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File: Press Release - Credent - LOI FINAL VERSION.pdf
CREDENT CAPITAL CORP.
CREDENT CAPITAL CORP. ANNOUNCES LETTER OF INTENT WITH ELEPHANT
COPPER LTD.
Not for distribution to United States newswire services or for release, publication,
distribution or dissemination directly, or indirectly, in whole or in part, in or into the United States.
May 11, 2012 - Vancouver, British Columbia � Credent Capital Corp. (TSXV: CDT.P) ("Credent") is
pleased to announce that it has signed a non-binding letter of intent (the "LOI") with Elephant Copper
Ltd., a corporation existing under the laws of the British Virgin Islands ("Elephant"), which outlines the
general terms and conditions pursuant to which Credent and Elephant would be willing to complete a
transaction that will result in a reverse take-over of Credent by the shareholders of Elephant (the
"Transaction"). The LOI was negotiated at arm's length and is effective as of May 3, 2012.
The LOI is to be superseded by a definitive merger, amalgamation or share exchange agreement (the
"Definitive Agreement") to be signed on or before May 18, 2012 (or such other date as may be mutually
agreed in writing by Credent and Elephant). The Transaction is subject to requisite regulatory approval,
including the approval of the TSX Venture Exchange (the "TSXV") and standard closing conditions,
including the approval of the directors of each of Credent and Elephant of the Definitive Agreement and
completion of due diligence investigations to the satisfaction of each of Credent and Elephant, as well as
the conditions described below. The legal structure for the Transaction will be determined after the parties
have considered all applicable tax, securities law, and accounting efficiencies.
Credent is incorporated under the provisions of the Business Corporations Act (British Columbia) with its
registered and head office in Vancouver, British Columbia. It is a Capital Pool Company and intends for
the Transaction to constitute its "Qualifying Transaction" as such terms are defined in the TSXV policies.
Credent is a "reporting issuer" within the meaning of the Securities Act (British Columbia) and Securities
Act (Alberta).
Since the Transaction is an arm's length transaction, Credent is not required to obtain shareholder
approval for the Transaction. However, Credent may hold a special meeting of shareholders to approve
certain matters ancillary to the Transaction.
Trading in the common shares of Credent is halted at present. It is unlikely that the common shares of
Credent will resume trading until the Transaction is completed and approved by the TSXV.
The Proposed Transaction
Credent proposes to acquire all of the issued and outstanding ordinary shares of Elephant (each, an
"Elephant Share") pursuant to the terms of the Definitive Agreement. It is expected that each Elephant
shareholder will receive one common share of Credent (a "Credent Share") for each Elephant Share
held (the "Exchange Ratio") resulting in the Credent Shareholders holding approximately 4.98%of the
common shares of the combined entity (the "Resulting Issuer") and the former Elephant shareholders
holding approximately 95.02% of the common shares of the Resulting Issuer upon completion of the
Transaction (immediately prior to giving effect to the Offering (as defined below) but assuming
completion of the Principal Sale (as defined below)).
As part of the Transaction, an aggregate of 2,200,000 Credent Shares, owned by certain directors, officers
and shareholders of Credent and currently held in escrow, will be sold to certain officers and directors of
Resulting Issuer at a purchase price of $0.10 per Credent Share (the "Principal Sale").
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Certain Conditions to Transaction
The completion of the Transaction will be subject to the satisfaction of certain conditions prior to closing,
including the following:
Elephant must complete a financing (the "Offering") for minimum gross proceeds of not less
than Cdn$1,000,000 at an issue price of not less than $0.15. It is expected that the Offering will
be completed prior to the closing of the Transaction and the securities of Elephant issued pursuant
to the Offering will be exchanged into corresponding securities of Credent in accordance with the
Exchange Ratio. The net proceeds of the Offering will be released to the Resulting Issuer upon
completion of the Transaction. Further details regarding the Offering will be included in a
subsequent press release once additional details become available.
Elephant and Credent will enter into a Definitive Agreement in respect to the Transaction.
All requisite regulatory approvals relating to the Transaction, including, without limitation,
TSXV approval, will have been obtained.
About Elephant
Elephant is a corporation existing under the laws of the British Virgin Islands and was incorporated on
February 22, 2012. Its registered office is located at ABM Chambers, P.O. Box 2283, Road Town,
Tortola, British Virgin Islands.
The principal shareholders of Elephant are Champfest Holdings Limited, a Mauritius company the
principal shareholder of which is Strand Hanson Ltd., a company incorporated in the United Kingdom,
Jonathan Challis, a resident of Canada, Coppergate Industries Ltd., a Seychelles company the principal
shareholder of which is Marc Lindsay, a resident of South Africa and George Perperidis, a resident of
Canada. The principal shareholders hold 15%, 15%, 11% and 11%, respectively, of the currently issued
and outstanding Elephant Shares.
Elephant has two properties in Zambia covering 240 square kilometers, namely the Nyimba Project and
the Lunga Project and three properties in Botswana covering 18,001 square kilometers.
Nyimba Project
The Nyimba Project is located 300 kilometers east-northeast of Lusaka, Zambia and can be reached by
tarred road.
A number of base metal, gold and graphite deposits are known throughout the Nyimba area, most of
which have been discovered by fairly regional exploration activities over the last 30 years.
The Chipirinyuma target consists of massive sulphides hosted in quartz-feldspar gneiss. The
mineralization appears to be stratabound, conformable to the gneiss banding. The major sulphide mineral
is pyrrhotite, with lesser amounts of pyrite, sphalerite and chalcopyrite. Massive sulphide outcrops as
gossans, form prominent ridges in the area that can be traced along strike for approximately 6 kilometers
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and are orientated east-southeast. These massive sulphides are associated with a fragmental horizon
within the gneiss. The deposit is interpreted as a stratabound volcanogenic massive sulphide deposit.
Rio Tinto Zambia drilled 5 boreholes with reverse circulation drilling to test an Electro Magnetic (EM)
anomaly. The drilling intersected 5m to 11m of disseminated sulphides with up to 4% zinc. Minex
(Mindeco), a Zambian Government Department ("Mindeco"), drilled 3 boreholes that contained
significant amounts of molybdenum (up to 0.23%).
At the Latala Hills target the massive sulphide bands are associated with outcropping magnetite gossans.
Gridded geochemical work completed by Mindeco indicated copper, zinc and molybdenum anomalies
over the gossan areas, however the correlation between copper, zinc and molybdenum was negative.
Further EM surveys were carried out on the geochemical anomalous sites. Some of the drilling conducted
on these anomalies intersected sulphide mineralization.
The Umba River target is a massive sulphide represented by gossanous outcrops. There is also some
known gold mineralization associated with shear zones in the target area. MMindeco a conducted
geochemical surveys and a stream sediment survey which outlined anomalous zinc values of +300ppm
zinc at Umba River. RTZ drilled 12 reverse circulation boreholes on two parallel structures based on EM
and magnetic survey data, and coinciding with weak soil gold anomalies. Weak to moderate
mineralization was intersected consisting of 1% - 4% pyrite, � chalcopyrite and galena.
The Ngambwa and Ndake targets are interpreted to be base metal occurrences associated with
replacement mineralization along the contact between marble and gneiss. This type of scarn and/or
contact metasomatic mineralization is usually found where felsic intrusions are in contact with dolomitic
limestones and are often mineralogical complex.
At Ngambwa two areas of mineralization were defined, namely Ngambwa East and West. At Ngambwa
East, thin gossan horizons with copper up to 2000ppm, and molybdenum to 1000ppm, outcrop over some
2 kilometers. Original sulphides were dominantly pyrrhotite and pyrite. From geophysical and trenching
data, the region of gossan outcrop appears to represent a local NE trending antiform, with mineralized
horizons dipping gently to the NW and SW. EM and induced polarization surveys suggest down dip
extensions to the mineralization. The conductive material is interpreted to be probably massive sulphide.
At Ngamba West, where the mineralization has little surface expression, zinc anomalies of 6000ppm zinc,
in soils, were recorded in overlying marble. Three anomalies were drilled at Ngambwa West and one at
Ngambwa East. The Ngamwa Western anomalies did not bear any significant results and at the Ngambwa
East, pyrite- pyrrhotite mineralization with minor chalcopyrite (320ppm copper, 156ppm molybdenum)
were recorded.
At Ndake, zinc values of up to 3000ppm zinc, in soil, were reported by Afro Can Resources Ltd., with
low copper and lead values. Afro Can Resources Ltd. have also reported values of 8500ppm zinc,
4500ppm lead, 1500ppm molybdenum from samples taken from pits and trenches.
Lunga Project
The Lunga Project is located in west central Zambia approximately 250 kilometers by road to the
southwest of the town Kitwe, in western Zambia.
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The Lunga Project lies at the boundary between the Upper Roan and Lower Kundelunga. There is
limestone outcrop in the northern part of the Lunga Project and argillite outcrop in the southern part of the
Lunga Project. Chartered Exploration and successor Zamanglo Ltd. identified a zinc anomaly through
geochemical soil sampling and reported values of up to 3100ppm zinc, 245ppm lead and 780ppm copper.
Twenty five pits were excavated over the anomaly and material sampled gave results of up to 5.6% zinc.
The material overlies brecciated dolomite with insignificant zinc values. Three diamond boreholes were
drilled on the anomaly and the zinc grades obtained were below 1.5%. Later geochemical work by
Avmin Venture Limited and Lukusashi Mining Limited confirmed historical results with zinc values up
to 2300ppm and lead values up to 654ppm.
Botswana Properties
Elephant's three properties in Botswana are located on either side of the Kalahari Copper Belt where
Hana Mining Ltd. and Discovery Metals Ltd are currently active and have reported copper mineralization
and published Mineral Resources.
The western properties are approximately 250 kilometers (western lower) and 200 kilometers (western
upper), respectively from the town of Maun and the eastern property is 100 kilometers to the east of
Maun. The town of Maun is accessible through tarred roads. The properties are accessible on secondary
roads from Maun.
The properties are all covered by Kalahari Sands and only through the interpretation of aerial-magnetic
data can the subsurface geology be interpreted
The eastern property lies predominantly on an unknown Achaean lithology and Karoo volcanics with the
Lebung Group, Ecca Group and Mamuno Formation making a minor appearance. The centre of the area
is intruded by Karoo aged dyke swarms that extend from South Africa to within Namibia. The Karoo
dykes might have encouraged metal-rich hydrothermal fluids to migrate from enriched Achaean
lithologies to younger lithologies.
The western properties consist predominantly of metasedimentary formations associated with the
Proterozoic Belt going through Botswana. The western upper area has been historically been explored for
diamonds and the occurrence sulphide hosted copper mineralization. Projects neighbouring the western
lower property have reported 25 million tonnes zinc/lead at 3%.
No exploration activities of significance have been conducted on any of Elephant's properties in
Botswana.
Brendan Botha (Pri.Sci.Nat), Elephant's "Qualified Person" as defined in NI 43-101, has reviewed and
approved the technical information in this news release.
Insiders of the Resulting Issuer
Upon completion of the Transaction, it is anticipated that the board of directors and management of the
Resulting Issuer will include the following:
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Dr. Luc Antoine, President and Chief Executive Officer
Dr. Luc Antoine is a professional geologist and geophysicist who has worked on the African continent in
such countries as Algeria, Libya, Tanzania, Sudan, Mozambique, South Africa, Angola, Congo, Gabon,
Mauritania, Senegal, Morocco and Botswana for over 20 years. His expertise is focused on exploration,
data security and quality control, data acquisition, and data interpretation. Dr. Antoine is co-founder and
technical director of GeX Surveys Pty Ltd, a company specializing in airborne geophysical data
acquisition contracting services since 2006. He is also co-founder and technical director of Geoscientific
Exploration Services, a company offering geological, geotechnical, remote sensing and geophysical
consulting and contracting services since 1999. During his career, Dr. Antoine has been extensively
involved in developing exploration programmes for leading mining and mineral companies
including Anglo American Gold Corporation (1986 to 1987) and Anglo American Gold's base metals
operations (1980 to 1986), as well as Falconbridge Exploration (1973 and 1978 to 1979). He also taught
exploration methodology at the University of the Witwatersrand from 1987 to 2002. A resident of South
Africa, Dr. Antoine is an Associate Member of South African Geophysical Association (President 1993),
a member of the Geological Society of South Africa, the European Association of Geoscientists and
Engineers, and the Society of Exploration Geophysicists. Dr. Antoine is also a Director of Sono
Resources Inc. (OTC:SRCI).
Paul Robert Lindsay, Director
Mr. Paul Robert Lindsay has over 33 years mineral and mining experience, focused on management and
mine development. He has experience in both underground and surface mining and development of flat
and decline mining operations. He is a specialist in mine development and construction and has a long
history with Managing Civil & Mechanical Construction on surface and underground, as well as
environmental management working towards I.S.O 14001 accreditation. He was the Mining Coach at the
Geita Gold Mine operated by Anglo Gold Ashanti in Tanzania from 2007 to 2010 and was also the
Mining Manager at their Yatela Gold Mine in Mali during that time. He was the Senior Mining Engineer
for De Beers' Venetia Mine in South Africa (1997-2007) and the Mine Overseer at De Beers' Finsch
Mine, also located in South Africa (1981 to 1997). A resident of South Africa, Mr. Lindsay is an
Associate Member of the South African Institute of Mining & Metallurgy and Fellow Member of the
Institute of Quarrying. Mr. Lindsay is also a Director of Sono Resources Inc. (OTC:SRCI).
Jonathan Challis, Director
Mr. Challis is a mining engineer with over 30 years' experience in the operation, management, financing
and analysis of mining projects around the world. Mr. Challis has an honors degree in Mineral
Exploitation and an MBA. Mr. Challis started his professional life as a Mining Engineer with Gold Fields
of South Africa Limited in 1974, before returning to Europe where he worked as a mining analyst and
project financier for several European institutions. He subsequently joined McLeod Young Weir in
London in 1987, as a mining analyst, prior to relocating to Toronto in 1990. In 1994, he joined CM
Oliver in Toronto as a Director and Senior Mining Analyst, prior to moving back to London, where he
was instrumental in establishing a European presence for CM Oliver. In 1997, he joined Ivanhoe Capital
Corporation and was involved in numerous early stage exploration ventures in diverse locations. Mr.
Challis has subsequently been involved in several Canadian resource companies in the roles of Chief
Executive Officer, President and Director. Mr. Challis is currently a Director and Chief Executive Officer
of SEAM Ltd., a private UK based mineral exploration company active in Eastern Africa. Mr. Challis is
also a Director of Peregrine Diamonds Ltd. (TSX:PGD); West African Iron Ore (TSXV: WAI) and Rye
Patch Gold Corp. (TSXV:RPM).
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Sponsorship
The TSXV requires sponsorship of a Capital Pool Company's Qualifying Transaction unless exempt in
accordance with TSXV policies. Credent will apply to the TSXV for a waiver of the requirement to
engage a sponsor with respect to the Qualifying Transaction; however, there is no assurance that a waiver
will be granted. Credent intends to include any additional information regarding sponsorship in a
subsequent press release.
Further Information
All information contained in this news release, with respect to Credent and Elephant, was supplied by the
parties respectively, for inclusion herein. Each party and its directors and officers have relied on the other
party for any information concerning the other party.
For further information, please contact John A. Versfelt, President and Chief Executive Officer at:
120 Lonsdale Avenue, 3rd Floor
North Vancouver, BC
V7M 2E8
Telephone: (604) 984-9959
Facsimile: (604) 983-8056
On behalf of the Board,
"John A. Versfelt"
John A. Versfelt
President and Chief Executive Officer
Completion of the transaction is subject to a number of conditions, including but not limited to, TSXV acceptance
and if applicable pursuant to the requirements of the TSXV, 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.
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.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION: This news release
includes certain "forward-looking statements" under applicable Canadian securities legislation. Forward-looking
statements include, but are not limited to, statements with respect to: the terms and conditions of the proposed
Transaction; the terms and conditions of the proposed Offering; future exploration and testing; use of funds; and the
business and operations of the Resulting Issuer after the proposed transaction. Forward-looking statements are
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necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to
known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to
differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are
not limited to: general business, economic, competitive, political and social uncertainties; delay or failure to recei
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board, shareholder or regulatory approvals; and the results of current exploration and testing. There can be no
assurance that such statements will prove to be accurate, as actual results and future events could differ materially
from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking
statements. Credent and Elephant disclaim any intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise, except as required by law.
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