MEGA Graphite inc. NEWS
TORONTO, Aug. 3, 2012 /CNW/ - WB II Acquisition Corp. ("WB II" TSX Venture Exchange: WXB.P) is pleased to announce that it has entered into a letter of intent dated August 3, 2012 with MEGA Graphite Inc. ("MEGA") to complete a going public transaction for MEGA (the "Proposed Transaction") by way of a reverse takeover of WB II, a capital pool company listed on the TSX Venture Exchange (the "Exchange"). The Proposed Transaction will be conducted pursuant to a definitive agreement to be entered into between WB II and MEGA. The structure of the Proposed Transaction has not yet been determined.
MEGA is a private Canadian junior mining company with natural graphite mining interests and project plans inAustralia, Canada and eastern India. In conjunction with the Proposed Transaction and as a condition thereof, MEGA will acquire Tarcoola Gold Inc. ("Tarcoola"), a subsidiary of Strategic Energy Resources Ltd. (Australian Stock Exchange Code: SER) through a merger of Tarcoola with MEGA's Australian subsidiary in order to acquire and develop a natural graphite ore body and former producing mine known as Uley Graphite in South Australia that MEGA and Tarcoola have been working on bringing back into production.
In conjunction with, or prior to the closing of, the Proposed Transaction, MEGA intends to complete a brokered private placement (the "Private Placement") of common shares for gross proceeds of up to $3.5 million. It is contemplated that the common shares issued pursuant to the Private Placement will ultimately be exchanged into freely tradeable common shares (the "Resulting Issuer Shares") of the surviving entity upon completion of the Proposed Transaction (the "Resulting Issuer").
In addition, immediately prior to the completion of the Proposed Transaction, it is anticipated that WB II will consolidate its common shares on a ratio to be determined prior to the completion of the Proposed Transaction. It is intended that Resulting Issuer Shares will be issued to holders of MEGA common shares under the Proposed Transaction on the basis of one (1) Resulting Issuer Share (on a post-consolidation basis) for every one (1) common share of MEGA. In addition, and subject to regulatory approval, it is intended that any outstanding options or warrants of WB II and MEGA will be exchanged for comparable securities of the Resulting Issuer having the same economic terms (as adjusted).
If the Proposed Transaction is completed, it is anticipated that the board of directors of the Resulting Issuer will consist of between three and nine directors, including the current directors of MEGA, and one (1) nominee to be appointed by WB II. In addition, if the Proposed Transaction is completed, it is anticipated that: (a) WB II will change its name, which name will be determined prior to the completion of the Proposed Transaction; and (b) new auditors will be appointed. If completed, the Proposed Transaction will constitute WB II's Qualifying Transaction (as defined in Policy 2.4 of the Exchange's Corporate Finance Manual). A comprehensive press release with further particulars relating to the Proposed Transaction will follow in accordance with the policies of the Exchange.
Completion of the Proposed Transaction is subject to a number of conditions including, but not limited to, completion of satisfactory due diligence, completion of the Private Placement, execution of a definitive agreement in respect of the Proposed Transaction, regulatory approvals, Exchange acceptance, shareholders of MEGA approving, among other things, the Proposed Transaction, certain principal shareholders of MEGA and Ronald D. Schmeichel entering into and complying with support agreements and, if applicable pursuant to Exchange requirements, the filing of a sponsorship report and majority of the minority shareholder approval. Where applicable, the Proposed Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Proposed 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 Proposed Transaction, any information released or received with respect to the Proposed Transaction may not be accurate or complete and should not be relied upon. Trading in securities of a capital pool company should be considered highly speculative.
The 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. Neither the Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Exchange) accepts responsibility for the adequacy or accuracy of this release.
This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction.