/NOT FOR DISSEMINATION TO U.S. NEWSWIRE SERVICES/
TORONTO, May 4 /CNW/ - 71 Capital Corp. (the "Corporation") (TSXV-NEX: SVN.H) announced today that it has terminated its
previously announced letter of intent with Orx Pharmaceutical
Corporation and that it has today entered into a letter of intent (the
"Letter of Intent"), for the amalgamation of the Corporation with Kingsview Iron Ore
Limited ("Kingsview"). Kingsview is a private company engaged in the exploration and
development of mining claims in Quebec, Canada prospective for iron
deposits. The Corporation is a capital pool company and intends for the
amalgamation with Kingsview to constitute the Qualifying Transaction of
the Corporation (the "Qualifying Transaction") as such term is defined in the policies of the TSX Venture Exchange
Terms of Qualifying Transaction
Pursuant to the terms of the Letter of Intent, subject to completion of
satisfactory due diligence, a definitive amalgamation agreement (the "Agreement") and receipt of applicable approvals, the Corporation intends to
amalgamate with Kingsview.
The Qualifying Transaction is an arm's length transaction. No insiders
of the Corporation own securities in Kingsview and no insiders of
Kingsview own securities in the Corporation. It is intended that the
Corporation will complete a 5 for 1 consolidation of its shares and a
name change in connection with the Qualifying Transaction. The Corporation intends to call a meeting of its shareholders in the
near future in order to authorize the Qualifying Transaction.
Upon completion of the Qualifying Transaction, the Corporation will be
engaged in the business of Kingsview.
Kingsview was founded in February, 2011 under the laws of Canada.
Kingsview is a private company engaged in the exploration and
development of mining claims in Quebec, Canada which are prospective
for iron deposits. The Kingsview project is located in the Kativik,
Western Ungava Bay region of northern Quebec. The Kingsview properties
lie within the Labrador Trough. The Labrador Trough contains
world-class iron deposits, which have been mined since 1954. The band
extends for approximately 1,100 km southeast of Ungava Bay through
Quebec and Labrador. The company owns a 100% interest in over 1,100
claims totalling approximately 110,000 acres, subject to a 2% net
smelter royalty. All of the claims are strategically located close to
tidewater (Atlantic Ocean).
Significant work, including channel sampling and diamond drilling was
undertaken on the properties by Consolidated Fenimore Iron Mines Ltd in
the 1950's. The results indicated a large tonnage of concentrating
grade iron ore was present on the claims. The properties were restaked
in 2005 and 2006 and a new company was formed, Fenimore Iron Mines
Inc. Fenimore commissioned an extensive airborne magnetic and
radiometric survey as well as a geological mapping program. The claims
were subsequently acquired by Kingsview.
Kingsview has commissioned a National Instrument 43-101 report on the
properties. The Company also is planning an extensive summer drill
program focussing on the areas previously drilled in the 1950s and
1960s, and new targets that were delineated by the more recent work.
This work will be conducted under the supervision of Kingsview's team
of geologists who have extensive iron ore experience.
Management and Board of Directors of the Resulting Issuer
Upon completion of the Qualifying Transaction, it is anticipated that
the resulting issuer's board of directors will consist of Michael Opara
and William Quan and three (3) additional board members to be named
later. It is intended that such new board members will be qualified independent
Michael Opara, has been involved in the acquisition, financing,
exploration and development of key mineral projects since 1996. He has
extensive private and public company experience and is currently a
director and President and CEO of a public company engaged in mineral
exploration. He has a Bachelor of Commerce from the University of
Toronto and an MBA from the Schulich School of Business, York
William Quan, has been involved in brokering, trading and financing of
various commodities including minerals, wood products and apparel. He
has extensive private and public company experience and is currently a
director of a public company engaged in mineral exploration.
It is also intended that Gregory Hewitt will resign as President and
Chief Executive Officer of the Corporation and George Matthew will
resign as the Chief Financial Officer and Secretary of the Corporation.
The Corporation and Kingsview are reviewing the potential officers for
the resulting issuer and further disclosure will be made regarding this
once this is finalized.
Sponsorship of Qualifying Transaction
Sponsorship of a qualifying transaction of a capital pool company is
required by the Exchange unless exempt in accordance with the Exchange
policies. The Corporation is currently reviewing the requirements for
sponsorship and may apply for exemption from sponsorship requirements
pursuant to the policies of the Exchange, however there is no assurance
that the Corporation will ultimately obtain this exemption.
Proforma Capital Structure
Although it is not a condition to the completion of the Qualifying
Transaction, Kingsview may complete a private placement financing (the
"Private Placement") prior to the closing of the Qualifying Transaction.
The Corporation currently has 4,411,271 common shares issued and
outstanding and 439,060 reserved for issuance on the exercise of
Following completion of the amalgamation, shareholders of the
Corporation will hold equity interests equal to approximately 3.8% of
the combined entity with the remaining equity interests being held by
shareholders of Kingsview. The relative ownership percentages will
vary depending on whether a Private Placement is completed and the
price of such Private Placement. The Corporation will provide further
disclosure when the pro forma capital structure is determined with greater certainty.
In accordance with Exchange policy, the Corporation's shares are
currently halted from trading and will remain so until the completion
of the Qualifying Transaction.
The letter of intent will terminate (i) on the mutual consent of both
the Corporation and Kingsview, (ii) if the Corporation is not satisfied
with its due diligence review of Kingsview at 5:00 p.m. (Toronto time),
on or before the date (the "Due Diligence Deadline") which is five (5) business days following the date on which Kingsview
is able to provide the Corporation with a 43-101 compliant technical
report on Kingsview's principal property and financial statements of
Kingsview for those periods required to be included in any disclosure
document to be disseminated to shareholders in connection with the
Transaction, (iii) if a Definitive Agreement is not executed on or
before 5:00 p.m. (Toronto time) on the earlier of either June 30, 2011
or the date which is 5 business days following the Due Diligence
Deadline, (iv) if a regulatory authority notifies the Corporation or
Kingsview that the transaction may not proceed.
Description of Significant Conditions to Closing
Completion of the Qualifying Transaction is subject to a number of
conditions including but not limited to, due diligence, Exchange
acceptance and if required by Exchange policies, 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 Qualifying Transaction, any information released or received
with respect to the Qualifying 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 highly speculative.
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 Corporation will make a subsequent news release with information on
sponsorship and summary financial information in accordance with
This news release contains "forward-looking statements" within the
meaning of applicable securities laws relating to the proposal to
complete the Qualifying Transaction and associated transactions,
including statements regarding the terms and conditions of the
Qualifying Transaction and associated transactions. Readers are
cautioned not to place undue reliance on forward-looking statements.
Actual results and developments may differ materially from those
contemplated by these statements depending on, among other things, the
risks that the parties will not proceed with the Qualifying Transaction
and associated transactions, that the ultimate terms of the Qualifying
Transaction and associated transactions will differ from those that
currently are contemplated, and that the Qualifying Transaction and
associated transactions will not be successfully completed for any
reason (including the failure to obtain the required approvals or
clearances from regulatory authorities). The statements in this news
release are made as of the date of this release. The Corporation
undertakes no obligation to comment on analyses, expectations or
statements made by third parties in respect of the Corporation,
Kingsview, or their respective financial or operating results or (as
applicable), their securities.
Neither TSX Venture Exchange nor its Regulation Services Provider (as
that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release.
SOURCE 71 Capital Corp.
For further information:
71 CAPITAL CORP.
PHONE NO: (416) 941-8811