RE: RE: March 31st financials filed (tidbits)
Maybe you should read it a couple times in case you didn't understand it after the first read through.
Toronto, Ontario – May 22, 2013 – Maxim Resources Inc. (“Maxim” or the “Company”) (TSX V: MXM
Frankfurt: MSH OTCBB: MXMSF) announces, further to its press release of March 14, 2013 and in
accordance with the requirements of the TSX Venture Exchange (the “TSXV”), additional details with
respect to the non-binding heads of agreement entered into between the Company and Leni Gas & Oil
plc (“LGO”) in connection with a proposed transaction (the “Proposed Transaction”) whereby Maxim
and LGO will work together to jointly pursue oilfield development opportunities in the Republic of Trinidad
and Tobago (“Trinidad”).
The terms of the Proposed Transaction consist of:
(a) a cash payment of Cdn$75,000 by LGO to Maxim upon the execution of the definitive
heads of agreement
(b) the issuance by LGO to Maxim, on the Closing Date, of that number of free-trading
ordinary shares in the capital of LGO (each, a “LGO Share”) equal to a value of
Cdn$1,925,000, with the price per LGO Share being equal to the closing mid-market
price of the LGO Shares on the trading date immediately preceding the closing date (the
“Closing Date”) or a cash payment of Cdn$1,925,000 at LGO’s election.
(c) the issuance by Maxim to LGO of that number of common shares in the capital of Maxim
(each, a “Maxim Share”) which would result in LGO holding beneficial ownership or
control and direction (directly or indirectly) of approximately forty-nine (49%) of the issued
and outstanding Maxim Shares (currently estimated to be approximately 30,000,000
Maxim Shares at a deemed price of $0.0833 per Maxim Share, 24,000,000 Maxim
Shares to be issued on the Closing Date and 6,000,000 Maxim Shares to be issued
following completion of the transactions contemplated under paragraph (d) below, taking
into consideration the conversion of certain debts of Maxim owing to three non-arm’s
length parties in the aggregate amount of $300,000 and these amounts may be
converted at the election of such parties in whole or in part into Maxim Shares, with the
result that if this entire amount is converted into Maxim Shares, 6,000,000 Maxim Shares
will be issued at a deemed price of $0.05 per Maxim Share (“Shares for Debt”), subject
to the receipt of shareholder approval and the approval of the TSXV; and
(d) the issuance by LGO to Maxim, should Maxim gain effective control of the South Erin
Field through Jasmin Oil and Gas Limited (“Jasmin”), of that number of LGO Shares
equal to a value of Cdn$500,000, with the price per LGO Share being equal to the closing
mid-market price of the LGO Shares on the trading date immediately preceding the date
of issuance, or a cash payment of Cdn$500,000 at LGO’s election. This will then bring
the total invested by LGO into Maxim to Cdn$2.5 million. In addition, should Maxim gain
effective control of the South Erin Block, LGO has agreed to provide Cdn$5 million to a
work program on the Jasmin Oilfield and shall earn a direct working interest of not less
than 50% of the South Erin Oilfield (the “Joint Venture”) on terms to be agreed between
the parties, subject to the approval of the TSXV in accordance with its policies, the
approval by the shareholders of Maxim, along with any required regulatory approval of
the Petroleum Company of Trinidad and Tobago. LGO will assume operatorship of the
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work program. Once the definitive terms of the JV have been agreed to between LGO
and Maxim, Maxim will issue a further release announcing the material terms of the JV.
Maxim has obtained the TSXV conditional approval in connection with the transactions referred to both
paragraph (b) and (c) above subject to meeting the filing of closing documents with the TSXV and
obtaining the requisite level of shareholder approval. Maxim has filed a notice of meeting and will be
holding its annual and special shareholders’ meeting on July 10, 2013 to approve the Proposed
Transaction and the Shares for Debt.
As disclosed in Maxim’s press release dated March 14, 2013, Maxim and LGO agreed that LGO shall
have the right to nominate two (2) directors to the board of directors of Maxim. The parties have
subsequently agreed in principal that this right shall be exercisable within 12 months from the closing date
of the Proposed Transaction as LGO does not intend to make these nominations at the time of closing the
Proposed Transaction.
In connection with the LGO Shares issuable to Maxim pursuant to paragraphs (b) (assuming that LGO
elects to issue LGO Shares to Maxim) and (c) above, Maxim shall deposit such LGO Shares with a duly
licensed broker in the United Kingdom and Maxim shall proceed to sell all of the LGO Shares issuable to
Maxim under the terms of the Proposed Transaction through this broker within 90 days from the date of
issuance.
Maxim currently has 24,000,491 Maxim Shares issued and outstanding and at the completion of the
Proposed Transaction and the Shares for Debt, the total issued and outstanding Maxim shares will be up
to 60,000,491 with (i) up to 6,000,000 Maxim Shares being issued pursuant to the Shares for Debt and (ii)
30,000,000 being issued to LGO pursuant to the Proposed Transaction.