OAKVILLE, ON, Aug. 15, 2014 /CNW/ – Giyani Gold Corp. (TSXV: WDG, JSE: GIY) (“Giyani”) is pleased to announce that it has entered into a binding letter of intent agreement (the “Agreement“) with the shareholders of Horizon Enerji A.Ş. (“Horizon”) and Sumo Coal (Pty) Ltd. (“Sumo”) which outlines the general terms and conditions of a proposed transaction pursuant to which Giyani would acquire all the issued and outstanding securities of Horizon and Sumo by means of a business combination or other form of transaction (the “Transaction”).
Upon completion of the Transaction Giyani will hold a 100% interest in Horizon’s Ceyhan Project, a fully permitted crude oil storage and dry bulk cargo port development project in Turkey, and a 100% interest in Sumo, a cash-flow generating coal operator in South Africa. As consideration, it is expected that common shares in the capital of Giyani will be issued to the shareholders of Horizon and Sumo.
The Transaction and the terms outlined in the Agreement are subject to a number of conditions, including the parties executing a definitive agreement by September 19, 2014 (or such later date as the parties may agree), completion of due diligence investigations to the satisfaction of each of the parties, Giyani obtaining the required financing, acceptance of the Transaction by the TSX Venture Exchange (the “TSXV“), no material adverse change and receipt of all necessary regulatory and shareholder approvals. If all conditions are satisfied, it is expected that the Transaction would close on or about October 30, 2014. There can be no assurance that the Transaction will be completed as proposed or at all.
In connection with the Transaction, it is contemplated that a debt and/or equity financing of up to US$25M will be undertaken by Giyani, with a minimum of US$15M of this financing closing concurrently with the Transaction with the balance of such funds to be raised in due course following the completion of the Transaction. In addition, it is contemplated that the common shares of Giyani will be consolidated on a basis to be determined by the parties.
The Transaction is expected to be structured as a Reverse Takeover (“RTO”) pursuant to Policy 5.2 – Change of Business and Reverse Takeovers of the TSXV. The legal structure for the Transaction will be determined after the parties have considered all applicable tax, securities law, and accounting efficiencies.
“Giyani has assembled a unique package of energy assets that will mold our company in to a major player in the oil services and energy sector. We have delivered on our strategy of acquiring a cash-flow generating asset, which will elevate the profile of our company and remove exploration risk moving forward.” stated Duane Parnham, Executive Chairman of Giyani. “The energy sector is strong and we anticipate that as the sector continues to strengthen our shareholders will be rewarded based on the superior projects Giyani is acquiring and the team we have assembled to progress them.”
Bertan Atalay, an associate of Giyani and a consultant to the parties in the Transaction stated: “With this transaction, Giyani and its Turkish partners are creating a Canadian mid-stream energy company which will have access to a very exciting high growth mid-stream oil and gas opportunity in a strategically important location at the upstream of European markets. The associated dry bulk cargo port facility will allow the new company to take advantage of the increasing demand for energy import port facilities in a high growth Turkish market.”
Trading in the common shares of Giyani has been halted in relation to this announcement. Reinstatement of the trading of Giyani shares will resume upon TSXV’s confirmation that Giyani has satisfied the Requirements for Reinstatement of Trading as set forth in Section 3.4 of TSX Venture Exchange Policy 5.2 – Change of Business and Reverse Takeovers.
About Horizon Enerji
Horizon Enerji is a late stage development business and the 100% owner of the Ceyhan Project, a fully permitted crude oil storage facility and dry bulk port to be located in Ceyhan, Adana on the Mediterranean coast of southeast Turkey. The Republic of Turkey has stated its objective to develop Ceyhan as a major energy hub given its strategic location as the terminus point for crude oil pipelines from the Caspian, central Asia, northern Iraq, and other Middle Eastern States. Near-term plans are also being developed to allow for Russian, Israeli, and Eastern Mediterranean oil & gas to arrive in close proximity to the proposed Ceyhan Project. The planned crude oil storage facility has a permitted capacity of 2 million cubic meters and will be the largest independently owned crude storage facility in the Eastern Mediterranean. The planned dry bulk cargo port will provide much needed additional transport capacity to the region, featuring a cargo pier with a capacity of 20 million tonnes per year.
Sumo is situated in the renowned Witbank coalfield in Middleburg, Mpumalanga province, South Africa. Sumo has operated collieries since 1995 and has generated revenues of between US$50-80 million per year over the last three years by conducting sales internationally and locally. Sumo holds numerous thermal coal assets with a focus to achieve economies of scale in future production, and as part of its growth strategy has formed independently operating subsidiaries in the areas of exploration, drilling, mining, coal beneficiation, and marketing.
Neither the TSX Venture Exchange Inc. 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. The TSX Venture Exchange has not passed upon the merits of the proposed transaction.
Further details about the proposed Transaction will be provided in a comprehensive press release when the parties enter into a definitive agreement and in any management information circular (the “Circular”) to be prepared and filed in respect of the Transaction.
Investors are cautioned that, except as disclosed in the disclosure document 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 Giyani should be considered highly speculative.
If and when a definitive agreement is executed, Giyani will issue a subsequent press release in accordance with the policies of the TSX-V containing the details of the definitive agreement and additional terms of the Transaction including information relating to sponsorship, summary financial information in respect of Sumo and Horizon, and other prescribed information.
On behalf of the Board of Directors of Giyani Gold Corp.
(signed) “Duane Parnham”
Duane Parnham, Executive Chairman
Forward Looking Statements
This news release contains certain statements that may be deemed “forward-looking statements”. Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by the words “expects”, “plans”, “anticipates”, “believes”, “intends”, “estimates”, “projects”, “potential” and similar expressions, or that events or conditions “will”, “would”, “may”, “could” or “should” occur. Although Giyani believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results may differ materially from those in forward-looking statements. Forward-looking statements are based on the beliefs, estimates and opinions of Giyani’s management on the date the statements are made. Except as required by law, Giyani undertakes no obligation to update these forward-looking statements in the event that management’s beliefs, estimates or opinions, or other factors, should change.