TSX VENTURE SYMBOL: DFC.P
MONTREAL, Sept. 14 /CNW Telbec/ - D-Fense Capital Ltd.. ("D-Fense" or the
"Resulting Issuer"), a Capital Pool Company trading on The TSX Venture
Exchange ("TSX-V"), is pleased to announce that it has entered into a letter
of intent dated September 4, 2007 that was definitively accepted by all
parties on September 14, 2007 (the"Letter of Intent") and agreed, subject to
regulatory approval, to initiate procedures for the conclusion of a qualifying
transaction in accordance with policies of the TSX-V Corporate Finance Manual.
The proposed qualifying transaction (the "Qualifying Transaction") of
D-Fense consists in the acquisition of a 51% interest in the Mostazal project
(the "Project"), a property comprising 68 mining concessions, which covers
approximately 1750 hectares (the "Concessions"), with SOCIEDAD LEGAL MINERA
MOSTAZAL 1-20, SOCIEDAD LEGAL MINERA MOSTAZAL DOS 1-20, SOCIEDAD LEGAL SIETE
1-5, SOCIEDAD LEGAL MINERA MOSTAZAL TRES, SOCIEDAD LEGAL MINERA MOSTAZAL
CUATRO AND SOCIEDAD LEGAL MINERA MOSTAZAL SEIS, all of which are Chilean-based
limited liability corporations incorporated under the laws of Chile and that
are collectively the sole owners of the Concession (collectively referred to
as the "Chilean Partner").
Exploration Joint Venture
In order to acquire its option to purchase a 51% interest in the
Concessions, D-Fense will need to invest, over a maximum period of 4 years, a
minimum of US$3,000,000 (the "Investment") in exploration (geological,
geophysical and geochemical studies, drilling RC and DDH, and tunnelling).
Overhead costs of D-Fense are not included in the Investment. D-Fense has no
obligation to make the Investment according to a particular disbursement
schedule. In the event that the exploration costs exceed US$3,000,000, both
parties will contribute to the extra costs proportionally to their
participations. If the Chilean Partner is unable to contribute its share,
D-Fense will finance the Chilean Partner in the form of a loan, bearing market
interest rate, to be repaid by future income derived from the Project, or
alternately the Chilean partner could elect to dilute its position relative to
D-Fense. The Chilean Partner would be allowed to sell its 49% interest to any
third party, however D-Fense would have a right of first refusal over such
In addition to the Exploration Joint Venture, D-Fense will also have the
right to acquire a 50% participation in an exploitation company (the
"Exploitation Company") that would be operated by a Technical Committee
designated jointly by the partners. All terms and conditions relating to the
Exploitation Company would be determined in a definitive agreement to be
entered into between the partners.
The project is located approximately 80 km to the north of the city of
Copiapo and 30 km to the east of the Inca de Oro copper-gold district in the
third region of northern Chile. It sits at an altitude ranging from 2,700 and
3,000 metres and covers an area of 1,500 hectares. Codelco's world class El
Salvador porphyry copper deposit is found some 42 kilometres to the north of
the project and the port of Chanaral at 105 km to the WNW.
The Mostazal deposit consists of a stratabound copper-silver mineralized
system (manto) hosted in porphyritic andesites striking north-south to N40W
and dipping 40-60 degrees to the south. Alteration consists of an assemblage
of chlorite-epidote-sericite and locally silicification. Mineralized mantos
are observed in an area covering 1,300 meters by 500 metres. Towards the
northwest, it is covered by the Atacama gravel formation which hide its
possible extension in that direction.
The andesite units present on the property are part of the Lower
Cretaceous Sierra Fraga Formation. They consist of andesitic to
andesitic-basaltic lava flows and breccias of purple, greenish and garish
colors. They are locally interbedded with volcaniclastics and intruded by
dacitic porphyries and afanitic to porphyritic rhyolitic dikes of
The current capital structure of D-Fense consists of 2,850,000 common
shares ("Common Shares") and options to purchase up to 155,000 Common Shares.
In conjunction with the Qualifying Transaction, D-Fense shall complete a
private offering for a minimum amount of US$750,000 and a maximum of
US$1,500,000 (the "Concurrent Financing").
The proceeds from the Concurrent Financing shall serve a number of
purposes, namely without limitation, to fund the Investment of D-Fense in the
exploration program and working capital.
Jones, Gable & Company Ltd. (the "Agent"), subject to completion of
satisfactory due diligence, has agreed to act as agent in connection with the
Concurrent Financing. The remuneration of the Agent will be in accordance with
industry standards for similar transactions.
Pricing of the Common Shares offered in connection with the Concurrent
Financing will be agreed upon between D-Fense and the Agent once the NI 43-101
Technical Report has been finalized.
NI 43-101 Technical Report
D-Fense has mandated Mr. Pierre O'Dowd, geologist, as the qualified
person (as defined in the TSX-V policies) to prepare a NI43-101 Technical
Report with respect to the Concessions. Mr. O'Dowd has reviewed the section of
this press release entitled "Mostazal Project".
In relation with the assistance provided by Gadaline S.A. ("Gadaline"),
an Uruguayan company unrelated to D-Fense and acting at arm's length,
regarding D-Fense's negotiations with the Chilean Partner for the option in
the Mostazal Concessions, D-Fense proposes to issue to Gadaline a total
compensation of 1,000,000 Common Shares at a deemed price of $0,20 per share
over time and upon the occurrence of certain events. 500,000 Common Shares
will be issued to Gadaline upon closing of the Qualifying Transaction as
described in the Information Circular to be filed with the TSX-V. Finally,
D-Fense will issue 500,000 Common Shares on a pro-rata basis over the first
three year period at each anniversary of the closing of the Qualifying
Transaction. However, D-Fense will be under no obligation to issue such Common
Shares if it chooses not to pursue the Project on or before the anniversary of
the closing of the Qualifying Transaction.
The issuance of the Common Shares contemplated hereinabove will be
conditional upon D-Fense obtaining the required regulatory approvals, namely
the TSX-V's approval pursuant to its rules regarding finder's fees and
commissions, and conditional upon the issuance being exempt from the
prospectus and registration requirements of applicable securities legislation
in Canada and Uruguay.
The Qualifying Transaction and the Concurrent Financing are expected to
be completed concurrently and shall constitute D-Fense's Qualifying
Transaction in accordance with policies of the TSX-V Exchange Corporate
As a condition precedent to the closing of this Qualifying Transaction,
D-Fense must be satisfied:
(a) with the results of its due diligence review covering all aspects of
the Concessions and the mine, including, namely but without
limitation, legal, technical and environmental due diligence;
(b) that there have been no material adverse changes in the Concessions
between the date of execution of the Letter of Intent and the closing
of the Qualifying Transaction;
(c) that the Concurrent Financing has been completed; and
(d) that there be no pending or existing law, order or legal proceeding
challenging the Qualifying Transaction.
The closing of the Qualifying Transaction is also subject to satisfactory
regulatory approval, completion of formal agreements among the parties
involved and appropriate due diligence enquiries and investigations by said
D-Fense has 90 days, beginning on September 15, 2007, to close its
Arm's Length Transaction
This Transaction is entirely at arm's length as no party thereto has any
direct or indirect interest in the other party. This Transaction will
therefore not require shareholder approval under the terms of the Policy 2.4
of the TSX-V.
Board of the Resulting Issuer
Upon closing of the Qualifying Transaction, the board of directors of the
Resulting Issuer will be constituted of a minimum of five directors: two of
which are currently directors of D-Fense and three or more to be nominated
The following persons are currently directors of D-Fense and will also be
directors of the Resulting Issuer:
Robert Ayotte, age 55, is President and Chief Executive Officer of
Normabec Mining Resources Ltd., an exploration mining company listed on the
TSX-V since 1993. Mr. Ayotte holds a degree in Business Administration from
Université du Québec à Trois-Rivières since 1975. From 1975 to 1977, he was
cost analyst and inventory supervisor for Quebec Cartier Mining Company. From
1978 to 1986, Mr. Ayotte held several financial and administrative positions,
namely as chief accountant, financial analyst, broker and gold trader for
SOQUEM, an exploration mining company. From 1986 to 1993, Mr. Ayotte was
Vice-president, Corporate financing, for two stockbroking firms, namely McNeil
Mantha Inc. and Whalen Béliveau Inc. In 1993, he joined Gestion Corpomin Inc,
a company specialized in the management of mining companies, as
Vice-President. He was Vice-President of Cache Exploration from 1993 to
December 1995 and President of Agibway, an exploration mining company from
November 1993 to July 1996. Since January 2004, Mr. Ayotte is director of
Explor Resources inc., an exploration mining company listed on the TSX-V and
since April 2007, he is director of Komet Manufacturers Inc., a company which
is also listed on the TSX-V.
Robert Talbot, age 58, practices law since his admission to the Quebec
Bar in 1974. He is senior partner of the law firm Talbot & Associés since May
2004 and was previously lawyer and senior partner of the law firm Talbot
Drapeau Martel, from 1994 to 1999 and with Talbot Martel from 1999 to 2004.
Mr. Talbot is specialized in commercial and corporate law and has acted as
director of several private companies and of 4 reporting issuers Corporation
Minière Afcan, Semafo Inc., GIE Environment Technologies Ltd. and D-Fense.
Completion of the Qualifying Transaction is subject to a number of
conditions, including but not limited to, TSX-V acceptance and if applicable
pursuant to TSX-V Requirements, majority of the minority shareholder approval.
Where applicable, the Qualifying Transaction cannot close until the required
shareholder approval is obtained. There can be no assurance that the
Qualifying 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
The TSX Venture Exchange has in no way passed the merits of the proposed
transaction and has neither approved or disapproved the contents of this
press release. The TSX Venture Exchange has not reviewed and does not
accept responsibility for the adequacy or accuracy of this press release.
This news release may contain forward-looking statements based on the
assumptions and judgments of management regarding future events or results.
Such statements are subject to a variety of risks and uncertainties which
could cause actual events or results to differ materially from those reflected
in the forward-looking statements. D-Fense disclaims any intention or
obligation to revise or update such statements.
For further information:
For further information: Mr. Christian Perrier, President, (514)
336-0388, ext. 101; Mr. Robert Talbot, Corporate Secretary, (450) 686-1122,