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KELOWNA, BC, Nov. 21, 2013 /CNW/ - TrinCan Capital Corp. ("TrinCan") (TSXV:TRN) and Markinch Resources Inc. ("Markinch") are pleased to jointly announce that they have entered into an acquisition agreement dated November 21, 2013 pursuant to which TrinCan will make an offer (the "Offer") to acquire all of the outstanding common shares of Markinch ("Markinch Shares") on the basis of 2.5 common shares of TrinCan per Markinch Share. The Offer will be subject to certain conditions, including the deposit of not less than 66 2/3% of the outstanding Markinch Shares (on a fully diluted basis), receipt of all required regulatory approvals, including TrinCan shareholder approval (which is anticipated to be satisfied by a written consent of holders of in excess of 50% of TrinCan Shares) and other customary conditions. The total value of the Offer for all of the outstanding Markinch Shares is approximately $5,598,608 based on current trading prices of the common shares of TrinCan (0.08/TrinCan Share), including $452,108 of assumed net debt.
The Offer has the unanimous support of the Board of Directors of both TrinCan and Markinch. The Board of Directors of Markinch has concluded that the Offer is in the best interests of its shareholders and will recommend that Markinch Shareholders tender their Markinch Shares to the Offer. Holders of approximately 60% of the outstanding Markinch Shares, including all directors and officers of Markinch, have entered into lock-up agreements with TrinCan whereby they have agreed to tender their Markinch Shares to the Offer. No person has a controlling interest in Markinch.
Markinch has agreed to pay TrinCan a non-completion fee in the amount of $100,000 in certain circumstances if the Offer is not completed due to a superior proposal being made to Markinch. Markinch has agreed to terminate any discussions with other parties and agreed not to solicit or initiate discussion or negotiation with any third party with respect to alternate transactions involving Markinch and has granted TrinCan a right of first refusal to match any other proposals Markinch may receive.
Under the proposal, Dr. Colin Bowdidge will become president and join the board of directors of TrinCan upon the successful completion of the Offer. Dr. Bowdidge was educated at the University of Cambridge, where he received an M.A. degree in mineralogy and petrology, and at the University of Edinburgh, where he earned a Ph.D. in geology. He is a registered Professional Geoscientist with the Association of Professional Geoscientists of Ontario. He has worked in mineral exploration for over 40 years, primarily in Canada, but including projects in the U.S.A., South America, Africa and Europe. Dr. Bowdidge has been involved in the development of several mines: the Pinebay copper mine in Manitoba, the Thierry nickel-copper mine in northwest Ontario, the Cerro Mojon gold mine in Nicaragua and the San Andres gold mine in Honduras. Dr. Bowdidge has served as a director and/or officer of several publicly traded mining and exploration companies.
Mr. Burkhard Franz will continue as Chairman and CEO of TrinCan.
TrinCan's strategic objective is to grow shareholder value based on current assets while remaining focused on continued resource asset acquisition, exploration and production opportunities.
TrinCan is engaged in the acquisition, exploration and development of oil and natural gas in western Canada. TrinCan has varying working interests (25% - 50%) in 640 acres of land in the Buzzard area of western Saskatchewan, approximately 40 kilometers south of Lloydminster. This property currently produces heavy oil (13-14 degree API) from the Lloydminster, Sparky, and GP formations. TrinCan has nine producing oil wells, with current net production of approximately 18 bopd, two standing oil wells, and four shut-in oil wells at Buzzard, Saskatchewan.
TrinCan also has 1¾ sections of undeveloped lands in the Nipisi area of Alberta. TrinCan has prepared a development plan with respect to its Nipisi area lands. Subject to available funds, TrinCan anticipates initially drilling one vertical well in 2014, targeting light oil, as well as potential follow up wells. Under its Nipisi plan, TrinCan may farm-out a portion of its interest and remain as operator.
Markinch was incorporated under the Business Corporations Act (Alberta) on November 25, 2009.
Since its incorporation in November 2009, Markinch has been in the business of acquiring mineral exploration properties in Ontario and Quebec. Markinch is focused on acquiring and exploring advanced-stage base and precious metal projects using a prospect generator model. Markinch's objective is to acquire gold and copper projects and it only considers properties for acquisition that are backed by documented evidence to support the potential viability of a proposed project.
Markinch's principal property is known as the "Tashota Property". The Tashota Property consists of 20 staked mining claims (203 units) and 6 leases, comprising 54 leased claims. The claim group is situated in Gzowski and Oboshkegan Townships and the Metcalfe Lake and Willet Lake Areas, Thunder Bay Mining Division, Ontario. The Tashota properties lie within NTS 42L/04 NE and 42L/05 SE. The geographic coordinates at the approximate center of the Ontario Properties are 50° 14" north, 87° 40" west.
Markinch has an option to acquire a 100% interest in an Opinaca, James Bay, Quebec property which consists of 137 claims, approximately 15 km southwest of Goldcorp's Eléonore or Roberto deposit which is expected to commence production in 2014. Markinch commissioned an airborne magnetic and electromagnetic survey of the property and results are under review.
The ProForma Enterprise
Burkhard Franz, CEO of TrinCan says, "This transaction will bring together an interesting group of Canadian assets and opportunities for a junior company such as TrinCan. Basic cash flow from producing oil properties, and exploration and development opportunities in oil and gas, as well as base and precious metals."
The key benefits of the takeover are outlined as:
- an increased resource base with optionality to pursue oil and gas and/or gold or copper mining projects in Canada;
- an increased shareholder base; and
- a tax free roll-over to most Markinch shareholders with a greater opportunity for liquidity.
Dr. Colin Bowdidge, President of Markinch believes "the combination of the two companies results in a resource exploration and production company upon which we can build opportunities for Markinch shareholders" he added "The resulting company is well positioned to take advantage of numerous opportunities in the current market."
Upon completion of the transaction, TrinCan will have the following attributes:
|Proven plus Probable Reserves (Mboe)(1)||55.2||Nil||55.2|
|Undeveloped Land (net acres) at September 30, 2013|
|Oil and gas||1,120||Nil||1,120|
|Current Production (Boe/d)||19||Nil||19|
|Total Assets at September 30, 2013||1,254,461||1,750,810||7,005,846|
|Total Liabilities at September 30, 2013||998,280||492,105||1,548,655|
|Net Debt at September 30, 2013||256,181||452,108||702,917|
|(1)||TrinCan's reserves were evaluated by PNG Consultants Ltd. under the report effective December 31, 2012. Additional details, including assumptions and qualifications, can be found in TrinCan's public filings at www.sedar.com.|
It is expected that the Take-Over Bid Circular and Offer will be mailed to Markinch shareholders on November 22, 2013 and will expire approximately 36 days thereafter, with the Take-up Date under the Offer expected on December 27, 2013. Assuming all Markinch Shares are acquired under the Offer, TrinCan would issue 64,331,250 shares and have outstanding an aggregate of 81,800,250 common shares.
Completion of the transaction is subject to a number of conditions, including TSX Venture Exchange acceptance of a Filing Statement by TrinCan. 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 Take-Over Bid Circular and/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 TrinCan should be considered highly speculative.
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.
The Take-Over Bid Circular and Offer as well as the Markinch Directors' Circular will be posted on TrinCan's SEDAR public filings at www.sedar.com once mailed to Markinch shareholders.
This press release shall not constitute an offer to sell or a solicitation of an offer to buy the securities in any jurisdiction. The common shares of TrinCan will not be and have not been registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States, or to a U.S. person, absent registration or applicable exemption therefrom.
BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf:1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
Statements in this press release may contain forward-looking information including expectations of future production and components of cash flow and earnings. The reader is cautioned that assumptions used in the preparation of such information may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted, a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of TrinCan. These risks include, but are not limited to; the risks associated with the mining and oil and gas industry, availability of capital to carry on operations, commodity prices, financial market volatility, availability of key personnel and exchange rate changes. Industry related risks could include, but are not limited to: operational risks in exploration, development and production, delays or changes in plans, risks associated to the uncertainty of reserve estimates, environmental, health and safety risks and the uncertainty of estimates and projections of production, costs and expenses. The reader is cautioned not to place undue reliance on this forward looking information.
The reader is further cautioned that the preparation of financial statements in accordance with generally accepted accounting principles requires management to make certain judgements and estimates that affect the reported amounts of assets, liabilities, revenues and expenses. Estimating reserves is also critical to several accounting estimates and requires judgments and decisions based upon available geological, geophysical, engineering and economic data. These estimates may change, having either a negative or positive effect on net earnings as further information becomes available, and as the economic environment changes.
SOURCE: TrinCan Capital Corp.
For further information:
Burkhard Franz, President & CEO
TrinCan Capital Corp.
Suite 212, 1708 Dolphin Avenue
Kelowna, B.C. V1Y 9G2
Tel: (250) 860-4604
Dr. Colin Bowdidge, President & CEO
Markinch Resources Inc.
Suite 609, 475 Howe Street
Vancouver, B.C. V1Y 9G2
Tel: (416) 807-2004