Upon completion of the Shark Acquisition, which is expected to occur in February 2013, the following individuals will be appointed to serve as officers of Canaco: Rick Clark as Chairman, Simon Jackson as President and Chief Executive Officer, Alessandro Bitelli as Chief Financial Officer and Hugh Stuart as Vice President, Exploration. The board of directors will initially be comprised of Rick Clark, Dr. Jingbin Wang, Shuixing Fu, Simon Jackson, Robert Chase and Alex Davidson. In light of Canaco's new focus and changes to the board of directors and management team, Canaco will change its name to Orca Minerals Inc. ("Orca").
Orca is expected to be a well-financed resource company with over $60 million in cash, focused on exploration opportunities in Sudan and East Africa with an experienced board of directors and management team.
Canaco President and CEO Andrew Lee Smith stated: "We believe Shark's assets will serve as an excellent foundation to build a leading resource company in the Arabian-Nubian Shield. We are very pleased Rick and his team have entered into the Transaction. We feel their significant experience and proven track record coupled with the Shark exploration properties will provide Canaco shareholders with unique exposure to one of the most prospective geological belts in Africa. In addition, the Transaction preserves Canaco shareholders' interest in its Tanzanian assets through East Africa Metals and provides sufficient capital to ensure the potential value of its asset base is realized."
Principal terms of the Transaction
-- Canaco shareholders will receive one East Africa Metals share for every three shares of Canaco held as of the effective date of the Spinout Transaction, which is expected to occur immediately prior to the completion of the Shark Acquisition.-- Shark shareholders will receive 2.705 Canaco common shares for each Shark share held, to be adjusted for any option exercises prior to closing.-- Immediately following the Shark Acquisition, Canaco is expected to consolidate its common shares on a three for one basis.-- In the event the Transaction is not completed, Canaco has agreed, under certain circumstances, to pay Shark a termination fee of $3 million.
A special committee established to review the Transaction received an oral opinion from Canaccord Genuity Corp. that the Transaction is fair, from a financial point of view, to the shareholders of Canaco. Canaco's board of directors has determined the Transaction is in the best interest of Canaco and its shareholders and has unanimously approved the Transaction. The Shark Acquisition has also been unanimously approved by the board of directors of Shark.
The Transaction will be subject to, among other things, the approval of the TSX Venture Exchange, the approval of the Court for the Spinout Transaction and the favourable vote by Canaco shareholders at a special meeting called to approve it. The directors of Canaco intend to recommend, in the information circular for the shareholder meeting at which Canaco shareholders will be asked to approve the Transaction, that Canaco shareholders vote in favour of the Transaction. Directors and officers of Canaco as well as its significant shareholder, SinoTech (Hong Kong) Corporation Limited, have entered into voting support agreements under which they have agreed to vote their Canaco shares in favour of the Shark Acquisition and the Spinout Transaction, which represent, in the aggregate, approximately 22% of Canaco's outstanding shares. It is expected that the special meeting of Canaco shareholders to approve the Shark Acquisition and the Spinout Transaction will be held in February 2013.