Bitumen Capital Inc. Announces Proposed Qualifying Transaction with Cape Verde Group.

MONTREAL, April 2, 2012 /CNW Telbec/ - Bitumen Capital Inc. (TSXV: BTM.H) ("Bitumen") has entered into a letter of intent dated March 16, 2012, for the arm's-length acquisition of 100% of the common shares of Monte Gordo SA and Fortim Mindelo SA and Salute LDA t/a Cape Verde Development, (referred to collectively  as the "CVD Group"), companies incorporated under laws of Cape Verde and Portugal respectively . Pursuant to the terms of the letter of intent, and subject to completion of satisfactory due diligence and receipt of all necessary regulatory and exchange approvals, the proposed acquisition of the CVD Group will qualify as Bitumen's "Qualifying Transaction"  as defined in Policy 2.4 of the TSX Venture Exchange (the "Exchange").

About Bitumen Capital Inc.

Bitumen, a capital pool company within the meaning of the policies of the Exchange, was incorporated on March 17, 2006 and was listed on the Exchange on March 13, 2007. Bitumen does not have any operations and has no assets other than cash. Bitumen's business is to identify and evaluate businesses and assets with a view to completing a qualifying transaction under the policies of 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 approvals are obtained. There can be no assurance that the transaction will be completed as proposed or at all.

About The CVD Group

The CVD Group was established in 2005 and is one of the first resort development companies in Cape Verde with a focus on high-end resort and property development.

Monte Gordo SA is the developer of a mixed hotel and residential site on the Island of San Nicolau, Cape Verde, which will be managed by Extreme Hotels Worldwide Limited. This development will consist of a 108 bed hotel and 128 apartments. The Extreme Hotels management team includes some of the most knowledgeable hotel industry professionals. The many decades of combined experience of this senior team was gained in a broad range of positions including directorships at leading accountancy and consultancy firms, construction, design and hotel management positions with major international hotel groups in over 30 countries.

Fortim Mindelo SA is the developer of a mixed hotel, residential and casino site on the island of Sao Vicente, Cape Verde, which will be managed by Nikki Beach Hotels and Resorts. The 128 bed hotel will be operated under the "Casa" Nikki Brand.

Cape Verde Development SA is the developer of a project known as "The Boathouse" located in Baia Das Gata, on the island of Sao Vicente, which consists of a gated development of 11 villas with their own private pool and parking.

About Cape Verde 

The Republic of Cape Verde, is an island country, spanning an archipelago of 10 islands located 1,500 km south of the Canary Islands.  The population of Cape Verde is approximately 500,000 and the official language is Portuguese.

With a tropical climate, average temperature of 28 degrees, the country is beginning to be known as "The Caribbean of Europe".  Cape Verde was listed 3rd in BBC's 'Lonely Planet 2011' top destination guide. The country has no tropical diseases and is free of hurricanes.

There are four international airports on Sal, Santiago, Boa Vista and Mindelo, Sao Vicente Island. In addition there are inter- island flights and fast ferry connections. The  international airports already receive flights from London (5.5  hrs.),  Birmingham,  Manchester,  Bristol, Glasgow, East Midlands, Paris, Oslo, Copenhagen, Stockholm, Amsterdam, Madrid, Munich, Prague, Las Palmas,  Rome, Bergamo, Helsinki, Luxemburg, Warsaw, Moscow, Frankfurt, Brussels and Barcelona, as well as Boston, Havana, Brazil and several counties on the West Coast of Africa.

A "privileged-partnership" was signed with the EU in 2010. The archipelago won the Millennium Challenge Account Award on two occasions.

The Cape Verde islands have beautiful beaches, as well as having engaging local people. Tourists and leisure seekers from across Europe and the world are coming to the country in larger numbers.

About the proposed transaction

Bitumen and the CVD Group have agreed to combine their businesses by means of an amalgamation. The amalgamation will effectively provide for the acquisition of all of the outstanding equity interests of the CVD Group by Bitumen in a transaction in which the shareholders of the CVD Group will receive shares of Bitumen. As a result of the amalgamation Bitumen will become the sole beneficial owner of all of the outstanding shares of the amalgamated corporation.

The amalgamation will result in Bitumen issuing to CVD Group an aggregate of 56,520,000 common shares.

As at the date hereof, Bitumen has 13,150,000 common shares outstanding and convertible securities (options) exercisable for 1,349,999 Bitumen shares at an exercise price of $0.20 per common share.

Closing of the Qualifying Transaction will be conditional upon the completion of a concurrent majority arm's length private placement of securities for gross proceeds of a minimum of $15,000,000 and a maximum of $20,000,000 (the "Concurrent Financing"), whereby the number of Bitumen common shares to be issued (exclusive of warrants) will represent approximately 36% of the issued and outstanding Bitumen shares upon completion of the Qualifying Transaction

Following completion of the Qualifying Transaction and assuming that the maximum Concurrent Financing is achieved, the former shareholders of CVD Group will own approximately 51.61% of the Bitumen shares, current shareholders of Bitumen will hold approximately 12% of the Bitumen shares, and subscribers in the Concurrent Financing will hold approximately 36.39 %. Accordingly, the amalgamation will constitute a reverse takeover of Bitumen. Two new "Control Persons" of Bitumen will be created as a result of the Qualifying Transaction, namely Mr. Niall Fleming, a resident of Sintra, Portugal and ACL Malta Ltd, a corporation registered in Malta, which holds the shares in the capacity of Trustee of a Discretionary Trust, the beneficiaries of which include the family of Mr. Tom Sheehy, who will control directly approximately 25 million shares each, representing approximately 23% of the issued and outstanding Bitumen shares each.

The amalgamation is an arm's-length transaction and therefore is not a related-party transaction. As a result, no meeting of Bitumen shareholders is contemplated as a condition to completion of the amalgamation.

All parties have agreed to use their good faith efforts to complete and be in a position to execute a definitive agreement relating to the amalgamation on or before April 30, 2012 (or such other date as may be mutually agreed to by Bitumen and CVD Group).

The net proceeds from the private placement will be used to complete the build out of the Extreme Hotel, for advancing the Fortim site preparation and for general working capital.

Completion of the amalgamation is conditional upon all necessary regulatory approvals, including the approval of the Exchange, closing of the Concurrent Financing and other conditions which are typical for a business combination transaction of this type.

Subject to prior Exchange approval and to conditions contained in the Exchange's policies, Bitumen will advance to the CVD Group a bridge loan of up to $250,000 Canadian Dollars, upon the execution of a collateral mortgage on one of the mutually agreeable assets.

Proposed management

The proposed management of Bitumen following the completion of the amalgamation will include:

Richard T. Groome (Director and Chairman)

Mr. Groome is presently the Chairman of the Board of Bitumen. Mr. Groome has extensive experience in business ventures worldwide.  Richard T. Groome is Managing Partner of Notre-Dame Capital Inc. ("NDC").  His expertise stems from financing small and mid-size emerging growth companies.  Prior to NDC, Richard started Groome Capital, and created Canada's leading underwriter of IPO's, Private Placements and Secondary offerings on the Internet. The firm was sold to Desjardins Securities in 2001. Mr. Groome joined a new and vibrant executive team with a very aggressive plan to grow Desjardins Securities into the top 10 securities firms in the country. In the year 2005, this was accomplished and Mr. Groome left Desjardins (Canada's seventh largest financial institution) to set up what is now Notre-Dame Capital. Richard has been in the financial industry for more than 25 years at such firms as Groome Capital, Marleau Lemire Securities, Sprott Securities and Levesque Beaubien Geoffrion. Mr. Groome was a director of the CDNX Exchange, the predecessor of the TSX Venture Exchange for several years and currently sits on the boards of directors of several private and public companies. He has a BA in Economics from McGill University.  Mr. Groome has actively managed or participated in over 400 financings representing some $4 billion of small cap financings. Mr. Groome is very active in several non-profit, charitable organizations specializing in helping underprivileged children and a member of Canada Company, a registered charity focusing on making sure Canadians, who serve or wish to serve in the Canadian Forces and Reserves, and their families receive the widest possible support, recognition and care they deserve.

Tom Sheehy (President and Director)

Mr. Sheehy is currently the president of Monte Gordo SA, Fortim Mindelo SA and Cape Verde Development SA. Having a strong amount of relationships and being well connected in Cape Verde.  Mr. Sheehy is an experienced businessman and has served as a director and chairman in a wide variety of private companies. The experience gained in his early career as a manager at Dunnes Stores department store Ireland helped him to expand, as a director, his family furniture and hardware business Tom Sheehy & Co Ltd., Cork into a leading provider for the area. Mr. Sheehy was also a Director for National Hardware Ltd a large Irish independent buying group and Chairman of Symbol group ARRO who have over 100 hardware stores through Ireland. In addition Mr. Sheehy was the founder of Irish Mobiles.com, Ireland's first mobile phone internet business. In 2004 Mr. Sheehy founded Cape Verde Development and he has been to the forefront of the expansion of Cape Verde on the international map as a recognised tourist and residential destination. He is involved in many award winning developments in Cape Verde

Neil Walker (Chief Financial Officer)

With over 25 years of experience, including at the CFO and director level of various companies in Europe, Mr. Walker provides public companies and reporting issuers with the necessary support to meet the increasing demand of the regulators. In addition, Mr. Walker provides assistance in developing financial projections and business plans for entrepreneurs seeking the support of a strong financial executive with extensive public company experience, as well as turnaround and operational experience on an as needed basis.

Mr. Walker's approach has always been to merge his management and property finance expertise with that of his financial accounting knowledge to help clients meet their goals and supply the services they require. Mr. Walker's expertise spans the following industries: asset-based lending, distribution, financial services, manufacturing, technology and construction, with projects that have led him to a number of continents. Mr. Walker is ACA registered with the Institute of Chartered Accountants in England and Wales since 1991, and Revisor Oficial de Contas (Portuguese Statutory Auditor) registered with the Ordem dos Revisores Oficais de Contas (no 899) since 1995. Mr. Walker resides in Lisbon, Portugal.

Niall Fleming (Director)

Niall has served as a director on a number of companies, with considerable experience in banking and finance in different business sectors. He has worked in the Irish banking industry for 11 years and started his career with AIB Bank. While working with AIB Bank he spent a number of years on secondment with AIB Finance and Leasing. He has experience in commercial lending having been responsible for a lending Portfolio which included Agriculture, Corporate and Commercial. He was also a shareholder, Director and CFO of a large private company, involved in the motor industry. He spent some time as a Business Development Manager with Ulster Bank Ireland, a member of The Royal Bank of Scotland Group. After building up a personal property portfolio, he joined Mr Sheehy as a business partner in Cape Verde Development. He studied at The School of Commerce in Limerick and while employed by AIB Bank he also completed levels in a Financial Services Degree and was a member of The Institute of Bankers of Ireland.

Nikolas Perrault (Director)

Mr. Perrault is a Chartered Financial Analyst who has spent the first 15 years of his career working as an investment executive with some of Canada's largest institutions, including National Bank, Merrill-Lynch, CIBC and Scotia Capital. He is President, CEO and Director of Colt Resources Inc., a Canadian-based junior exploration company engaged in the acquiring, exploring and developing mineral properties with an emphasis on gold and tungsten. His focus throughout his career has been on small cap resource companies. His work has focused on small companies in the energy and resource sectors in Canada and abroad, which has allowed him to develop an extensive international network. In May 2007, he founded a management consulting company providing strategic advice to early stage energy and resource companies. Mr. Perrault is also a director of TSX listed Calvalley Petroleum Inc., as well as a director of Bitumen.  He is a member of the Advisory Board of Quantitative Alpha Trading. Mr. Perrault is President of Twilight Capital Inc., which is registered as an exempt market dealer in Ontario. Mr. Perrault holds a Bachelor of Commerce and obtained his Chartered Financial Analyst designation in 1997.

David Johnson (Director)

Mr. Johnson is the Chief Legal Officer and a Director of Colt Resources (TSX-V.GTP), an exploration company holding gold and tungsten concessions in Portugal. He is also an attorney and trade-mark agent with his own law firm based in Montreal, Quebec, Canada. Mr. Johnson specializes in corporate law, commercial transactions and intellectual property. In addition to mining and exploration, he has also practised across several industries including, software, energy, real estate, manufacturing, clean tech, transportation and entertainment in Canada, France, Portugal, Germany, Albania, the United States of America and Israel. Mr. Johnson has several years' experience at the senior management level in a variety of companies and not for profit organizations. He is presently a director of Genoil Inc. (TSX-V. GNO), formerly the Corporate Secretary of Sofame Inc. (TSX-V.SOF) and a director and the Secretary-Treasurer of the International Law Association, Canadian Branch, a registered charity. Mr. Johnson holds a Bachelor of Arts (Hons.) from Queen's University, a Master of Urban Planning, Bachelor of Common Law (LL.B.) and a Bachelor of Civil Law (B.C.L.) from McGill University. He has completed the International Executive Program for Mining Leadership at the School of Business, Queen's University and the Canadian Securities Course at the Canadian Securities Institute. He is also currently enrolled in the Directors' Education Program at the Rotman School of Management, University of Toronto.

In addition to the foregoing, one or more additional directors may be appointed in compliance with the policies of the exchange.

Sponsorship of Qualifying Transaction

Bitumen intends to make application to the exchange that the qualifying transaction should be exempt from sponsorship requirements in accordance with Policy 2.2 of the exchange. However, there can be no assurance that Bitumen will obtain such exemption.

General

Trading of the common shares of Bitumen will remain halted after the dissemination of this press release, and will recommence at such time as the Exchange may determine, having regard to the completion of certain requirements pursuant to Exchange Policy 2.4.  Further details of the proposed transaction, including the consideration to be paid and the structure of the Concurrent Financing , will be described in future press releases.

The information in this press release related to CVD Group, its business and the proposed management of Bitumen following the completion of the amalgamation was provided to Bitumen by CVD Group.

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.

The information in this news release includes certain information and statements about management's view of future events, expectations, plans and prospects that constitute forward looking statements. These statements are based upon assumptions that are subject to significant risks and uncertainties. Because of these risks and uncertainties and as a result of a variety of factors, the actual results, expectations, achievements or performance may differ materially from those anticipated and indicated by these forward looking statements. Although Bitumen believes that the expectations reflected in forward looking statements are reasonable, it can give no assurances that the expectations of any forward looking statements will prove to be correct. Except as required by law or by the rules of the Exchange, Bitumen disclaims any intention and assumes no obligation to update or revise any forward looking statements to reflect actual results, whether as a result of new information, future events, changes in assumptions, changes in factors affecting such forward looking statements or otherwise.

Neither 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.

Richard T. Groome
Chief Executive Officer
Bitumen Capital Inc.
Tel: [phone] ext 774
Email: [email protected]

Mr. Tom Sheehy
President and CEO
Cape Verde Development
Email: [email protected]