TORONTO, ONTARIO -- (Marketwire) -- 02/28/13 -- NOT FOR DISTRIBUTION IN THE UNITED STATES OR FOR DISSEMINATION TO U.S. NEWS WIRE SERVICES
OutdoorPartner Media Corporation (TSX VENTURE: OPX.H) ("OPX") announced today that it has entered into a letter of intent dated February 25, 2013 to complete a business combination (the "Transaction") with Bay Minerals Ltd. ("Bay Minerals") and Halston Exploration Inc. ("Halston"), a wholly-owned subsidiary of AXG Mining Ltd. ("AXG"), a public company listed on the Australian Stock Exchange.
AGX, through Halston, holds an exclusive option to acquire up to a 75% interest in the Condoroma property located in the "Cordillera Huaylla Apacheta" of Southern Peru (the "Condoroma Property"). Bay Minerals is a newly incorporated company based in Toronto, Ontario. Prior to completion of the Transaction, Bay Minerals will acquire all of the outstanding securities of Halston (the "Halston Acquisition"). Upon completion of the Transaction, Bay Minerals and Halston (or an entity resulting from the amalgamation of Bay Minerals and Halston) will be wholly-owned by OPX, and this combined entity (the "Resulting Issuer") will carry on the business of Halston, which is the exploration and development of Condoroma Property.
In accordance with an undertaking provided by OPX to the Ontario Securities Commission, as a condition precedent to completing the Transaction, OPX will file a preliminary long form prospectus and final long form prospectus (the "Prospectus"), which Prospectus will contain disclosure relating to the Condoroma Property, OPX, Bay Minerals, Halston, the Resulting Issuer and the Transaction, generally.
Prior to, or in conjunction with, the completion of the Transaction, it is anticipated that Bay Minerals will complete a brokered private placement of subscription receipts ("Subscription Receipts") at a price of $0.10 per Subscription Receipt for gross proceeds of up to $1,500,000 (the "Private Placement"). Bay Minerals will issue an additional 15,000,000 Subscription Receipts (with a deemed value of $0.10 per Subscription Receipt) to AXG in connection with the Halston Acquisition.
Immediately prior to the closing of the Transaction, following the satisfaction of the escrow release conditions to be set forth in the subscription receipt indenture governing the Subscription Receipts (the "Escrow Release Conditions"), the Subscription Receipts will be exchanged for units of Bay Minerals ("Bay Units"). Each Bay Unit will be comprised of one common share of Bay Minerals and one-half of one Bay Minerals common share purchase warrant (each whole warrant, a "Bay Warrant"). Each Bay Warrant will entitle the holder thereof to acquire one common share of Bay Minerals at a price of $0.10 for a period of two years following the closing of the Private Placement. In connection with the closing of the Transaction, all such Bay Minerals common shares will ultimately be exchanged for post-Consolidation (as defined below) common shares of the Resulting Issuer ("Resulting Issuer Shares") on a one for one basis and all such Bay Warrants will ultimately be exchanged for warrants of the Resulting Issuer on the same terms as the Bay Warrants.
OPX, Halston and Bay Minerals are each governed by the Business Corporations Act (Ontario). The Transaction is an arm's length transaction and will constitute a reverse take-over under the policies of the TSX Venture Exchange (the "TSX-V"). It is anticipated that the Resulting Issuer will be named "Bay Minerals Ltd." or such other name as may be determined by Bay Minerals.
OPX currently has 47,963,671 common shares issued and outstanding, as well as 572,000 stock options, such options to be cancelled in connection with the Transaction. Prior to the completion of the Transaction and subject to applicable regulatory and shareholder approvals, among other things, OPX has agreed to consolidate its outstanding common shares on a 1 (new) for 11 (old) basis (the "Consolidation").
Following completion of the Transaction, and assuming the Private Placement is for gross proceeds of $1,500,000, the Resulting Issuer will have approximately 38.4 million Resulting Issuer Shares issued and outstanding, of which approximately 11.4% will be held by current OPX shareholders, 49.5% will be held by Bay Minerals shareholders (including investors under the Private Placement) and 39.1% will be held by AXG, on a non-diluted basis.
The letter of intent is non-binding with respect to commercial terms, but includes binding obligations typical in the circumstances, including those relating to a period of exclusive dealing and confidentiality. 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), obtaining a receipt from the Ontario Securities Commission for the Prospectus, the completion of satisfactory due diligence investigations, the approval of the directors of each of OPX, Halston and Bay Minerals, the approval of the shareholders of OPX, and the approval of the TSX-V and other applicable regulatory authorities.
The parties intend that the Resulting Issuer will be listed on the TSX-V as a mining issuer following completion of the Transaction. Trading in the common shares of OPX will remain halted pending the satisfaction of all applicable requirements of the TSX-V. There can be no assurance that trading in the common shares of OPX will resume prior to the completion of the Transaction. Further details concerning the Transaction, Bay Minerals and Halston (including additional financial information and technical information in respect of the Condoroma Property) and other matters will be announced if and when a definitive agreement is reached.
Information Concerning the Condoroma Property
The Condoroma Property is approximately 740 km southeast of the capital city of Lima and to the SE end of Cusco department. The Condoroma Property consists of one contiguous concession block of 12 mineral concessions covering a total of 9,817 ha. The concessions are numbered Condoroma 1 to Condoroma 11 and Leon Primero. The concessions are located in the Provinces of Espinar and Lampa, Departments (region) of Cusco and Puno. They are registered under the name of a 100% owned subsidiary of Lara Exploration called Maxy Gold Peru S.A.C.
Management and Board of Directors of Resulting Issuer
The board of directors and management of the Resulting Issuer will be nominated by Bay Minerals and subject to approval by the TSX-V. Upon completion of the Transaction, it is anticipated that the board of directors and management of the Resulting Issuer will include the persons identified below.
-- Gordon Sklenka - Chief Executive Officer and Director-- Daniel Crandall - Chief Financial Officer-- Guy Le Page - Director-- Jeremy Niemi - Director
Completion of the Private Placement is a condition precedent to the closing of the Transaction.
The proposed Transaction is subject to the sponsorship requirements of the TSX-V, unless an exemption from those requirements is granted by the TSX-V. OPX intends to apply for an exemption from the sponsorship requirements; however, there can be no assurance an exemption will be obtained. If an exemption from the sponsorship requirements is not obtained, a sponsor will be identified at a later date. An agreement to act as sponsor in respect of the Transaction should not be construed as any assurance with respect to the merits of the Transaction or the likelihood of its completion.
Information Concerning OPX
The sale of substantially all of OPX's operating assets (the "Asset Sale") was completed on February 9, 2010. As a result, OPX is a public company without an operating business or any material liabilities or assets, other than the net cash proceeds from the Asset Sale and accumulated tax losses.
This news release contains certain "forward looking statements" including, for example, statements relating to the completion of the proposed Transaction, completion of the Private Placement, completion of the Halston Acquisition, obtaining a receipt for the Prospectus and the ability of Halston to acquire an interest in and title to the Condoroma Property in accordance with the option agreement governing its option on the property. Such forward-looking statements involve risks and uncertainties, both known and unknown. The results or events depicted in these forward-looking statements may differ materially from actual results or events. In addition to other factors and assumptions which may be identified herein, assumptions have been made regarding and are implicit in, among other things: receipt of government and third party approvals in respect of the Halston Acquisition; the state of the capital markets; the ability of the Resulting Issuer to successfully manage the political and economic risks inherent in pursuing mineral exploration opportunities in Peru; and the ability of the Resulting Issuer to obtain qualified staff, equipment and services in a timely and cost efficient manner to develop its business. Any forward-looking statement speaks only as of the date of this news release and, except as may be required by applicable securities laws, OPX and Bay Minerals disclaim any intent or obligation to update any forward-looking statement, whether as a result of new information, future events or results or otherwise.
All information contained in this press release relating to AXG and Halston was provided by AXG to OPX for inclusion herein. OPX has not independently verified such information and shall bear no liability for any misrepresentation contained therein.
Completion of the Transaction is subject to a number of conditions, including, but not limited to, acceptance by the TSX-V and shareholder approval. 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, as applicable, of OPX 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 OPX should be considered to be highly speculative.
The Exchange has in no way passed upon the merits of the proposed Transaction and has neither approved nor disapproved the contents of this press release.
NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
Bay Minerals Ltd.
OutdoorPartner Media Corporation
Richard D. McGraw
Chief Executive Officer