SYMBOL - CMN.P
TORONTO, Feb. 27 /CNW/ - Chairman Capital Corp. ("Chairman") is pleased
to announce that it has entered into a letter of intent (the "LOI") dated
February 19, 2008 with Rockport Mining Corp. ("Rockport"), a mining
exploration company incorporated under the laws of Canada on December 21,
2006, in respect of a proposed "qualifying transaction" that is to be
completed in accordance with Policy 2.4 of the TSX Venture Exchange (the
"Exchange") concerning Capital Pool Companies.
Under the terms of the LOI, it is proposed that Chairman would acquire
all of the issued and outstanding securities of Rockport in exchange for
equity in Chairman, as further described below (the "Transaction"). It is
currently anticipated that the Transaction will be effected through a
"three-cornered amalgamation" (the "Amalgamation"), whereby: (i) Rockport will
amalgamate with a newly incorporated company incorporated under the laws of
Canada wholly-owned by Chairman, to form an amalgamated corporation
("Amalco"); (ii) the holders of Rockport common shares will receive one common
share of Chairman for every one Rockport share held; (iii) the holders of
Rockport common share purchase warrants will receive one common share purchase
warrant of Chairman ("Chairman Warrants") for every one Rockport warrant held,
the terms of which will be substantially the same as the terms of the Rockport
warrants; and (iv) Amalco will become a wholly-owned subsidiary of Chairman.
The final structure of the Transaction is subject to receipt of definitive
tax, corporate and securities law advice satisfactory to both Chairman and
The Transaction will be negotiated and carried out by parties dealing at
arm's length to one another and therefore will not be a Non-Arm's Length
Qualifying Transaction, as such term is defined under the rules and policies
of the Exchange (the "Policies").
As of the date hereof, Chairman has 1,666,667 common shares ("Chairman
Shares") issued and outstanding, 100,000 share purchase warrants outstanding
and 166,667 incentive stock options (the "Chairman Options") outstanding.
Currently, there are 33,781,187 common shares of Rockport ("Rockport Shares"),
16,722,958 share purchase warrants (the "Rockport Warrants") and
4,100,000 Rockport incentive share purchase options (the "Rockport Options")
issued and outstanding. Rockport is widely held and currently has
approximately 127 shareholders.
Pursuant to the terms of the LOI, upon completion of the proposed
Transaction (i) the holders of Rockport Shares will receive one Chairman Share
for every one Rockport Share held; (ii) the holders of Rockport Warrants will
receive one Chairman Warrant for every one Rockport Warrant held; (iii) Amalco
will become a wholly-owned subsidiary of Chairman; (iv) the Rockport Options
will have been cancelled; and (v) the current directors of Chairman will have
resigned and the five nominees of Rockport identified below will have been
appointed (the "New Directors"). It is anticipated that new Chairman Options,
on terms substantially the same as the Rockport Options, will be granted by
Chairman subsequent to the completion of the Transaction to replace the
cancelled Rockport Options.
Rockport intends to undertake a non-brokered private placement of up to
10,000,000 common shares (the "Rockport Financing Shares") prior to the
closing of the Transaction (the "Rockport Financing"). It is anticipated that
approximately 2,941,174 of the Rockport Financing Shares will be flow-through
shares offered at $0.85 per share and the balance will be common shares
offered at $0.75 per share. Parties who introduce investors to Rockport in
connection with the Rockport Financing will be entitled to receive a finder's
fee comprised of a cash fee equal to 8% of the value of the Rockport Financing
Shares purchased by the introduced investor and a number of Rockport
compensation warrants ("Rockport Compensation Warrants") determined by
multiplying the number of Rockport Financing Shares purchased by the
introduced investor by 8%. Each Rockport Compensation Warrant will entitle the
holder to acquire one common share of Rockport for $0.85 at anytime within
twelve months of the date of the closing of the Rockport Financing. All
Rockport Compensation Warrants will be exchanged for share purchase warrants
of Chairman upon completion of the Transaction.
Following the completion of the Transaction and assuming the Rockport
Financing is fully subscribed, it is expected that 45,447,854 common shares of
Chairman, 17,635,926 Chairman Warrants and 4,266,667 Chairman Options will be
outstanding. The Chairman Options outstanding assumes that 4,100,000 will have
been granted to those parties who had their Rockport incentive stock options
cancelled prior to completion of the Transaction. Based on the foregoing
assumptions, shareholders of Rockport will hold Chairman Shares representing
approximately 96.3% of the issued and outstanding common shares of Chairman on
a non-diluted basis following completion of the Transaction.
Conditions of Closing
Completion of the Transaction will be subject to certain conditions
including, without limitation: (a) satisfactory completion of a due diligence
review by each of Chairman and Rockport; (b) receipt of all necessary
approvals of the board of directors of both Chairman and Rockport; (c) receipt
of all necessary third party consents; (d) approval of the Transaction by the
Exchange; (e) approval of the Transaction by the shareholders of Rockport; and
(f) Chairman satisfying the minimum listing requirements set by the Exchange
for a Tier 1 or Tier 2 issuer.
Chairman will be seeking an exemption from the sponsorship requirements
of the Exchange on the basis that: (i) the Transaction is not with a foreign
issuer; (ii) the Transaction will involve a technical report that is being
prepared in accordance with National Instrument 43-101 on the Clarence Stream
Gold Property (defined below) owned by Freewest Resources Canada Inc.
(FWR:TSX-V) ("Freewest"); and (iii) following completion of the Transaction,
the management of Chairman will be comprised of experienced and well qualified
Business of Rockport
Rockport is a private Canadian company focused on the exploration and
development of gold and base metal properties located in southern New
Brunswick. Rockport has assembled a portfolio of properties, all of which have
been selected because of the strategic combination of their geological promise
and proximity to existing transportation and processing infrastructure. The
focus has been on assembling properties with large scale potential for market
driven metals such as gold, antimony, molybdenum, tungsten, zinc and indium.
Rockport owns 4,000 claims representing more than 640 square kilometres.
Rockport has also successfully negotiated joint venture and co-ownership
arrangements with certain mature industry participants in connection with
properties at more advanced stages.
A summary of Rockport's principal properties and property interests is
set forth below.
The gold properties include two properties known as the Annidale Gold
Belt (1,700 claims) and Oak Bay/Clarence Stream Gold Trend (300 claims) and
interests in two more advanced properties, namely the Clarence Stream Gold
Property and the Golden Ridge Property, under joint venture agreements with
Annidale Gold Belt
The Annidale Gold Belt, which includes the Devil's Pike property,
straddles approximately 40 kilometres by 10 kilometres trend of the
Sawyer-Taylor Brook Fault Zone located northwest of St. John, New Brunswick. A
20 hole first phase drill program began at the end of 2007 on the Devil's Pike
property. Rockport has entered into an option agreement dated May 22, 2007
(the "Devil's Pike Prospect Agreement") to earn a 100% interest, subject to a
2% NRS, in the 1,232 hectare Devil's Pike property by making cash and share
payments totalling $330,000 and completing $300,000 of exploration work by May
Oak Bay/Clarence Stream Gold Trend
The Oak Bay/Clarence Stream Gold Trend properties, which total
approximately 300 claims or 4,800 hectares, are adjacent to the Clarence
Stream Gold Property currently in exploration/development under the Freewest
Clarence Stream Agreement.
Clarence Stream Gold Property Joint Venture
Rockport has entered into a joint venture agreement dated October 11,
2007 with Freewest (the "Freewest Clarence Stream Agreement") pursuant to
which Rockport can earn a 65% interest in an 11,296 hectare property (the
"Clarence Stream Gold Property") located 10 kilometres from the
formerly-producing Mount Pleasant tin-tungsten-molybdenum-indium mine. The
Freewest Clarence Stream Agreement provides that Rockport must expend
$3,000,000 for exploration and development work on the Clarence Stream Gold
Property by October 2008 to earn a 30% vested interest. Rockport may expend an
additional $4,500,000 for exploration and development work to be spent by
October 2011 to earn an additional 20% vested interest (50% total). After
Rockport has earned a 50% interest, it may elect to earn an additional 15%
(65% total) by funding the project through to a positive feasibility study.
Freewest has identified two distinct deposit clusters on the Clarence
Stream Gold Property which contain 43-101 compliant mineral resources. As
reported in Freewest's news release dated October 19, 2007, Roscoe, Postle
Associates ("RPA") calculated an indicated mineral resource of 648,000 tonnes
at an uncut grade of 7.30 g/t gold or 152,000 ounces of gold and an inferred
mineral resource of 540,000 tonnes at an uncut grade of 6.58g/t gold,
amounting to 115,000 ounces of gold. RPA also estimated antimony mineral
resources of 126,000 tonnes averaging 2.3% antimony or 6,395,000 pounds of
antinomy in the indicated category.
Golden Ridge Property Joint Venture
Rockport has entered into another joint venture agreement dated
November 13, 2007 with Freewest (the "Freewest Golden Ridge Agreement" )
pursuant to which Rockport can earn a 60% interest in a 3,386 hectare property
(the "Golden Ridge Property") located 80 kilometres west of the City of
Fredericton in York County, New Brunswick and in the neighbouring Town of
Amity, Maine, USA. During the period from 1997 to 2004, Freewest discovered a
spectrum of gold, antimony and base-metal mineralization associated with
extensive alteration zones on the Golden Ridge Property. Some of the better
gold intercepts obtained in diamond drilling include 4.40 g/t gold over
6.00 metres, 2.26 g/t gold over 19.9 metres and 1.71 g/t gold over
29.5 metres. As indicated in the Freewest news release dated December 18,
2007, all of the gold zones remain completely open-ended along strike and to
depth. The Freewest Golden Ridge Agreement provides that Rockport is required
to spend $1,600,000 on exploration and development work on the Golden Ridge
Property by November 2010 in order to earn a 60% interest. Upon Rockport
earning its 60% interest, a joint-venture will be formed with further
exploration and development costs shared by Rockport and Freewest on a 60%-40%
Rockport's base metal properties in New Brunswick are located in the
Sisson Brook area(tungsten/molybdenum) and Mount Pleasant area (tungsten,
zinc, indium and molybdenum).
Sisson Brook Property
In the Sisson Brook area, Rockport owns 47.1% of an entity that holds a
30% "carried interest" in the Sisson Brook property which is operated by
Geodex Minerals Ltd. (TSX-V:GXM) ("Geodex"). In addition, Rockport owns a 100%
interest in over 400 claims or 6,400 hectares surrounding a portion of the
Sisson Brook property.
Mount Pleasant Properties
Rockport's Mount Pleasant area properties include a 100% interest in over
2,036 claims or 5,216 hectares surrounding the formerly producing Mount
Pleasant mine (tin-tungsten-molybdenum-indium). Included amongst such
properties is the Pughole-Whopper property which consists of 136 claims or
2,176 hectares (the "Pughole Property").
Pursuant to a joint venture agreement between Rockport and Geodex dated
April 21, 2006 and amended July 20, 2007 (as amended, the "Pughole Joint
Venture Agreement"), Teck Cominco Limited (TSX:TCK.A) has the option to earn a
60% interest in the Pughole Property by completing a $15 million expenditure
over 5 years or to feasibility, whichever comes first. In addition Geodex is
required to expend a minimum of $1 million on exploration and development of
the Pughole Property by July 2009.
Significant results reported by Geodex from drilling activity in 2007 on
the Pughole Property included 31.7 metres of 62.81g/t indium and 2.8% zinc and
10.23 metres of 3.45% zinc and 128.64 g/t indium.
Officers and Directors Post-Transaction
Upon completion of the Transaction, it is anticipated that the following
individuals will be the officers and directors of Chairman:
Henry A. Miller, President and Chief Executive Officer: Mr. Miller, a
resident of Metairie, Louisiana, has over 25 years experience in the natural
resources industry. Mr. Miller served as the Chief Financial Officer of Idaho
General Mines, Inc. and as a senior executive for over 17 years in various
capacities for Freeport-McMoRan Inc. and as General Counsel for
Freeport-McMoRan Copper & Gold Inc. Mr. Miller was also a principal, founder
and director with a national venture capital firm.
Roger Dahn, Senior Vice President and Chief Operations Officer: Mr. Dahn,
a resident of St. Andrews, New Brunswick, has over 25 years experience in the
mining and exploration industry. His experience includes over 16 years with
Noranda Inc. and Hemlo Gold Mines Inc., Exploration Manager-Eastern Canada for
Battle Mountain Gold Company and Vice President-Exploration with Olympus
Pacific Minerals Inc. Mr. Dahn is a registered professional geologist and
Qualified Person as defined by National Instrument 43-101.
Craig Brown, Secretary: Mr. Brown, resident in Toronto, Ontario, is a
partner with Fasken Martineau DuMoulin LLP, Chairman of the firm's Emerging
Global Business Group. Mr. Brown carries on an active corporate finance and
mergers/acquisitions practice and regularly advises both public and private
Ken Hight: Mr. Hight, a resident of Toronto, Ontario, has over 30 years
experience working in global institutional financial markets. His financial
industry experience includes serving as the Chief Executive Officer of E(*)TRADE
Canada and Executive Vice-President of E(*)TRADE Capital Markets as well as the
Chief Executive Officer and President of ITG Canada and Deputy Chair of TD
Securities. Mr. Hight has significant experience serving as a director of
private and public companies.
Richard H. Block: Mr. Block, a resident of Lake Forest, Illinois, is
presently a private investor after spending almost 30 years working with
leading mining companies around the world. His mining industry experience
includes serving as President and Chief Executive Officer of IMC-Agrico, a
$1.7 billion mining and chemicals company and several senior positions,
including Executive Vice-President and Chief Operating Officer, of
Freeport-McMoRan Inc., a $3 billion mining, fertilizer manufacturing and
Steven D. Van Nort: Mr. Van Nort, a resident of Tucson, Arizona, is
presently the Chief Executive Officer and director of Vane Minerals, PLC, a
public company engaged in mining, exploration and the development of mineral
resources. Mr. Van Nort holds an M.S. degree in Economic Geology from Stanford
University and has over 40 years of mining exploration experience with some of
the world's leading mining companies. His mining exploration experience
includes serving as the Senior Vice-President of Freeport-McMoRan Copper &
Gold Inc. where he was responsible for the company's worldwide exploration
William H.R. Smith: Mr. Smith, a resident of St. Andrews, New Brunswick,
has over 25 years of finance and accounting experience with some of Canada's
leading technology companies. His industry experience includes serving as
Regional Vice President, Atlantic Canada of Nortel and Vice President Finance
of Bruncor, the parent company of NBTel.
The technical information in this release has been reviewed by Roger
Dahn, a qualified person as defined in NI 43-101.
Statements in this press release regarding the Company's business which
are not historical facts are "forward-looking statements" that involve risks
and uncertainties, such as terms and completion of the proposed transaction.
Since forward-looking statements address future events and conditions, by
their very nature, they involve inherent risks and uncertainties. Actual
results in each case could differ materially from those currently anticipated
in such statements.
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 the 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 this
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 on the merits of this
proposed transaction and has neither approved nor disapproved the
contents of this press release.
ON BEHALF OF THE BOARD
CHAIRMAN CAPITAL CORP.
Jonathan Aune, CEO
For further information:
For further information: Jonathan Aune, CEO, Chairman Capital Corp.,
(416) 361-1448; Additional information on Chairman Capital Corp. can be found