VANCOUVER, Jan. 15 /CNW/ - Galena Capital Corp. (TSXV: FYI) ("Galena" or
the "Company"), a Vancouver based company listed on the TSX Venture Exchange
(the "Exchange"), is pleased to announce that it has entered into a Letter
Agreement effective January 15, 2008 with Norma Mines Limited ("Norma Canada")
under which the Company has agreed to acquire Norma Canada (the
"Acquisition"). The Acquisition is an arm's length transaction within the
meaning of the Exchange's policies.
Norma Canada owns interests in two prospective mineral exploration
properties in Mexico and four prospective mineral exploration properties in
Peru (the "Properties") through its wholly-owned Mexican and Peruvian
subsidiaries. Norma Canada and its subsidiaries are known as the Norma Mining
Group. The Norma Mining Group is actively pursuing additional projects from
its extensive list of prospects, six of which it anticipates being worthy of
The Norma Mining Group currently employs more than a dozen exploration
geologists and mining engineers, headed by Norma Canada's President Danson
Tolman, who collectively have extensive knowledge of mineral exploration and
mining operations in Latin America and South America and a deep network of
contacts from which to access additional properties.
By acquiring the Norma Mining Group, Galena will accelerate its ability
to aggressively pursue and aggregate highly prospective gold, silver and other
metal projects in Latin America and South America. Arni Johannson, CEO &
Chairman of Galena commented: "The acquisition of the Norma Mining Group
involves both the acquisition of outstanding properties and an enhanced level
of expertise that will enable Galena to be well on its way to executing its
three step business plan introduced to investors when its Qualifying
Transaction closed in November 2007."
Under the terms of the Letter Agreement, the Company will acquire all of
the issued securities of Norma Canada from its shareholders in exchange for
4,200,000 common shares in the capital of the Company.
Certain of these common shares will be subject to escrow in accordance
with the TSX Venture Exchange's policies.
Proposed Private Placement
Concurrent with the completion of the Acquisition, the Company proposes
to complete a brokered private placement consisting of 1,500,000 units of the
Company at a price of C$2.00 per unit, for gross proceeds of up to
C $3,000,000. Each unit will consist of one common share and one-half of one
transferable common share purchase warrant, with each whole warrant entitling
the holder to purchase an additional common share in the capital of the
Company for a price of $2.50 for a period of two years from the closing of the
The Company may pay finder's fees in connection with the private
placement within the limits set by the Exchange.
Canaccord Capital Corporation has agreed to act as the Company's agent
for the purpose of completing the private placement and will be paid a cash
fee of 7% of the gross proceeds of the financing, agent's warrants to purchase
up to that number of common shares in the capital of the Company that equals
7% of the number of units issued under the private placement at a price of
$2.50 per common share for a period of two years from the closing of the
private placement, a corporate finance fee of 15,000 units (having the same
terms as those issued to the purchasers) and $10,000 in cash as an
The net proceeds of the private placement will be used to fund the costs
associated with completing the Acquisition and land maintenance obligations
relating to the Properties, exploratory work programs on selected properties
owned by Norma Canada as detailed below, and for general working capital
purposes in operating the Norma Mining Group.
Description of the Properties
Norma Canada's two subsidiaries own, or hold options to purchase, various
interests in six prospective mineral exploration and development projects in
Mexico and Peru. The Properties cover an area in excess 30,620 acres.
Galena intends to direct its initial attention to exploration work on the
Maria project in Mexico and the Patricia project in Peru, where the Company
proposes to expend approximately $500,000 per project over the next 12 months
in preliminary exploration work with a view to completing a technical report
in accordance with National Instrument 43-101 on those projects that show
merit as a precursor for more advanced developmental work.
Maria Project, Mexico
Pursuant to an option agreement dated October 19, 2007, Norma Mines SA de
CV has the option for a period of one year to acquire 100% of the legal and
beneficial interest in the San Juan Nepomuceno project for a cash payment of
This project is located north of Mexico City and comprises an area of
approximately 550 hectares. It hosts numerous free gold and silver structures
running over an area 8 km long by 6 km wide. Preliminary sampling undertaken
by the Norma Mining Group in 2007 included sample sets with up to 500g per
Pursuant to a mineral exploitation agreement dated December 18, 2007,
Norma Mines Peru S.A. has the right to acquire 100% of the legal and
beneficial ownership in the Patricia properties in consideration for paying a
total of US$2,225,000, completing a mineral exploration and exploitation
program, paying all maintenance costs on the concessions and granting the
vendor a 2% Net Smelter Return royalty over production from the concessions.
The Patricia project is located in Ancash, in north central Peru, and
consists of 10 mineral exploration and exploitation concessions totalling
approximately 3,900 hectares that have numerous areas of disseminated gold
mineralization in anomalous intrusive and shale structures. More than 10
mantos have been identified to date in the project area and preliminary work
by the Norma Mining Group has identified six anomalous areas returning samples
with over 5g per tonne gold.
The sample results discussed in this news release do not conform to the
standards of National Instrument 43-101 and should not be relied upon by the
The parties' obligations to complete the Acquisition are subject to the
satisfaction of the usual conditions precedent including:
(a) all necessary approvals of the Exchange and all other regulatory
authorities and third parties to the Acquisition and the private
placement being obtained;
(b) no adverse material change shall have occurred in the business,
affairs, financial condition assets or operations of the Company,
Norma Canada or its subsidiaries or the Properties prior to
completion of the Acquisition;
(c) the completion of the brokered private placement on the terms set
forth above; and
(d) both parties being satisfied with the results of its due diligence
review in connection with the Acquisition.
Completion of this transaction is subject to Exchange acceptance. The
transaction cannot close until the required Exchange approval is obtained.
There can be no assurance that the transaction will be completed as proposed
or at all.
Investors are cautioned that any information released or received with
respect to the transaction may not be accurate or complete and should not be
The TSX Venture Exchange has in no way passed upon the merits of the
proposed transaction and has neither approved nor disapproved the contents of
this press release.
ON BEHALF OF GALENA CAPITAL CORP.
CHAIRMAN AND CEO
THE TSX VENTURE EXCHANGE DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY
OR ACCURACY OF THIS RELEASE.
For further information:
For further information: Ian Pedersen, (Investor Relations), Suite 1101,
808 West Hastings Street, Vancouver, British Columbia, V6C 2X4, Canada, Tel:
(604) 638-0260, Toll Free: (877) 906-3987