|February 07, 2012|
Orient Venture Capital Inc. Announces Proposed Qualifying Transaction With Virginia Energy
|Orient Venture Capital Inc. (the "Company" or "OVC"), a Vancouver based capital pool company listed on the TSX Venture Exchange Inc. (the "Exchange") (TSX.V: OVC.H) is pleased to announce that it has entered into a Letter of Intent ("LOI") effective February 1, 2012 with Virginia Energy Resources Inc. (TSX.V: VAE) (OTCQX: VAERF) ("VAE"), a British Columbia company based in Vancouver, to acquire its Hawk Ridge copper-nickel-PGM property (the "Hawk Ridge Property") in Ungava Bay, Quebec (the "Acquisition"). The 14,976 hectare property is located 130 km north of Kuujjuak in the Labrador Trough and includes several deposits with substantial past drilling.|
The Acquisition is intended to constitute the Company's "Qualifying Transaction" under Exchange Policy 2.4 -- Capital Pool Companies ("Policy 2.4"). VAE is at arm's length to the Company and no non-arm's length parties of the Company have any direct or indirect interest in the Hawk Ridge Property. Therefore, the Acquisition will not be a Non-Arm's Length Qualifying Transaction as such term is defined in Policy 2.4.
As the Company is proposed to issue more than 100% of its outstanding common shares in a 12 month period and a new Control Person, as such term is defined by the policies of the Exchange, may be created, shareholder approval is expected to be required in connection with the Qualifying Transaction.
Upon completion of the Qualifying Transaction, the Company is expected to cease being a capital pool company and anticipates that it will graduate from the NEX board of the Exchange and will be listed as a Tier 1 mining issuer under the policies of the Exchange. Upon completion of the Qualifying Transaction, the Company expects that it will be engaged in the exploration and development of prospective mineral properties, including the Hawk Ridge Property. The Company expects that it will be an exploration stage company with no producing properties and, consequently, no operating income, cash flow or revenues. There is no assurance that a commercially viable mineral deposit exists on the Hawk Ridge Property. Upon completion of the Qualifying Transaction, it is proposed that the Company will change its name and will be announced as available.
About the Hawk Ridge Property
The Hawk Ridge Property is well situated on tidewater at Ungava Bay, Quebec. VAE's predecessor Santoy Resources Ltd. acquired the property through a merger with Troymin Resources Ltd in 2003.
The property is located near the northern end of the Labrador Trough (New Quebec Orogen), an Early to Middle Proterozoic folded volcanic-sedimentary sequence intruded by gabbro, pyroxenite and peridotite sills. The target on the property is massive and disseminated, magmatic Cu-Ni sulphide deposits similar to the Raglan Mine in the Cape Smith (Ungava) fold belt to the north, and the Thompson nickel belt of Manitoba. On the adjoining Hopes Advance iron property, Oceanic Iron Ore Corp is drilling out a large historic iron resource, leading to a scoping study in late 2011. A port facility is being studied for the area.
A substantial amount of drilling has been completed on the Hawk Ridge Property since the early 1960s. Both high-grade massive sulphide and lower grade disseminated mineralization has been discovered in trenches and drill holes. Minor past high-grade production is reported to have taken place from the Pio Lake deposit in the early 1980s. Twelve deposits and numerous other targets have been identified on the property including the Hopes Advance North, Main, and
Middle zones; Mac I and II; Pingo; Gamma; Pio East and West zones; and the Gabbro zone. Drill results, geophysical surveys and preliminary metallurgical studies and resource calculations are available in historic reports but have not been verified by VAE.
This property has over $2.7 million in excess assessment credits and is expected to remain in good standing for many years. Work in this part of Quebec qualifies for a refundable tax credit of up to 51% of exploration costs. To date, VRE's predecessor Troymin Resources Ltd. has invested over $18 million into the Property.
The technical information in this news release has been reviewed by Michael S. Cathro, P.Geo., Virginia Energy's Vice President of Exploration and a Qualified Person as defined by National Instrument 43-101.
About Virginia Energy Resources Inc.
Virginia Energy Resources Inc. is a uranium development and exploration company that holds a 29% stake in the advanced stage Coles Hill uranium project in Virginia. VAE is also pursuing active exploration programs in the Athabasca Basin of Saskatchewan and in the Otish Basin of Quebec. Virginia Energy Resources Inc. trades on the TSX Venture Exchange under the symbol VAE and on the OTCQX under the symbol VAERF.
Under terms of the LOI, Orient Venture Capital Inc. will earn a 100% interest in the Hawk Ridge Property, subject to underlying royalty interests, by making staged payments totalling $2,000,000 in cash and $1,000,000 in OVC common shares to VAE. The LOI calls for an initial payment of $500,000 in cash and $250,000 in OVC common shares within 5 days of final Exchange approval of the Qualifying Transaction. In addition, OVC may be required to pay up to $500,000 in OVC common shares for the expenses of a geophysical survey. The second payment of $500,000 in cash and $250,000 of OVC common shares must be paid by December 31, 2012. The final payment of $1,000,000 in cash and $500,000 in OVC common shares must be paid by December 31, 2013.
Completion of the Acquisition is subject to a number of conditions, including, but not limited to, completion of a working capital financing of $200,000, execution of a definitive agreement, Exchange acceptance of the Acquisition, acceptance by the Exchange of a National Instrument 43-101 technical report prepared by a qualified independent consultant, and a concurrent OVC financing of $3,500,000.
Working Capital Private Placement
The execution of a formal definitive agreement between OVC and VAE with respect to the Acquisition (the "Definitive Agreement") is subject to, among other things, completion of a working capital private placement in the amount of $200,000 by OVC through issuance of 4,000,000 OVC common shares at a price of $0.05 per share. The proceeds from this working capital private placement are expected to be used to pay for the expenses associated with the Qualifying Transaction.
The completion of the Qualifying Transaction is subject to, among other things, completion of a non-brokered private placement for $3,500,000 (the "Concurrent Financing") through issuance of 17,500,000 units of OVC (each a "Unit") at a price of $0.20 per Unit with each Unit consisting of one OVC common share and one half of one OVC common share purchase warrant. Each whole OVC common share purchase warrant is exercisable for a period of two years at a price of $0.40 per share in the first year and $0.60 per share in the second year. The proceeds of the Concurrent Financing are expected to be used to fund the business plan of the Company upon completion of the Qualifying Transaction and for general working capital purposes.
The LOI provides that VAE will be granted a pre-emptive right to maintain its pro rata ownership in OVC by participating in any equity offering during the period of the Definitive Agreement. The LOI also provides that Urban Select's partners will also be given the right to invest in future financings of OVC from completion of the Concurrent Financing to December 31, 2013 for up to the pro-rata ownership of such partners of Urban Select if such partners of Urban Select has participated in the working capital private placement or the Concurrent Financing.
Professional and Finders' Fees
The LOI provides that at the completion of the Qualifying Transaction, a finder's and advisory fee of 600,000 OVC common shares at a deemed price of $0.20 per share will be paid to two arm's-length parties for introducing OVC to the Hawk Ridge Property.
In accordance with the policies of the Exchange, the Company is expected to retain a sponsor in connection with the Acquisition or request that the Exchange grant a waiver of the sponsorship requirement.
Trading in the OVC common shares was halted on January 31, 2012 in connection with the announcement of the Company's Qualifying Transaction involving the Hawk Ridge Property and pursuant to the policies of the Exchange will remain halted until the documentation required by the Exchange for the Qualifying Transaction can be provided to the Exchange. 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 proposed transaction and has neither approved nor disapproved the contents of this press release.
This Press Release contains forward-looking statements that are based on the beliefs of management and reflect the Company'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. The forward-looking statements in this Press Release includes the Company's anticipation that it will graduate from the NEX board of the Exchange and will be listed as a Tier 2 mining issuer, and its expectation that shareholder approval will be required in connection with the Qualifying Transaction, its expected business upon completion of the Qualifying Transaction, its expectation regarding the good standing of the Hawk Ridge Property, the information relating to the working capital private placement and the Concurrent Financing, its expectation regarding a sponsor, and the information relating to the proposed management and directors of the Company upon completion of the Qualifying Transaction.
By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause 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: risks associated with the completion of the Acquisition and matters relating thereto, the inability of the parties to obtain approval of any third parties or shareholders, as required, the unavailability of the exemptions from the prospectus and registration requirements for the issuance of the securities, the inability to produce a technical report on the Hawk Ridge Property for any reason whatsoever, the refusal of the Exchange to accept the Acquisition, the risks associated with the marketing and sale of securities, the need for additional financing, the Company's ability to raise the necessary capital or to be fully able to implement its business strategies, the volatility of the Company's common share price and volume, the state of the market for minerals for which the Company may explore in the event the Acquisition is completed, the potential for conflicts of interest among certain officers or directors with certain other projects, and change in laws and regulations governing the mining industry, refusal of the proposed directors or officers to act for any reason, including conflicts of interest, and reliance on key and qualified personnel. Forward-looking statements are made based on management's beliefs, estimates and opinions on the date that statements are made and the Company undertakes no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change, except as required by applicable securities laws. Investors are cautioned against attributing undue certainty to forward-looking statements.
For further information concerning the Acquisition and this Press Release, please contact Ms. Min Kuang, Chief Executive Officer and Director of Orient Venture Capital Inc. or Mr. Walter Coles Jr., President and CEO of Virginia Energy Resources Inc., as follows:
Telephone: (604) 689-0618
Walter Coles Jr.
Telephone: (604) 669-4799
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.
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