PACIFIC HARBOUR ANNOUNCES ACQUISITION AGREEMENT TO ACQUIRE IRON ORE CLAIMS IN
NORTHERN QUEBEC
TSX Venture Exchange: PCF
VANCOUVER, Oct 7 /CNW/ - Pacific Harbour Capital Ltd. ("Pacific Harbour") has entered into an agreement dated October 1, 2010 (the "Acquisition Agreement") with John Patrick Sheridan of Toronto, Ontario and Peter Ferderber of Val D'or, Quebec (collectively the "Vendors") to acquire a 100% interest, subject to a 2% net smelter returns royalty (the "NSR"), in approximately 3,000 mining claims (the "Property") located near Ungava Bay, Quebec.
As consideration for the acquisition, Pacific Harbour has agreed to issue to the Vendors 30,000,000 common shares which will be held in escrow and releasable on terms acceptable to the TSX Venture Exchange ("TSXV"), provided that the shares will not be releasable any sooner than as to 20% of the shares on the date that is four months following the closing date and 20% on each of the dates that are 10 months, 16 months, 22 months and 28 months following the closing date. Commencing on the date that is one year following the closing date, Pacific Harbour must pay the Vendors minimum advance NSR payments of $200,000 per year, which will be credited against all future NSR payments payable from production. Pacific Harbour may purchase 50% of the NSR by paying the Vendors $3,000,000 at any time in the first two years following the commencement of commercial production from the Property.
The Property is currently subject to a dispute between Kataria Holdings Limited, a British Virgin Islands company, Atulkumar Patel and Ramzy Abdul-Majeed, both of Dubai, UAE, (collectively the "Kataria Group") and the Vendors. In relation to the acquisition of the Property, Pacific Harbour has also entered into agreements with the Vendors and the Kataria Group which provide that, upon closing under the Acquisition Agreement, the Vendors and the Kataria Group will dismiss all legal proceedings in respect of the Property and enter into full and final releases. In consideration therefore, Pacific Harbour has agreed to pay the Kataria Group U.S.$2,000,000 on the closing date under the Acquisition Agreement and issue the Kataria Group 8,000,000 common shares on the closing date under the Acquisition Agreement, of which 4,000,000 common shares will be held in escrow and only released upon receipt of an independent report under National Instrument 43-101 which validates a resource equal to or greater than 450 million metric tonnes of 35% or higher iron content.
Concurrently with closing under the Acquisition Agreement, Pacific Harbour will change its name to Oceanic Iron Ore Corp. and will complete a non-brokered private placement of up to 10,000,000 units at a price of $0.40 per unit, for gross proceeds of $4,000,000. Each unit will consist of one flow-through common share and one-half of one share purchase warrant, with each whole warrant entitling the holder to purchase one non-flow-through common share at a price of $0.65 per share for a period of five years from closing. Finder's fees of up to 5% of the gross proceeds of the offering may be paid.
In respect of the Acquisition, Endeavour Financial will be paid a finder's fee of $40,000 and 760,000 common shares and Bahram Ebrahimi will be paid a finder's fee of $50,000 and 250,000 common shares. Pacific Harbour will also grant options to purchase up to 8,500,000 common shares at a price of $0.40 per share to directors, officers, consultants and charities.
Closing under the Acquisition Agreement, which is expected to occur on or before October 30, 2010, is subject to several conditions, including receipt of all consents, approvals and other authorizations of the TSXV and other applicable regulatory authorities, shareholders or third parties. At closing under the Acquisition Agreement, the directors and officers of Pacific Harbour will be the following:
Gregg Sedun, Interim President & CEO
Mr. Sedun has had an extensive business career relating to mining, corporate finance and venture capital over a 27 year period. He was a partner in boutique law firms specializing in mining/corporate finance for approximately 14 years, ran a venture capital business for early stage companies for 11 years and was president and CEO of a producing diamond mining company for over 2 years. Mr. Sedun is currently an independent businessman with a particular focus on mining and is the Chairman and CEO of Uracan resources Ltd.
Gordon Keep, Interim CFO, Secretary & Director
Mr. Keep has extensive business experience in investment banking and creating public natural resource companies. Mr. Keep currently is Executive Vice-President of Fiore Financial Corporation, a private boutique merchant banking firm. He also serves as an officer and/or director for several natural resource companies. From January 2001 to July 2007, Mr. Keep was Managing Director of Corporate Finance at Endeavour Financial Corporation, September 1997 until March 2004, he was Senior Vice President and a director of Lions Gate Entertainment Corp., and from April 1987 until October 1997, he was Vice President, Corporate Finance in the Natural Resource group of Yorkton Securities Inc. He obtained his B.Sc. in Geological Science from Queen's University in 1979 and his Master's of Business Administration from the University of British Columbia in 1983 and is a Professional Geologist in the province of British Columbia.
Paul Matysek, Chairman & Director
Mr. Matysek has been President and Chief Executive Officer of Potash One Inc. since November 2007. Formerly, he was President and Chief Executive Officer of Energy Metals Corporation, a public company listed on the TSX, New York Stock Exchange - Arca from January 1999 to August 2007 (subsequently acquired by Uranium One Inc.). He has been a self-employed Geological Consultant since 1996.
The Hon. John Reynolds, Director
The Honourable John Reynolds career includes substantial experience in venture capital development, resource sector development and elected political office, both federal and provincial. The Hon. John D. Reynolds served as a Member of Parliament of Canada, 1972 - 1977 and 1997 - 2006 and also as leader of Her Majesty's official opposition. His career in the private sector has included directorships on the boards of numerous public companies, including Calibre Mining Corp. (TSXV:CXB), Oriel Resources pls (formerly TSX listed), Rusoro Mining Ltd. (TSXV:RML), and Terrane Metals Corp. (TSXV:TRX).
Steven Dean, Director
Mr. Dean is a Fellow of the Institute of Chartered Accountants of Australia, a Fellow of the Australian Institute of Mining and Metallurgy and a Member of the Canadian Institute of Mining, Metallurgy and Petroleum. He has extensive experience internationally in mining, most recently as President of Teck Cominco Limited until his retirement in July 2002. Mr. Dean is Chairman and a director of Amerigo Resources Ltd. and Spur Ventures Inc. both of which are listed on the Toronto Stock Exchange, and of Infinito Gold Ltd., whose shares are listed on the TSX Venture Exchange.
Michael Reynolds, Director
Mr. Reynolds is the managing director of Swiss-based Aries Asset Advisors where he specializes in the establishment, organization and marketing of offshore hedge fund products. Prior to founding Aries, Mr. Reynolds was involved extensively in investment banking, corporate finance and institutional sales with Canaccord Capital Inc. During Mr. Reynolds 20 years with Canaccord he served as a key member of the Institutional Equities Group and raised over a billion dollars of capital for emerging companies in the field of life sciences, technology and mining.
The Properties cover over 300 km of iron formation along the northern extension of the Labrador Trough in the Nunavik Region of northern Quebec. Three groups of deposits (Roberts Lake, Morgan Lake, and Hopes Advance areas) were explored in the 1950s and 1960s and are within 50 km of the Ungava Bay coast.
Ungava Iron Ores Company completed most of the exploration in the Hopes Advance area (1951-1962) including 12,935 m in 185 holes in eight deposits. Scoping and pre-feasibility studies were also completed. An unclassified historic mineral resource estimate of 591 million tonnes with an average of 35.7% soluble iron was reported for seven of the deposits (P.E. Auger, 1958).
International Iron Ores Limited explored the Roberts Lake area (1952-1957) including 5,115 m in 97 holes. An unclassified historic mineral resource estimate of 439 million tonnes with an average of 36.8% soluble iron was reported for four of the deposits (P.E. Cavanagh, 1970).
Oceanic Iron Ores Company was active in the Morgan Lake area (1955-1957) and work included 3,611 m in 45 holes in two deposits. An unclassified historic mineral resource estimate of 438 million tonnes with an average of 21.8% magnetic iron was reported for the Morgan Lake deposit (A.T. Griffis, 1967). Another unclassified historic mineral resource estimate of 72 million tonnes with an average of 23.9% magnetic iron was reported for the Payne Range deposit (G.A. Gross, 1964).
These are historical resource estimates that do not comply with the current Canadian Institute of Mining, Metallurgy and Petroleum Resources (CIM) Definition Standards on Mineral Resources and Mineral Reserves as required by National Instrument 43-101 (NI 43-101) "Standards of Disclosure for Mineral Projects." These historic resources were described as "drill indicated" at the time of reporting which does not correspond to the categorization as set forth in Section 1.2 and 1.3 of NI43-101. Although these historic resources are relevant to support the presence of large areas of iron mineralization, they are not considered reliable for current reporting given the use of small diameter drill core (i.e. 22 mm; AX or EX diameter), and the lack of a quality assurance/quality control program, metallurgical testwork, collar surveys and an incomplete database of drill hole logs.Micon International ("Micon") has been contracted to prepare a NI43-101 technical report. Micon's Qualified Person for the report is Sam J. Shoemaker B.Sc., (member of AusIMM). Mr. Shoemaker has reviewed and approved of the technical disclosure in this news release.
Pacific Harbour is currently classified as an investment issuer by the TSXV and will become a mining issuer on completion of the transaction. In accordance with TSXV policies, the transaction constitutes a "Change of Business" for Pacific Harbour.
Completion of the transaction is subject to a number of conditions, including TSXV acceptance and disinterested shareholder approval. 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 Filing Statement to be prepared in connection with the transaction, any information released or received with respect to the Change of Business may not be accurate or complete and should not be relied upon. Trading in securities of Pacific Harbour should be considered highly speculative.
The TSXV has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.
On behalf of the Board of Directors
"Gregg Sedun"
Interim President & CEO
Neither the 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.
For further information:
PACIFIC HARBOUR CAPITAL LTD.
Ste. 3123 - 595 Burrard Street
Vancouver, BC
V7X 1J1
Tel: 604-609-6110
Fax: 604-609-6145
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