Novadx and Sandstorm Agree to Acquire Additional Rex Coal and
Related Assets in Tennessee
/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR
DISSEMINATION IN THE UNITED STATES
/
- Aimed to maximize productivity and future expansion through
second mine entry on Rex coal.
- Intended to significantly increase reserves, resources and
mine life.
- Facilitates a quicker start-up of mining operations at Rex #
1 mine.
Trading Symbol: NDX - TSX-V
VANCOUVER,
Oct. 16, 2012 /CNW/ - Novadx Ventures
Corp. ("Novadx" or the "Company") (TSXV: NDX)
announces that Novadx and Sandstorm Metals & Energy Ltd.
("Sandstorm") have entered into a Letter of Intent to
acquire (the "Acquisition") certain coal properties and
assets located in Campbell and
Scott Counties, Tennessee generally known as Mine 12, the
Turley Rail LoadOut, and the Smokey Junction Preparation Plant (the
"Tennessee Properties") in the vicinity of the Company's Rex
# 1 Mine. The Tennessee
Properties will be acquired from Premium Coal Company
("Premium") and National Coal, LLC ("National"),
subsidiary companies of Justice Corporation, for an aggregate
purchase price of US$8.5 million (the
"Purchase Price").
The acquisition of these assets will facilitate
a number of positive steps for the Company. Mine 12 is also
permitted to produce in the Rex seam and is contiguous with and
will add significantly to the Company's existing Rex coal reserves.
Mine 12 will provide a second mine entry into the high quality Rex
coal seam, positioning the Company for future expansion and
maximized productivity and extended mine life. Smokey
Junction Preparation Plant will facilitate a more rapid start-up of
mining operations at Rex # 1 mine. The Turley Rail Load-Out
facility brings improved market access, both domestic and export,
to the Company. The combination of incremental reserves with
a mine permit at Mine 12, a wash plant and refuse facility at
Smokey Junction, and control of a load-out facility at Turley,
located on the Norfolk Southern railroad, positions the Company for
significant growth and improved market access.
Novadx CEO, Mr. Daniel
Roling commented, "the Acquisition will greatly benefit the
Company through the accretion of additional Rex coal at
Mine 12, broadening our market access through the Turley Rail Load
Out, and accelerating production at our Rex # 1 mine by having
immediate access to the nearby Smokey Junction Preparation
Plant." Mr. Roling continued "Mine 12 is located about 5
miles from our Rex # 1 mine, is fully permitted, is contiguous
with, and ties into our existing property allowing us far greater
flexibility in our future mine planning."
The Acquisition will be completed through a
newly incorporated company ("Newco") to be initially owned
by Sandstorm and by Novadx, based on their relative contribution to
the Purchase Price. Novadx will have full control over
management and operation of Newco.
The Purchase Price will be payable through a
cash payment of US$3,000,000
contributed by Sandstorm; US$2,000,000 payable through the issuance of
4,377,675 common shares of Sandstorm; and a short term promissory
note ("Note") issued by Newco in the amount of US$3,500,000 payable in accordance with one of
the following outcomes:
- In the event that Novadx closes the special warrant (the
"Special Warrants") financing announced on September 21, 2012 and October 12, 2012, ("Financing") for the
maximum amount of CDN$25 million and
Novadx obtains shareholder approval of its proposed restructuring,
the Note shall be repaid by (A) US$500,000 in cash and (B) the issuance of
5,884,545 post 10:1 consolidated common shares of Novadx;
- In the event Novadx closes the Financing for at least
$15 million but less than the
$25 million and obtains shareholder
approval for the Restructuring, the Note shall be repaid by (A) the
issuance of 5,884,545 post consolidated common shares of Novadx and
(B) at Novadx's option either US$500,000 in cash or the issuance of an
additional 980,760 post consolidated common shares; or,
- In the event Novadx does not close the Financing or does not
obtain shareholder approval for the Restructuring, the Note shall
become a 5 year term loan (the "Loan") secured by a first
lien and security interest in the Smokey Junction Preparation
Plant, payable in annual installments of US $700,000 in principal plus accrued interest at
the Prime Rate quoted in the Wall Street Journal. Newco may
pay the outstanding principal balance plus accrued interest at any
time prior to maturity without penalty. Sandstorm has the
option to pay the outstanding principal balance plus accrued
interest at any time through the issuance of Sandstorm common
shares at the 10 day trading average prior to Sandstorm making such
election. Novadx has otherwise agreed to fund the repayment of the
Note.
The US $3,000,000
cash commitment from Sandstorm towards the Purchase Price forms
part of Sandstorm's previously announced commitment to subscribe
for up to $5,000,000 under the
Financing. Sandstorm has also granted Novadx an option to
acquire Sandstorm's interest in Newco at cost. The option
exercise price will be satisfied by Novadx issuing to Sandstorm an
amount of units (on the same terms as the Financing) that is equal
to US$5,000,000 less any other amount
subscribed for or converted by Sandstorm pursuant to the
Financing. The balance of the option exercise price will be
owed by Novadx to Sandstorm pursuant to a promissory note, with a
one year term, bearing interest at 8% per annum. In the event
that Sandstorm issues additional shares or cash in payment of the
Loan, Novadx will have the option to repay such amount pursuant to
a promissory note bearing the same interest, but with a three year
term.
Completion of the Acquisition and related
transactions remains subject to the approval of the TSX Venture
Exchange.
About Novadx: Novadx Ventures Corp.
is a Vancouver based mining
investment company. Through its wholly owned subsidiary, Novadx's
primary focus is to invest its capital to acquire and develop
companies with active or near production high quality coal reserves
in the US Appalachia coal region. Novadx intends to continue to
grow the value of its coal investments through expanding production
and reserves amongst its existing investments and by investing in
additional acquisitions. Novadx is actively evaluating a
number of high quality coal acquisition opportunities. For
more information please visit www.novadx.com.
About MCoal: MCoal Corporation is a
wholly-owned subsidiary of Novadx Ventures Corp. which operates the
Rosa coal mine in Blount County, Alabama and is developing the
Rex #1 coal mine in Campbell County,
Tennessee.
ON BEHALF OF THE BOARD
Daniel A. Roling
President, CEO and Director
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 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. This press release shall not constitute an offer to sell
or the solicitation of an offer to buy, nor shall there be any sale
of these securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to the qualification
under the securities laws of such jurisdiction.
This release contains "forward-looking
information" that includes information relating to future events
and future financial and operating performance, including
management's assessment of Novadx's and MCoal's future outlook,
potential financings, potential acquisitions, properties,
permitting and mining activities and production. Specifically, this
release contains forward-looking information related to
future development of assets, mining operations, permitting and
regulatory approvals, and potential financings. Statements included
in this announcement, including statements concerning our plans,
intentions and expectations, which are not historical in nature are
intended to be, and are hereby identified as, "forward-looking
statements" for purposes of the safe harbor provided by Section 21E
of the Securities Exchange Act of 1934, as amended by the Private
Securities Litigation Reform Act of 1995. Forward-looking
statements may be identified by words including "anticipates",
"believes", "intends", "estimates", "expects" and similar
expressions. Forward-looking information should not be read as a
guarantee of future performance or results and will not necessarily
be accurate indications of the times at, or by which, that
performance or those results will be achieved. Forward-looking
information is based on information available at the time it is
made and/or management's good faith belief as of that time with
respect to future events, and such information is subject to risks
and uncertainties that could cause actual performance or results to
differ materially from those expressed in or suggested by the
forward-looking information. Important factors that could cause
these differences include but are not limited to: requisite
regulatory and shareholder approvals, actual or expected sampling
or production results, pricing and assumptions, projections
concerning reserves and/ or resources in our mining operations;
changes in contracted sales, the business of the Company may suffer
as a result of uncertainty surrounding the coal market; the Company
may be adversely affected by other economic, business, and/or
competitive factors; the worldwide demand for coal; the price of
coal; the price of alternative fuel sources; the supply of coal and
other competitive factors; the costs to mine and transport coal;
the ability to maintain existing mining leases and rights and the
ability obtain new mining leases, rights and permits; governmental
and regulatory approvals, the costs of reclamation of previously
mined properties; the risks of expanding coal mining activities and
production; the ability to bring new mines on line on schedule;
industry competition; the Company's ability to continue to execute
its growth strategies; the Company's ability to secure and complete
additional financing and debt restructuring; the Company's ability
to complete planned acquisitions; and general economic conditions.
You should not put undue reliance on any forward-looking
information. We assume no obligation to update forward-looking
information to reflect actual results, changes in assumptions or
changes in other factors affecting forward looking information,
except to the extent required by applicable securities laws. If we
do update one or more forward-looking information, no inference
should be drawn that we will make additional updates with respect
to those or other forward-looking information. The company
cautions readers that forward-looking statements, including without
limitation those relating to the company's future operations and
business prospects, are subject to certain risks and uncertainties
that could cause actual results to differ materially from those
indicated in the forward-looking statements.
SOURCE Novadx Ventures Corp.