HUGE NEWS!!!!! Acquisition and Financing!!This will be a company builder!!
Afrasia to acquire Oracle Ridge, arranges financing
2010-02-2513:04 ET -News Release
Shares issued 19,489,163
AFS.H Close 2010-01-21C
.34
Mr. Praveen Varshney reports
ACQUISITION OF ORACLE RIDGE COPPER PROJECT, ARIZONA, USA
Afrasia Mineral Fields Inc. is purchasing 100 per cent of theshares of 0830438 B.C. Ltd. The seller's wholly owned U.S. subsidiaryowns the subsurface mining rights and is leasing those surface miningrights necessary to explore, rebuild and operate the Oracle Ridgeproject located near Tucson, Ariz.
Pursuant to the terms of a definitive agreement (DA) dated Jan. 25,2010, between the company and the seller, Afrasia will issue 50 millioncommon shares of the company to the seller at 25 cents per common sharefor a deemed amount of $12.5-million and advance $300,000 (U.S.) incash, of which $75,000 (U.S.) was advanced upon on signing of the letterof intent and the balance upon signing of the DA. A finder's fee of1.5 million common shares will also be payable in conjunction with theacquisition.
The Oracle Ridge copper project is a historic high-grade copper producerlocated at Marble Mountain in Pima county in Arizona in the UnitedStates. The project hosts multiple zones of primary copper skarnmineralization with potentially significant gold and silver byproductcredits. The project was in production as recently as 1996, at a rateof 1,000 tons per day, and had an expansion plan in place to increaseproduction to 2,000 tons per day.
In 1995, a prior operator reported a geologic reserve ofapproximately 8.14 million tons proven and probable at 2.33 per centcopper, and a total geological reserve of approximately 24.74 milliontons proven, probable and possible at 2.33 per cent copper. Thisestimate is not NI 43-101 compliant; it is cited for historical purposesonly and should not be relied upon until further work is carried out.
The electronic database of 534 holes with 163,622 feet ofhistoric drilling has been recovered along with a significant amount ofhistoric data, information and mine plans. In addition, twosemi-trailers containing intact drill core are present on the property.
Much of the historic mine infrastructure remains in place. Theunderground mine consisted of three access levels containing an estimateof over 5.5 miles of haulages and development drives. Groundconditions were reported to be competent at mine closure. A maintenanceshop is present and in good repair. While the flotation mill wasremoved, the site and attendant earthworks remain.
Environmentally, the project has no known liabilities. Coppermineralization is hosted in carbonate rocks and is therefore non-acidgenerating.
Following approval for the acquisition of the Oracle Ridge project, thecompany intends to complete a program designed to validate the existingdatabase and produce an NI 43-101-compliant resource study. Thisprogram will consist of resampling and assaying the existing core,drilling of confirmation holes, surveying the underground workings,confirming drill hole collar locations, and underground mapping andsampling.
In addition, a significant portion of the property has not been drilltested. The proposed program will also include an underground coredrilling program to locate additional areas of mineralization.
Proposed financing
Concurrent with the completion of the acquisition, Afrasia will use itsreasonable best-efforts to complete a non-brokered private placement toissue between 12 million units and up to 20 million units at a price of50 cents per unit for gross proceeds of between $6-million to$10-million. Each of the units will consist of one common share andone-half share purchase warrant of the company. Each whole warrant willentitle the holder, on exercise, to purchase one additional commonshare of the company at a price of 75 cents per share for one year. If,after the expiry of all Canadian resale restrictions, the closing priceof the company's shares on the TSX Venture Exchange is $1 or greaterfor a period of 10 consecutive trading days, the company may acceleratethe expiry of the warrants to 11 trading days after giving noticethereof or the warrants will be cancelled.
A finder's fee of 6 per cent is payable on all or a portion of thefinancing in either cash or units. In addition, finder warrants equalto 10 per cent of the aggregate number of units sold will be issued on aportion of the financing. Each finder's warrant will be exercisablefor a period of one year at an exercise price of 75 cents per share.The proceeds are to be used primarily for the Oracle Ridge copperproject.
Proposed board of directors
On completion of the acquisition, it is expected that the board ofdirectors will consist of Gregory Liller, Peeyush Varshney, PraveenVarshney and Paul Eagland.
Mr. Liller obtained a bachelor of geology from Western State College in1977. He has more than 32 years experience in exploration and minedevelopment. He was a director or officer of several public companieslisted on the TSX Venture Exchange, the Toronto Stock Exchange mainboard and the American Stock Exchange, including Genco Resources Ltd.,Gammon Gold Inc. and Mexgold Resources Inc. Mr. Liller has seen sevenof the projects in which he played a key role become mines, and managedexploration programs which developed over 11 million ounces of gold and600 million ounces of silver in combined reserves and resources.
Mr. Eagland has been working as an investment and merchant banker since1985. Currently, as the Canadian representative of an Asianstate-controlled corporation, his primary duty is to seek resourceopportunities in the West.
Peeyush Varshney obtained a bachelor of commerce degree in 1989,and a bachelor of laws degree in 1993, from the University of BritishColumbia. He is currently principal and director of Varshney CapitalCorp., a public venture capital firm. He is also a director or officerof several public companies listed on the TSX-V and the TSX, includingCanada Zinc Metals Corp. and Mountain Province Diamonds Inc. CanadaZinc Metals is a publicly listed mineral resource exploration companywith a 100-per-cent interest in the Akie property in British Columbia,Canada. Mountain Province Diamonds is a partner in one of the largestnew diamond mines under development globally. The project has thepotential to become one of Canada's major high-grade and long-lifediamond mines.
Praveen Varshney obtained a bachelor of commerce degree from theUniversity of British Columbia in 1987. Following that, he was withKPMG from 1987 to 1991, where he obtained his chartered accountantdesignation in 1990. He has been actively working in the capitalmarkets for 16 years. He has previously been a director of CamphorVentures Inc., now merged with Mountain Province Diamonds, and chieffinancial officer and a director of Carmanah Technologies Corp., one ofthe largest solar companies in Canada. He currently is CFO of CanadaZinc Metals.