TORONTO, March 1, 2013 /CNW/ – Further to the press release issued on February 4, 2013, Giyani Gold Corp. (TSXV: WDG) (“Giyani Gold“) and C Level III Inc. (TSXV: CLV.P) (“C Level“), a capital pool company under the policies of the TSX Venture Exchange Inc. (the “TSXV“), are pleased to announce the details of two concurrent financings (the “Offering“) to be carried out in connection with C Level’s qualifying transaction in accordance with the policies of the TSXV (the “Qualifying Transaction“). Pursuant to the Qualifying Transaction, C Level will acquire all of the issued and outstanding common shares of 2299895 Ontario Inc. (“OntarioCo“), a majority owned subsidiary of Giyani Gold, and subject to TSXV approval, the resulting issuer (the “Resulting Issuer“) will be listed on the TSXV.
The proposed Offering will consist of private placements by C Level (the “C Level Private Placement“) and OntarioCo (the “OntarioCo Private Placement“) for combined gross proceeds of a minimum of $2-million up to a maximum of $4-million.
The C Level Private Placement will include a combination of subscription receipts for C Level common shares (the “C Level Subscription Receipts“) at a price of $0.20 per C Level Subscription Receipt and subscription receipts for C Level common shares issued on a “flow-through” basis (the “FT Subscription Receipts“) at a price of $0.25 per FT Subscription Receipt. Upon completion of the Qualifying Transaction, each C Level Subscription Receipt will automatically convert into one common share of the Resulting Issuer (a “Resulting Issuer Share“) and each FT Subscription Receipt will automatically convert into one flow-through common share of the Resulting Issuer.
The OntarioCo Private Placement will consist of subscription receipts for OntarioCo common shares (the “OntarioCo Subscription Receipts“) at a price of $1.00 per OntarioCo Subscription Receipt. Upon completion of the Qualifying Transaction, each OntarioCo Subscription Receipt will automatically convert into five Resulting Issuer Shares.
The Offering will be led by Portfolio Strategies Securities Inc. (the “Agent“). The Agent will receive a cash commission and broker warrants (the “Broker Warrants“) each equal to 7% of the gross proceeds directly raised by the Agent pursuant to the Offering (or 2% of the gross proceeds directly raised by the Agent from retail investors connected to principals of C Level or OntarioCo). Each Broker Warrant will be exercisable to acquire one Resulting Issuer Share at a price of $0.20 per Resulting Issuer Share for a period of 12 months following the closing of the Qualifying Transaction.
The C Level Private Placement remains subject to TSXV approval. No subscriptions for the C Level Subscription Receipts or the FT Subscription Receipts will be accepted from prospective investors unless and until such approval is received. Accordingly, an alternative structure for the Offering may be pursued should it be deemed necessary by C Level, OntarioCo, and/or the Agent. In accordance with the policies of the TSXV, the gross proceeds from the Offering will be held in escrow until completion of the Qualifying Transaction.
Pursuant to the Qualifying Transaction, C Level will acquire all of the issued and outstanding common shares of OntarioCo in exchange for approximately 24,605,265 Resulting Issuer Shares, issued at a price of $0.20 per Resulting Issuer Share, representing a deemed value of $4,921,053 (subject to change, based on the aggregate gross proceeds raised pursuant to the OntarioCo Private Placement). OntarioCo owns the Canadian portfolio of mining properties held by Giyani Gold. The Abbie Lake-Keating Gold Project is the most significant of the mining properties held by OntarioCo along with the Skead gold property and the Baska-Eldorado rare earth elements property. Upon completion of the Qualifying Transaction, Giyani Gold will become the majority shareholder of the Resulting Issuer, which will continue to operate and expand the Canadian mining exploration activities of OntarioCo, independent of Giyani Gold. Giyani Gold will thereafter be purely focused on corporate activities relating to the Giyani Gold Project in South Africa.
It is anticipated that the Qualifying Transaction will be carried out by means of an amalgamation agreement pursuant to which OntarioCo will amalgamate with a wholly-owned subsidiary of C Level, the whole of which remains subject to TSXV approval and certain closing conditions, including receipt of necessary shareholder approvals.
About Giyani Gold and OntarioCo
Giyani Gold is an Africa focused exploration company with gold assets in the Limpopo province of South Africa. Giyani Gold’s Canadian properties, the Abbie Lake-Keating and Skead gold properties and the Baska Eldorado rare earth elements property, are held through OntarioCo, which will be acquired by C Level as part of the Qualifying Transaction. The flagship asset of OntarioCo is the Abbie Lake-Keating gold property located on similar geology and in close proximity to producing gold mines near White River, Ontario. A potential gold bearing structure called the Iron Lake Deformation Zone (the “ILDZ“) spans 27 km through the Abbie Lake-Keating property. An exploration program comprised of geophysics and drilling focused on the ILDZ was conducted on the property in 2012 and new drilling targets on the eastern extension of the ILDZ have been identified for the upcoming 2013 drill program.
About C Level
C Level is a capital pool company with its registered and head office in Toronto, Ontario. The company currently has 5,004,343 common shares issued and outstanding. In accordance with TSXV policy, trading of C Level common shares has been halted and it is not expected to resume until the closing of the Qualifying Transaction.
Sponsorship of a qualifying transaction of a capital pool company is required by the TSXV unless exempt in accordance with TSXV policies. C Level is currently reviewing the requirements for sponsorship and may apply for an exemption from the sponsorship requirements pursuant to the policies of the TSXV; however, there is no assurance that C Level will ultimately obtain this exemption. C Level intends to include any additional information regarding sponsorship in a subsequent press release.
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 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 receive 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. The Parties 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.