SUDBURY, ON, March 4, 2013 /CNW/ - Transition Metals Corp. (XTM - TSX.V) ("Transition") and HTX Minerals Corp. ("HTX"), a private company incorporated under the laws of Ontario, are pleased to announce that they have entered into a letter of intent dated March 3, 2013 (the "LOI") to combine the businesses. Transition and HTX ("the Parties") intend to implement a plan of arrangement pursuant to which Transition will acquire all of the securities of HTX in exchange for common shares of Transition. It is expected that the business combination will be by means of a plan of arrangement pursuant to Section 182 of the Business Corporations Act (Ontario) (the "Proposed Transaction"). However, the final structure of the Proposed Transaction will be determined collectively by Transition and HTX based on taxation, securities and corporate law, and other considerations.
"This is very positive for the shareholders, employees and partners of both companies," said Scott McLean, CEO of both Transition Metals and HTX Minerals. "The combined entity will be a much larger project generator focused on the discovery of gold, platinum and base metal deposits in Canada. With an award-winning and highly experienced team of geologists, strategic exploration alliances with Implats and the Nunavut Resources Corporation, JV partnerships, and a portfolio of 20 projects in Ontario, Nunavut, Saskatchewan and BC (Figure 1), the company will be further positioned for growth and success."
Highlights of the Combined Business:
The following are the key attributes of a combined business. The contribution of each company is noted in parentheses as "Transition", "HTX", or "Transition + HTX" in the event they contribute equally or share the attribute.
Directors and Officers
The parties anticipate that upon completion of the Transaction and subject to the approval of the TSX-V, the board of directors of the combined business shall consist of seven members, including all of the non-executive board members of both Transition and HTX, as follows:
In addition, it is anticipated that following completion of the Proposed Transaction the officers of the combined business will be Scott McLean (President and CEO), Greg Collins (Chief Operating Officer), Kevin Stevens (VP and Chief Geophysicist), and Anna Ladd (Chief Financial Officer).
Transaction Terms
Under the Proposed Transaction, and upon receipt of the requisite approvals, including regulatory and shareholder approvals, the parties will implement a plan of arrangement whereby all common shares of Transition will be consolidated on a 2:1 basis. HTX shareholders will receive shares of Transition at an exchange ratio of 0.8 post-consolidation Transition shares for each HTX share, and all shares of Transition held by HTX will be cancelled.
The Transaction, when completed, will be considered to be a reverse take-over for the purposes of the TSX Venture Exchange (the "TSXV") and the Resulting Issuer will be a Tier 2 Mining Issuer on the TSXV. For the purposes of the press release the term "Resulting Issuer" means the Company upon completion of the Transaction.
Transition Metals was spun out of HTX Minerals in 2010 to capitalize on the market for gold-focused resource companies, and went public in August, 2011 to provide HTX shareholders with some liquidity. While the two companies operate independently, they each follow the project generator business model, and have common CEOs, CFOs and IR/Marketing executives.
The current (unaudited) combined cash position for HTX Minerals and Transition Metals Corp. is $2.2 million, as of March 1, 2013.
Completion of the Proposed Transaction shall be subject to satisfactory completion by each party of due diligence, the negotiation of definitive agreements, the receipt of regulatory and required consents and approvals, including the approval of the Transition and HTX shareholders. The Parties acknowledge that the definitive agreement will contain customary and detailed conditions precedent, representations and warranties, covenants and provisions dealing with the mechanics of completing the Proposed Transaction as are typical for a transaction similar in nature to the Proposed Transaction. Neither Party is under any obligation to enter into any definitive agreement.
Completion of the Proposed 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 Management Information Circular to be prepared in connection with the 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 the securities of Transition Metals should be considered highly speculative. The TSX Venture 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.
Timing
The Parties will use their reasonable commercial efforts to negotiate and complete the Formal Agreement in Q1, 2013, and plan to close the Proposed Transaction in Q2, 2013.
Qualified Person
The technical elements of this press release have been approved by Mr. Greg Collins (Transition), P.Geo (APGO), and by Mr. Kevin Stevens (HTX), P.Geo (APGO), each a Qualified Person under National Instrument 43-101.
About Transition Metals Corp
Transition Metals Corp (XTM -TSX.V) is a Canadian-based, gold-focused project generator that specializes in converting new exploration ideas into Canadian discoveries. The team has over 60 years of collective exploration experience in the established, emerging and historic mining camps of northern Ontario, and actively develops and tests new ideas for discovering gold mineralization in places that others have not looked, which often allows the company to acquire properties inexpensively. The team is rigorous in its fieldwork, and combines traditional techniques with newer ones to help unearth compelling prospects and drill targets. Transition's business model is to acquire and advance multiple grassroots exploration projects simultaneously, thereby maximizing shareholder exposure to discovery and capital gain. Joint venture partners fund a significant portion of higher-risk drilling and exploration, allowing Transition to conserve capital and minimize shareholder's equity dilution. The company, which went public in 2011, has an expanding portfolio that currently includes 11 early stage gold projects in Ontario and British Columbia, two additional gold properties that are being explored by partners, and one sediment hosted copper project in Saskatchewan.
About HTX Minerals Corp.
HTX is a privately held Canadian exploration company that specializes in the discovery of new mineral deposits using a project-generator business model. This approach provides investors with the greatest growth potential and minimizes shareholder dilution through joint-venture funding partnerships and revenue generating opportunities. HTX was selected as the partner of choice by the Nunavut Resources Corporation and has a three-year $4.1 million strategic alliance with Implats, the world's second largest producer of platinum group metals. The company's founders have a +20 year track record of success, having discovered over 50 Mt of resources. HTX leverages this deep expertise with a proven methodology that combines custom-built digital compilations, advanced 3D geoscience modeling and interpretive techniques, and rigorous fieldwork to systematically identify economically attractive targets, including many that would otherwise go undiscovered.
Cautionary Note on Forward-Looking Information
Except for statements of historical fact contained herein, the information in this news release constitutes "forward-looking information" within the meaning of Canadian securities law. Such forward-looking information may be identified by words such as "plans", "proposes", "estimates", "intends", "expects", "believes", "may", "will" and include without limitation, statements regarding estimated capital and operating costs, expected production timeline, benefits of updated development plans, foreign exchange assumptions and regulatory approvals. There can be no assurance that such statements will prove to be accurate; actual results and future events could differ materially from such statements. Factors that could cause actual results to differ materially include, among others, metal prices, competition, risks inherent in the mining industry, and regulatory risks. Most of these factors are outside the control of the Company. Investors are cautioned not to put undue reliance on forward-looking information. Except as otherwise required by applicable securities statutes or regulation, the Company expressly disclaims any intent or obligation to update publicly forward-looking information, whether as a result of new information, future events or otherwise.
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.
1 Mineralization at the Lupin Mine may not be representative of mineralization on the Itchen Lake property.
PDF available at: http://stream1.newswire.ca/media/2013/03/04/20130304_C9956_DOC_EN_24231.pdf
SOURCE: Transition Metals Corp.
Further information is available on the Company websites at: www.transitionmetalscorp.com and www.htxminerals.com or by contacting:
Scott McLean
President and CEO
Transition Metals Corp. & HTX Minerals Corp.
Tel: (705) 669-0590
George McTaggart
VP Investor Relations & Marketing - Transition Metals Corp.
Marketing & Communications Officer - HTX Minerals Corp.
Tel: (705) 669-0590
[email protected]
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