Nov 20 2010
X-Tal Minerals Corp. (TSX VENTURE:XMT.H) has announced that, further to its press release dated November 2, 2010, the TSX Venture Exchange has accepted for filing its merger documentation and technical report on Form 43-101, subject to final review and approval, and that it will resume trading on the NEX on Monday, November 22, 2010 at 9:30 AM EST.
Under the terms of the definitive Merger Agreement (the "Agreement"), the Company will acquire all of the outstanding shares of American Eagle Resources, Inc. ("AME") (the "Transaction"). The combined entity will focus on generating shareholder value through the exploration and development of its mineral projects in Fiji.
Under the terms of the Agreement, the parties shall amalgamate and consolidate all of their outstanding common shares and stock options. AME and X-Tal currently have 21,108,543 and 6,300,001 common shares outstanding, respectively, representing 77% and 23% ownership in the combined company.
The Tuvatu High-Grade Gold Project
Tuvatu hosts the second largest gold deposit in Fiji after the large Emperor Gold Mines ("Emperor") gold deposit at Vatukoula (7 million oz. Au produced to date). These deposits are 50 km apart and are associated with the same NE trending lineament of alkaline rocks on the island of Viti Levu. Epithermal gold veins at Tuvatu occur along the margins of the eroded Navilawa volcanic center in a multi-phase environment also featuring porphyry copper-style mineralization.
Historic and Current Mineral Resource and Reserve Estimates
Historical mineral resource estimates for Tuvatu were reported in compliance with the Australian Joint Ore Reserves Committee (JORC) guidelines and included Indicated Mineral Resources of 1,065,000 tonnes at 8.45 grams Au per tonne, or 289,000 oz. Au, in addition to Inferred Mineral Resources of 757,000 tonnes at 10.31 grams Au per tonne, or 251,000 oz. Au. In connection with a pre-feasibility study commissioned by Emperor in 2000, a Probable Reserve was reported of 269,034 oz. Au grading 6.3 grams Au per tonne.
A NI 43-101 compliant Mineral Resource Estimate prepared in conformance with generally accepted CIM "Estimation of Mineral Resource and Mineral Reserves Best Practices" (2005) guidelines was completed in August 2010 by P&E and supersedes all historic resources. Eugene Puritch P.Eng., and F.H. Brown, CPG, Pr.Sci.Nat. of P&E are the QP's responsible for preparation of the Mineral Resource Estimate shown below.
The total sampling database for the Tuvatu project consists of 607 records encompassing data from surface and underground sampling and surface and underground drilling. The mineral resource was estimated using Inverse Distance Cubed weighting of capped composite samples, with a grade capping of 40g/t Au. The strike length of the deposit is on the order of 900 m.
Planned Financing of $10 Million
In conjunction with the Transaction, the Company has engaged MGI Securities Inc., (the "Agent") as an advisor. MGI Securities has also been engaged as an agent along with PI Financial Corp. to carry out a concurrent private placement (the "Financing") of up to 10,000,000 subscription receipts priced at $1.00 per subscription receipt. The Agent has also agreed to serve as a sponsor for purposes of TSXV approval. Upon completion of the Transaction, each subscription receipt will, for no additional consideration, automatically be exercised into one unit of the Company, each unit consisting of one common share of the Company and one half of one share purchase warrant, with each whole warrant entitling the holder to purchase one common share of the Company at a price of $2.00 for a period of 12 months following closing. The Financing is expected to close on or before December 15, 2010. At closing the gross proceeds of the Financing will be held in escrow pursuant to the terms of a subscription receipt agreement to be entered into by the Company and Computershare Investor Services Inc., and will be released to the Company upon the completion of the Transaction.
The Company has agreed to pay cash commissions of up to 6% of the gross proceeds raised, and issue agent's warrants of up to 6% of the number of shares sold. In addition, the Agents have the option (the "Agents' Option") to sell up to that number of additional units which is equal to 15% of the number of units sold pursuant to the offering at a price equal to the Issue Price. The Agents' Option may be exercised at any time within 30 days after the closing date of the offering.
Upon completion of the Transaction and Financing, it is anticipated that the Company will have approximately 37,408,544 common shares, approximately 2,705,000 stock options, 5,000,000 warrants, and 600,000 broker warrants outstanding.
Upon completion of the Transaction and Financing, the Company expects to use its available funds towards commencing and completing the exploration programs on Tuvatu.
Change of Name
In connection with the closing of the Transaction, the Company will also complete a name change to Lion One Metals Limited and plans to graduate from the NEX to the TSX Venture Exchange ("TSXV").
New Board Composition
Upon completion of the Transaction, it is expected that Walter H. Berukoff, who is currently a director of both companies, Richard Meli, and David Duval, will remain as directors of the Company. In addition, it is expected that upon completion of the Transaction, George S. Young will be appointed as President and Director, Darcy Krohman will be appointed as Chief Financial Officer and VP Exploration, and Hamish Greig will be appointed as Corporate Secretary.
The Transaction is unanimously supported by the Board of Directors of both AME and X-Tal and will be fully described in the Management Information Circulars to be filed with regulatory authorities and mailed to AME and X-Tal shareholders in accordance with applicable securities laws. The Transaction will be subject to disinterested shareholder approval of the Company, and will be voted upon at the Annual Meeting of the Company, to be held at the offices of the Company on or about December 21, 2010. The record date for the meeting will be November 16, 2010.
The Agreement will result in a Reverse Takeover ("RTO"), as defined under the TSXV Corporate Finance Manual, of the Company, which is subject to shareholder and regulatory approval, including approval of the TSXV. The Transaction is also subject to the approval of the AME shareholders. The shares of the Company to be issued to current shareholders of AME may be subject to escrow and/or resale restrictions in accordance with applicable securities legislation and the policies of the TSXV.
Darcy Krohman, P.Geo, a Qualified Person for the Company under the meaning of Canadian National Instrument 43-101, has reviewed the technical information in this news release.