UPTOWN GOLD PROJECT, NORTHWEST TERRITORIES -- (Marketwire) -- 03/12/13 -- Petro-Occidente Capital Corp. ("OPP" or the "Company") (TSX VENTURE: OPP.P) is pleased to announce that on March 7, 2013 it entered into a letter agreement (the "Agreement") for the arm's length acquisition (the "Acquisition") of 100% of Manson Creek Resources Ltd.'s ("Manson") (TSX VENTURE: MCK) interest in an option to acquire a mining property located in the Northwest Territories (the "Property" or "Uptown"). Panarc Resources Ltd. ("Panarc") owns a 100% interest in and to the Property and granted Manson an option to acquire such 100% interest, subject to 2.5% net smelter return royalty retained by Panarc, pursuant to an agreement between Panarc and Manson dated January 23, 2012, as amended on January 20, 2013 (the "Underlying Option").
The Property is situated in the South MacKenzie District of the Northwest Territories. It is located approximately three kilometres north of the city of Yellowknife and is accessible by foot or snow machine from the road, or by helicopter originating in Yellowknife. The Property consists of seven mineral claims, totaling 8,368.5 acres or 3386.6 hectares. To date, Manson has conducted three exploration work programs on the Property including, sampling and winkie drilling.
If completed, and subject to receipt of approval from the TSX Venture Exchange Inc. (the "Exchange"), the Acquisition is anticipated to constitute the Company's "Qualifying Transaction" as defined in Exchange Policy 2.4. Each of OPP, Panarc and Manson are dealing at arm's length to one another and therefore the Acquisition will not be a Non-Arm's Length Qualifying Transaction (as defined in Exchange Policy 2.4). OPP does not anticipate the Acquisition will require the approval of its shareholders.
"The acquisition of the Uptown Gold Project is a significant milestone in the development of OPP. The Manson team has done a great job with the initial exploration at Uptown and we look forward to building on that success through continued exploration", said Douglas Porter, President, CEO, CFO and a Director of OPP.
To date, OPP has been a Capital Pool Company (as defined in Exchange Policy 2.4) and its sole business has been identifying and evaluating potential Qualifying Transactions. Upon completion of the Qualifying Transaction, and subject to Exchange approval, the Company will be designated as a Tier 2 mining issuer on the Exchange and will be engaged in the exploration and development of prospective mineral properties, including at Uptown. The Company has engaged Aurora Geosciences Ltd. to prepare a National Instrument 43-101 compliant technical report on the Property (the "Technical Report") and will disclose further technical information concerning the Property in a subsequent news release.
Aggregate Consideration for the Acquisition
In consideration of the assignment of the Underlying Option to the Company, the Company has agreed to pay Manson $25,000 in cash and issue Manson 100,000 common shares in the capital of the Company ("OPP Shares") concurrently with the closing of the Acquisition. In addition, the Company has agreed to assume all of Manson's rights and obligations under the Underlying Option, including required yearly exploration expenditures (totalling up to an aggregate of $400,000 by 2016) and certain cash payments (totalling up to an aggregate of $250,000 by 2016), required to be made to Panarc to keep the Underlying Option in good standing for each year that the Underlying Option remains in effect, other than with respect to certain share issuance and cash payment obligations, which obligations will be retained by Manson. The Company has also agreed to issue a further 100,000 OPP Shares to Manson on or about each of January 28, 2014 and January 28, 2015, provided that the Underlying Option remains in effect on the applicable dates.
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