/NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR DISTRIBUTION TO U.S.
- X-Ore shares to be consolidated on a 1 for 12.307692 basis
- X-Ore to issue 49,775,000 post-consolidation shares to Shamika
- Shamika Resources holds mining properties in the Democratic Republic of
VAL D'OR, QC, Oct. 8 /CNW Telbec/ - X-Ore Resources Inc. ("X-Ore")
(TSXV - XOR) announces that it has entered into a letter agreement dated
October 7, 2008 with Shamika Resources Inc., a Montreal-based private company
with mining exploration properties in the Democratic Republic of the Congo
(the "DRC"), for an arm's-length reverse take-over transaction. The letter
agreement provides for the acquisition by X-Ore of all of the issued and
outstanding shares of Shamika Resources for an aggregate purchase price of
approximately $19.9 million, payable by the issuance of 49,775,000 common
shares of X-Ore, following a consolidation of the 86,034,711 common shares of
X-Ore on the basis of one share for every 12.307692 shares issued and
outstanding. Upon the closing of the reverse take-over and a concurrent
private placement, there will be 63,072,578 issued and outstanding X-Ore
common shares, the current shareholders of Shamika Resources will collectively
exercise control over X-Ore, and X-Ore's corporate name will be changed to
reflect the transaction with Shamika Resources.
Completion of the proposed reverse take-over is subject, among other
things, to regulatory approval and to the closing of a concurrent private
placement of a minimum of 6,307,258 units. Each unit will consist of one
common share of X-Ore and one-half of a share purchase warrant. Each whole
warrant will entitle the holder to purchase one common share of the new
Company for a period of one year. The final terms and conditions of the
concurrent private placement will be determined in the context of the market.
About Shamika Resources Inc.
Shamika Resources was incorporated under the Canada Business Corporations
Act and is in the business of exploring and developing natural resource
properties on the African continent. Shamika Resources holds near-term
production properties containing tantalum, tin, tungsten and niobium, as well
as the possibility of other minerals, including copper, platinum-group
elements, diamonds and gold, in the resource-rich Kibara metallogenic belt
area of the DRC. Shamika's strategy in the DRC is to secure a large portfolio
of mining blocks containing tantalum, tin, niobium and tungsten ore.
As of August 1st, 2008, Shamika held 721 mining blocks and is in the
process of claiming an additional 6,726 blocks. By the end of 2008, Shamika
expects to hold full mining rights on approximately 6,000 blocks for a total
area of about 5,000 square kilometres, most of these concessions being located
in the Kibara Belt of the DRC. All of Shamika's properties were granted under
the new democratically-elected government of the DRC.
Reports prepared in accordance with National Instrument 43-101 will be
available shortly with respect to two of Shamika's properties (Idjwi and
Léon Méthot, President & CEO of X-Ore commented, "This is a defining
transaction for X-Ore shareholders, as it provides leverage to a portfolio of
projects in one of the world's richest mineralized regions and to a host of
strategic metals with widespread industrial applications in steel and
electronics. It also allows X-Ore to advance its current projects in Mexico
and Canada, thereby unlocking value that is being overlooked in the current
Terms of the Proposed Reverse Take-Over
The letter agreement between X-Ore and Shamika Resources provides that
the 86,034,711 issued and outstanding common shares of X-Ore will be
consolidated on the basis of one share for every 12.307692 shares issued and
outstanding, so that there will be 6,990,320 X-Ore shares outstanding. X-Ore
will then acquire all of the shares of Shamika Resources for an aggregate
purchase price of $19,910,000, payable by the issuance of 49,775,000 common
shares of X-Ore. There are approximately 20 shareholders of Shamika Resources.
Holders of 4,703,628 Shamika Resources options will receive, in exchange
for such securities, options of X-Ore to purchase up to 4,703,628 X-Ore common
shares. These X-Ore options will entitle their holders to purchase X-Ore
common shares at exercise prices equivalent to those under their current
Shamika Resources options, ranging from $0.20 to $0.75 per share.
The letter agreement also provides that holders of 15,675,000 Shamika
Resources warrants will receive, in exchange for such securities, warrants of
X-Ore to purchase up to 15,675,000 X-Ore common shares at a price of $0.30 per
share, equal to the exercise price of their current Shamika Resources
The letter agreement further provides that holders of Shamika Resources
debentures in an aggregate principal amount of approximately $715,000 will
receive, in exchange for such securities, equivalent debentures of X-Ore. The
debentures will be convertible into an aggregate of approximately
3,700,000 X-Ore common shares until dates ranging from February to October
Upon completion of the reverse take-over and concurrent private
placement, it is expected that X-Ore will be a Tier 2 mining exploration
company pursuant to the policies of the TSX Venture Exchange, and that there
will be 63,072,578 issued and outstanding X-Ore common shares. Of these, the
current shareholders of Shamika Resources will hold an aggregate of
49,775,000 shares, representing 78.9% of the issued and outstanding X-Ore
common shares, the current shareholders of X-Ore will hold an aggregate of
6,990,320 shares, representing 11.1% of the issued and outstanding shares, and
investors in the private placement will hold an aggregate of 6,307,258 shares,
representing 10% of the issued and outstanding shares. The principal
shareholder of X-Ore will be a Québec private company controlled by Messrs.
Robert Vivian and Abdou Boughanmi, both of Montreal, Québec, which will own
approximately 51% of X-Ore's outstanding shares. Mr. Vivian is the Chairman of
the Board, President and Chief Executive Officer of Shamika Resources.
The proceeds from the proposed concurrent private placement will be used
for working capital purposes and to carry out recommended exploration programs
on Shamika Resources' two principal properties.
The transaction between X-Ore and Shamika Resources was negotiated at
Shamika Financial Information
As of June 30, 2008, based on unaudited unconsolidated financial
statements, Shamika Resources had assets of $3,171,885, liabilities of
$989,125 and shareholders' equity of $2,182,760. For the period from
October 17, 2007 to June 30, 2008, Shamika Resources had nominal revenues and
a net loss of $1,016,563.
Proposed Directors and Management Team
At the closing of the reverse take-over, the current Board of Directors
of X-Ore will resign, with the exception of Mr. Terence Ortslan, who is also a
director of Shamika Resources, and Messrs. Robert Vivian, Alvin Schacter,
C.A., Kikaya Bin Karubi, (resident of the DRC), Jacques Bouchard Jr., David
Crevier, Hubert Marleau, Ashwath Mehra (resident of Switzerland) and Jean
Précourt, all current directors of Shamika Resources, will be appointed to the
Board of Directors of X-Ore to replace them, either immediately or at the next
shareholders' meeting. Upon completion of the reverse take-over, the new
senior management team of X-Ore will be led by Mr. Robert Vivian, President
and Chief Executive Officer, Mr. Alvin Schacter, C.A., Vice-President, Finance
and Chief Financial Officer, and Mr. Anthony Keogh, Comptroller. Mr. Léon
Méthot, X-Ore's current President and CEO, will continue to advise the new
management on current and future initiatives.
The following are brief résumés of the currently-proposed management team
of X-Ore following the reverse take-over:
Robert Vivian, President and Chief Executive Officer. After a successful
career as manager for the investment and industrial division of a major
Canadian trust company and as an entrepreneur, Robert Vivian founded Shamika
Resources to capitalize on his extensive relationships in the DRC. Mr. Vivian
has extensive knowledge and hands-on experience with the identification and
development of natural resource opportunities in Africa.
Alvin S. Schacter, C.A., Vice-President Finance and Chief Financial
Officer. Mr. Schacter brings 30 years of finance, operations and consulting
experience to Shamika Resources. He has served on the Board of Directors of
several public companies. Mr. Schacter also served as President and Chief
Operating Officer of Warrington Inc., a public company with approximately
3,000 employees and $200 million in annual sales.
Anthony Keogh, Comptroller. Mr. Keogh is a Chartered Accountant
(England), with more than 30 years of experience in accounting, financial
management and internal auditing. As an accountant, Mr. Keogh was with Price
Waterhouse in London and Montreal. In industry, he spent 18 years with Cemp
Investments Ltd., a major private investment company, and subsequently with
other companies, including Standard Life and GE Capital.
Guy Arbour, P. Eng., Geo., M.Sc (Geophysics), Exploration Manager.
Mr. Arbour will supervise the exploration and development of claims and
properties, while providing assistance to the President with communications
and other groundwork. Mr. Arbour has extensive experience in field geophysics
and mining exploration. He was Director of Development for the Canadian
Institute of Mining and Metallurgy.
Patrick Vualu, Chief Geologist. Mr. Vualu has a diploma in geology from
the University of Lubumbashi in the DRC and extensive experience in all
aspects of mining in the DRC. He served as project manager for De Beers in the
DRC and was appointed chief department officer for the Ministry of Mines
(Département du Domaine Minier et des Carrières). Mr. Vualu is also President
of Général de la Société Mining Consulting and Services, a firm offering
services in the mining sector, including geological mapping, structural and
lithological mapping, geological logging, analysis and testing of minerals,
and preparation of preliminary geological and project reports.
Jane Qu, Business Development Coordinator for China. Originally from a
very active mining area in China, Ms. Qu is familiar with senior management of
some of China's largest mining companies, involved with minerals such as tin,
iron ore, coal and copper. Prior to joining Shamika Resources, Ms. Qu was
responsible for the sales and marketing of a Chinese pharmaceutical group for
more than 13 years. In that role, she increased sales substantially and
expanded the company's markets throughout China, Japan and North America.
Patrick Martineau, Environmental and Social Affairs. Mr. Martineau has a
Master's degree in Political Science from the Université du Québec à Montréal
(UQAM). Mr. Martineau did his research work on the governance of DRC mining
activities and the challenges of the columbo-tantalite sector. He has made
several visits to Africa, where he was appointed Co-coordinator on a research
project on the social impact of mining investments and Head Researcher for a
survey on the columbo-tantalite sector in the DRC.
Conditions to Completion of Reverse Take-over
Completion of the transaction is subject to a number of conditions,
including, but not limited to, the closing of the concurrent private
placement, approval by the TSX Venture Exchange, completion of satisfactory
legal, accounting and financial due diligence by both X-Ore and Shamika
Resources, and preparation and signing of formal agreements, including a share
exchange agreement between X-Ore and all of Shamika Resources' security
holders. The reverse take-over will also be subject to approval by X-Ore's
shareholders, as will the share consolidation and change of X-Ore's corporate
name. Closing of the transaction is expected to occur in the first quarter of
2009. The transaction cannot close until the required X-Ore shareholder
approval is obtained. There can be no assurance that the transaction will be
completed as proposed or at all.
Investors are cautioned that, except as disclosed in X-Ore's management
information circular to be prepared in connection with the transaction, any
information released or received with respect to the reverse take-over may not
be accurate or complete and should not be relied upon. Trading in the
securities of X-Ore should be considered highly speculative.
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. The TSX Venture Exchange does not accept
responsibility for the adequacy or accuracy of this release.
Additional information regarding Shamika Resources' properties, financial
situation and the proposed concurrent private placement will be provided in a
subsequent press release.
About X-Ore Resources Inc.
X-Ore is a mineral exploration company with 18 properties located in
known gold regions of Mexico and Canada, including the prolific Sierra Madre
Gold Belt and the Val-d'Or region of Québec.
The TSX Venture Exchange does not accept responsibility for the accuracy
of this press release. This press release contains "forward-looking
statements" not based on historical facts. Forward-looking statements express,
as of the date of this press release, our estimates, forecast, projections,
expectations and opinions as to future events or results. Forward-looking
statements herein expressed are reasonable, but involve a number of risks and
uncertainties, and there can be no assurance that such statements will prove
to be accurate. Therefore, actual results and future events could differ
materially from those anticipated in such statements. Factors that could cause
results or events to differ materially from current expectations expressed or
implied by the forward-looking statements include, but are not limited to,
fluctuations in the market price of precious metals, mining industry risks,
uncertainty as to calculation of mineral resources and requirements of
additional financing and the capacity of the Company to obtain financing.
For further information:
For further information: please visit X-Ore's website at www.x-ore.com
or contact: Mr. Léon Méthot, President and CEO, (819) 824-5422; Mr. Paul
Goulet, Investor Relations, (514) 710-8290, firstname.lastname@example.org