Mr. Brad Kitchen reports
SECOVA ARRANGES PRIVATE PLACEMENT AND QUEBEC PROPERTY ACQUISITION
Secova Metals Corp.
has arranged a non-brokered private placement to raise gross proceeds to the company of up to
$1-million by the issuance of up to 20 million units at a purchase price of five cents per unit.
Each unit will consist of one common share of the company and one common share purchase
warrant. Each warrant will entitle the holder to purchase one common share of the
company at a purchase price of five cents per share for a period of nine months from the date of
the closing of the offering.
In connection with the financing, the company may pay 8 per cent in cash finders' fees and issue 8 per cent in
finders' warrants. The finders' warrants will be exercisable into
common shares for a period of nine months at an exercise price of five cents per common share.
The gross proceeds of the offering will be used for exploration, development of the company's
gold projects in Quebec and general corporate purposes. The offering is subject to the acceptance
of the TSX Venture Exchange, and securities issued in the financing will be subject to a four-month-plus-one-day hold period.
In other corporate news, Secova has signed a letter of agreement with DNA Canada Inc. pursuant to which the company shall acquire from DNA all the following assets:
- 152 mining claims and one mining concession located in the Montauban and Chavigny
townships in the county of Portneuf in the province of Quebec;
- The buildings, immovables, and other assets and permits located on, or with respect to, the
This acquisition will allow Secova to develop and to evaluate the four tailings sites from past
production that are found at the Montauban project and further explore the site for additional gold
Terms of the acquisition
The acquisition shall be completed by Secova in consideration of the issuance by the company to
DNA of a convertible debenture:
- The debenture shall not bear any interest, shall mature 12 months after the execution of a
formal agreement and shall be convertible in common shares
of Secova as follows:
- A first tranche of 15 million common shares of Secova on the date that is four months and one day following the execution of the formal agreement;
- Only if the first tranche of 15 million shares referred to has been distributed by
DNA to its shareholders, a second tranche of 15 million common shares of Secova
on the date that is eight months following the execution of the formal
- Only if the second tranche of 15 million shares referred to has been distributed by
DNA to its shareholders, a third tranche of 20 million common shares of Secova on
the date that is 12 months following the execution of the formal agreement.
- Secova shall also: (i) assume certain current outstanding debts of DNA up to a maximum
aggregate amount of $100,000, including: (a) amounts to be paid to Hydro-Quebec; (b) unpaid
taxes; (c) payments under an existing mortgage; and (d) debts to service providers; and (ii) be
responsible for all liabilities owed to the City of Notre-Dame-de-Montauban and shall have
to negotiate a new lease with it.
The entire surface of the property covers a total of 6,372 hectares. Finders' fees may be paid by
Secova in connection with the acquisition.
Secova will, on behalf of, and following instructions of, DNA, distribute, through its transfer agent,
the shares issuable to DNA directly to DNA shareholders. If the debenture is not fully converted
in the 12 months following the execution of the formal agreement, the conversion price shall
automatically be increased to 10 cents, and the number of shares of Secova to be issued pursuant
to such conversion shall be reduced accordingly.
The completion of the acquisition is subject to its approval by the shareholders of DNA and the
TSX Venture Exchange.
About Secova Metals Corp.
Secova Metals is a Canadian exploration company focused on building a strong asset base
through exploration of undervalued projects in Canada. Management has demonstrated expertise
in advancing gold exploration projects into acquisition targets, most notably in the province of
Quebec. The company's main focus is its 100-per-cent ownership of the Eagle River project, which is
adjacent to, and on trend to, several gold projects in the Windfall Lake district of Urban Barry in
Quebec. Secova will use its expertise in early-stage exploration to create shareholder value by
attempting to prove out the potential resource in these assets.
We seek Safe Harbor.
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