/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, 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
Darin Wagner, Director (President and Chief Executive Officer of
Balmoral Resources Ltd.)
Greg Lipton, Director (President and Chief Executive Officer of Metallum
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.
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