07:03:13 EDT Fri 29 Mar 2024
Enter Symbol
or Name
USA
CA



Red Star Capital Ventures Inc
Symbol RSM
Shares Issued 9,960,000
Close 2013-11-28 C$ 0.01
Market Cap C$ 99,600
Recent Sedar Documents

Red Star to acquire three Nunavut properties as QT

2013-11-29 10:27 ET - News Release

Mr. Brian Thurston reports

RED STAR ANNOUNCES AGREEMENT FOR QUALIFYING TRANSACTION

Red Star Capital Ventures Inc. has entered into a binding letter agreement dated effective Nov. 26, 2013, with Adamera Minerals Corp. to acquire a 100-per-cent interest in the KAM, Hawk and South Baker properties located in Nunavut, Canada. Adamera is incorporated under the Business Corporations Act (British Columbia) and listed on the TSX Venture Exchange.

Red Star is a capital pool company under the policies of the exchange and the acquisition of the properties will constitute its qualifying transaction in accordance with Policy 2.4. Upon completion of the transaction, Red Star expects to be listed as a Tier 2 mining issuer on the exchange, and will be engaged in the exploration and development of mineral properties, including the properties. In consideration for the properties, Red Star will pay to Adamera the sum of $100,000 cash and will issue one million common shares of the company to Adamera. Red Star will grant Adamera a 2-per-cent net-smelter-return royalty with respect to the properties, 1 per cent of which may be purchased by Red Star for $1-million.

The properties

The KAM property consists of four mineral claims and is located 415 kilometres west of the Hudson Bay coastline and the community of Arviat, Nunavut. The Hawk property consists of three claims and is located 385 kilometres west of the community of Arviat, Nunavut, and the Hudson Bay coastline. The South Baker property consists of 25 claims and is located near Arviat, Nunavut.

Work completed by Adamera on the properties includes airborne radiometric and magnetic surveying, sampling, prospecting, and drilling. An independent geological report of the properties prepared in accordance with National Instrument 43-101 will be completed in conjunction with the transaction. Upon its receipt, Red Star intends to issue a press release announcing the results of the geological report.

Concurrent financings

Prior to Dec. 31, 2013, Red Star intends to complete a non-brokered private placement of 1.65 million common shares at a price of six cents per share for gross proceeds of $99,000. In connection with closing of the transaction, Red Star intends to complete the following non-brokered private placements, subject to the approval of the exchange:

  • A private placement of up to 10 million units of Red Star at a price of 10 cents for gross proceeds of up to $1-million. Each such unit will consist of one common share of Red Star and one common share purchase warrant. Each warrant will entitle the holder thereof to purchase one additional common share at a price of 15 cents for a period of one year;
  • A private placement of up to 4,166,666 units of Red Star at a price of 12 cents for gross proceeds of up to $500,000. Each such unit will consist of one common share of Red Star to be issued on a flow-through basis pursuant to the Income Tax Act (Canada) and one-half of one common share purchase warrant. Each warrant will entitle the holder thereof to purchase one additional common share (not issued on a flow-through basis) at a price of 20 cents for a period of one year.

Red Star will raise an aggregate minimum of $750,000 pursuant to the 10-cent financing and the 12-cent financing. A maximum of $1-million will be raised pursuant to the 10-cent financing and a maximum of $500,000 will be raised pursuant to the 12-cent financing. Closing of each of the concurrent financings is subject to approval by TSX-V. Red Star intends to use the proceeds of the concurrent financings to execute a work program for the properties.

All securities issued in the concurrent financings will be subject to a statutory hold period expiring four months and one day after closing. Red Star may pay finders' fees in connection with the concurrent financings in accordance with exchange policies. Zimtu Capital Corp. has agreed to assist with the concurrent financings on a best-efforts basis.

Proposed directors and officers

On completion of the transaction, the directors and officers of Red Star are anticipated to be:

Brian Thurston, chief executive officer and director

Mr. Thurston received a bachelor of science degree in geology with honours from the University of Western Ontario in May, 1992. Mr. Thurston is currently a director of the following mineral exploration companies listed on the TSX-V: Encanto Potash Corp. since August, 2009, and Upper Canyon Minerals Corp. since June, 2010. Mr. Thurston was formerly a director of the following mineral exploration companies listed on the TSX-V: Lion Energy Corp. from November, 2007, to June, 2011 (served as president and chief executive officer from November, 2007, to May, 2010); Northern Iron Corp. from August, 2010, to April, 2011; Grenville Gold Corp. from November, 2010, to October, 2011; Maxtech Ventures Inc. from September, 2010, to February, 2012; Resource Hunter Capital Corp. from February, 2010, to April, 2011; Desert Gold Ventures Inc. from September, 2010, to February, 2011 (also former president and chief executive officer); Megastar Development Corp. from November, 2008, to December, 2010; Abbastar Resources Corp. from April, 2008, to June, 2008; and Great Bear Resources Ltd. from June, 2007, to February, 2010. In addition, Mr. Thurston served as a director of Network Media Group Inc. (formerly Andele Capital Corp.), an entertainment company listed on the TSX-V, from July, 2010, to March, 2012, and as a director of Auric Development Corp. (now First Mexican Gold Corp.), a capital pool company listed on the TSX-V, from May, 2008, to June, 2009. Mr. Thurston was a project manager with Pacific Ridge Exploration Ltd. from February, 2006, to January, 2007, and the executive vice-president of Lateegra Gold Corp. from June, 2007, to November, 2008.

David Hodge, president

Mr. Hodge is a businessman with over 17 years of experience in the management and financing of publicly traded companies. He has been the president of Zimtu since July, 2008. Mr. Hodge has been the president and director of Commerce Resources Corp., a junior natural resource mining company listed on the exchange since May, 1999; president and director of Pasinex Resources Ltd., a junior natural resource mining company listed on the Canadian National Stock Exchange, since May, 2008; and a director of Western Potash Corp., a mining company listed on the Toronto Stock Exchange, since July, 2007; and a director of Lakeland Resources Inc., a mining exploration company listed on the TSX-V since July, 2010.

Dean Nawata, chief financial officer and director

Mr. Nawata has over 18 years of public market experience, nine of which he spent as a licensed stockbroker focusing on financing of junior oil and gas, and mining projects with Nesbitt Burns (1989 to 1990), Research Capital Corp. (1994 to 1998) and with Raymond James (1998 to 2001). Mr. Nawata currently holds a position in business development for 49 North Resources Inc. (October, 2011, to present). He is president and chief executive officer of Olympic Resources Ltd. (May, 2012, to present), a director of Prima Fluorspar Corp. (April, 2013, to present) and a director of Big North Graphite Corp. (December, 2011, to present). He is also a director of Greywacke Exploration Ltd (June, 2013, to present). Previously, Mr. Nawata was vice-president of Barkerville Gold Mines (July, 2009, to October, 2011), director of corporate development for Longview Capital Partners (December, 2006, to March, 2008), manager of corporate development for Crosshair Exploration (November, 2005, to December, 2006) and vice-president of Blind Creek Resources Ltd. (October, 2010, to October, 2011).

Sean Charland, corporate secretary and director

Mr. Charland is a seasoned communications professional with experience in raising capital and marketing resource exploration companies. Mr. Charland has been a director of Zimtu since January, 2012. His network of contacts within the financial community extends across North America and Europe. Mr. Charland also serves as a director (April, 2011, to present) and corporate secretary (September, 2011, to present) of Pacific Polar Energy Group, and a director (May, 2012, to present) of Prima Fluorspar Corp., both private exploration companies. Mr. Charland is a director of Nanton Nickel Corp. (April, 2012, to present) and Arctic Star Exploration Corp. (March, 2012, to present), both exchange-listed companies.

Mark Jones, director

Mr. Jones was a registered financial adviser for 28 years and has been involved on the financing side for numerous transactions. He has also held the position of head of corporate finance, director and was a senior vice-president at Raymond James. As the head of corporate finance, Mr. Jones participated in raising funds junior companies and has been involved with many capital pool companies.

John Kiernan, PEng, director

Mr. Kiernan is a mining engineer with more than 25 years of mine operating, engineering, corporate and financial experience, including four years as an underground miner and operating foreman. Mr. Kiernan's engineering experience includes project implementation, mine design, ventilation network analysis, backfill trade-offs studies, production engineering, project management and operations scheduling for various mining methods. Most recently Mr. Kiernan has been involved in business development, as part of a team, evaluating potential mergers and acquisitions deals, and investment opportunities in mining-friendly jurisdictions. His experience includes vice-president of project development for Magellan Minerals Ltd. (August, 2012, to present); manager, project evaluation, for Quadra FNX Mining Ltd. (September, 2009, to June, 2012); mining analyst for PI Financial Corp. (September, 2007, to August, 2009); VP, mining, for Roca Mines Inc. (April, 2006, to August, 2007); and manager, project evaluation for American Gold Capital (September, 2004, to 2006).

Sponsorship

Red Star intends to make an application to the exchange to have the requirement for sponsorship of the qualifying transaction waived. There can be no assurance that the waiver will be granted. In any event, an agreement to sponsor should not be construed as any assurance with respect to the merits of the transaction or the likelihood of its completion.

Trading halt

In accordance with exchange policies, Red Star's common shares are currently halted for trading and will remain so until the documentation required by the exchange for the qualifying transaction can be provided to the exchange. The Red Star common shares may remain halted until completion of the qualifying transaction.

Other matters concerning the transaction

Subject to the approval of the exchange, upon closing of the transaction, the existing directors of Red Star will transfer all of the escrow shares held by them to the incoming insiders.

The transaction will be carried out by parties dealing at arm's length to one another and therefore will not be considered to be a non-arm's-length qualifying transaction, as such term is defined under the policies of the exchange. A filing statement in respect of the transaction will be prepared and filed in accordance with Policy 2.4 of the exchange on SEDAR no less than 10 business days prior to the closing of the proposed transaction. A press release will be issued once the filing statement has been filed as required pursuant to exchange policies.

The completion of the transaction is subject to the approval of the exchange and all other necessary regulatory approval. The completion of the transaction is also subject to additional conditions, including completion of a definitive agreement setting forth the terms and conditions set out in the letter agreement, completion of the concurrent financings, satisfactory completion of a due diligence review by Red Star, board of directors approval of Red Star, and certain other usual conditions. If and when a definitive agreement is executed, in accordance with the policies of the exchange, the company will issue a subsequent press release containing the details of the definitive agreements and additional terms of the transaction, and to the extent not contained in this press release, additional information required by exchange policies.

We seek Safe Harbor.

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