Cancana Shareholders Approve Rio Madeira Joint Venture and Cancana
Closes US$5.7 Million Private Placement and Appoints a New Director
TORONTO, ONTARIO--(Marketwired - Apr 23, 2014) - Cancana
Resources Corp. (TSX-VENTURE:CNY) (the "Company" or "Cancana") is
pleased to announce that on April 17, 2014 the shareholders of
Cancana (the "Shareholders") approved the Rio Madeira Transactions
(as defined below), and that on April 23, 2014 Cancana closed
non-brokered private placement offerings of Units and Debentures
(each as defined below) with Ferrometals BV ("Ferrometals") for
aggregate gross proceeds of CDN$1.7 million and US$4.15 million,
respectively, and, effective immediately upon closing of the
Offerings (as defined below), Anthony Julien, Chief Executive
Officer of Ferrometals, was appointed to the board of directors of
Cancana.
Shareholder Approval of
Rio Madeira Transactions
At Cancana's special meeting of Shareholders held on April 17,
2014 (the "Meeting"), the Shareholders voted overwhelmingly in
favour of the ordinary resolution (the "Resolution") approving the
Rio Madeira Transactions (as defined in Cancana's management
information circular dated March 18, 2014 (the "Circular")) and the
creation of Ferrometals, a subsidiary of The Sentient Group, as a
"control person" of the Company as such term is defined in the
policies of the TSX Venture Exchange (the "TSXV"). Of the
15,750,203 Common Shares voted at the Meeting, approximately 99.9%
voted in favour of the foregoing resolution. As further disclosed
in the Company's press release dated April 15, 2014, the vote on
the special resolution with respect to the transfer of the
Company's interest in the mining claims owned by M L B de Nogueira
EPP was withdrawn from the business of the Meeting and has been
deferred until the Company's annual general meeting scheduled to be
held on or about July 17, 2014.
Private Placement
Financings
At the Meeting, the Shareholders voted in favour of the Joint
Venture Financings (as defined in the Circular) as part of the Rio
Madeira Transactions. These financings were previously disclosed by
the Company in its December 20, 2013 and February 24, 2014 press
releases. Accordingly, on April 23, 2014 the Company completed the
Offerings and issued to Ferrometals the following:
1. An aggregate of 8,500,000 units (the "Units") at a price of
CDN$0.20 per Unit. Each Unit consists of one (1) common share in
the capital of the Company (a "Common Share") and one (1) Common
Share purchase warrant (a "Warrant"), for aggregate gross proceeds
of CDN$1.7 million (the "Equity Offering"). Each Warrant is
exercisable into one (1) Common Share at a price of CDN$0.25 per
Common Share and is exercisable for a period of two (2) years from
the date hereof; and
2. A secured convertible debenture, (the "Debenture") for a
purchase price of US$4.15 million (approximately CDN$4.58 million)
(the "Debt Offering" and, collectively with the Equity Offering,
the "Offerings"). The Debenture has a term of three (3) years and
bears interest at a rate of 8% per annum. The principal of the
Debenture is convertible, in whole or in part, into Common Shares
at a price of CDN$0.20 per Common Share at the option of
Ferrometals.
Upon closing of the Offerings, Ferrometals owns an aggregate of
13,857,656 Common Shares and an aggregate of 13,857,656 common
share purchase warrants, including the Warrants issued under the
Offerings and the common share purchase warrants issued to
Ferrometals in the private placements of the Company previously
disclosed in the Company's press releases of February 24, 2014 and
March 6, 2014. Accordingly, Ferrometals currently holds
approximately 24% of the issued and outstanding Common Shares on a
non-diluted basis (or approximately 53.5% of the Company's then
issued and outstanding Common Shares on a partially-diluted basis,
assuming the exercise by Ferrometals of all of the warrants of the
Company held by it and the conversion in full of the principal
amount of the Debenture). As Ferrometals currently owns more than
20% of the Company's issued and outstanding Common Shares,
Ferrometals is a "control person" of Cancana pursuant to the
policies of the TSXV.
In connection with the Offerings, an aggregate amount of
CDN$102,000 and US$166,000 in cash finder's fees are payable to
certain eligible arm's length persons and an aggregate of 510,000
non-transferable finder's warrants (the "Finder Warrants") are
issuable to certain eligible arm's length persons. Each Finder
Warrant is exercisable into a Unit at an exercise price of CDN$0.20
per Unit and is exercisable for a period of two (2) years from the
date hereof.
All securities issued pursuant to the Offerings, including the
Common Shares and Warrants comprising the Units and the Finder's
Warrants and the Common Shares underlying the Warrants, the
Debenture and any Common Shares issuable upon conversion of the
Debenture, are subject to a four (4) month and one (1) day
statutory hold commencing from the date of issuance. The Offerings
are subject to TSXV final acceptance of requisite regulatory
filings.
As further described in the Circular, US$5.5 million of the
gross proceeds raised from the Offerings will be used by Cancana to
purchase shares (quotas) of Rio Madeira Comércio Importação e
Exportação de Minérios Ltda. ("Rio Madeira") to enable Cancana's
participation in the Rio Madeira joint venture as previously
disclosed. The balance of the gross proceeds raised from the
Offerings will be used by the Company for general working
capital.
Andrew Male, President and CEO of Cancana, commented: "We are
happy to conclude this next step of the acquisition of Rio Madeira
and Joint Venture with Ferrometals. This will conclude a total of
in excess of $11.0 million in debt and equity financings since
January 2013. The culmination of all these corporate activities
allows the next stages of activity to occur. The exploration,
research and production of the operations of the joint venture will
begin to add corporate value in the near future."
Appointment of
Director
As described in the Company's news releases of December 20, 2013
and February 24, 2014, pursuant to the terms of the Company's
Revised Binding Term Sheet with Ferrometals and The Sentient Group,
as its Rio Madeira future joint venture partner Cancana has granted
Ferrometals certain board nomination rights, with such rights to
take effect after closing of the Offerings. Cancana is pleased to
announce that, effective today, Anthony Julien has been appointed
to the Company's board of directors.
Mr. Julien, the CEO of Ferrometals, is developing industrial
minerals projects in Brazil and the United States, to provide
products to both the agricultural and steel industries. His
business career is underpinned by energy and an entrepreneurial
spirit refined by the experience of developing and selling various
companies in IT, wholesale/distribution and media. He strengthened
these capabilities with a move to enterprise level organizations
when he sold his mobility software company to Epicor in 2009 and
took on the global mobility sales responsibilities. Building on his
global sales experience with Epicor, he joined SAP in 2011, focused
on providing SAP mobility solutions to major accounts in retail,
mining and energy. This experience fostered his interest in
resource-based industries and created an opportunity to reconnect
with The Sentient Group who funded his early entrepreneurial
business success. Ferrometals' first major investment is the
formation of Rio Madeira as a joint venture with Cancana to expand
existing production and further develop Cancana's manganese-mining
claims in Brazil. In addition to being CEO of Ferrometals, Mr.
Julien will hold the position of chairman of Rio Madeira and holds
the positions of CEO of Oregon Resource Corporation and CEO of
Ferrometals Holdings.
About
Cancana
Cancana is an exploration stage company that has transitioned
into production with assets in Brazil and Canada. The Company has
been seeking projects that expand its resource base and provide for
near term production and revenue. All available resource reports
and information on the Company's properties are located on the
Company website: www.cancanacorp.com
For further information about Cancana, please visit the
Company's website.
Issued on behalf of the Board of Directors of Cancana Resources
Corp.
Andrew Male, President, CEO and Director
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this press release. This press release contains forward-looking
information under Canadian securities legislation. forward-looking
information includes, but is not limited to, statements with
respect to completion of the Financings, the development potential
and timetable of the Rio Madeira project and Cancana's other assets
in Brazil and Canada; Cancana's ability to raise additional funds
necessary; the future price of manganese, the estimation of mineral
reserves and mineral resources; conclusions of economic evaluation;
the realization of mineral reserve estimates; the timing and amount
of estimated future production, development and exploration; costs
of future activities; capital and operating expenditures; success
of exploration activities; mining or processing issues; currency
exchange rates; government regulation of mining operations; and
environmental risks. Generally, forward-looking statements can be
identified by the use of forward-looking terminology such as
"plans", "expects" or "does not expect", "is expected", "budget",
"scheduled", "estimates", "forecasts", "intends", "anticipates" or
"does not anticipate", or "believes", or variations of such words
and phrases or statements that certain actions, events or results
"may", "could", "would", "might" or "will be taken", "occur" or "be
achieved". Forward-looking statements are based on the opinions and
estimates of management as of the date such statements are made.
Forward-looking statements are subject to known and unknown risks,
uncertainties and other factors that may cause the actual results,
level of activity, performance or achievements of Cancana to be
materially different from those expressed or implied by such
forward-looking statements, including but not limited to those
risks described in the annual information form of Cancana and in
its public documents filed on SEDAR from time to time. Although
management of Cancana has attempted to identify important factors
that could cause actual results to differ materially from those
contained in forward-looking statements, there may be other factors
that cause results not to be as anticipated, estimated or intended.
There can be no assurance that such statements will prove to be
accurate, as actual results and future events could differ
materially from those anticipated in such statements. Accordingly,
readers should not place undue reliance on forward-looking
statements. Cancana does not undertake to update any
forward-looking statements, except in accordance with applicable
securities laws.
Cancana Resources Corp.+1 403 269
2065cancana.ir@cancanacorp.comwww.cancanacorp.com
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