Mr. Kevin Maloney reports
THEMAC RECEIVES CONDITIONAL APPROVAL FROM THE TSX VENTURE EXCHANGE FOR ACQUISITION OF COPPER FLAT
Themac Resources Group Ltd., further to its news in Stockwatch on Dec. 23, 2010, and Nov. 24, 2010, has received conditional approval from the TSX Venture Exchange to complete the acquisition of the Copper Flat property from ECR Resources PLC (formerly named Electrum Resources PLC and Mercator Gold PLC) and ECR's wholly owned New Mexico subsidiary, Copper Flat Corporation (CFC). In addition, the company has also:
- Appointed an additional independent director and new chief financial officer;
- Made arrangements to borrow an additional $5.25-million from Tulla Resources Pty. Ltd., a company controlled by Kevin Maloney;
- Made a $150,000 deferral payment, through CFC, in respect of the option to acquire the Copper Flat property;
- Filed its filing statement and an updated technical report in respect of the Copper Flat acquisition.
Conditional approval from the TSX Venture Exchange
The exchange has conditionally approved the completion of the acquisition of the exclusive option to acquire a 100-per-cent interest in the Copper Flat property and related assets from CFC. The acquisition is described in the company's filing statement dated Feb. 25, 2011, which is available under the company's profile on SEDAR. In connection with its approval of the acquisition, the TSX Venture Exchange approved:
- The issue of 10.5 million shares and 10.5 million warrants to ECR as partial consideration for the acquisition, each warrant exercisable to acquire one share at a price of 28 cents per share for a period of five years from closing of the acquisition;
- The issue of 5,582,556 shares and 5,582,556 warrants to subscribers of the May, 2010, private placement of subscription receipts, each warrant exercisable to acquire one share at a price of 28 cents per share at any time before May 3, 2013;
- The issue to Tulla of 40 million units, each unit consisting of one common share and one warrant, at a price of 25.5 cents per unit, with each warrant being exercisable to acquire one share at a price of 34 cents per share for a period of five years from closing.
The exchange has also approved the reactivation of the company to Tier 2, subject to the company (i) filing final documentation, (ii) completing the financing with Tulla for $10.2-million, (iii) implementing a $5.25-million bridge loan, and (iv) appointing a second independent director, and the completion of a distribution trade to ensure the company meets the 10-per-cent public float requirement.
Appointment of independent director and chief financial officer
The company is pleased to announce the appointment of Joel Schneyer to the board of directors. Mr. Schneyer's international career spans 30 years as an investment banker, financial engineer, geologist, and expert witness to private and listed resource companies, private equity groups, as well as law firms and governments. Mr. Schneyer is based in Denver, Colo., and is the managing director of the investment banking firm Headwaters MB. Prior to joining Headwaters MB, Mr. Schneyer founded Mercantile Resource Finance, an advisory firm to the natural resource sector. Prior to that, he was manager of derivative finance in the metals group of Barclays Bank, and a senior analyst in the new business and strategic planning group at Billiton Royal Dutch Shell. Before commencing on his banking career, Mr. Schneyer worked as an oil and gas exploration geologist with Celeron Oil & Gas. Mr. Schneyer has served on the board of directors of a number of mining companies over the years and currently serves on the boards of the Toronto Stock Exchange and TSX-V listed companies, including Globex Mining Enterprises, Inc. and Claim Post Resources, Inc. He also serves on the board of SynCoal Solution, Inc., a private Colorado-based company advancing a precombustion coal upgrading and flue gas conditioning technology. He has earned an undergraduate degree from Colgate University, a master in geology from the University of Texas at Austin and a master in mineral economics from the Colorado School of Mines. He holds the ICD.D certification from the Institute of Corporate Directors and the Finra Series 79 investment banking licence.
The company is also pleased to announce the appointment of Steve Vanry as chief financial officer of the company. Mr. Vanry's career includes over 17 years with public and private natural resource companies at both the management and board levels, concentrated in strategic planning, fundraising, mergers and acquisitions, regulatory compliance, and financial reporting. In 2003, he founded Fury Explorations Ltd., a precious-metal-focused company, which was subsequently acquired by Golden Predator Mines Inc. Mr. Vanry currently serves as a director and officer of several public companies in the mining sector and provides consulting services in corporate finance, business development and merchant banking. He holds the right to use the chartered finance analyst (CFA) and Canadian investment manager (CIM) designations and is a member of the CFA Institute and the Vancouver Society of Financial Analysts.
$5.25-million loan from Tulla
In addition to the purchase of 40 million units, Tulla has agreed to provide the company with a $5.25-million. The loan will bear interest at 10 per cent per annum and mature 15 months after being made. The loan may be repaid by the company at any time without penalty, and will be required to be repaid if the issuer completes an equity financing for greater than $20-million. The loan will be advanced upon closing of the acquisition, and will be used to execute the company's business plan described in the filing statement.
Copper Flat property option payments
As previously announced, Themac entered into a transaction agreement dated June 28, 2010, as amended Nov. 23, 2010, to acquire an exclusive option over a 100-per-cent interest in the Copper Flat property from CFC. CFC has to date paid to the underlying optionors a total of $2.85-million (U.S.) pursuant to the underlying option agreement. A portion of these payments were funded by an advance from Themac to CFC. CFC has also deferred the final payment of $7.0-million (U.S.) from Feb. 14, 2011, to May 14, 2011, by making a deferral payment of $150,000 (U.S.) (also advanced by Themac) on Feb. 11, 2011.
Filing statement and technical report
The company has filed a filing statement with the exchange in connection with the acquisition of the Copper Flat property and related transactions, and has made the filing statement available on SEDAR. Details regarding the company and the acquisition of the Copper Flat property are available in the filing statement.
In addition, the company has filed on SEDAR an updated technical report on the Copper Flat property, prepared by SRK Consulting (U.S.), Inc. and endorsed by qualified persons Peter Clarke, PEng, BSc, MBA; Jeffrey Volk, CPG, FAusIMM, MSc; Bret Swanson, BE Mining, MAusIMM of SRK Consulting (U.S.), Inc.; and Mark Pfau, BA, MSc, RPG of Tellurian Exploration, Inc. -- all of whom are independent of the company -- entitled "Updated NI 43-101 Preliminary Assessment, Themac Resources Group Limited, Copper Flat Project, Sierra County, New Mexico" dated June 30, 2010, and updated on Feb. 25, 2011.
The updated technical report clarifies the recommended work program and budget for the Copper Flat property. The updated report provides that the proposed prefeasibility study program be conducted in two phases, the second phase being contingent on the first phase. The authors of the updated report estimated an aggregate cost of the two-phase program to be approximately $3.0-million (U.S.), excluding project environmental permitting programs, divided into two phases.
Distribution trade
Marley Holdings Pty. Ltd., a company controlled by Mr. Maloney, a director of the company who also controls Tulla, has entered into an agreement to sell a total of 3.4 million shares of the company on a private basis to an offshore purchaser. Such sale of shares is anticipated to be completed shortly prior to or concurrently with the closing of the concurrent financing and will reduce Marley's holdings of shares of the company, to ensure the company has an adequate public float to meet Tier 2 listing requirements, at the request of the exchange. Following the disposition of 3.4 million shares and prior to closing of the acquisition and the concurrent financing, Mr. Maloney will own, directly and indirectly through Marley, a total of 10,806,879 common shares, representing approximately 60 per cent of the outstanding shares of the company.