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TORONTO, July 4, 2013 /CNW Telbec/ - Further to its preliminary news releases dated February 4, 2013 and March 1, 2013, C Level III Inc. (TSXV: CLV.P) (the "Corporation"), a TSX Venture Exchange (the "TSXV") capital pool company, is pleased to announce that it has received the conditional approval of the TSXV to acquire all of the issued and outstanding common shares of 2299895 Ontario Inc. ("OntarioCo") as part of its qualifying transaction pursuant to Policy 2.4 of the TSXV (the "Qualifying Transaction"). The Qualifying Transaction will be carried out by means of securities exchange agreements, pursuant to which Giyani Gold Corp. ("Giyani Gold"), the majority shareholder of OntarioCo, and two minority OntarioCo shareholders will collectively receive an aggregate of 23,880,265 common shares of the Resulting Issuer (the "Resulting Issuer Shares") in exchange for their OntarioCo common shares (the "OntarioCo Shares").
Upon completion of the Qualifying Transaction, OntarioCo will be a direct, wholly-owned subsidiary of the Resulting Issuer. The Qualifying Transaction will constitute a reverse take-over of the Corporation inasmuch as the current shareholders of OntarioCo will own approximately 51.7% of the outstanding shares of the Resulting Issuer immediately upon completion of the Qualifying Transaction (on a non-diluted basis and assuming full subscription of the Offering described below).
As a result of the securities exchange agreements and the Offering described below, the Resulting Issuer will have up to 46,217,942 Resulting Issuer Shares, 483,392 options to acquire Resulting Issuer Shares, and up to 1,223,768 share purchase warrants to acquire Resulting Issuer Shares outstanding. Approximately 15,852,515 Resulting Issuer Shares will be subject to escrow and will be gradually released in accordance with the policies of the TSXV.
Terms of the Offering
In connection with the Qualifying Transaction, the Corporation and OntarioCo will each carry out respective private placements, which are expected to close on or around July 30, 2013 (the "Offering"). The Offering will consist of a combination of OntarioCo Shares at a price of $1.00 per OntarioCo Share, subscription receipts for Resulting Issuer Shares (the "Subscription Receipts") at a price of $0.20 per Subscription Receipt, and subscription receipts for Resulting Issuer Shares issued on a flow-through basis (the "FT Subscription Receipts") at a price of $0.25 per FT Subscription Receipt, for maximum aggregate gross proceeds of $4-million.
The subscription agreements for the OntarioCo Shares will provide that each OntarioCo Share sold pursuant to the Offering shall be exchanged for Resulting Issuer Shares on the basis of five (5) Resulting Issuer Shares for each OntarioCo Share upon completion of the Qualifying Transaction.
Each Subscription Receipt will automatically convert, without any further action by the holder thereof, and without any additional consideration, into one (1) Resulting Issuer Share upon completion of the Qualifying Transaction. Each FT Subscription Receipt will automatically convert, without any further action by the holder thereof, and without any additional consideration, into one (1) Resulting Issuer Share issued on a flow-through basis upon completion of the Qualifying Transaction.
The Offering will be led by Portfolio Strategies Securities Inc. (the "Agent"). The Corporation will pay the Agent a commission of 7% of the gross proceeds from the Subscription Receipts and FT Subscription Receipts and 2% of the gross proceeds from the OntarioCo Shares sold pursuant to the Offering upon satisfaction of certain release conditions, including completion of the Qualifying Transaction (the "Release Conditions"). The Agent will also be issued broker warrants (the "Broker Warrants") upon satisfaction of the Release Conditions, equal to a total of 7% of the aggregate number of Subscription Receipts and FT Subscription Receipts and 2% of the aggregate number of OntarioCo Shares sold pursuant to the Offering. Each Broker Warrant will be exercisable to acquire one Resulting Issuer Share at $0.20 per Resulting Issuer Share for a period of eighteen (18) months following the satisfaction of the Release Conditions.
The gross proceeds from the Subscription Receipts and FT Subscription Receipts sold pursuant to the Offering will be held in escrow in an interest bearing account pending satisfaction of the Release Conditions (the "Escrowed Proceeds"). If the Release Conditions are not satisfied or waived on or before 5:00 p.m. (Toronto time) on the date that is four (4) months and one (1) day from the closing date of the Offering, then the Subscription Receipts and FT Subscription Receipts will immediately become null and void and C Level shall distribute the Escrowed Proceeds and accrued interest to the holders of the Subscription Receipts and FT Subscription Receipts on a pro rata basis so that they are refunded their full purchase price.
Completion of the Qualifying Transaction is subject to a number of conditions, including but not limited to receipt of final approval of the Qualifying Transaction from the TSXV.
The Qualifying Transaction is not a "Non-Arm's Length Qualifying Transaction", as the Corporation and OntarioCo do not share any common "Control Persons", within the meaning of those terms in Policy 2.4 of the TSXV. As such, the approval of the Corporation's shareholders is not required; however, in connection with the Qualifying Transaction, an annual general and special meeting of the Corporation's shareholders will take place on June 27, 2013, at which time the shareholders will be asked to consider and approve, among other things, a special resolution to change the name of the Resulting Issuer to "Canoe Mining Ventures Corp."
The TSXV has waived its sponsorship requirements in connection with the Qualifying Transaction.
A filing statement in respect of the Qualifying Transaction has been prepared and conditionally approved by the TSXV and will be filed in accordance with Policy 2.4 of the TSXV on SEDAR at www.sedar.com at least seven (7) business days prior to the commencement of trading of the Resulting Issuer's shares.
OntarioCo is a majority owned subsidiary of Giyani Gold, incorporated under the Business Corporations Act (Ontario) on September 23, 2011. The company has its head office in Oakville, Ontario. OntarioCo is a gold exploration company with assets in the Northwestern region of the province of Ontario, including its Abbie Lake-Keating Property, and its rare earth projects in the province Saskatchewan. According to the independent technical report prepared by J. Garry Clark, P. Geo. in respect of the Abbie Lake-Keating Property, dated February 15, 2013 (the "Technical Report"), the Abbie Lake-Keating Property has the potential to host significant gold resources and is a property of merit, worthy of further exploration.
As described in the Technical Report, the Abbie Lake-Keating Property covers a 38km section of the Kabenung Lake greenstone belt that hosts the Iron Lake Deformation Zone (the "ILDZ") and subsidiary shear zones which have been proven to contain significant gold showings. The gold mineralization found associated with the shears on the Abbie Lake and Keating East portions of the Abbie Lake-Keating Property resembles gold bearing structures found in the Timmins camp area. Quartz eye porphyry zones located on the boundaries between the Abbie Lake and Keating townships are the likely heat engines that have driven gold bearing fluid. Shears with pyrite and green mica that occur in quartz eye sericite schists in the Keating East portion visually resemble Hemlo-style alteration. The ILDZ and associated formation and shear zones that are traced by geophysics and diamond drilling across the area have the potential of hosting economic gold mineralization.
An exploration budget of $878,300 is recommended to further evaluate the Abbie Lake-Keating Property. OntarioCo's exploration program will be comprised of diamond drilling and Induced Polarization surveying to extend the known gold bearing alteration zones.
About the Corporation
The Corporation is a capital pool company incorporated under the provisions of the Canada Business Corporations Act on June 10, 2011, with its registered and head office in Toronto, Ontario. It is a reporting issuer in the provinces of British Columbia, Alberta, Saskatchewan, Manitoba, and Ontario.
Proposed Management and Directors
As part of the completion of the Qualifying Transaction, the Corporation's board of directors will be comprised of the persons listed below. The following are brief descriptions of the management team and the proposed nominees for directorships.
Duane Parnham, Director
Mr. Parnham is the Executive Chairman of OntarioCo and Giyani Gold. Mr. Parnham has a successful track-record of developing exploration companies from start-up to fully permitted projects with considerable resources and reserves since the early 1990s. His experience includes working internationally with governments and landowners to identify high-impact and underdeveloped projects, and providing the capital and managerial resources necessary to create shareholder value. Mr. Parnham has founded and developed multiple resource focused companies, including Giyani Gold, Forsys Metals Corp., UNX Energy Corp., Angus Mining Namibia Inc., and Temex Resources Corp. Mr. Parnham is a former director of Forsys Metals Corp., UNX Energy Corp., Angus Mining Namibia Inc., and Temex Resources Corp. and was a member of the Audit Committee of Forsys Metals Corp. and UNX Energy Corp. Mr. Parnham also has substantial experience in corporate governance, stakeholder relations and raised capital providing a high rate of success in realizing shareholder value. Mr. Parnham is the Chairman, a member of the board of directors, and a member of Audit and Disclosure Committee and the Nominating and Governance Committee of Giyani Gold. Mr. Parnham is a graduate of the Mineral Engineering Technology program from Sir Sandford Fleming College (now Fleming College). Mr. Parnham became a director of OntarioCo in September 2011.
Scott Kelly, Director
Mr. Kelly is a director of Giyani Gold Corp. and the founder and President of Cabrana Inc., a firm offering advisory strategic communications services for public companies and capital market participants. From 2001 to 2011, Mr. Kelly served as Sr. Vice President of the TMX Group's Equicom division, Canada's largest investor relations consultancy firm. Mr. Kelly also founded Biocom Inc., a strategic communications firm purchased by The Equicom Group in 2001. Mr. Kelly holds a degree from Queen's University and post-graduate certifications from the Canadian Institute of Advertising and the University of Toronto.
Jean-François Pelland, Director
Me Pelland is a Partner at the law firm McMillan LLP in Montreal, a position he has occupied since September 2004. Me Pelland conducts a Canadian and international business law practice, focused in private and public equity financing, in addition to M&A transactions and tax matters. He advises clients in a variety of sectors, including mining and natural resources, life sciences, information technology, and the clean-tech industry. Prior to joining McMillan LLP, Me Pelland was a partner of the Montreal law firm Hart Saint-Pierre (now merged with Heenan Blaikie LLP) from September 2002 to August 2004 and an associate of that firm from January 1998 to August 2002. Me Pelland is a member of the Quebec Bar and holds a post-graduate tax degree from HEC Montréal.
Jorge (George) Estepa, Director
Mr. Estepa has over 20 years of experience with publicly listed companies in the areas of corporate management, development and investor relations. Mr. Estepa has actively participated in the advancement of exploration companies from start-up to the pre-feasibility stage, including the successful listing of resource companies on Canadian and international stock exchanges. Mr. Estepa has years of direct experience in corporate governance and currently serves as Vice President and Secretary-Treasurer of TSX listed Champion Iron Mines Limited, which has delineated an iron resource of over 5 billion tonnes and has a pre-feasibility stage project in the southern Labrador Trough. Mr. Estepa also holds the same position with Champion's affiliate, Cartier Iron Corporation, and has also been the Corporate Secretary of TSX listed Forsys Metals Corp. since 2004. Mr. Estepa holds a Bachelor of Arts degree from the University of Toronto.
Eugene Lee, Director
Mr. Lee is a mining finance professional with experience in capital markets, financial reporting, risk management, internal controls and corporate governance. He is currently Chief Financial Officer of Premier Royalty Inc., which he helped take public via a RTO transaction with Bridgeport Ventures Inc. His previous roles include Vice President, Finance and Assistant Corporate Secretary for Northgate Minerals Corporation until its acquisition by AuRico Gold Inc. and Senior Accountant at Centerra Gold Inc. Mr. Lee is a Chartered Accountant with the Institute of Chartered Accountants of Ontario and he articled with PricewaterhouseCoopers in the audit and assurance group before transferring to PwC's consulting practice focusing on corporate bankruptcies and restructurings. Mr. Lee is a graduate of Trinity College at the University of Toronto and holds a Bachelor of Commerce in Economics and Finance.
R. Charles (Chuck) Allen, President and Chief Executive Officer
Mr. Allen is the President and a director of OntarioCo and the President and Chief Executive Officer of Giyani Gold. He has a diverse background including experience as a senior executive, investment banker and finance/M&A lawyer. He has been involved in more than $5 billion of equity, debt and M&A transactions, and has been a Board member of a number of public companies. He has also worked internationally, in regions including, Central, Eastern and Western Europe, Canada and the U.S., Africa, the Caribbean and Central and South America. Mr. Allen was previously the President of a precious metals company with producing assets in southern Africa. During his tenure, Mr. Allen managed more than 1,000 employees and more than doubled revenues. Mr. Allen received his LL.B. and a Bachelor of Education degree from the University of Alberta.
Ron Reed, Chief Financial Officer
Mr. Reed is a CGA with an MBA (Finance) from New York Institute of Technology. He has more than 20 years of progressively senior experience in implementing, revising, and monitoring financial business strategies. He also has been involved in more than 15 acquisition and divestiture transactions. He began his career working with electronic and agricultural companies, joining The Thomson Corporation (now Thomson Reuters) in 1999. At Thomson, Mr. Reed began as a controller and advanced to vice-president, finance and CFO for its Nelson Education Ltd. Mr. Reed has been providing CFO services in the mining industry since 2008.
Jo-Anne Archibald, Corporate Secretary
Ms. Archibald is President of DSA Corporate Services Inc., and has over thirty years of corporate secretarial, investor relations and marketing experience. Previously, Ms. Archibald was senior vice president, at TMX Equicom Group Inc. In addition, Jo-Anne has held roles with Sun Life Financial, Nestlé Canada, Second Cup, Campbell's and Loblaws. She has an MBA from the Richard Ivey School of Business at the University of Western Ontario and an H.Bsc. from the University of Guelph. She is a Fellow (FCIS) of the Institute of Chartered Secretaries and Administrators (ICSA), where she serves on the Ontario Board of Directors. She is also on the Editorial Committee for Canada's "Corporate Governance Quarterly" magazine. Ms. Archibald has been a member of the Canadian Investor Relations Institute (CIRI) since 2000 and a CIRI Ontario Director since 2006. She served as CIRI Ontario's Secretary to the Board from 2006-2009 and as Treasurer since 2010. Ms. Archibald also acts as Corporate Secretary to a number of client companies.
All information contained in this news release with respect to the Corporation and OntarioCo was supplied by the parties respectively, for inclusion herein, and each party and its directors and officers have relied on the other party for any information concerning the other party.
Completion of the transaction is subject to a number of conditions, including but not limited to, TSXV acceptance. 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 and filing statement 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 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.
NEITHER THE 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.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION: This news release includes certain "forward-looking statements" under applicable Canadian securities legislation. Forward-looking statements include, but are not limited to, statements with respect to: the terms and conditions of the Qualifying Transaction; the terms and conditions of the proposed Offering; future exploration and testing; use of funds; and the business and operations of the Resulting Issuer after the proposed transaction. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: general business, economic, competitive, political and social uncertainties; delay or failure to receive board, shareholder or regulatory approvals; and the results of current exploration and testing. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The Parties disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
SOURCE: C LEVEL III
For further information:
Jean-François Pelland, Director
C Level III Inc.
Tel: (514) 984-4431
R. Charles Allen, President
Giyani Gold Corp.
Tel: (905) 844-1456 ext. 223