/NOT FOR DISSEMINATION IN THE UNITED STATES OF AMERICA/
TSX VENTURE EXCHANGE: CAU.P
TORONTO, Oct. 31 /CNW/ - China Goldcorp Ltd. ("China Goldcorp"), a
capital pool company, announces that it has entered into a letter agreement
dated October 30, 2007 (the "Agreement") to complete an arm's length
qualifying transaction (the "Qualifying Transaction") with Globe State
International Ltd. ("Globe") and the security holders of the Globe, in
accordance with the policies of the TSX Venture Exchange (the "Exchange").
About China Goldcorp Ltd.
China Goldcorp is a corporation existing under the laws of Ontario and is
a reporting issuer in the provinces of Ontario, Alberta and British Columbia.
China Goldcorp currently has outstanding 7,082,600 common shares (the "China
Goldcorp Shares"). In addition, there are outstanding 665,000 options
exercisable at $0.20 per share that have been granted to China Goldcorp's
directors and officers, and an agent's option to purchase 27,400 China
Goldcorp Shares at an exercise price of $0.20 per share granted to certain
sub-agents in respect of China Goldcorp's initial public offering.
Further information concerning China Goldcorp can be found in the
prospectus of China Goldcorp dated October 14, 2005.
About Globe State International Ltd.
Globe is a corporation existing under the laws of the British Virgin
Islands. Globe currently has outstanding 20 common shares (the "Globe
The principal shareholder of Globe is Ms. Hongxia Li, an individual
resident in Vancouver, British Columbia. The only other shareholder of Globe
holding 10% or more of the outstanding Globe Shares is Mr. Changming Yan, an
individual resident in Vancouver, British Columbia. Currently, Ms Li holds 80%
and Mr. Yan holds 20% of the outstanding Globe Shares.
Globe, through its wholly-owned subsidiary, Magma Minerals Limited
(existing under the laws of Hong Kong), owns a 60% percent interest in Yunxin
Exploration and Development Co. Ltd. ("Yunxin"), a corporation existing under
the laws of China. Yunxin is the registered owner of a 100% interest in the
Sarbulak Mine comprised of an operating gold mine situated on a mining
property covering 1.5975 square kilometres located in Fuyun County, Xinjiang,
China (the "Mine"). Yunxin also holds three gold exploration permits covering
11.48, 4.54 and 1.61 square kilometres respectively (collectively, the
"Exploration Property"). The Exploration Property is also located in Fuyun
County, Xinjiang, China.
The center of the Exploration Mine is situated at approximately
46 degrees 57' 08" North Latitude, 89 degrees 08' 57" East Longitude. The
property is underlain by clastic metasedimentary rocks of predominantly
Carboniferous age that have been folded and deformed by the northwest-trending
Irtysh Fault system. A felsic dike of probable Permian age has intruded the
metasediments along fractures in the fault zone, and is the principal host of
gold mineralization. Within the Exploration Property, gold occurs in
association with disseminated arsenopyrite and minor pyrite that principally
occurs on the margins of the felsic dike, and also within the adjacent
Gold mineralization was discovered within the Exploration Property in
1987 and was tested by soil geochemical surveys, trenching and sixty surface
drill holes. Mining and heap-leaching of oxidized mineralization commenced in
1990 and has continued to the present. Open-pit mining and conventional
milling of unoxidized mineralization has been carried out during the past
Wardrop Engineering Inc. has been retained to carry out a National
Instrument 43-101 compliant technical report on the property delivery of which
is expected within 30 days.
About the Proposed Qualifying Transaction
Pursuant to the terms of the Agreement, the holders of Globe Shares will
receive 1,555,000 China Goldcorp Shares for every one Globe Share held. The
total number of Globe Shares that will be issued under the Agreement is
The completion of the Qualifying Transaction is subject to Exchange
approval and any other necessary regulatory approvals. It is also subject to
additional conditions precedent, including security holder approvals of China
Goldcorp and Globe as required under applicable corporate or securities laws,
satisfactory completion of due diligence reviews by both parties, approvals of
the board of directors of China Goldcorp and Globe, completion by Globe of a
technical report on the Mine in compliance with National Instrument 43-101 and
certain other conditions customary for transactions of this nature. The
completion of the Qualifying Transaction is also subject to the successful
completion of a concurrent private placement offering of China Goldcorp shares
to raise additional working capital for the resulting issuer, the particulars
of which will be disclosed in a subsequent press release once they are
determined. The approximate value of the private placement upon completion is
$2,000,000. The private placement is expected to be brokered, but an agent has
yet to be retained.
Upon completion of the proposed Qualifying Transaction, China Goldcorp
will apply to list the resulting issuer on Tier 1 of the Exchange. The
proposed Qualifying Transaction is an arm's length transaction and accordingly
does not require shareholder approval. On completion of the proposed
Qualifying Transaction, the resulting issuer will be a mining company focused
on expanding production at the Mine and developing the Exploration Property.
Trading in China Goldcorp Shares has been halted pending the completion
of certain due diligence investigations by the Exchange. There can be no
assurance that trading in China Goldcorp Shares will resume prior to the
completion of the Qualifying Transaction.
Sponsorship of Qualifying Transaction
Sponsorship of a Qualifying Transaction of a capital pool company is
required by the Exchange unless exempt in accordance with Exchange policies.
Maison Placements Canada Inc. has agreed to act as the sponsor of the
Maison Placements Canada Inc., subject to completion of satisfactory due
diligence, has agreed to act as sponsor in connection with 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.
Management and Board of Directors of the Resulting Issuer
Upon completion of the Qualifying Transaction, it is anticipated that the
board of directors and management of the resulting issuer will include the
persons identified below. Additional proposed directors and officers of the
resulting issuer will be identified at a later date.
Tim Sun, Ph.D - Chief Executive Officer
Dr. Sun is currently the President of Canadian Sinosun Energy Inc., a
private mining company based in Vancouver. Dr. Sun has over 25 year experience
operating mining and exploration business, including with Ivanhoe Mines Ltd.
as Country Manager for China, Griffin Mining Ltd. as Chief Representative for
China and Asia Minerals Corp. as Vice President. After completion of the
Qualifying Transaction, Dr. Sun will stay on with the resulting issuer as
President, Chief Executive Officer and as a director. He holds a Ph.D. degree
from the Department of Mining Engineering of Queen's University at Kingston,
Qiang Zhao, CPA - Chief Financial Officer
Mr. Zhao is currently the Executive Vice President of Lingbo Gold Company
Ltd., a Hong Kong listed public company. Mr. Zhao has over 10 year extensive
experience in financial management and three years of experience in the mining
industry. After completion of the Qualifying Transaction, Mr. Zhao will stay
on with the resulting issuer as Chief Financial Officer and as a director. He
is a Registered Public Accountant in China and also holds the certificate of
International Internal Auditor.
Herbert Gasser - Director
Mr. Gasser is a current director of China Goldcorp and is President of
Fountainhead Mercantile Inc., a management company. Mr. Gasser has an
extensive career in Canadian business and entered the investment industry in
1969 with Swiss Corporation for Canadian Investments Ltd., a wholly-owned
subsidiary of Swiss Bank Corp. Mr. Gasser has experience doing business in
China, namely as Vice-Chairman of MGS Hong Kong, an entity he formed in 1989
on behalf of Magnasonic Canada Inc. Mr Gasser also has a vast array of
experience in the mining industry having served as President, Chief Executive
Officer and/or a director of St. Andrews Goldfields Ltd., Garrison Creek
Consolidated, Anglo Dominion Gold Corp. and Bachelor Lake Gold Mines. After
completion of the Qualifying Transaction, Mr. Gasser will stay on with the
resulting issuer as a director.
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 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 news release.
For further information:
For further information: Peter Walker, China Goldcorp Ltd., President,
Chief Executive Officer, Chief Financial Officer and Director, Telephone:
(416) 926-8104; Tim Sun, Globe State International Ltd., Chief Executive
Officer, Telephone: (604) 682-6583 (Vancouver), (86) 1370 121 2083 (China)