OTTAWA, Sept. 5 /CNW Telbec/ - YOW Capital Corp. ("YOW") (TSX Venture
Exchange: YOW.p) is pleased to provide further details regarding the signing
of a letter of intent (the "Letter of Intent") with 1618254 Ontario Ltd.
("161"), dated July 31, 2008 and accepted August 5, 2008, to acquire all of
the issued and outstanding shares of 161 by means of a one-for-one share
exchange (the "Acquisition"). 161's principal asset consists of exploration
and other rights on certain copper mineral claims, as further described below.
The signature of the Letter of Intent was previously announced by YOW on
August 6 and 7, 2008.
Management of 161 has indicated to YOW that it expects 161's seven
shareholders to support the sale of the company and to tender their shares at
closing. The following persons hold 10% or more of the issued and outstanding
shares of 161: Bernie Stannus (11.8%), David Lajack (27.5%) and Advance8
Precious Metals Ltd. (39.2%), a company controlled by Cathy Fong, a resident
of Vancouver, British Columbia. As further detailed hereunder, upon completion
of the Transaction (as defined below), it is expected that Mr. Lajack will be
appointed as a director and Executive Vice-President of YOW and that
Mr. Stannus will be appointed as a director and Vice-President, Mining of YOW.
To the knowledge of YOW's management, no shareholder of 161 owns any shares of
In the event the parties are able to negotiate definitive agreements, the
Acquisition will constitute YOW's qualifying transaction under the policies of
the TSX Venture Exchange (the "Exchange"). The transactions contemplated by
the Letter of Intent are arm's length transactions and, as such, will not be
subject to the approval of YOW's shareholders.
161's assets essentially consist of about $115,000 in cash and of an
option (the "Option") granted to it by C-D Development Corporation, a company
formed under the laws of Alaska (the "Optionor"), to acquire all of the
Optionor's right, title and interest in and to an advanced stage copper
project consisting of 31 mining claims (the "C-D Claims") totalling
1,360 acres in the Talkeetna mining district of Alaska (the "Property") by
paying the sum of $1,720,806 over four years (the "Option Period"). The
Optionor has a 100% interest in the C-D Claims. During the Option Period, 161
has the right to explore for minerals on the Property and to remove reasonable
quantities of rocks for the purposes of sampling, obtaining assays or making
other tests. Should the property be brought into production before the end of
the Option Period, the unpaid balance of the exercise price will become
immediately due. The Option will lapse if the Property is not determined to be
a Qualifying Property (as defined by Exchange rules) within 150 days of the
date of the Option, which is May 21, 2008. 161 has no long-term debt.
The Option obligates 161 to maintain in good standing the C-D Claims by
doing and filing the maximum available work credits on the Property, or by
making payments in lieu thereof, and by paying all taxes and rentals in order
the keep the Property free of liens. 161 may abandon any one or more of the
mineral claims comprised in the Property at any time during the Option Period
by giving appropriate notice to the Optionor. Also, if either the Optionor or
161 acquires any interests within a certain area in the vicinity of the
Property, those interests are deemed included in the Property. Therefore, in
the event the Option is terminated, such interests will revert to the
Optionor. On July 10 and 15, 2008, 161 staked 66 additional claims totalling
8,880 acres surrounding the original C-D Claims. These claims were recorded on
August 19, 2008 and form part of the assets of 161 for the purposes of the
The Property, known as the Caribou Dome Project, is located in the far
northern portion of the Matanuska-Susitna Borough of South-Central Alaska,
approximately 257 km northeast of Anchorage, the state's capital, on the south
side of the Alaska Range, within 25 km of the Denali Highway, and about 8 km
east of the Valdez Creek placer gold mine. Historic exploration and
development work on the Property from its discovery in 1963 through 1971
defined a near-surface, high grade copper resource in the form of nine (9)
major chalcopyrite-bearing lodes along with numerous smaller lodes that have
been explored by trenching and more than 36,000 feet of surface and
underground drilling in more than 230 core and percussion holes. In addition
to the extensive drilling and trenching, an adit, 1,189 feet in length, and a
decline, 1,706 feet in length, were driven by Alaska Exploration Syndicate
(AES) into three of the lodes to expose the mineralization at depth and to
provide drill stations for further exploration. A resource of 550,400 tons of
mineralized rock grading 5.84% copper, delineated by the drilling and
underground workings, was calculated by R. H. Seraphim Engineering Limited in
1970 on only three (3) of the nine (9) copper-bearing lodes. These lodes are
currently open at depth. The other six lodes have not been drilled with enough
detail to calculate a resource but are known to contain significant copper
mineralization. The potential quality and grade of the mineral resources is
conceptual in nature. A Qualified Person (as defined by applicable rules) has
not done sufficient work to classify the historical estimate as current
mineral resources. YOW is not treating the historical estimate as current
mineral resources and the historical estimate should not be relied upon.
161 has commissioned a geological report and plans to soon commission a
number of other studies, including water sampling and wetlands studies as well
as geographical surveys.
The consideration for the Acquisition will be approximately $510,000,
which consideration will be paid by the issuance from treasury of 2,550,000
common shares at a deemed price per share of $0.20, which will represent
approximately 15% of the issued and outstanding shares of YOW upon completion
of the Transaction (as hereinafter defined).
Concurrent with the Acquisition, YOW will offer for sale by way of a
brokered private placement (the "Financing") 7,500,000 units ("YOW Units") at
a price of $0.20 per YOW Unit for gross proceeds of up to $1,500,000. Each YOW
Unit will consist of one common share of YOW and one half of one common share
purchase warrant ("YOW Warrant"). Each whole YOW Warrant will entitle the
holder to purchase one Common Share of YOW at a price of $0.40. The YOW
Warrants will expire two years from the closing of the Financing. The
Acquisition and the Financing are collectively hereinafter referred to as the
Funds from the Financing will be primarily utilized to satisfy the
initial listing requirements of the Exchange and to conduct drilling and
exploration as well as a re-sampling of the existing core and a metallurgical
analysis of a recent bulk sample. Funds will also be allocated to re-build and
expand the mining camp.
The completion of the Transaction is subject to certain conditions,
including the following: (i) the approval of applicable regulatory authorities
including the Exchange, (ii) the completion of satisfactory due diligence on
161 and the Property, (iii) the obtaining by YOW of a geological report which
recommends a non-contingent work program in the amount of $200,000 or more,
(iv) full repayment of all third- and related-party indebtedness (including to
and from direct or indirect shareholders, directors or their affiliates), if
any, (v) the negotiation and execution of the required definitive agreement(s)
to the satisfaction of YOW, (vi) the approval to proceed with the Transaction
by the board of directors of YOW, (vii) the receipt of all necessary
third-party consents and approvals, including those of governmental
authorities having jurisdiction over the Property, and (vii) the completion by
YOW of a private placement for no less than $1,500,000 in connection with the
closing of the Acquisition, which shall have been approved by the Exchange.
Concurrently with the completion of the Transaction, all of the current
directors of YOW except Paul Barbeau and Pierre Vella-Zarb will resign. The
board of directors of YOW will thereafter consist of five (5) directors,
namely David Lajack, who will also assume the position of Executive
Vice-President, Bernie Stannus, who will also assume the position of
Vice-President, Mining, Pierre Vella-Zarb, who will assume the role of
President and Chief Executive Officer, Michael England and Paul Barbeau.
Messrs. Lajack and Stannus are both residents of Tucson, Arizona,
Mr. Vella-Zarb is a resident of Thornhill, Ontario and Mr. Barbeau is a
resident of Kanata (Ottawa), Ontario.
Barry Gould will remain the company's Chief Financial Officer. Mr. Gould
is a resident of Ottawa, Ontario.
David Lajack has worked in lode mineral exploration since the early
1980s. In 1985 he founded a successful prospecting syndicate (Lajack and
Associates) which still has active properties in Alaska. Mr. Lajack is a
founding member and President of Royal Pretoria Gold Ltd., a private mineral
exploration company incorporated in Alaska in August 2000. Mr. Lajack has
worked as a consultant in the industry and has co-authored published papers on
geology and geochemistry. Mr. Lajack serves on the board of several mining
companies including Alix Resources Corp. (TSX-V: AIX), Andover Ventures Inc.
(TSX-V: AOX), Geo Minerals Ltd. (TSX-V: GM) and Silver Phoenix Resources Inc.,
a private company.
Bernie Stannus, P.Eng., is Vice-President, Mining for Inca Pacific
Resources Inc. (TSX-V: IPR, Bolsa de Valores de Lima: IPR). Mr. Stannus has
more than 34 years of experience in mineral exploration and mine management in
North and South America. Mr. Stannus has played an integral part in the
design, development, construction and operation of a number of mines including
the Picacho Mine in California, the Gilt Edge Mine in South Dakota, the
Ryan Lode Mine in Alaska and the Andacollo Gold Mine in Chile.
Pierre Vella-Zarb is President of Falcon Corporation, a corporate finance
advisory services company which he founded in 1993. Falcon Corporation
provides strategic advice on financings and mergers and acquisitions to both
private and public companies and assists private companies through the process
of becoming publicly traded, including locating business targets and
negotiating and documenting transactions. He is currently a director of
Alix Resources Corp. (TSX-V: AIX), having previously been a director of NPN
Investment Group Inc. ("NPN) from February 2005 until the completion of the
company's Qualifying Transaction in June 2007. Mr. Vella-Zarb received his
Bachelor of Science from the University of Toronto in 1982. Mr. Vella-Zarb is
currently a director of YOW.
Michael England is President, Chief Executive Officer and a director of
Alix Resources Corp. (TSX-V: AIX) and President, Chief Executive Officer and a
director of Geo Minerals Ltd. (TSX-V: GM). He has been involved in public
capital markets since 1983, beginning with CM Oliver & Co. and Richardson
Greenshields and later working for RBC Dominion Securities. Since 1995
Mr. England has been involved directly with public companies in various
capacities including investor relations, chief financial officer, director and
president. He was notably President and Chief Executive Officer of Andover
Ventures Inc. (TSX-V: AOX) from August 2006 to December 2007. Mr. England
serves on the board of several other companies including Alston Ventures Inc.
(TSX-V: ALO.p), Ashburton Ventures Inc. (TSX-V: ABR.p), Consolidated Beacon
Resources Ltd. (TSX-V: KBC) and Kent Exploration Inc. (TSX-V: KEX).
Paul Barbeau is the President of the privately owned hyperNet Inc., an
application development and services company. Mr. Barbeau is also currently
the President, Chief Executive Officer and a director of YOW and the Chief
Executive Officer of Panda Capital Inc., a capital pool company (TSX-V:
PDA.p). Mr. Barbeau was President, CEO and a director of NPN from April 2004
to August 2007. NPN is a former capital pool company that completed its
Qualifying Transaction in June 2007 and now trades on the Exchange under the
name Alix Resources Corp. (TSX-V: AIX).
Mr. Gould is President and CEO of Pitagora Solutions Corporation, a
privately-held management consulting firm, since January 2004. Mr. Gould has
over 30 years of experience in financial analysis and modeling with the
Department of National Defence and in the federal public service. Mr. Gould
obtained his Certified Management Accountant (CMA) designation in
October 1979. He holds a Bachelors Degree (Honours 1971) in Economics and
Commerce from the Royal Military College. Mr. Gould retired from the Canadian
Navy in 1990 with the rank of Commander. Mr. Gould was Chief Financial Officer
and a director of NPN, a capital pool company listed on the Exchange (TSX-V:
NPN), from April 2004 to June 2007. NPN completed its Qualifying Transaction
in June 2007 and now trades on the Exchange under the name Alix Resources
Corp. (TSX-V: AIX). Mr. Gould is currently the Chief Financial Officer and a
director of YOW.
The preparation of the geological information in this press release has
been supervised by Dr. Donald L. Stevens of Stevens Exploration Management
Corp., who is a "qualified person", as such term is defined in National
Instrument 43-10, at arm's length with 161 and YOW.
Sponsorship of a qualifying transaction of a capital pool company is
required by the Exchange unless exempt in accordance with the Exchange's
policies. YOW intends to apply for an exemption from sponsorship requirements
based on the conduct of a brokered private placement in connection with the
Transaction and/or the preparation of a current geological report for the
property, including recommendations for exploration and/or development work.
However, no assurance can be given that YOW will obtain this exemption.
Completion of the Transaction is subject to a number of conditions,
including but not limited to, Exchange acceptance and if applicable pursuant
to Exchange Requirements, majority of minority shareholder approval. Where
applicable, the Transaction cannot close until the required 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 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 Inc. 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 Inc. does not
accept responsibility for the adequacy or accuracy of this release.
For further information:
For further information: Mr. Paul Barbeau, CEO, YOW Capital Corp., (613)
232-1567, (613) 232-1658 (fax)