Chairman Capital Corp. announces qualifying transaction


TORONTO, Nov. 11 /CNW/ - Chairman Capital Corp. ("Chairman") is pleased to announce that it has entered into an arm's length letter of intent (the "LOI") dated November 11, 2009 with Longreach Oil and Gas Ventures Ltd. ("Longreach") for the completion of a business combination, which if completed, will be the qualifying transaction (the "Transaction") for Chairman and result in the listing of the resulting issuer (the "Resulting Issuer"). The Transaction is to be completed in accordance with Policy 2.4 of the TSX Venture Exchange (the "Exchange") concerning capital pool companies.

The Transaction, as it will be negotiated and carried out by parties dealing at arm's length to one another, will not be a Non-Arm's Length Qualifying Transaction, as such term is defined under the rules and policies of the Exchange.

    Business of Longreach

Longreach is a private oil and gas exploration company incorporated in Jersey, Channel Islands. Established in April 2006 under the Companies (Jersey) Law 1991, to date Longreach has raised approximately (pnds stlg)900,000 in seed capital financing that has been used in part to acquire four licenses to explore for oil and gas in southern onshore and offshore Morocco. Longreach's licenses cover an area of approximately 47,955 km(2). Extensive exploration work has been done on these licenses, in particular those offshore, where 5,200km of 3D seismic and 2,000km of 2D seismic was completed as recently as 2004. Upon completion of the Transaction, it is anticipated that the Resulting Issuer will carry on the oil and gas exploration business currently being conducted by Longreach.

    Overview of Morocco

Exploration for and exploitation of hydrocarbons in Morocco are governed by law Nr 21-90 enacted on April 15, 1992 as amended by law 27-99 enacted on March 16, 2000. Such law provides a favourable fiscal environment granting a ten year corporate tax holiday from the start of commercial production for each concession. State participation in commercial discoveries is set at a maximum of 25%, with the state sharing costs. Royalty charges are very competitive at 10% for oil and 5% for gas (and for offshore greater than 200m depth 7.5% for oil and 3.5% for gas).

Under the leadership of King Mohammed VI, Morocco is regarded as one of the most politically stable countries on the African continent with macroeconomic stability. According to the Central Intelligence Agency World Fact Book, in 2008, Morocco's GDP growth rose to 5.9%, it experienced low inflation of 3.9% and it had a large foreign exchange reserve of $22.72 billion.

Morocco is well positioned to serve the European gas market via the Maghreb Europe Gas pipeline, and the North American LNG market via LNG carriers.

    Longreach Exploration Licenses

                       Longreach Exploration Licences
                                  Acreage                          Longreach
    Licence        Play Concept   (km(2))  Exploration activity   interest*
                                                 to date
    Foum Daa      Oil, offshore   5,090    3D seismic: 3,750 km(2)    10%
    Sidi Moussa   Oil, offshore   7,624    2D seismic: 2,000 km       10%
                                           3D seismic: 1,450 km(2)
    Tarfaya       Oil, onshore   13,434    2D seismic: 2,293 km       30%
    Zag Basin     Oil, onshore   21,807    Aeromag Survey: 15,000 km  30%

    * Longreach's interest reduces to 7.5% & 22.5% respectively if ONHYM,
        the State owned oil company, exercises its earn-in right in the event
        of a commercial discovery. ONHYM pays its share of costs going
        forward following commerciality.


    As of the date hereof, Chairman has 1,666,667 common shares ("Chairman
Shares") and 166,667 options ("Chairman Options") issued and outstanding. As
of the date hereof, Longreach has 3,000,000 common shares ("Longreach Shares")
and no options ("Longreach Options") issued and outstanding. Longreach
currently has 14 shareholders.

                   Longreach Shareholders Holding Over 10%
    Shareholder Name                               Jurisdiction of Residence
    Aramis Services Limited                          Jersey, Channel Islands
    The Gascoigne Trust                                       United Kingdom

    Longreach intends to complete a private placement in connection with
closing of the Transaction. See "The Transaction" below.

    The Transaction

Pursuant to the terms of the LOI, subject to the completion of satisfactory due diligence and the receipt of applicable regulatory and, if required, shareholder approvals, and the entering into of a definitive agreement, Chairman will acquire all of the shares of Longreach. In addition, prior to the completion of the Transaction, and subject to conclusive structuring advice, Chairman will continue its corporate existence out of Ontario into the Jersey Islands. Chairman anticipates that a shareholder meeting will be held to consider such matters as may be required to be dealt with by way of shareholders meeting under the circumstances.

Pursuant to the Transaction: (i) the holders of Longreach Shares will exchange their Longreach Shares for common shares of the Resulting Issuer ("Resulting Issuer Shares") on a one for 32.24 basis, based on a valuation of $0.10 per Chairman Share; and (ii) the holders of Chairman Shares will exchange their Chairman Shares for Resulting Issuer Shares on a one for one basis.

Longreach has engaged a syndicate of agents (the "Agents"), led by Deacon and Company Capital Markets Inc. ("Deacon & Co"), to complete on a best efforts basis a private placement (the "Longreach Private Placement") of 1,683,333 units of Longreach ("Longreach Units") at a price of $3.00 per unit for gross proceeds of $5,050,000. Each Longreach Unit consisting of one Longreach Share and one half purchase warrant of Longreach ("Longreach Warrant"). Each whole Longreach Warrant shall be exercisable for one Longreach Share at the price of $4.50 per share. The Longreach Private Placement, which may be structured as an offering of 1,683,333 subscription receipts with such subscription receipts being convertible into an equal number of Longreach Units, will close prior to the completion of the Transaction. In connection with the Longreach Private Placement, the Agents will be entitled to receive a fee comprised of a cash fee equal to 8% of the value of the Longreach Shares issued pursuant to the Private Placement and a fee payable by the issuance of that number of Longreach compensation warrants ("Longreach Compensation Warrants") equal to 8% of the number of Longreach Shares issued in connection with the Longreach Private Placement. Each Longreach Compensation Warrant will entitle the holder to acquire one Longreach Share (or equivalent security of the Resulting Issuer) at a price of $3.00 (subject to adjustment in giving effect to the Transaction) for the period that is the longer of: (i) twelve (12) months from the closing date of the Transaction; and (ii) twenty-four (24) months from the closing date of the Longreach Private Placement. All Longreach Compensation Warrants will be exchanged for share purchase warrants of the Resulting Issuer ("Resulting Issuer Warrants") upon completion of the Transaction.

Longreach has also agreed to pay Deacon & Co an advisory fee, such fee to be satisfied by the issuance at the closing of the Transaction of that number of Resulting Issuer Warrants equal to 1% of the total number of non-diluted Resulting Issuer Shares. Each Resulting Issuer Warrant shall be exercisable for one Resulting Issuer Share at a price of $0.10 per share.

Immediately following the completion of the Transaction and assuming the Longreach Private Placement is fully subscribed for, it is anticipated that 152,666,667 Resulting Issuer Shares, 8,563,334 Resulting Issuer Options and 33,005,600 Resulting Issuer Warrants (including 4,341,922 compensation warrants issuable to the Agents) will be issued and outstanding. Based on the foregoing assumptions, shareholders of Longreach will hold Resulting Issuer Shares representing approximately 98.91% of the issued and outstanding common shares of the Resulting Issuer on a non-diluted basis following completion of the Transaction. Additionally, immediately following the closing of the Transaction, the Resulting Issuer will undergo a stock consolidation on a 10 for 1 basis.

    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 Longreach; (b) receipt of all necessary approvals of the board of directors of both Chairman and Longreach; (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 Longreach; (f) Chairman satisfying the minimum listing requirements set by the Exchange for a Tier 1 or Tier 2 issuer; and (g) the Private Placement being completed for gross proceeds of not less than $5,050,000.

    Officers and Directors of the Resulting Issuer

Upon completion of the Transaction, it is anticipated that the following individuals will be the officers and/or directors, subject to individual and Exchange approval, of the Resulting Issuer:

Chairman - Bryan Benitz - Over 40 years of experience within the natural resources industry. He is Non Executive Chairman of Island Oil and Gas plc. On the mining side he is Chairman of MagIndustries, with projects in the Republic of Congo & DRC. Recent notable transactions include the sale of Tanganyika Oil (role as Director) to SINOPEC for $2 billion and the sale of Scandinavian Minerals (past role as Chairman) to First Quantum valued at $281 million. He has also recently accepted a directorship on the board of Africa Oil. He was formerly a member of the Toronto and New York Stock Exchanges.

Non Executive Director, Technical Advisor - Dr Mahmoud Zizi - Brings over 30 years of experience as a petroleum geologist, 27 years of which was at The National Office of Hydrocarbons and Mining ("ONHYM"), the oil and mining state company in Morocco. Dr. Zizi holds key relationships with ONHYM and was awarded his doctorate from a scholarship at Rice University, Texas.

Director, COO - Andrew Benitz - Previous experience with the Oil and Gas corporate finance team at Deutsche Bank in London and with the Global No. 1 ranked equity capital markets team. Notable transaction experience included the $180 million secondary equity financing for Turkey's oil distribution company, Petrol Ofisi.

An interim CFO is in the process of being appointed prior to closing of the Transaction and the position of CEO will be appointed following conclusion of the Transaction. Discussions with potential candidates are current underway. Longreach is also currently in discussions with at least three additional candidates to serve as an independent Director of the Resulting Issuer following the close of the Transaction.

    Sponsorship for the Proposed Transaction

Chairman is in negotiations to retain a sponsor for the Transaction. An agreement to sponsor should not be construed as any assurance with respect to the merits of the Transaction or the likelihood of completion.

Statements in this press release regarding Longreach's and Chairman's businesses 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 highly speculative.

    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.



    "Jonathan Aune"

    Jonathan Aune, CEO

Additional information on Chairman Capital Corp. can be found at


For further information: For further information: Jonathan Aune, CEO, Chairman Capital Corp., (416) 361-1448

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