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- Maximizes productivity and future expansion through second mine entry on Rex coal.
- Potential to significantly increase reserves, resources and mine life.
- Facilitates a quicker start-up of mining operations at Rex No. 1 mine.
Trading Symbol: NDX - TSX-V
VANCOUVER, Jan. 2, 2013 /CNW/ - Novadx Ventures Corp. ("Novadx" or the "Company") (TSX-V: NDX) and Sandstorm Metals & Energy Ltd. ("Sandstorm") announce completion of the acquisition (previously announced on October 16, 2012) of Mine 12, the Turley Rail Load-Out, and the Smokey Junction Preparation Plant (the "Acquisition") located in Campbell and Scott Counties, Tennessee (the "Tennessee Properties"). The Tennessee Properties were acquired from Premium Coal Company National Coal, LLC and Jacksboro Coal Company, LLC for an aggregate purchase price of US$8.5 million (the "Purchase Price").
The Acquisition was completed through a newly incorporated company ("US Inc.") owned by Sandstorm. Novadx will have full control over management and operation of US Inc. and, subject to Novadx completing financings for minimum aggregate proceeds of not less than $10,000,000, Novadx will have a one-year option (the "Option Period") to acquire Sandstorm's interest in US Inc. at cost. Novadx will be responsible for the costs of any operations until the expiry of the Option Period. The Purchase Price was paid through a cash payment of US$3,000,000 contributed by Sandstorm, US$2,000,000 paid through the issuance of 4,377,675 common shares of Sandstorm and a 5 year secured loan from National Coal LLC. to US Inc. in the amount of US$3,500,000 (the "Loan"). The Loan is secured by a first lien and security interest in the Smokey Junction Preparation Plant, payable in annual installments of US $700,000 in principal plus accrued interest at the Prime Rate quoted in the Wall Street Journal. US Inc. may pay the outstanding principal balance plus accrued interest at any time prior to maturity without penalty. Sandstorm has the option to pay the outstanding principal balance plus accrued interest at any time through the issuance of Sandstorm common shares at the 10 day trading average prior to Sandstorm making such election. Novadx has otherwise agreed to fund the repayment of the Loan and in doing so will earn up to a 41.2% ownership interest in US Inc. based on its and Sandstorm's relative contribution to the Purchase Price. By exercising the Option and repaying the Loan, Novadx would gain a 100% interest in the Tennessee Properties.
Mine 12 is contiguous with Novadx's existing Rex coal reserves and will provide a second mine entry into the high quality coal seam and potentially add to the reserves and resources and extend the mine life. In addition, the Smokey Junction Preparation Plant should facilitate a more rapid start-up of mining operations at the Rex No. 1 mine and the Turley Rail Load-Out facility brings improved market access, both domestic and export. The acquisition of the Tennessee Properties significantly improves Novadx's asset package and marketability and puts Novadx in a more favorable position to complete the special warrant financing previously announced on September 21, 2012 and October 12, 2012. The US$3,000,000 cash commitment from Sandstorm towards the Purchase Price forms part of Sandstorm's previously announced commitment to subscribe for up to $5,000,000 under the Novadx special warrant financing.
Novadx CEO, Mr. Daniel Roling commented, "With completion of this acquisition, the Company now has the complete suite of assets needed to produce, prepare, and ship coal at its Tennessee operations. Not only does this improve our access to Rex coal, it should ultimately increase our reserve and resource position in this highly sought after coal. " Mr. Roling continued "Our immediate objective continues to be completion of the announced equity raise, proceeds of which will be used to bring the Tennessee assets into production. There is much to do to bring these facilities on line; however, we believe that objective is achievable within three to six months. It is our objective to be producing and shipping coal to customers six months after completion of our announced equity raise."
Addressing the Company's objective Mr. Roling went on to say that a number of productive meetings with potential investors had been held, and said additional meetings are being scheduled. "It is my view that we have come a very long way in a very short period of time, and success is within our reach. With the holiday season now over, the Company is continuing its efforts to complete the previously announced Special Warrant Financing."
About Novadx: Novadx Ventures Corp. is a Vancouver based mining investment company. Through its wholly owned subsidiary, Novadx's primary focus is to invest its capital to acquire and develop companies with active or near production high quality coal reserves in the US Appalachia coal region. Novadx intends to continue to grow the value of its coal investments through expanding production and reserves amongst its existing investments and by investing in additional acquisitions. Novadx is actively evaluating a number of high quality coal acquisition opportunities. For more information please visit www.novadx.com.
About MCoal: MCoal Corporation is a wholly-owned subsidiary of Novadx Ventures Corp. which operates the Rosa coal mine in Blount County, Alabama and is developing the Rex No.1 coal mine in Campbell County, Tennessee.
ON BEHALF OF THE BOARD
Daniel A. Roling
President, CEO and Director
Neither 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 The TSX Venture Exchange has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the qualification under the securities laws of such jurisdiction.
This release contains "forward-looking information" that includes information relating to future events and future financial and operating performance, including management's assessment of Novadx's and MCoal's future outlook, potential financings, potential acquisitions, properties, permitting and mining activities and production. Specifically, this release contains forward-looking information related to future development of assets, mining operations, permitting and regulatory approvals, and potential financings. Statements included in this announcement, including statements concerning our plans, intentions and expectations, which are not historical in nature are intended to be, and are hereby identified as, "forward-looking statements" for purposes of the safe harbor provided by Section 21E of the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by words including "anticipates", "believes", "intends", "estimates", "expects" and similar expressions. Forward-looking information should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by which, that performance or those results will be achieved. Forward-looking information is based on information available at the time it is made and/or management's good faith belief as of that time with respect to future events, and such information is subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking information. Important factors that could cause these differences include but are not limited to: requisite regulatory and shareholder approvals, actual or expected sampling or production results, pricing and assumptions, projections concerning reserves and/ or resources in our mining operations; changes in contracted sales, the business of the Company may suffer as a result of uncertainty surrounding the coal market; the Company may be adversely affected by other economic, business, and/or competitive factors; the worldwide demand for coal; the price of coal; the price of alternative fuel sources; the supply of coal and other competitive factors; the costs to mine and transport coal; the ability to maintain existing mining leases and rights and the ability obtain new mining leases, rights and permits; governmental and regulatory approvals, the costs of reclamation of previously mined properties; the risks of expanding coal mining activities and production; the ability to bring new mines on line on schedule; industry competition; the Company's ability to continue to execute its growth strategies; the Company's ability to secure and complete additional financing and debt restructuring; the Company's ability to complete planned acquisitions; and general economic conditions. You should not put undue reliance on any forward-looking information. We assume no obligation to update forward-looking information to reflect actual results, changes in assumptions or changes in other factors affecting forward looking information, except to the extent required by applicable securities laws. If we do update one or more forward-looking information, no inference should be drawn that we will make additional updates with respect to those or other forward-looking information. The company cautions readers that forward-looking statements, including without limitation those relating to the company's future operations and business prospects, are subject to certain risks and uncertainties that could cause actual results to differ materially from those indicated in the forward-looking statements.
SOURCE: Novadx Ventures Corp.
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