Completion of Qualifying Transaction and $3.0 Million in Financings
TRANS NATIONAL MINERALS INC.
5th Floor, 530 Hornby Street Vancouver, BC V6C 2E7
TSXV: TNF.P June 29, 2010
For Immediate Release
NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
COMPLETION OF QUALIFYING TRANSACTION AND $3.0 MILLION IN FINANCINGS
(Vancouver, June 29, 2010) – Trans National Minerals Inc. (TSXV: TNF.P) (“Trans National” or the “Company”) is pleased to announce the closing on June 25, 2010 of its acquisition of an option (the “Option”) to acquire a 100% interest in and to certain unpatented mineral lode claims known as the Pine Tree copper-molybdenum property (the “Pine Tree Property”) located in the Pilot Mountains in Mina, Nevada. The Company acquired the Option from Mosquito Mining Corp. (US) (“Mosquito US”), a whollyowned subsidiary of Mosquito Consolidated Gold Mines Limited (“Mosquito”) pursuant to an option agreement (the “Option Agreement”) dated January 26, 2010, as amended on April 6, 2010 and May 31, 2010 among the Company, Mosquito and Mosquito US. The acquisition of the Option and concurrent equity financings constitute the Company’s Qualifying Transaction under the policies of TSX Venture Exchange (“TSXV”). As a result of the completion of these transactions, the Company will cease to be a capital pool company, and its common shares are expected to resume trading on TSXV as a ‘Tier 2 Mining Issuer’ effective at market open on Friday July 2, 2010 under the new stock symbol ‘TNF’.
PINE TREE PROPERTY AND THE OPTION
The Pine Tree Property is an exploration stage mineral resource property with the targeted resources being copper and molybdenum as well as other mineral values. The property is comprised of 59 mineral lode claims covering an area of approximately 1320 acres located in the Pilot Mountains Mining District in west-central Nevada.
The Pine Tree Property is subject to a 2% net smelter return royalty (the “NSR Royalty”) in favour of Western Geosciences, Inc. and James H. Meyers. Upon the payment of US$2,000,000 in royalty payments, the NSR Royalty will be reduced from 2% to 0.5%.
In order to maintain the Option in good standing and earn a 100% interest in the Pine Tree Property, the Company is required to make the following payments and share issuance to Mosquito US or Mosquito:
(1) on closing of the Qualifying Transaction (the “Effective Date”), a cash payment of two hundred thousand ($200,000) dollars and one million (1,000,000) common shares (this payment and share issuance were made on June 25, 2010);
(2) on or before the first anniversary date of the Effective Date, an additional cash payment of two hundred thousand ($200,000) dollars and an additional one million (1,000,000) common shares;
(3) on or before the second anniversary date of the Effective Date, a cash payment of an additional two hundred thousand ($200,000) dollars and an additional one million (1,000,000) common shares;
(4) on or before the third anniversary date of the Effective Date, a cash payment of an additional two hundred thousand ($200,000) dollars and an additional one million (1,000,000) common shares; and
(5) on or before the fourth anniversary date of the Effective Date, a cash payment of an additional two hundred thousand ($200,000) dollars and one million (1,000,000) common shares.
In addition, the Company must incur aggregate exploration and development expenditures on the property of three million ($3,000,000) dollars on or before the fourth anniversary date of the Effective Date, subject to minimum expenditures of five hundred thousand ($500,000) dollars being incurred each year on or before the applicable anniversary date of the Effective Date.
During the option period, the Company will also be responsible for making advance royalty payments of US$25,000 per year to the holders of the NSR Royalty.
The Company treated the acquisition of the Option as non-arm’s length transaction by virtue of the fact that Hongxue Fu, the Chief Executive Officer and a director of the Company, is also a director and officer of Mosquito and at the time the Option Agreement was entered into, Mr. Fu and his wife indirectly held 72% of the Company’s issued and outstanding shares and approximately 18.99% of Mosquito’s issued and outstanding shares. As a consequence, the Company obtained minority shareholder approval for the acquisition of the Option at an annual and extraordinary meeting of its shareholders held on May 18, 2010.
CONCURRENT FINANCINGS
In conjunction with the completion of the acquisition of the Option, the Company completed equity financings involving the issuance of an aggregate of 10,000,000 common shares at a price of $0.30 per share for gross proceeds of $3,000,000. $1,020,000 of this amount was raised pursuant to a nonbrokered private placement (the “Private Placement”) of 3,400,000 common shares to International Energy & Mineral Resources Investment (Hong Kong) Company Limited (“IEMR”), a company controlled by Mr. Fu and his wife. The remaining $1,980,000 was raised pursuant to the brokered sale of 6,600,000 common shares by way of a short form offering document dated June 4, 2010 (the “SFOD Offering”).
Macquarie Private Wealth Inc. (“Macquarie”) acted as agent for the SFOD Offering. In consideration for the services provided by Macquarie and its sub-agents in connection with the SFOD Offering, the Company paid a commission comprised of $158,400 in cash, a corporate finance fee of $30,000 in cash and issued compensation options entitling the holders to acquire up to an aggregate of 528,000 common shares at a price of $0.30 per share for a period of 24 months from closing of the SFOD Offering.
The net proceeds of the financings will be used primarily for the exploration of the Pine Tree Property, to fund the Company’s general and administrative expenses and to provide the Company with a working capital reserve.
The common shares issued under the Private Placement are subject to a four month hold period from the date of closing under applicable securities laws and TSXV policies. In addition, all such common shares are subject to a three year staged release escrow pursuant to TSXV Policies.
Of the common shares issued under the SFOD Offering, an aggregate of 854,000 shares are subject to a four month hold period from the date of closing under applicable securities laws and TSXV policies.
On behalf of the Board of Directors of TRANS NATIONAL MINERALS INC.
“Hongxue Fu”
Hongxue Fu President and Chief Executive Officer
For further information, contact: Judson Culter, Director Trans National Mineral Inc.
206-979-9977 [email protected]
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.
The securities referred to in this news release have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or applicable state securities laws, and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons (as such term is defined in Regulation S under the U.S. Securities Act) unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration requirements is available. This press release does not constitute an offer to sell or a solicitation of an offer to buy any of these securities within any jurisdiction, including the United States.
Cautionary Note Regarding Forward-Looking Statements
This news release contains forward-looking information within the meaning of Canadian securities laws. Such information includes, without limitation, information regarding proposed exploration activities. Although the Company believes that such information is reasonable, it can give no assurance that such expectations will prove to be correct. Forward-looking information is typically identified by words such as: believe, expect, anticipate, intend, estimate, postulate and similar expressions, or are those, which, by their nature, refer to future events. The Company cautions investors that any forward-looking information provided by the Company is not a guarantee of future results or performance, and that actual results may differ materially from those in forward looking information as a result of various factors, including, but not limited to, the state of the financial markets for the Company’s equity securities, the state of the market for copper and molybdenum or other minerals that may be produced generally, recent market volatility; variations in the nature, quality and quantity of any mineral deposits that may be located, the Company's ability to obtain any necessary permits, consents or authorizations required for its activities, to raise the necessary capital or to be fully able to implement its business strategies and other risks associated with the exploration and development of mineral properties. The reader is referred to the Company's information circular dated March 31, 2010 for its annual and extraordinary meeting of its shareholders held on May 18, 2010 and its short form offering document dated June 4, 2010 for a more complete discussion of such risk factors and their potential effects, copies of which may be accessed through the Company’s page on SEDAR at www.sedar.com.