scottish properties and for general working capital purposes.

Focus Celtic has entered into an agreement with Union Securities Ltd. (the "Agent") to act as agent in connection with the Offering.  As compensation for their services, the Agent shall be paid a fee of $25,000 and Focus Celtic shall cause the Resulting Issuer to issue 100,000 Resulting Issuer Shares to the Agent as work fees.  The Agent shall be paid a further commission consisting of: (i) a cash fee of 7% of the aggregate gross proceeds of the Offering, and (ii) compensation options of Focus Celtic which will be exchanged into compensation options of the Resulting Issuer on closing of the Transaction entitling the holder to purchase, upon payment of an amount equal to the issue price per Subscription Receipt, that number of Resulting Issuer Units which is equal to 7% of the number of Subscription Receipts sold pursuant to the Offering, exercisable at any time before 5:00 p.m. (Toronto time) on the date which is 18 months following the closing of the Transaction.

About Focus Celtic

Focus Celtic is a corporation federally incorporated under the Canada Business Corporations Act.  The company has offices in Canada, with its head office located in Toronto, Ontario.  Focus Celtic is currently a wholly-owned subsidiary of Focus Gold.

Focus Celtic is a junior mining company that owns mineral assets in the United Kingdom through its majority interest in Metallum Resources and Metallum Resources' wholly-owned subsidiary, Metallum Exploration.

Metallum Resources is a corporation existing under the laws of England and Wales.  Metallum Exploration is a corporation existing under the laws of Northern Ireland.  Metallum Resources' sole asset is its 100% ownership of Metallum Exploration.

Metallum Exploration's assets are comprised of gold-copper assets in Fore Burn, Scotland; gold assets in Sperrins, Northern Ireland; and base metals assets in Clogher Valley, Ireland and Northern Ireland.

Following completion of the Transaction, it is the intention of the parties that the Resulting Issuer will be renamed "Celtic Mining Corporation".

Financial Information Concerning Focus Celtic

The table below sets out certain selected financial information regarding Focus Celtic as at November 30, 2011 (unaudited).  The selected information was prepared in accordance with US Generally Accepted Accounting Principles (US GAAP).

  As at November 30, 2011
Assets

Liabilities(1)

Shareholders' Equity
$6,090,902

$808,426

$5,282,476

Notes: (1) Focus Celtic's liabilities include intercompany loans with Focus Gold.

Insiders, Officers and Board of Directors of the Resulting Issuer

Upon completion of the Transaction, it is anticipated that the board of directors of the Resulting Issuer shall be comprised of: Grant White, Dorian Nicol, one nominee of the current POC management and two independent directors to be nominated by Focus Gold.  In addition, it is expected that Grant White shall also serve as Chief Executive Officer of the Resulting Issuer.  A CFO is expected to be appointed before the completion of the Transaction.

Following completion of the Transaction and the Offering (assuming minimum gross proceeds of $1 million), it is anticipated that the following persons will exercise direction or control over more than 10% of the issued and outstanding shares of the Resulting Issuer: Focus Gold Corporation (76.05%).

The following sets outs the names and backgrounds of all persons who are expected to be considered insiders of the Resulting Issuer.

Grant White (Chief Executive Officer)

Mr. White has primarily been an investment banker in New York, San Francisco and Toronto since 1992.  During such time, he has guided the successful completion of numerous financing and merger and acquisition transactions in multiple sectors, including mining.  Mr. White was the Global Head of Capital Markets - Pope and Company between April 2009 and July 2010.  Prior to that, from 2005 to 2008, Mr. White was Managing Director, Head of Investment Banking, for Blackmont Capital in Toronto.  He is currently the Chief Executive Officer of Focus Gold Corporation.

Dorian Nicol (Director of Exploration)

Mr. Nicol has a B. Sc. in Geology from M.I.T. and has a Master's Degree in Geology from Indiana University.  He is an exploration geologist with over 30 years of international experience in mineral exploration and mine development and is fluent in five languages.  He is a Qualified Person pursuant to National Instrument 43-101 - Standards of Disclosure for Mineral Projects and is a Fellow of the Australasian Institute of Mining and Metallurgy, a member of the American Institute of Professional Geologists and a Fellow of the Society of Economic Geologists.  Mr. Nicol is the President and Chief Executive Officer European Uranium Resources Ltd., a TSXV listed company.

Martin Bernholtz (Director)

Mr. Bernholtz, BBA, CA became a Chartered Accountant in 1983 and has held the position of Chief Financial Officer of Kerbel Group Inc. an integrated real estate developer and property owner since 1988.  He has served as a director and officer of several public, private, not for profit and condominium corporations over the last 25 years. Mr. Bernholtz previously spent six years with Laventhol & Horwath in the Litigation Support and Business Valuation areas. Mr. Bernholtz graduated with a Bachelor of Business Administration degree from York University in 1981.

Sponsorship

Sponsorship of a qualifying transaction of a capital pool company is required by the TSXV unless exempt in accordance with TSXV policies.  POC is currently reviewing the requirements for sponsorship and may apply for an exemption from the sponsorship requirements under subsection 3.4(a)(ii) of Policy 2.2 of the TSXV Corporate Finance Manual, however, there is no assurance that POC will ultimately obtain this exemption.  POC intends to include any additional information regarding sponsorship in a subsequent press release.

Further Information

All information contained in this news release with respect to POC, Focus Gold, Focus Celtic, Metallum Resources and Metallum Exploration was supplied by the parties respectively, for inclusion herein, and each party and its directors and officers have relied on the other party for any information concerning the other party.

Completion of the Transaction is subject to a number of conditions, including but not limited to, TSXV acceptance and, if applicable, pursuant to the requirements of the TSXV, 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 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.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION: This news release includes certain "forward-looking statements" under applicable Canadian securities legislation.  Forward-looking statements include, but are not limited to, statements with respect to: the terms and conditions of the proposed Transaction; the terms and conditions of the proposed Offering; future exploration and testing; use of funds; and the business and operations of the Resulting Issuer after the proposed transaction.  Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements.  Such factors include, but are not limited to: general business, economic, competitive, political and social uncertainties; delay or failure to receive board, shareholder or regulatory approvals; and the results of current exploration and testing.  There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements.  Accordingly, readers should not place undue reliance on forward-looking statements.  POC, Focus Gold, Focus Celtic, Metallum Resources and Metallum Exploration disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

All information about the Vending Parties and their management has been provided to POC by the Vending Parties for inclusion in this press release and has not been independently verified by POC.

For further information:

regarding the Transaction, please contact:

If to POC, then to Martin Bernholtz, Chief Executive Officer:

Telephone: 416.721.1721
Email:   mbernholtz@kerbel.ca

If to a Vending Party, then to Grant White, Chief Executive Officer, Focus Gold:

Telephone: 647.348.4300
Email:   grant@focusgoldcorp.com