Foxpoint Capital Corp. Announces the Signing of a Non-Binding Letter of Intent in Connection with a Proposed Qualifying Transaction

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TORONTO, Sept. 19, 2011 /CNW/ - Foxpoint Capital Corp. ("Foxpoint" or the "Corporation") (TSX-V: FXC.P), a capital pool company, is pleased to announce that it has entered into a non-binding letter of intent dated September 15, 2011 (the "Letter of Intent") with Telegraph Gold Inc. ("Telegraph"), a private company incorporated under the laws of the Province of Ontario, with respect to the proposed acquisition by Foxpoint of all of the issued and outstanding securities of Telegraph.  The Letter of Intent is not an Agreement in Principle (as defined in TSX Venture Exchange (the "Exchange") Policy 2.4).

Subject to final structuring and the execution of a definitive transaction agreement, the transaction is proposed to be structured as a merger (the "Merger") between Telegraph and a wholly-owned subsidiary of Foxpoint, whereby the common shares of Telegraph would be exchanged for common shares of Foxpoint, and the common share purchase warrants and options of Telegraph would be exchanged for common share purchase warrants and options of Foxpoint or adjusted to be exercised into common shares of Foxpoint, all in accordance with an exchange ratio to be agreed upon.

Telegraph is the owner of a 100% earn-in option related to the Telegraph claims (1,900 acres, including the past producing Telegraph Mine), and the 100% owner of the Excelsior claims (1,050 acres, including the past producing Monte Cristo Mine), both located in Sierra County, California. The Telegraph and Excelsior claims are adjacent and contiguous to each other.

Financial information for Telegraph will be provided in the management information circular or other disclosure document of the Corporation to be prepared in connection with the transaction.

The Corporation intends for the proposed Merger to constitute the "Qualifying Transaction" of the Corporation as such term is defined in Exchange Policy 2.4.

The Telegraph Gold Project  

The Telegraph Gold Project, comprised of the Telegraph and Excelsior claims, is located in the Mother Lode Gold district of Sierra County, Northern California. The Telegraph Mine, which is fully permitted for underground rehabilitation and underground exploration drilling, was in production from high-grade placer deposits as recently as 1996.

Telegraph has the exclusive option to earn a 75% interest in the Telegraph Gold Project by completing $4,730,000 in project expenditures and making payments of $3,600,000 to the vendor by 2014. Telegraph can earn an additional 25% by completing a feasibility study, issuing an additional payment of $6,500,000 in either cash or stock, and providing a 2% Net Smelter Royalty.

During August of 2011, Telegraph initiated a private placement of 12.1M common shares for total net proceeds of $6.0M at a price of $0.50 per common share. The company has completed the first tranche of the financing issuing 10.8M shares, for proceeds of approximately $5.4M. Upon completion of the financing, Telegraph will have 39.437 million shares outstanding and $6.5M in the treasury.

Telegraph Management and Board of Directors

Telegraph has a board of directors and management team with significant expertise in gold exploration and mining operations. Members of the board of directors include:

  • Gary Freeman, President and Chief Executive Officer, Director (Previously Chief Executive Officer of Pediment Gold Corp.)
  • Kevin Bullock, Non-Executive Chairman, Director (President and Chief Executive Officer of Volta Resources Inc.)
  • Mark Wayne, Director (Chairman of Alamos Gold Inc.)
  • Colin Sutherland, Director (Chief Financial Officer of Timmins Gold Corp.)
  • Darin Wagner, Director (President and Chief Executive Officer of Balmoral Resources Ltd.)
  • Greg Lipton, Director (President and Chief Executive Officer of Metallum Resources Inc.)
  • Andrew Powers, Director (Lawyer, Osler, Hoskin and Harcourt LLP)

Conditions to Closing

The transaction is expected to be subject to the execution and delivery of a definitive transaction agreement and other conditions, including the following: (i) completion of satisfactory due diligence investigations; (ii) delivery of a satisfactory title opinion and of an NI 43-101 compliant technical report with respect to the Telegraph Gold Project; (iii) conditional approval of the proposed transaction by the Exchange; (iv) board of director approvals of each party to the transaction; and (v) receipt of all required or desirable shareholder, regulatory approvals, consents, waivers and compliance with all other applicable regulatory requirements and conditions.

Exclusivity and Termination Provisions

The parties have agreed to work exclusively together in an effort to negotiate the definitive transaction agreement following the date of this news release until the termination of the Letter of Intent and to not pursue any discussions with, provide information to, or enter into any agreement that would result in a transaction similar to the proposed transaction with another party. Additionally, the Corporation and Telegraph have agreed to promptly advise the other of the receipt of any unsolicited proposals.

The Letter of Intent will terminate upon the earlier of (a) 5:00 p.m., Toronto time, on November 15, 2011; (b) the date of execution of a definitive transaction agreement; or (c) such later or earlier date and time as Foxpoint and Telegraph may agree in writing.

Other Information and Updates

The Corporation is working on finalizing a definitive transaction agreement with respect to the transaction.  The Corporation's common shares are currently listed for trading on the Exchange.  However, the Corporation's common shares 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 Corporation's common shares will resume prior to the completion of the proposed transaction.  The Corporation will provide further details in respect of the proposed transaction in due course by way of press release.

Cautionary Statements

Certain statements contained in this press release constitute forward-looking information.  These statements relate to future events or future performance.  The use of any of the words "could", "intend", "expect",  "believe", "will", "projected", "estimated" and similar expressions and statements relating to matters that are not historical facts are intended to identify forward-looking information and are based on the Corporation's current belief or assumptions as to the outcome and timing of such future events.  Actual future results may differ materially.  In particular, this release contains forward-looking information relating to the intention of the parties to enter into the definitive transaction agreement and the Merger.  Various assumptions or factors are typically applied in drawing conclusions or making the forecasts or projections set out in forward-looking information. Those assumptions and factors are based on information currently available to the Corporation.  The material factors and assumptions include the parties to the Letter of Intent being able to obtain the necessary director, shareholder and regulatory approvals; Exchange policies not changing; completion of satisfactory due diligence; and no unforeseen circumstances with respect to the technical report that would cause delay while the parties rectified deficiencies.  Risk Factors that could cause actual results or outcomes to differ materially from the results expressed or implied by forward-looking information include, among other things: conditions imposed by the Exchange, the failure to obtain the required directors' and shareholders' approvals; changes in tax laws, general economic and business conditions; and changes in regulation.  The Corporation cautions the reader that the above list of risk factors is not exhaustive.  The forward-looking information contained in this release is made as of the date hereof and the Corporation is not obligated to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable securities laws. Because of the risks, uncertainties and assumptions contained herein, investors should not place undue reliance on forward-looking information. The foregoing statements expressly qualify any forward-looking information contained herein.

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

SOURCE Foxpoint Capital Corp.

For further information:

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

Profil de l'entreprise

Foxpoint Capital Corp.

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