TORONTO, ONTARIO -- (Marketwired) -- 07/03/13 -- Sagittarius Capital Corporation (NEX: SCX.H) ("Sagittarius" or the "Company"), a capital pool company, is pleased to announce that it has entered into a binding arm's-length letter of intent (the "Agreement") dated June 28, 2013 with AMR Mineral Metal Inc. ("AMR"), a non-reporting issuer, pursuant to which Sagittarius will, subject to a number of conditions, acquire all of the issued and outstanding securities of AMR. The transaction will constitute the Company's qualifying transaction (the "Qualifying Transaction" or "QT") under the policies of the TSX Venture Exchange (the "Exchange").
Under the terms of the Agreement, Sagittarius will incorporate a wholly owned subsidiary under the Business Corporations Act (British Columbia) ("SubCo"), which will amalgamate with AMR upon the closing of the Qualifying Transaction. As consideration for the amalgamation of AMR and SubCo, holders of common shares in the capital of AMR (the "AMR Shares") will receive one (1) common share in the capital of the Company (a "Company Share") for every one (1) AMR Share, valued at $2.25 per Company Share. In addition, the Company will issue replacement warrants, broker warrants and options for any warrants (the "AMR Warrants"), broker warrants (the "AMR Broker Warrants") and options (the "AMR Options") issued by AMR prior to the closing of the Qualifying Transaction, on the same 1:1 basis.
As a condition of the amalgamation, the shareholders of the Company will be asked to approve: (i) a consolidation (the "Share Consolidation") of the Company Shares on either one (1) old share for 0.02721029 new share basis or one (1) old share for 0.0320 new share basis, depending on certain factors to be determined by the Company and AMR; (ii) a change of the Company's name to "AMR Mineral Metal Inc."; and (iii) the adoption of an amended and restated stock option plan to be proposed by AMR, which complies with the rules and policies of the Exchange or the Toronto Stock Exchange (the "TSX"), as applicable. The proposed Share Consolidation will become effective prior to completion of the Qualifying Transaction. All share numbers and pricing herein assume completion of the Share Consolidation prior to closing of the Qualifying Transaction.
The Company and AMR have agreed to pay a finder's fee of $37,500 (the "Finder's Fee") to Foundation Opportunities Inc. ($12,500 on account of the Company and $25,000 on account of AMR) following completion of the Qualifying Transaction, subject to the approval of the Exchange.
Capital Structure of AMR
AMR presently has approximately 16 security holders holding an aggregate of 40,674,166 AMR Shares. The principal shareholder of AMR is AMR Mineral Metal Yatirim, a Turkish company controlled by Sedar Aral (Istanbul, Turkey), the Executive Chairman and CEO of AMR, and Guliz Komurcu (Istanbul, Turkey), Vice Chairman, General Coordinator and a director of AMR, which holds approximately 78.5% of the issued and outstanding AMR Shares.
Currently, AMR has 40,674,166 AMR Shares issued and outstanding (not including up to 22,222,222 AMR Shares issuable in connection with, and following completion of, the Pre-QT Financing (as hereinafter defined) and the securities that may be issued pursuant to the Interim Private Placement (as hereinafter defined). In addition, 460,000 AMR Shares are reserved for issuance for the exercise of 460,000 AMR Options at $2.00 per AMR Share, and 2,666,666 AMR Shares are reserved for issuance of 2,666,666 AMR Warrants at $2.50 per AMR Share. Furthermore, a number of AMR Broker Warrants will be issued to Jacob Securities Inc. in connection with the Pre-QT Financing and Interim Private Placement. The AMR Broker Warrants will entitle the holder to purchase securities of AMR.
AMR is currently in the process of marketing an equity financing for gross proceeds of up to $25 million dollars worth of subscription receipts of AMR (the "Pre-QT Financing") at a proposed price of $2.25 per subscription receipt, with each subscription receipt convertible, for no additional consideration, into securities of AMR. In connection with the Pre-QT Financing, AMR will pay a cash commission and also issue an amount of AMR Broker Warrants pursuant to the terms of the engagement letter dated February 5, 2013, between AMR and Jacob Securities Inc.
In addition, prior to the closing of the Qualifying Transaction, AMR intends to complete an interim private placement of AMR securities at a proposed price between $1.80 and $2.00 (the "Interim Private Placement"). AMR hopes to raise between $150,000 and $1,000,000 in the Interim Private Placement.
AMR securities issued pursuant to the Pre-QT Financing and the Interim Private Placement will be exchanged for shares, warrants and broker warrants of the Company on the same basis 1:1 as described above.
It is expected that the net proceeds of the Pre-QT Financing and the Interim Private Placement will be used to further advance AMR's flagship Canakli Project (as hereinafter defined) into the pre-production phase, such advancement to include upgraded technical reports including resources estimates, completion of additional technical studies using its pre-existing pilot plant and the beginning of construction of a 10 tph - 30 tph (tonnes per hour) demonstration plant. Further press releases will be issued when the terms of the Interim Private Placement and Pre- QT Financing have been determined.
Selected AMR Financial Information
The following is selected financial data derived from the unaudited consolidated financial statements of AMR at December 31, 2012 and 2011.
Year Ended Year ended December 31, December 31, 2012 2011----------------------------------------------------------------------------Total revenue $ nil $ nil----------------------------------------------------------------------------Net loss $ (2,407,336) $ (1,842,141)----------------------------------------------------------------------------Net loss per share $ (0.06) $ (0.07)---------------------------------------------------------------------------- As at December As at December 31, 2012 31, 2011----------------------------------------------------------------------------Total assets $ 4,688,491 $ 3,348,290----------------------------------------------------------------------------
Resulting Issuer Capital Structure
There are currently 4,190,000 Company Shares issued and outstanding. Upon completion of the proposed Qualifying Transaction (assuming the 0.02721029:1 Share Consolidation and the proposed amalgamation, and assuming that the Pre-QT Financing is fully subscribed for, and without taking into consideration any securities that may be issued pursuant to the exercise of the AMR Warrants, which may be issued pursuant to the Pre-QT Financing or to the Interim Private Placement), the Company will have 51,927,688 Company Shares, 460,000 options and 2,666,666 warrants (not including the AMR Broker Warrants that will be issued to Jacob Securities Inc. in connection with the Pre-QT Financing, and any AMR Broker Warrants that may be issued in connection with the Interim Private Placement) issued and outstanding.
The closing of the Qualifying Transaction with AMR is subject to a number of conditions, including, but not limited to the following: (i) completion or waiver of sponsorship; (ii) receipt of all director and shareholder approvals on or before August 31, 2013; (iii) receipt of all required regulatory approvals of the Qualifying Transaction and the Share Consolidation, including the approval of the Exchange, on or before August 31, 2013; (iv) the negotiation, execution and delivery of the amalgamation agreement prior to August 31, 2013; (v) there being no liabilities of the Company other than the Finder's Fee; and (vi) satisfaction of the Minimum Listing Requirements of the Exchange and all requirements under the Exchange rules relating to completion of a "Qualifying Transaction".
The proposed Qualifying Transaction does not constitute a Non-Arm's-Length Qualifying Transaction and will not be subject to shareholder approval.
A filing statement in respect of the proposed Qualifying Transaction will be prepared and filed in accordance with Policy 2.4 of the Exchange on SEDAR at www.sedar.com no less than seven business days prior to the closing of the proposed Qualifying Transaction. A press release will be issued once the filing statement has been filed as required pursuant to Exchange policies.
Proposed Management and Directors of the Resulting Issuer
Effective as of completion of the Qualifying Transaction each of the current directors and officers of the Company will resign and be replaced by the current directors and officers of AMR. The following are brief descriptions of AMR's management team and its proposed nominees that will, collectively, assume management responsibility for the Company upon completion of the Qualifying Transaction:
I. Serdar Aral - Executive Chairman, CEO and Director
Serdar Aral graduated from University of Birmingham and has a MSc. from Aston University. Mr. Aral is a former managing director of Borusan Foreign Trade. He has 27 years of experience in the fields of Ferro Alloys and steel products. Mr. Aral is also the chairman of Ferco Group of companies.
Carmelo Marrelli - CFO
Mr. Marrelli holds a Bachelor of Commerce degree from the University of Toronto and is qualified as a Chartered Accountant and as a Certified General Accountant in Canada. In addition to acting as AMR's Chief Financial Officer, Mr. Marrelli has been a principal of Marrelli Support Services Inc., a firm providing administration services to Canadian public companies, since February, 2009, and prior to February, 2009, a partner with Marrelli & Drake Corporate Services (formerly Duguay & Ringler Corporate Services) (a firm providing administration services to Canadian public companies). Mr. Marrelli also serves as the Chief Financial Officer of several publicly listed junior mining companies and as a director of Odyssey Resources Limited, which is listed on the Exchange.
Guliz Komurcu - Vice Chairman, General Coordinator and Director
Guliz Komurcu graduated from University of Oxford Brooks, Department of Business Administration in 2000. Between 2000 and 2005, she worked at her family-owned companies in Mining & Production of Natural Stones as Product and Export Coordinator. Ms. Komurcu has been involved in AKSU DIAMAS PROJECT since 2005, and is currently Vice Chairman and General Coordinator of AMR.
Jack Lifton - Director
Jack Lifton is the founding principal of Technology Metals Research, LLC. He is also a consultant, author and lecturer on the market fundamentals of the technology metals, the term that he coined to describe those strategic rare metals whose electronic properties make our technological society possible. These include the rare earths, lithium and most of the rare metals. Educated as a physical chemist, specializing in high-temperature metallurgy, Mr. Lifton was first a researcher before becoming both a marketing and manufacturing executive. Finally, he became a metal trader specializing in the field of technology metals and of rare metals. Today, after 48 years of industry involvement, Mr. Lifton advises both OEM high tech industry and the global institutional-investment community on the natural resource issues that impact either a proposed business model or a high-volume manufacturing plan for the mass market. Mr. Lifton's work today is principally as a due diligence consultant for institutional investors, looking into opportunities where rare and technology metals availability are a factor in determining the probability of commercial success of a metals-related venture. Mr. Lifton is a Senior Fellow of the Institute for the Analysis of Global Security.
Bradley Kipp - Director
Mr. Kipp holds CA and CFA designations and has over 18 years experience of financial, capital market and operations specializing in the mining sector. He is Vice-President Finance of a mining development company that has made a number of investments in emerging and start-up mineral projects worldwide. In addition, Mr. Kipp is or has been Chief Financial Officer and/or Director of several public companies including African Copper Plc, Titanium Corporation, MinCore Inc., Equity Financial Holdings Inc. and Atikwa Minerals Limited.
Gregory Ho Yuen - Director
Greg Ho Yuen is a partner and a member of Fasken Martineau's Securities Group and its Global Mining Group. His corporate and securities law practice focuses on corporate finance and mergers and acquisitions.
About AMR Mineral Metal Inc.
AMR is a British Columbia incorporated company that owns 99.77% of the mining rights to six unique heavy mineral-sands-like Rare Earth Element (REE) and minor metals deposits in southern Turkey.
AMR's flagship property is the Canakli deposit (the "Canakli Project") near Isparta, in southwest Turkey. The Canakli Project is at an advanced stage of development and has recently completed a NI 43-101 Preliminary Economic Assessment, prepared by Roscoe Postle Associates in May of 2013. AMR has carried out significant development at the Canakli Project, including hydro- mining and processing at a pilot-scale 100 tonnes per hour (tph) gravity/magnetic concentration plant, which produced saleable magnetite product, and a rare earth concentrate that also contains other iron oxides, titanium, zirconium and niobium. AMR is targeting commercial production rates of between 800 tph and 3,800 tph at the Canakli Project, with end products including separated light rare earths, a mixed heavy rare earth precipitate, titanium oxide, zirconia, niobium, magnetite and an iron oxide precipitate.
About Jacob Securities Inc.
Jacob Securities Inc. ("JSI") is an independent full-service investment bank providing underwriting and financial advisory services to companies in the mining, oil and gas, renewable power, infrastructure and energy sectors. The firm, which is headquartered in Toronto, primarily services small- to mid-cap issuers in North America and around the world.
Over the past five years, JSI has been involved in over $3.5 billion in global equity financings and M&A transactions. Of that figure, JSI's team has led over 35 transactions, raising over $500 million for its clients. JSI's leadership includes one of the most accomplished advisory teams in the sector. JSI's focused approach allows its clients to source capital, expand strategic relationships and facilitate liquidity in the public markets.
Completion of the transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable pursuant to Exchange Requirements, 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.
Sagittarius Capital Corporation