TORONTO, Sept. 6, 2012 /CNW/ - Everfront Ventures Corp. ("Everfront") (EVC.P), a capital pool company, is pleased to announce that it has
entered into a letter of intent dated September 4, 2012 ("LOI") with Canagco Mining Corp. ("Canagco"), a private Ontario company, pursuant to which Everfront will directly
or indirectly acquire all of the outstanding common shares of Canagco
in exchange for common shares of Everfront on the basis of one
Everfront common share for each Canagco common share outstanding at the
time of such exchange (the "Business Combination").
The Business Combination is subject to TSX Venture Exchange ("TSXV") approval and is intended to constitute Everfront's Qualifying
Transaction under the policies of the TSXV. The Business Combination
will not be a Non-Arm's Length Qualifying Transaction (as that term is
defined under the TSXV policies) and as such, unless the agreed-upon
structure to effect the Business Combination otherwise requires, it is
not expected that approval of the Everfront shareholders will be
Additional information concerning the Business Combination, including
the terms of the Private Placement related to the Business Combination
referred to below and details relating to the directors, officers and
other insiders of the resulting issuer, will be provided in subsequent
communication from Everfront.
Business of Canagco
Canagco is a private corporation incorporated under the laws of the
Province of Ontario on March 18, 2011 with its principal office in
Toronto, Ontario. Northfield Capital Corp. is the only shareholder
which beneficially owns more than 10% of the outstanding common shares
of Canagco. Upon completion of the Business Combination, it is not
expected that any shareholder of Canagco will beneficially own greater
than 10% of the outstanding common shares of the resulting issuer.
Canagco is an exploration stage mining company and its current principal
mineral project is the Langis Silver Project which consists of 35
patented contiguous mining claims located in Casey and Harris Townships
in Ontario's famed Cobalt Silver Mining Camp, which has seen historical
production of some 500,000,000 ounces of silver from numerous mines.
The property is located approximately 500 kilometres north of Toronto.
The Langis Project includes the past-producing Langis and
Dolphin-Miller silver-cobalt deposits.
Canagco reported, as at December 31, 2011, total assets of approximately
$1.2 million, total liabilities of approximately $0.1 million and total
shareholders' equity of approximately $1.15 million, and total net loss
of approximately $0.05 million (or loss per share of $0.005) for the
period from March 18, 2011 to December 31, 2011. All of the above
figures are presented on an audited basis.
Terms of the Agreement
The Qualifying Transaction will be effected pursuant to a Business
Combination which contemplates the acquisition of all of Canagco's
common shares, directly or indirectly, by Everfront in exchange for
common shares of Everfront on the basis of one Everfront common share
for each Canagco common share outstanding at the time of such exchange.
Canagco has agreed to negotiate exclusively with Everfront until October
31, 2012 in order to pursue the Business Combination. The parties have
also agreed to negotiate in good faith and use reasonable commercial
efforts to settle a definitive agreement (the "Definitive Agreement") in the near future and are targeting the execution of such Definitive
Agreement by no later than October 31, 2012.
As of the date hereof, Everfront has 3,840,550 common shares issued and
outstanding, 384,054 management options exercisable at $0.20 per share
and 233,550 agent's options exercisable at $0.20. Prior to the
completion of the Business Combination, Canagco is expected to have up
to 40,055,555 Canagco common shares issued and outstanding. This
includes up to 5,400,000 common shares to be issued pursuant to certain
transactions already contemplated by Canagco and agreed to by Everfront
(the "Permitted Transactions").
Conditions for Closing
The Business Combination is expressly subject to: (a) the completion of
a due diligence review by Everfront of the business and affairs of
Canagco to the sole satisfaction of Everfront, including, without
limitation, audited financial statements of Canagco, documents used in
connection with prior distributions of securities by Canagco, filings
with regulatory or governmental authorities with respect to prior
distributions of securities of Canagco and the continuing development
of the business of Canagco on a timely basis without significant
delays; (b) the completion of a due diligence review by Canagco of
Everfront to the sole satisfaction of Canagco; (c) the availability of
exemptions from the registration and prospectus requirements of
applicable Canadian securities laws to facilitate the issuance of the
Everfront securities to Canagco's security-holders pursuant to the
Business Combination; (d) the Private Placement referred to below; (e)
the receipt of a technical report for Canagco's current principal
mineral project, the Langis Property, prepared in compliance with
National Instrument 43-101 Standards of Disclosure for Mineral Projects, together with all necessary consents to disclosure thereof; (f) the
approval of the Business Combination by the board of directors of each
of the parties; (g) the agreement of the board of directors and
officers of Everfront to resign their current director and officer
positions in and to Everfront (other than Mr. Joshua Gerstein who will
remain as a director following completion of the Business Combination)
as a condition to the completion of the Business Combination; (h) the
approval of the Business Combination by the shareholders of Everfront,
if required; (i) the final approval of the Business Combination by the
TSXV; and (j) Canagco will not sell or otherwise issue any additional
securities prior to the closing of the Definitive Agreement except
pursuant to the Permitted Transactions.
Prior to or concurrently with the closing of the Business Combination,
Canagco is required to complete a private placement (the "Private Placement") of securities (each an "Offered Security") for gross proceeds of not less than the amount necessary to ensure
that there are sufficient funds to satisfy any working capital
requirements of the TSXV to obtain the final approval of the Business
Combination by the TSXV, on terms whereby each Offered Security is
currently expected to be offered at a minimum subscription price of
$0.20 and will entitle the holder thereof to receive, without payment
of any additional consideration, one common share in the capital of
Everfront upon the satisfaction of certain conditions.
The Resulting Issuer
On the closing of the Business Combination, Everfront, the resulting
issuer, anticipates being classified as a "Tier 2" issuer that will
meet the TSXV's initial listing requirements for a mining company.
Management of the Resulting Issuer
It is expected that management of the resulting issuer would be as
George A. J. Monteith, B.Sc. Geology - Chairman and Chief Executive Officer and Director
Mr. Monteith is an exploration Geologist with over 30 years of
experience. He has developed and managed resource projects on four
continents. His experience ranges from precious and base metals
exploration to oil and gas. He has been involved in projects in Africa,
South America, Asia, Europe and the North America having spent the last
16 years in the United States. George attended the School of Mines in
Northeastern Ontario and earned his Honours degree in geology from
Brock University in 1976.
Gino P. Chitaroni, B.Sc. Geology - President and Director
Mr. Chitaroni has lived in the Town of Cobalt all his life and has been
in the mining business for over 30 years. He has worked, variously as
an underground miner in the 1980s and as a consulting geologist as well
as corporate director for various exploration entities. Since 1997,
Gino has been the founding president of Blackstone Development Inc., a
consultant firm and contractor for the mining exploration industry. He
is also the owner and president of Polymet Labs, an assay analytical
laboratory which he founded in Cobalt in 1998.
Harold J. Clifford - Treasurer and Secretary and Director
Mr. Clifford's forty years in the investment business focused primarily
on the Natural Resources sectors, and included: Director of Mining
Research for former TSE member J.P. Cannon and, subsequently, Manager
of Retail Research and an officer of Merrill Lynch Canada. Harold was a
director of a gold exploration company active in Mexico in the 1990s
and also spent a number of years as a consultant on mining company
research and investor relations.
They, together with current Canagco directors John R. Aschwanden,
Contract Manager, Orbit Garant Drilling Services Inc. and Robert S.
Richardson, Registered and Senior Trading Officer, W.D. Latimer Co.
Limited, as well as Joshua Gerstein, the current C.E.O. of Everfront,
will form the board of directors of the resulting issuer. Such
appointments are subject to the approval of the TSXV.
Sponsorship of a qualifying transaction of a capital pool company is
required by the TSXV unless an exemption from the sponsorship
requirement is available. Everfront intends to apply for an exemption
from the sponsorship requirement. There is no assurance that Everfront
will be able to obtain such an exemption.
Everfront's common shares are currently halted and Everfront anticipates
they will remain halted until the documentation required by the TSXV
for the proposed Business Combination can be provided to the TSXV.
Completion of the Business Combination is subject to a number of
conditions, including but not limited to, TSXV acceptance and, if
applicable pursuant to TSXV requirements, majority of the minority
approval of the shareholders of Everfront. Where applicable, the
Business Combination cannot close until the required shareholder
approval is obtained. There can be no assurance that the Business
Combination 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 Business Combination, any information released or received
with respect to the Business Combination 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 TSXV has in no way passed upon the merits of the proposed Business
Combination and has neither approved nor disapproved the contents of
this press release. Neither the TSXV nor its Regulation Services
Provider (as that term is defined in the policies of the TSXV) accepts
responsibility for the adequacy or accuracy of this release.
This press release contains forward-looking information within the
meaning of Canadian securities laws. Such information includes, without
limitation, information regarding the completion of the proposed
Business Combination, the proposed Private Placement, and the
anticipated business plan of Everfront subsequent to completion of the
Business Combination. Although Everfront believes that such information
is reasonable, it can give no assurance that such expectations will
prove to be correct.
Forward looking information is typically identified by words such as:
believe, expect, anticipate, intend, estimate, postulate and similar
expressions, or are those, which, by their nature, refer to future
events. Everfront cautions investors that any forward-looking
information provided by Everfront are not guarantees of future results
or performance, and that actual results may differ materially from
those in forward looking information as a result of various factors,
including, but not limited to: Everfront's ability to complete the
proposed Business Combination; the state of the financial markets for
Everfront's equity securities; the state of the market for minerals
that may be produced generally by the resulting issuer in the event the
Business Combination is completed; recent market volatility;
Everfront's ability to raise the necessary capital or to be fully able
to implement its business strategies; and other risks and factors that
Everfront is unaware of at this time. The reader is referred to
Everfront's most recent annual and interim Management's Discussion and
Analysis for a more complete discussion of all applicable risk factors
and their potential effects, copies of which may be accessed through
Everfront's page on SEDAR at www.sedar.com.
SOURCE: Everfront Ventures Corp.
For further information:
please contact Joshua Gerstein at (416) 479-8623