Foxpoint Capital Corp. Announces Proposed Qualifying Transaction


TORONTO, Jan. 23, 2012 /CNW/ - Foxpoint Capital Corp. ("Foxpoint") (TSX-V: FXC.P), a capital pool company listed on the TSX Venture Exchange (the "Exchange"), is pleased to announce that it has entered into an acquisition agreement dated January 23, 2012 (the "Acquisition Agreement") to acquire, by means of amalgamation involving 2308800 Ontario Inc. ("Foxpoint Subco", a wholly-owned subsidiary of Foxpoint), all of the issued and outstanding common shares in the capital of Telegraph Gold Inc. ("Telegraph") (the "Telegraph Shares") (the "Transaction").  Prior to closing of the Transaction, Telegraph proposes to complete a brokered private placement of Telegraph Shares, or other securities of Telegraph, through a syndicate of agents (the "Agents") for gross proceeds of up to $15,000,000 (the "Telegraph Financing") and upon completion of the Transaction, all of the issued and outstanding Telegraph Shares (including those issued pursuant to the Telegraph Financing) will be exchanged for common shares in the capital of Foxpoint (the "Foxpoint Shares").

The Transaction, if completed, will be structured as a three-cornered amalgamation (the "Amalgamation") and is intended to constitute Foxpoint's "Qualifying Transaction", as such term is defined pursuant to Exchange Policy 2.4.  It is intended that, subject to Foxpoint shareholder approval, immediately before the Amalgamation, the outstanding Foxpoint Shares will be consolidated on the basis of one new Foxpoint Share for every 1.5 Foxpoint Shares then outstanding (the "Consolidation").  Upon or immediately prior to completion of the Transaction, subject to approval by the shareholders of Foxpoint, Foxpoint's name will be changed to "Telegraph Gold Corp." (the "Resulting Issuer"). In connection with the Transaction, Foxpoint will apply for the Resulting Issuer to be listed on the Exchange as a Tier 1 mining issuer.

Upon completion of the Transaction, Foxpoint Shares will be issued to all shareholders of Telegraph, including the participants in the Telegraph Financing. Each shareholder of Telegraph will receive one Foxpoint Share (on a post-Consolidation basis) in exchange for each Telegraph Share (the "Exchange Ratio"). All convertible securities in the capital of Telegraph, including any common share purchase warrants issued by Telegraph to the Agents and all outstanding options to purchase Telegraph Shares, will be exchanged for convertible securities of Foxpoint in accordance with the Exchange Ratio. The precise number of securities to be issued by Foxpoint to acquire Telegraph is unknown at this time and will depend on the final size and terms of the Telegraph Financing and the completion of the Consolidation.

The Transaction is subject to satisfaction or waiver of conditions set out in the Acquisition Agreement, including the following: (i) conditional approval of the Transaction by the Exchange; (ii) board of director approvals of each party to the Transaction; (iii) Telegraph shareholder approval of the Amalgamation; (iv) Foxpoint shareholder approval of the Consolidation and change of name; (v) receipt of all required or desirable regulatory approvals, consents and waivers; (vi) completion of the Telegraph Financing; and (vii) compliance with all other applicable regulatory requirements and conditions. The Transaction does not constitute a "Non-Arm's Length Qualifying Transaction" as defined in Exchange Policy 2.4 and consequently Foxpoint is not required to obtain shareholder approval for the Transaction.

About Foxpoint and Foxpoint Subco

Foxpoint was incorporated on December 16, 2009 under the laws of the Province of Ontario and is a capital pool company under the Exchange Policies.  Foxpoint's sole business since incorporation has been to investigate business opportunities with a view to completing a qualifying transaction.

Foxpoint Subco was incorporated on December 8, 2011 under the laws of the Province of Ontario and is wholly-owned by Foxpoint. Foxpoint Subco has not carried on any business to date and was incorporated for the purpose of implementing the Transaction.

About Telegraph

Telegraph was incorporated on January 29, 2010 under the laws of the Province of Ontario.  Telegraph is the owner of mining claims in Sierra County, California comprised of the following: (i) a 100% earn-in option related to the Telegraph claims (1,900 acres, including the past producing Telegraph Mine 100%) (the "Telegraph Claims"), (ii) the Excelsior claims (1,070 acres, including the past producing Monte Cristo Mine) (the "Excelsior Claims", collectively with the Telegraph Claims, the "Telegraph Gold Project"), and (iii) the Mt. Vernon claims (140 acres). Telegraph has also entered into a non-binding letter of intent to acquire 100% of the White Bear claims, located directly to the south and adjacent to the Telegraph claims in Sierra County, California.

The Telegraph Gold Project is located in the Mother Lode Gold district of Sierra County in Northern California. The Telegraph Mine, which is fully permitted for underground rehabilitation and underground exploration drilling. Telegraph has the exclusive option to earn a 75% interest in the Telegraph Claims by completing $4,730,000 in project expenditures and making payments of $3,600,000 to the vendor by 2015. Telegraph can earn an additional 25% by completing a feasibility study, issuing an additional payment of $6,500,000 in either cash or stock, and providing a 2% net smelter royalty.

Based on Telegraph's September 30, 2011 unaudited financial statements, prepared in accordance with International Financial Reporting Standards, for the nine months ended September 30, 2011, Telegraph had no revenues and a net loss and comprehensive loss of $10,416.  Telegraph's total assets and liabilities were $7,946,643 and $7,817,665, respectively, as at September 30, 2011.  Audited and unaudited financial information for Telegraph will be provided in the filing statement to be prepared by Foxpoint in connection with the Transaction.

Velasquez Spring, P.Eng., Senior Geologist, is the Qualified Person in accordance with National Instrument 43-101 responsible for the technical content of this press release and has reviewed and approved it accordingly. Mr. Spring is an independent consultant contracted by Telegraph.

Proposed Management and Board of Directors of the Resulting Issuer

As a result of the Transaction, the entity resulting from the Amalgamation will be a wholly-owned subsidiary of the Resulting Issuer.  The following individuals are expected to be Insiders (as defined in the Exchange Policies) of the Resulting Issuer:

Peter Olander (Reno, Nevada), President and Chief Operating Officer - Mr. Olander holds a Masters degree in Geology from Eastern Washington University, and has over 25 years of experience as a Geologist, Project Manager, and Exploration Consultant. Most recently, Mr. Olander was employed by a private U.S. Company in evaluating gold property acquisitions. Mr. Olander has also worked with Kinross Gold Corporation, Placer Dome Inc., Majestic Diamonds and Metals Inc., and FMC Gold Company.

Fraser Buchan (Toronto, Ontario), Director - Mr. Buchan is the Chief Executive Officer and a Director of Foxpoint. Mr. Buchan has served as President and Chief Executive Officer of Angus Mining (Namibia) Inc. since his appointment in September 2010 and formerly served as Vice President Corporate Development at Elgin Mining Inc. (formerly Phoenix Coal Inc.). Between 2006 and 2009 he worked in institutional sales with GMP Europe LLP and GMP Securities LLP. Mr. Buchan earned a BA in Economics from McGill University in 2006.

Kevin Bullock (Toronto, Ontario), Non- Executive Chairman, Director - Mr. Bullock is a registered Professional Mining Engineer in the province of Ontario and received his engineering degree from Laurentian University in Sudbury, Ontario. Mr. Bullock is the founding President of both Volta Resources Inc. and Goldcrest Resources Ltd. and has been Chief Executive Officer of both companies since each company's inception in 2002 and 2003, respectively. Mr. Bullock has over 23 years experience, at senior levels, in mining exploration, mine development and mine operations and has completed several exploration and mining projects, both in North America and abroad, including projects in Mexico, Sweden, and West Africa, where he was Iamgold Corporation Ltd.'s General Manager. Until recently, he was VP, Operations for Kirkland Lake Gold Ltd.

Greg Lipton (Toronto, Ontario), Director - Mr. Lipton is a registered Professional Geoscientist with the Association of Professional Geoscientists of Ontario (APGO) and a long time member of the Prospectors and Developers Association of Canada (PDAC). He has more than 33 years of field experience in international exploration for base metal, precious metal, diamond, and industrial mineral deposits, most of which was with BHP Billiton Plc and Utah International, Inc. as a Senior Geologist. Mr. Lipton has worked many and varied geologic environments including porphyry, epithermal, VMS, MVT, BHT, and Sedex types in North, Central, and South America, Africa, Australia, Southeast Asia, and the Middle East. Mr. Lipton has held his current position as President, Chief Executive Officer and a Director of Metallum Resources Inc. (formerly Young-Shannon Gold Mines Limited) since 2004.

Andrew Powers (Toronto, Ontario), Director and Corporate Secretary - Mr. Powers is a lawyer with Osler, Hoskin & Harcourt LLP. His law practice focuses on corporate finance and mergers and acquisitions, with an emphasis on the mining and precious metals sectors. Mr. Powers is a member of the Prospectors and Developers Association of Canada and the Rocky Mountain Mineral Law Foundation. Mr. Powers holds a Bachelor of Arts (Honours) from the University of Ottawa and a law degree from Queen's University.

Colin Sutherland (Toronto, Ontario), Director - Mr. Sutherland is a Chartered Accountant and has over 15 years experience in corporate finance, capital markets, and strategic initiatives. Mr. Sutherland has extensive experience in mergers and acquisitions and financing mineral exploration and development projects having been involved in mergers and acquisitions totalling approximately $1 billion and financings in excess of $500 million. Mr. Sutherland has held senior executive positions with Aurico Gold Inc., Nayarit Gold Inc. and Capital Gold Corp. and is currently the Chief Financial Officer of Timmins Gold Corp.

Darin Wagner (Toronto, Ontario), Director - Mr. Wagner is a Professional Geologist with 20 years of exploration and corporate development experience. Early in his career, Mr. Wagner was a project geologist and manager for Noranda Inc. (now Xstrata plc) and Cominco Ltd. (now Teck Resources Limited). In 1999 Mr. Wagner became Vice-President, Exploration for New Millennium Metals Corp. which was successfully merged with Platinum Group Metals Ltd. in 2002. Mr. Wagner served as Exploration Manager for TSX-listed Platinum Group Metals Ltd. through the acquisition, discovery and initial delineation of the multi-million ounce West Bushveld PGE deposit in South Africa. Mr. Wagner became President of Sydney Resource Corp. in 2005 and helped engineer the successful merger with Band Ore Resources to form West Timmins Mining Inc. in 2006. He then served as a President, Chief Executive Officer, Director and Qualified Person for West Timmins Mining Inc. until its acquisition by Lake Shore Gold Corp. in 2009. Mr. Wagner currently serves as a director of Candente Gold Corp., Druk Capital Partners Inc. and GTA Resources and Mining Inc. and acts as a technical and/or corporate advisor to several other publicly listed resource companies including MAG Silver Corp. and Abzu Gold Ltd. Mr. Wagner is currently President and Chief Executive Officer of Balmoral Resources Ltd.

Mark Wayne (Toronto, Ontario), Director - After beginning his career practising corporate and securities law for seven years with Bennett Jones LLP, Mr. Wayne has been directly involved in the investment industry since 1987. Mark founded and was President of AltaFund Investment Corp. from 1987 to 1991. He was Vice President of Altamira Management Ltd. for seven years and has played a key role in raising funds for a broad array of companies in several industries. Mark has been involved with several other companies at either the officer or director level, including Antares Minerals Inc., Stem Cell Therapeutics Corp. and QGX Ltd. He is currently Chairman of the board of directors of Alamos Gold Inc.

Proposed Telegraph Financing

The Acquisition Agreement contemplates Telegraph completing a financing to raise gross proceeds of up to $15,000,000.  Agents will receive commissions consisting of cash and broker warrants in an amount to be agreed upon between the Agents and Telegraph.

Interests of Non-Arm's Length Parties

Each of Fraser Buchan and Robert Buchan have a direct interest in the Transaction by virtue of the fact that each are Insiders (as such term is defined in Exchange Policy 1.1) of Foxpoint and are also shareholders of Telegraph. Fraser Buchan is currently the President and Chief Executive Officer and a director of Foxpoint and Robert is currently a director of Foxpoint and each owns 23.2% of the Foxpoint Shares. Fraser Buchan and Robert Buchan own 200,000 and 500,000 Telegraph Shares, respectively, and are not Control Persons (as such term is defined in Exchange Policy 2.4) of Telegraph.


Foxpoint intends to rely upon the exemption in Section 3.4 of Exchange Policy 2.2 from the requirement to have an application for listing in connection with a Qualifying Transaction sponsored by a Member of the Exchange, assuming, among other things, the Telegraph Financing will raise in excess of the minimum amount required to qualify for the sponsorship exemption. There can be no assurance that Foxpoint will be able to obtain this exemption.

Filing Statement

Foxpoint will prepare an Exchange-compliant filing statement in conjunction with the Transaction and further information on Telegraph, including a National Instrument 43-101 - Standards of Disclosure for Mineral Projects compliant report, will be provided in the filing statement.

Other Information and Updates

The Foxpoint Shares are currently listed for trading on the Exchange; however, they have been halted from trading and will remain halted pending satisfaction of the Exchange's requirements. There can be no assurance that trading in the Foxpoint Shares will resume prior to the completion of the Transaction.

Cautionary Statements

This press release contains forward-looking statements and information that are based on the beliefs of management and reflect Foxpoint's current expectations. When used in this press release, the words "estimate", "project", "belief", "anticipate", "intend", "expect", "plan", "predict", "may" or "should" and the negative of these words or such variations thereon or comparable terminology are intended to identify forward-looking statements and information. The forward-looking statements and information in this press release include information relating to the business plans of Foxpoint, Foxpoint Subco and Telegraph, the Telegraph Financing, the Transaction (including Exchange approval, the Amalgamation, the Consolidation, the change of Foxpoint's name, and completion or termination thereof) and the board of directors and management of the Resulting Issuer upon completion of the Transaction. Such statements and information reflect the current view of Foxpoint with respect to risks and uncertainties that may cause actual results to differ materially from those contemplated in those forward-looking statements and information.

By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.

Such factors include, among others, the following risks:

  • There can be no assurance that the Telegraph Financing will be completed, as to the actual proceeds to be raised in connection with the Telegraph Financing or as to the offering price to be realized. In particular, the amount raised may be significantly less than the maximum amount indicated if investors are not prepared to invest and may dictate the offering price for Telegraph Shares or other securities of Telegraph;

  • There can be no assurance that the approval of the Exchange required to complete the Transaction will be obtained. Further, approval of the Exchange may be conditional upon amendments to the transactions disclosed herein; and

  • There can be no assurance that the conditions to closing required to complete the Transaction will be satisfied.

There are a number of important factors that could cause Foxpoint's actual results to differ materially from those indicated or implied by forward-looking statements and information. Such factors relating to the Telegraph claims include, among others, the timing and content of work programs, results of operation activities and development of mineral properties, the interpretation of drilling results and other geological data, the uncertainties of resource and reserve estimates, receipt and security of mineral property titles, receipt of licenses to conduct mining activities, project cost overruns or unanticipated costs and expenses, fluctuations in metal prices and general market and industry conditions.

Foxpoint cautions that the foregoing list of material factors is not exhaustive. When relying on Foxpoint's forward-looking statements and information to make decisions, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Foxpoint has assumed a certain progression, which may not be realized. It has also assumed that the material factors referred to in the previous paragraph will not cause such forward-looking statements and information to differ materially from actual results or events. However, the list of these factors is not exhaustive and is subject to change and there can be no assurance that such assumptions will reflect the actual outcome of such items or factors.


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 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 Transaction and associated transactions and has neither approved nor disapproved of 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.

SOURCE Foxpoint Capital Corp.

For further information:

Foxpoint Capital Corp.
Fraser Buchan: President, CEO
(416) 640-1933

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