TORONTO, ONTARIO -- (Marketwired) -- 06/24/13 -- Sparcap One Ltd. (the "Company") (TSX VENTURE: SON.P), a capital pool company, is pleased to announce that it has entered into a letter of intent ("LOI") dated June 14, 2013, with Griftco Corporation ("Griftco"), granting the Company the right to earn a 100% interest in 10 unpatented mining claims located in Butt Township, Ontario (the "Property"). Under the terms of the LOI, the Company can earn a 100% interest in the Property by issuing 3,300,000 common shares of the Company to Griftco over a three year period, incurring $900,000 of expenditures on the Property over a three year period and granting a 3% net smelter return royalty to Griftco (the "Transaction"). The Company may purchase half of the net smelter return royalty (1.5%) for $1,000,000. Griftco is a private company incorporated under the laws of the Province of Ontario and controlled by Chris Irwin and Ian Bendell, both residents of Ontario.
The Transaction shall serve as the Company's Qualifying Transaction, as defined in Policy 2.4 (the "CPC Policy") of the TSX Venture Exchange ("TSXV") and is subject to the approval of the TSXV.
Following completion of the Transaction, the Company will file articles of amendment to change its name to "Ebony Resources Inc.", or such other name as may be accepted by relevant regulatory authorities (the "Proposed Name Change"). The Proposed Name Change is subject to the approval by the shareholders of the Company at a special meeting of the shareholders of the Company.
The Transaction is not a Non Arm's Length Qualifying Transaction (as defined in the CPC Policy). No insiders, directors or officers of the Company have any interest in Griftco, nor are there any common directors or officers between the Company and Griftco. The Transaction will not be subject to approval by shareholders of the Company.
Completion of the Transaction is conditional upon, among other things, the completion of a private placement (the "Offering") of 4,285,714 common shares of the Company at $0.07 per share for gross proceeds of $300,000. The Company has agreed to pay a finder's fee equal to 8% of the gross proceeds of the Offering and issue finder warrants equal to 8% of the number of shares issued in connection with the Offering. Each finder warrant will entitle the holder to purchase one common share of the Company at a price of $0.07 per share for a period of two (2) years from the date of issuance.
Griftco owns a 100% interest in the 10 contiguous unpatented mining claims containing 88 units which comprise the Property, covering approximately 1408 hectares. The Property is located approximately 50 km north-northeast of Huntsville, Ontario and 22 km to the southwest of Kearney, Ontario. The Kearney Mine, privately owned by Ontario Graphite Limited, is contiguous to the northern boundary of the Property. The Kearny Mine plant and site were re-commissioned and re-opened in late 2012. According to its website, the objective of Ontario Graphite Limited is to produce approximately one million tonnes of ore per year to provide 20,000 tonnes of natural, large flake, high-carbon graphite concentrate per year. Since acquiring the Property in 2010, Griftco has completed various programs consisting of: 27 line-km of line cutting; 27 line-km of field magnetometer survey; 17 line-km of pole-dipole induced polarization (IP) survey; 6.3 line-km of pole-dipole IP survey; 9.6 line-km of total field magnetometer survey; and 12.5 line-k of pole-dipole IP survey. Based upon the previous work conducted on the Property, Mr. Lionel Winter (a Qualified Person) has recommended a phase 1 program consisting of geological mapping, prospecting, sampling and power stripping and trenching and a phase 2 program consisting of a preliminary diamond drilling program. The implementation of phase 2 would be contingent on positive results being obtained in the phase 1 work.
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