AMN Capital Corp. ("AMO")(TSX VENTURE:AMO.P), a Capital Pool Company ("CPC")
trading on the TSX Venture Exchange (the "Exchange"), is pleased to announce
that it has entered into a binding letter of intent dated July 6, 2011 (the
"Agreement") regarding a proposed transaction (the "Transaction") with Altan Rio
Minerals Limited ("Altan Rio"), a privately held company incorporated under the
Business Corporations Act (British Columbia), which operates as a mineral
exploration company with various mineral exploration interests in Mongolia.
It is intended that the Transaction will constitute AMO's "Qualifying
Transaction" in accordance with Policy 2.4 of the Exchange. AMO and Altan Rio
are at arm's length; accordingly the Qualifying Transaction is not a "Non-Arm's
Length Qualifying Transaction". As such, it is anticipated that the approval of
the shareholders of AMO will not be required. Subject to any regulatory,
director or other approvals that may be required, the completion of satisfactory
due diligence by AMO and other conditions contained in the Agreement, it is
intended that AMO will acquire 100% of the common shares of Altan Rio (the
"Altan Rio Shares") in a reverse takeover transaction which will be effected by
way of a three cornered amalgamation (the "Amalgamation") pursuant to which a
newly formed wholly-owned subsidiary of AMO will amalgamate with Altan Rio,
resulting in the amalgamated company becoming a wholly-owned subsidiary of AMO.
Pursuant to the Amalgamation, 41,804,343 Consolidated AMO Shares, as defined
hereafter, will be issued to the existing shareholders of Altan Rio. Upon
completion of the Qualifying Transaction, it is expected that the Resulting
Issuer, as defined in Exchange Policy 2.4, (the "Resulting Issuer") will be
listed on the Exchange as a Tier 2 mining issuer.
As a condition of the Amalgamation, the shareholders of AMO will be asked to
approve a consolidation (the "Share Consolidation") of AMO's common shares ("AMO
Shares") on the basis of approximately one and two-thirds (1.66665) old shares
for one (1) new share. The AMO Shares as so consolidated are hereinafter
referred to as the "Consolidated AMO Shares". Concurrently with closing of the
Qualifying Transaction, AMO will change its name to "Altan Rio Minerals Ltd." or
such other name as may be selected by Altan Rio. If requested and approved, the
Share Consolidation would become effective prior to completion of the Qualifying
Transaction. All share numbers and pricing herein assumes completion of the
Share Consolidation prior to closing of the Qualifying Transaction.
AMO and Altan Rio confirm that there are no finder's fees or other similar fees
payable to any person or party with respect to the Qualifying Transaction.
Capital Structure of Altan Rio
The principal stakeholders of Altan Rio, who as a group own beneficially,
directly or indirectly, or exercise control or direction over 41,449,935 Altan
Rio Shares, representing approximately 41.61% of the issued and outstanding
Altan Rio Shares, are founding shareholders Messrs. Evan Jones (of Perth,
Australia), John Jones (of Perth, Australia), and Kelly Cluer (of Carson City,
Rio). Mr. Evan Jones is a beneficiary of a trust that is the sole shareholder of
0809979 B.C. Ltd that owns 37,034,844 Altan Rio Shares or 37.17% of the issued
and outstanding Altan Rio Shares, Mr. John Jones through Jonmin Superannuation
Fund owns 300,109 Altan Rio Shares or 0.30% of the issued and outstanding Altan
Rio Shares and Mr. Kelly Cluer owns 4,114,982 Altan Rio Shares or 4.13% of the
issued and outstanding Altan Rio Shares. The remaining 58,177,115 Altan Rio
Shares are held by approximately 180 other shareholders. These shareholders
include Mr. Murray Seitz of AMO who owns 67,000 Altan Rio Shares or 0.07% of the
issued and outstanding Altan Rio Shares and Mr. Robert Scott of AMO who owns
33,333 Altan Rio Shares or 0.03% of the issued and outstanding Altan Rio Shares.
Altan Rio currently has 99,627,050 Altan Rio Shares issued and outstanding.
Altan Rio also has 31,547,002 warrants outstanding exercisable into an
equivalent number of Altan Rio Shares at an exercise price of $0.29 per share.
Contemplated Financings
In conjunction with the Qualifying Transaction, AMO will undertake a
non-brokered private placement (the "Offering") to raise gross proceeds of up to
$1,000,000. Under the terms of the Offering, AMO would issue up to 2,000,000
units (each a "Unit") at a price of $0.50 per Unit. Each Unit will consist of
one Consolidated AMO Share and one-half of one common share purchase warrant.
Each whole warrant (a "Warrant") will entitle the holder to acquire one
Consolidated AMO Share at the exercise price of $0.65 for a period of two years
from closing.
AMO may pay finder's fees to arm's length parties in an amount equal to 7% of
the proceeds raised under the Offering payable in cash and 7% in finder's
Warrants.
It is expected that the net proceeds of the Offering will be used to complete
additional exploration and a subsequent drill program on the Chandman-Yol
Properties (as defined and described below) in Mongolia, as well as for general
working capital purposes.
Resulting Issuer Capital Structure
Assuming completion of the Share Consolidation and the Amalgamation and that the
Offering is fully subscribed, the Resulting Issuer will have outstanding
approximately 43,484,360 Consolidated AMO Shares, 14,237,384 warrants, 140,000
finder's Warrants, and 90,000 agent's options.
Closing Conditions
The closing of the Qualifying Transaction with Altan Rio is subject to a number
of conditions, including, but not limited to the following:
1. completion of all due diligence reviews;
2. receipt of all director and shareholder approvals as may be required
under applicable laws or regulatory policies;
3. execution of a formal amalgamation agreement;
4. the Altan Rio shareholders entering into such escrow agreements as may
be required by the Exchange and applicable securities regulatory policy;
5. completion of the proposed Offering;
6. confirmation of ownership of key mineral exploration properties in Altan
Rio;
7. confirmation that the Altan Rio Shares will be free and clear of all
liens, claims, charges or encumbrances;
8. there being no material actions, suits or proceedings at the time of
closing involving either party;
9. there being no material adverse change to the assets, technology,
liabilities, business, operations, or financial condition of either
party at the time of closing;
10. completion or waiver of sponsorship;
11. receipt of all required regulatory approvals, including the approval of
the Exchange, of the Qualifying Transaction;
12. satisfaction of the Minimum Listing Requirements of the Exchange and all
requirements under the Exchange rules relating to completion of a
"Qualifying Transaction";
13. a new slate of directors be appointed as agreed by the parties; and
14. the AMO Shares be consolidated prior to closing;
Altan Rio has agreed to reimburse AMO up to a maximum of $100,000 for costs and
fees incurred in connection with the Qualifying Transaction.
A filing statement in respect of the proposed Qualifying Transaction will be
prepared and filed in accordance with Policy 2.4 of the Exchange on SEDAR at
www.sedar.com no less than seven business days prior to the closing of the
proposed Qualifying Transaction. A press release will be issued once the filing
statement has been filed as required pursuant to Exchange policies.
Altan Rio
Altan Rio is a private mineral exploration company incorporated November 30,
2007 pursuant to the Business Corporations Act (British Columbia) and the
indirect owner of the following material mineral exploration properties
(collectively, the "Chandman-Yol Properties"):
-- the Chandman Property consisting of five exploration licenses (currently
an option agreement with Gallant Minerals Limited, a private Bermuda
company, to acquire 80% of the shares of GS Minerals Corp. Ltd., a
private Bermuda company which holds 100% of the shares of Braveheart
Resources XXK, a private Mongolian incorporated company which holds the
Chandman Property exploration licenses); and
-- the Yol Property consisting of four exploration licenses (100% owned by
Altan Rio Mongolia LLC).
The Chandman-Yol Properties are located in western Mongolia and are held
indirectly by Altan Rio through a chain of British Virgin Island and Mongolia
incorporated subsidiaries. Altan Rio Mongolia LLC, is the name of the Mongolian
incorporated subsidiary. References below to Altan Rio include references to its
100% owned subsidiaries as applicable.
Altan Rio's primary focus, and assuming the completion of the Amalgamation, the
Resulting Issuer's primary focus over the 12 months following the Amalgamation,
will be the Chandman-Yol Properties.
Altan Rio's head office and registered office are located in Vancouver, British
Columbia.
Chandman Property. The Chandman Property is an early stage exploration property
comprised of approximately 5 mineral exploration licenses covering approximately
354.7 km(2) in the western region of Mongolia.
Altan Rio Limited, one of Altan Rio's British Virgin Island subsidiaries,
entered into an option agreement with Gallant Minerals Limited ("Gallant") dated
November 26, 2007 to acquire 80% of the shares of GS Minerals Corp. Ltd., a
Bermuda incorporated company, whose wholly owned Mongolian subsidiary,
Braveheart Resources XXK, is the 100% owner of the Chandman Property. The
agreement is subject to the following:
-- Payment of $50,000 in cash on signing (paid);
-- Incurrence of $3,000,000 of cumulative exploration expenditure on the
properties over a four year period as follows:
-- Minimum of $200,000 on or before the first anniversary of the
agreement (incurred);
-- Minimum of $1,000,000 (cumulative) on or before the second
anniversary of the agreement (incurred); and
-- Minimum of $3,000,000 (cumulative) on or before the fourth
anniversary of the agreement (incurred).
-- Payment of $600,000 in cash over a four year period as follows:
-- $100,000 on or before the second anniversary of the agreement
(paid); and
-- An additional $500,000(i) on or before the fourth anniversary of the
agreement (pending).
(i) In lieu of cash, Gallant may elect to receive Alan Rio shares. If Altan
Rio is publicly traded at the time the payment is due and Gallant elects to
be paid in shares then the price of the shares shall be the price at the
date of listing. If Altan Rio continues to be a private company and Gallant
elects to be paid in shares it may request to be granted options to acquire
shares at the listing price. All amounts are in US dollars.
On completion of the terms of the agreement, Gallant has a one-time option to
retain its 20% interest in the project or convert its 20% interest into a 2.5%
NSR.
Yol Property. The Yol Property is an early stage exploration property comprised
of approximately 4 mineral exploration licenses covering approximately 1,047
km(2) in the western region of Mongolia. Altan Rio Mongolia LLC is the 100%
holder of the Yol Tenements.
Technical Report. A National Instrument 43-101 ("NI 43-101") compliant technical
report in respect of the Chandman-Yol Properties is being prepared by Mr John L.
Stockley, B.Sc. (Hons), F.A.I.M.M., C.P. (Geo) of Lyndhurst Enterprises Pty Ltd.
Mr. Stockley is an independent "qualified person" within the meaning of NI
43-101.
Financial Position. Altan Rio has cash on hand and a current working capital
surplus in excess of $3.5 million as at today's date (unaudited). A more
detailed summary of financial information in respect of Altan Rio, and an
audited balance sheet, will be included in the Filing Statement which will be
prepared and filed by AMO on SEDAR in connection with the proposed Qualifying
Transaction.
About AMO
AMO, a capital pool company within the meaning of the policies of the Exchange,
was incorporated in British Columbia on December 20, 2010 and was listed on the
Exchange on June 29, 2011. AMO does not have any operations and has no assets
other than cash. AMO's business is to identify and evaluate businesses and
assets with a view to completing a Qualifying Transaction.
Officers, Directors, and Insiders of Resulting Issuer
Following the completion of the Qualifying Transaction, the officers, directors
and insiders of the Resulting Issuer will be as follows:
Evan Jones, Chief Executive Officer, President and Director
Mr. E. Jones serves as the Chief Executive Officer, President and director of
Altan Nevada Minerals Limited and Altan Rio Minerals Limited, both private
mineral exploration companies. Prior to that, he was the Commercial Manager of
Troy Resources Brasil Participacoes Ltd., a subsidiary of Troy Resources NL, a
public mining company listed in Canada and Australia. He also worked as an
Executive Advisor with Westchester Corporate Finance in Australia. Mr. E. Jones
has a Bachelor of Information Technology (Information Systems) and a Bachelor of
Commerce (Finance & Management) from Bond University in Australia.
John L.C. Jones, Chairman & Director
Mr. J.L.C. Jones has been a prominent player in the gold mining sector for over
30 years with a long list of successes. He serves as a Chairman and director of
Altan Nevada Minerals Limited and Altan Rio Minerals Limited, both private
mineral exploration companies. He has been a director of Troy Resources NL since
mid-1988 and was its Chairman from late 1988 until October 2008. Since 1990, he
has been Chairman of Anglo Australian Resources NL. He was formerly Chairman and
director of North Kalgurli Mines Limited and was a founding director of Jones
Mining NL. Mr. J.L.C. Jones has been a member of the Australasian Institute of
Mining and Metallurgy since 1977.
Kelly Cluer, Exploration Director & Director
Mr. Cluer serves as Exploration Director and Director of Altan Nevada Minerals
Limited and Altan Rio Minerals Limited, both private mineral exploration
companies. He was previously the Exploration Manager Mongolia for Centerra Gold
Inc., a public gold mining and exploration company and a Senior Geologist with
Cameco Corp. Mr. Cluer is a Certified Professional Geologist by the American
Institute of Professional Geologists. He obtained a Bachelor of Science
(Geology) from Idaho State University and a Masters of Science (Geology) from
the University of Arizona.
Murray Seitz, Director
Mr. Seitz graduated with a Bachelor of Business Administration with a
concentration in finance. After spending five years in financial planning, he
joined a mineral exploration management group where he spent 5 years providing
corporate compliance and business development/corporate communications services.
Mr. Seitz specializes in capital raising and corporate communications. His
extensive network has continually provided substantial equity capital for
partner/client companies and generated a variety of opportunities that have
added value to their businesses. Mr. Seitz is also President of Corex Management
Inc., a private company that provides administration services to public and
private companies.
Paul O'Brien, Director
Mr. O'Brien has over seven years of experience in gold equity research covering
senior gold producers, developers and precious metal forecasting, during which
time he was ranked in the top five of Wall Street Journal's "Best on the Street
Analyst Survey" for North American Mining Analysts two years in a row. His prior
corporate advisory and investment banking experience includes over eight years
of experience primarily focused on precious and base metals, while gaining
global mining markets experience in Canada and Australia as a member of
bank-owned capital markets groups. Mr. O'Brien received his B. Comm. from
McMaster University and is a CFA Charterholder.
Robert Scott, Chief Financial Officer
Mr. Scott has over 14 years of professional experience in the areas of corporate
finance, accounting and merchant and commercial banking. He is a C.A. and a CFA
Charterholder, and earned a B.Sc. from the University of British Columbia. Mr.
Scott currently serves as the Chief Financial Officer of Riverside Resources
Inc., a TSX-V listed mineral exploration company with early stage mineral
projects in Mexico and the United States, and is the CFO of Corex Management
Inc., a private company that provides administration services to public and
private companies.
The directors and officers and or companies controlled by them collectively will
own a total of 18,953,487 shares of the Resulting Issuer. Information as to the
individual shareholdings of each of the current officers and directors of AMO is
available on SEDAR.
Cautionary Statement
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.
Forward-Looking Statements
This news release contains certain forward-looking statements, including
statements regarding the business and anticipated financial performance of AMO.
These statements are subject to a number of risks and uncertainties. Actual
results may differ materially from results contemplated by the forward-looking
statements. When relying on forward-looking statements to make decisions,
investors and others should carefully consider the foregoing factors and other
uncertainties and should not place undue reliance on such forward-looking
statements. AMO does not undertake to update any forward looking statements,
oral or written, made by itself or on its behalf.
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