Giyani Gold Corp., C Level III Inc. and two Manitoba companies
enter into a conditional agreement
TORONTO,
Feb. 4, 2013 /CNW/ - Giyani Gold
Corp. (TSXV: WDG) ("Giyani Gold"), C Level III Inc. (TSXV:
CLV.P) ("C Level"), a capital pool company under the
policies of the TSX Venture Exchange Inc. (the "TSXV"),
6413251 Manitoba Ltd. ("ManitobaCo") and Canada Bay
Resources Ltd. ("Canada Bay") are pleased to announce a
conditional agreement (the "Agreement") by which Giyani
Gold, through its subsidiary 2299895 Ontario Inc.
("OntarioCo"), will transfer their Canadian mining
exploration properties for common shares of C Level. As part of the
Agreement, C Level will also acquire the shares of Manitoba based ManitobaCo and certain assets
of Canada Bay in exchange for common shares of C Level. Greater
details relating to the Agreement are outlined in the Transaction
below.
As a result of the proposed transactions, Giyani
Gold will become the majority shareholder of C Level. C Level
will continue to operate and expand the Canadian mining exploration
activities independent of Giyani Gold. Giyani Gold will thereafter
be purely focused on corporate activities relating to the Giyani
Gold Project in South Africa. The
proposed acquisition of Giyani Gold's Canadian properties by C
Level will constitute the qualifying transaction of C Level in
accordance with the policies of the TSXV. The Agreement was
negotiated at arm's length and is effective as of the date
hereof.
Duane Parnham,
Executive Chairman of Giyani Gold, stated that: "This is a very
exciting strategic transaction that unlocks considerable
shareholder value and strengthens the Giyani Gold balance sheet
while positioning us to participate and fully benefit in any future
discoveries made on these Canadian properties". Mr. Parnham
added: "Although our management team will assist in the new
company's growth profile, the Transaction allows Giyani Gold to
focus all its efforts into building a premier gold development
company through methodical corporate development and the
exploration of our excellent land package assembled in South Africa."
It is expected that the Board of directors of
the Resulting Issuer will be comprised of Duane Parnham, Scott
Kelly, Ed Guimares,
Donald Gibb, and Jean-François
Pelland and that the management of the Resulting Issuer will
initially be comprised of certain current senior officers of Giyani
Gold, including R. Charles (Chuck)
Allen as President.
A proposed technical team with expertise and
experience in gold exploration will be comprised of Doug Fogwill and Susan
Butorac with Robert S.
Middleton, Dr. Roy Shegelski
and Dr. Howard Poulsen acting as
technical advisors.
The Transaction
Under the Agreement, C Level is to acquire all of the issued and
outstanding common shares of OntarioCo in exchange for
approximately 24,605,265 common shares of C Level, issued at a
price of $0.20 per common share.
OntarioCo owns the Canadian portfolio of mining properties held by
Giyani Gold. The Abbie Lake-Keating Gold Project is the most
significant of the mining properties held by OntarioCo along with
the Skead gold property and the
Baska-Eldorado rare earth elements property. C Level will acquire
the shares of ManitobaCo as well as certain assets of Canada Bay in
exchange for approximately 8,000,000 common shares of C Level, also
issued at a price of $0.20 per common
share. ManitobaCo and Canada Bay are the owners of gold exploration
properties in the Rice Lake Gold Belt of Manitoba and the Silverleaf rare earth
elements property located in southern Manitoba. All parties to this Agreement are
arm's length parties. In addition, the shareholders of OntarioCo,
ManitobaCo and Canada Bay are arm's length parties to C Level. C
Level currently has 5,004,343 outstanding shares.
A concurrent $2-4
million financing ("the Offering") is proposed in order for
the Resulting Issuer to meet the TSXV listing requirements, and to
generate the general operating funds necessary to immediately
commence with exploration programs including drilling at the Abbie
Lake-Keating Gold Project. Insiders of Giyani Gold will be
participating in the Offering, and due to the participation of
certain insiders, the Offering may qualify as a "related party
transaction" pursuant to the rules of Multilateral Instrument
61-101 - Protection of Minority Security Holders in Special
Transactions ("MI 61-101"). C Level is relying on exemptions from
both the formal valuation and minority approval requirements of MI
61-101 based on the exemption for the fair market value of the
Offering being not more than 25% of the market capitalization of
the Resulting Issuer.
The Agreement is to be superseded by a
definitive merger, amalgamation, and/or share exchange agreement
(the "Definitive Agreement") and remains subject to TSXV
approval and certain closing conditions, including approval by the
directors of each of the Parties, necessary shareholder approvals,
and the obligation of OntarioCo to fund certain costs and expenses
of ManitobaCo and Canada Bay. The legal structure for the
Transaction will be confirmed after the parties have considered all
applicable tax, securities law and accounting efficiencies.
About Giyani Gold and OntarioCo
Giyani Gold is an Africa focused
exploration company with gold assets in the Limpopo province of
South Africa. As it relates to
this Transaction, Giyani Gold's Canadian properties held through
its subsidiary OntarioCo being the Abbie Lake-Keating and
Skead gold properties and the
Baska Eldorado rare earth elements property will be exchanged for
common shares in the Resulting Issuer. The flagship asset of
OntarioCo is the Abbie Lake-Keating gold property located on
similar geology and in close proximity to producing gold mines near
White River, Ontario. A potential
gold bearing structure called the Iron Lake Deformation Zone
("ILDZ") spans 27km through the Abbie Lake-Keating property. An
exploration program comprised of geophysics and drilling focused on
the ILDZ was conducted on the property in 2012 and new drilling
targets on the eastern extension of the ILDZ have been identified
for the upcoming 2013 drill program.
About ManitobaCo and Canada Bay
ManitobaCo and Canada Bay are private Canadian companies focused
primarily on gold exploration in the Rice Lake Gold Belt of
Manitoba in close proximity to San
Gold's newly constructed mine. They will contribute to the
Transaction their flagship gold exploration properties located in
the Rice Lake Gold Belt, as well as the Silverleaf rare earth
elements property in Southern
Manitoba. The Rice Lake Gold Belt has over 1.7 million oz of
historically reported gold production and the properties being
transferred by Canada Bay and ManitobaCo for the Transaction are
strategically located in underexplored and former producing areas
of this belt.
About C Level
C Level is a capital pool company with its registered and head
office in Toronto, Ontario and
intends for this Transaction to constitute its "Qualifying
Transaction" as such term is defined in the policies of the TSXV.
As of the date hereof, C Level has 5,004,343 common shares. The
trading on the common shares of C Level has been halted in
consideration of the issuance of this press release and it is
anticipated that trading will not resume until the closing of the
Qualifying Transaction or the termination of the Agreement.
Sponsorship
Sponsorship of a qualifying transaction of a capital pool company
is required by the TSXV unless exempt in accordance with TSXV
policies. C Level is currently reviewing the requirements for
sponsorship and may apply for an exemption from the sponsorship
requirements pursuant to the policies of the TSXV, however, there
is no assurance that C Level will ultimately obtain this exemption.
C Level intends to include any additional information regarding
sponsorship in a subsequent press release.
Completion of the transaction is subject to a
number of conditions, including but not limited to, TSXV acceptance
and, if applicable, pursuant to the requirements of the TSXV,
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.
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.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
INFORMATION: This news release includes certain "forward-looking
statements" under applicable Canadian securities legislation.
Forward-looking statements include, but are not limited to,
statements with respect to: the terms and conditions of the
proposed Transaction; the terms and conditions of the proposed
Offering; future exploration and testing; use of funds; and the
business and operations of the Resulting Issuer after the proposed
transaction. Forward-looking statements are necessarily based upon
a number of estimates and assumptions that, while considered
reasonable, are subject to known and unknown risks, uncertainties,
and other factors which may cause the actual results and future
events to differ materially from those expressed or implied by such
forward-looking statements. Such factors include, but are not
limited to: general business, economic, competitive, political and
social uncertainties; delay or failure to receive board,
shareholder or regulatory approvals; and the results of current
exploration and testing. 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. The Parties disclaim any intention or
obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise,
except as required by law.
SOURCE Giyani Gold Corp.