VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 02/07/13 -- Broome Capital Inc. (the "Company") (TSX VENTURE: BCP.P), a capital pool company pursuant to Policy 2.4 of the TSX Venture Exchange (the "TSX-V"), is pleased to announce that it has entered into a binding letter of intent dated January 14, 2013 to complete a business combination (the "Transaction") with three private Indonesian holding companies: PT Forel Mega Mineral ("Forel"), PT Anak Indonesia Mining ("Anak") and PT For El Shadai ("El Shadai" and collectively the "Minahasa Group") by acquiring all of the issued and outstanding securities of the Minahasa Group from their shareholders. The three companies in the Minahasa Group are all private companies incorporated under the laws of Indonesia, and collectively have the rights to acquire a 100% interest in the Minahasa Gold Project located in Northern Sulawesi, Indonesia. Upon completion of the Transaction, the combined entity will be listed as a Tier 2 mining issuer on the TSX Venture Exchange, carrying on the business of the Minahasa Group, which is the further exploration and development of the Minahasa Gold Project and acquisition and development of further exploration projects in Indonesia.
The Transaction will be effected by the Company issuing not greater than 12,500,000 common shares to shareholders of the Minahasa Group, which will result in the three companies in the Minahasa Group becoming wholly-owned subsidiaries of the Company (the Company after the Transaction being referred to herein as the "Resulting Issuer"). It is currently anticipated that 12,500,000 common shares will be issued at a deemed price of $0.20 per security for an aggregate purchase price of $2.5 million.
The Transaction is an arm's length transaction.
The Company currently has 11,400,000 common shares issued and outstanding, as well as 840,000 Incentive Stock options and 300,000 brokers warrants to acquire common shares at $0.10 per share.
Following the completion of the Transaction (based on the outstanding share capital of each of the Company and each company in the Minahasa Group as of the date hereof,), and the completion of a concurrent financing of 10,000,000 shares at $0.20 per share, the issuance of 187,500 shares to Evans & Evans as a finder's fee, the issuance of 125,000 shares to Mr. In Suk Chung as a finder's fee, and the issuance of 300,000 shares to Canaccord Genuity as a Corporate Finance Fee approximately 34,512,000 common shares of the Resulting Issuer would be issued and outstanding. Broome Capital shareholders will hold common shares representing approximately 33.03% of the outstanding common shares of the Resulting Issuer following the completion of the Transaction and the concurrent financing on an undiluted basis.
The proposed Transaction is subject to a number of terms and conditions, including the entering into by the parties of a definitive agreement with respect to the Transaction (such agreement to include representations, warranties, conditions and covenants typical for a transaction of this nature), the completion of satisfactory due diligence investigations, the approval of the directors of each of the Company and of each company in the Minahasa Group, the completion of a financing of the Company generating proceeds of $2 million from the sale of securities, on terms to be determined, at a price of $0.20 per security and the approval of the TSX-V and other applicable regulatory authorities.
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