Pan Terra Announces Transaction
PAN TERRA INDUSTRIES INC.
PAN TERRA ANNOUNCES TRANSACTION
For Immediate Release November 29, 2010 Calgary, Alberta Trading Symbol: TSXV - “PNT.H”
Calgary, Alberta - Mr. David Heighington, a Director of Pan Terra Industries Inc. (the "Corporation" or “Pan Terra”), is pleased to announce it has entered into a Letter Agreement made November 17, 2010 regarding a proposed transaction (the "Transaction") with 2152508 Ontario Inc. ("2152508"), a privately held company incorporated under the Business Corporations Act (Ontario), pursuant to which the shareholders of 2152508 will exchange all of the issued and outstanding common shares of 2152508 for common shares of Pan Terra, such that Pan Terra will issue an aggregate of 8,000,000 common shares at a deemed issue price of $0.20 per Pan Terra share for a total purchase price of $1,600,000 CDN. Pan Terra shall also issue 1,000,000 warrants to 2152508 shareholders at an exercise price of $0.20 and expiring 12 months from the date of the Transaction closing. Upon completion of the Transaction, it is anticipated that the current shareholders of Pan Terra will own approximately 50 per cent of the issued and outstanding Pan Terra common shares after giving effect to the Transaction and the private placement described below. The Pan Terra common shares to be issued pursuant to the Transaction will be subject to the escrow requirements of the TSXV. The Transaction and the private placement will result in a change of control and management.
Currently, there are 13,570,704 issued and outstanding common shares of Pan Terra. After giving effect to the Transaction and the private placement, Pan Terra will have 27,070,704 common shares issued and outstanding. It is also anticipated that Pan Terra will grant options to acquire an aggregate of 2,707,070 Pan Terra shares at a price of $0.20 per share to the directors, officers, employees and consultants of the resulting entity.
Before trading in Pan Terra's shares can resume on the TSXV, Pan Terra must comply with applicable TSXV requirements, including filing a current National Instrument 43-101 Technical Report on 2152508's Abitibi Lake Property and 2152508 audited financial statements. 2152508 is currently preparing its final National Instrument 43-101 Technical Report and its audited financial statements and expects to file same with the TSXV shortly. A future news release will be issued with further details regarding the technical report and financial statements, including particulars of any proposed name changes.
Pan Terra intends to obtain the requisite shareholder approval by written consent, and shall provide a copy of any applicable documentation with the written consent. Following completion of the Transaction, it is anticipated the resulting issuer will be listed on the TSXV as a Tier 2 mining issuer. The Transaction is arm’s length and will be classified as a reverse take-over and change of business transaction in accordance with TSXV policies.
Private Placement
Concurrently with closing the Transaction, Pan Terra expects to close a private placement financing of $1,200,000 and consisting of up to 3,500,000 units (the "Units") of Pan Terra at a price of $0.20 per Unit for gross proceeds of $700,000 and up to 2,000,000 flow-through units (the “FT Units”) of Pan Terra at a price of $0.25 per FT Unit for gross proceeds of $500,000. Each Unit will consist of one common share and one common share purchase warrant ("Warrant"). Each FT Unit will consist of one flow-through common share and one half of one common share purchase warrant (each whole flow-through warrant, a "FT Warrant") Each Warrant and FT Warrant will be exercisable for one common share of Pan Terra at $0.50 for a period of 24 months from closing. The private placement will remain subject to the final acceptance of the TSXV and a finder's fees may be payable in accordance with the policies of the TSXV. The securities issued will be subject to a four-month hold period.
The proceeds from the private placement offering will be used for general working capital and mineral exploration on the resulting entities properties.
The Lake Abitibi Property
2152508 is the registered owner of 200 mining claim units covering an area of 8,000 acres, which includes the Abitibi Lake Property. The Abitibi Lake Property, located in north eastern Ontario, is situated approximately 110 kilometres north east of Timmins, Ontario and covers an area involving part of the Abitibi Subprovince, commonly referred to as the Abitibi Greenstone Belt. The Abitibi Greenstone Belt has been recognised as a world class geological terrain known for abundant high quality mineral deposits and productive mining operations. Exploration and development efforts within this prolific belt continue to reap rewards.
The Lake Abitibi Property consists of 13 contiguous, manually staked mining claims consisting of 200 mining claim units covering an area of 8,000 acres which is equivalent to 3,200 ha’s. The mining claims are situated in the Sulphur Island Area and Iroquois Point Area located in the Provincial, Administrative District of Cochrane, and the Provincial, Larder Lake Mining Division, Ontario.
The Stimson Property
2152508 also owns 7 mining claims consisting of 111 mining claim units covering 4,200 acres which is equivalent to 1,700 ha’s. The Stimson Property area is located 20 kilometres east-south of the town of Cochrane, Ontario and 70 kilometres northwest of Timmins, 20 kilometres north of Iroquois Falls. Lake Abitibi is situated approximately 30 kilometres to the east and the Quebec Provincial border 75 kilometres to the east.
The property area is situated in the central part of the Archean-aged Abitibi Structural Subprovince of the Superior Geological Province, or more commonly known as the Abitibi Greenstone Belt. The metallic mineral endowment is historically significant and well known , with the most significant production in gold (orogenic/mesothermal to epithermal) and base metals (volcanogenic massive sulphides). Significant activity with some mining, in komatiite- and mafic-ultramafic-hosted nickel-copper+/- platinum group metals is growing.
Insiders and Board of Directors of the Resulting Entity
The current directors and officers of Pan Terra will remain following the completion of the Transaction and two additional nominees from 2152508 shall be appointed as directors and officers of the resulting entity. The following is a description of the proposed directors and officers of the resulting entity. Sean Felker of Burlington, Ontario is the President and sole director of 2152508, however he will not be an insider or control person of the resulting entity.
Mitchell Adam – Vancouver, British Columbia – Proposed President, Chief Executive Officer, and Director of the resulting entity
Mr. Adam, is the president of MGA Capital Corp. which provides management consulting services to public and private companies and various other consulting services including corporate finance and investor relations. Mr. Adam attended undergraduate studies at Simon Fraser University and in 1989 completed the Canadian Securities Course and RR exam. Mr. Adam spent four years working in the brokerage industry at Odlum Brown Ltd. and Nesbitt Thompson Inc. and has been for working with various public companies since 1993, holding the positions of officer and director of several public companies. He is currently the President and CEO of BonTerra Resources Inc. (TSX-V: BTR) and the President and Director of WestStar Resources (TSX-V: WER).
Rick Vaive – Toronto, Ontario – Proposed Director of the resulting entity
Mr. Vaive served as a director of Forsys Metals Corp (“Forsys”) (TSX: FSY) from 2005 to 2010 during the company's growth period as a startup company to developing a fully licensed uranium deposit in Namibia, Africa. Prior to joining Forsys, Mr. Vaive had a 13 year NHL career, most noted as the Toronto Maple Leaf’s youngest captain and the first player in franchise history to score over 50 goals in a single season. Ending his professional hockey career in 1992 with the Buffalo Sabres, Mr.Vaive proceeded as a successful player/coach and head coach in the American Hockey League (AHL), head coach, general manager and director of hockey operations in the East Coast Hockey League (ECHL) and head coach in the Ontario Hockey League (OHL). Mr. Vaive is also a Director of 99 Capital Corporation (TSX-V: WDG).
David D. Heighington LL.B (Hons.) – Calgary, Alberta – Currently a Director of Pan Terra and a proposed Director of the resulting entity
Mr. Heighington is a lawyer and founder of Heighington Law Firm, a securities law boutique operating in Calgary, Alberta. Mr. Heighington practices in the areas of securities, corporate finance, commercial transactions, natural resources and mergers and acquisitions. Mr. Heighington has acted for a broad range of domestic and foreign issuers, and securities dealers, with a particular emphasis on venture capital and mergers and acquisitions. Mr. Heighington has served as a director and officer of numerous publicly traded companies. Mr. Heighington is a member of the Law Society of Alberta and the Canadian Bar Association.
Greg Marr, CFA – Calgary, Alberta – Currently the Chief Financial Officer and Director of Pan Terra and the Proposed Chief Financial Officer and Director of the resulting entity
Mr. Marr has over 25 years of financial and tax expertise and extensive public company experience and has served as Chief Financial Officer and Director VP Finance and Controller for various private and public corporations, many of which have been start ups. Mr. Marr is currently a director and part time CFO for Cromwell Resources Limited, West Isle Energy Inc., and Detector Exploration Ltd., all TSXV listed companies.
Tony Pezzotti – Burnaby, British Columbia – Currently a Director of Pan Terra and a Proposed Director of the resulting entity
Mr. Pezzotti is a retired businessman. Prior to his retirement, Mr. Pezzotti was a co-founder and General Manager of a private British Columbia corporation involved in the steel business. Mr. Pezzotti is an experienced board member who has served on several public company boards, including Offshore Systems International Ltd., First Quantum Minerals Ltd., First Majestic Silver Corp. (currently a director), and Kensington Resources Ltd., which recently merged with Shore Gold Inc.
Sponsorship of the Transaction
Sponsorship of a reverse take-over transaction is required by the TSXV unless exempt in accordance with TSXV policies. Pan Terra intends to apply for an exemption from the sponsorship requirements. There is no assurance that Pan Terra will ultimately obtain an exemption from sponsorship.
Description of Significant Conditions to Closing
Completion of the Transaction is subject to a number of conditions, including but not limited to TSXV acceptance, shareholder and director approvals, the completion of satisfactory due diligence by Pan Terra, the negotiation and execution of definitive documentation, and the completion of a financing to raise gross proceeds of at least $1.2 million and other conditions contained in the Letter Agreement. The Transaction cannot close until the required approvals are 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 Pan Terra should be considered highly speculative.
About Pan Terra
Pan Terra was previously listed on the TSXV and operated as construction site preparation/excavating company until it disposed of all of its assets on December 22, 2006. Pan Terra was subsequently transferred to the NEX as a result of the sale of all of its assets. Pan Terra will remain listed on NEX until it acquires new assets or businesses, which would result in Pan Terra once again meeting the TSXV's initial listing requirements.
The TSXV has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.
For further information, please contact:
Pan Terra Industries Inc.
730, 1015 – 4th Street SW Calgary, Alberta T2R 1J4 Telephone: (403) 237 – 0018
Mr. David Heighington, Director
Email: [email protected]
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 TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of the information contained herein. Certain information regarding the Corporation contained herein may constitute forward-looking statements under applicable securities laws. Such statements are subject to known or unknown risks and uncertainties that may cause actual results to differ materially from those anticipated or implied in the forward-looking statements.
This news release may contain certain forward-looking information and statements, including without limitation, statements pertaining to: (i) Pan Terra's ability to obtain necessary approvals from the TSXV and from its shareholders; (ii) the proposed corporate name change, if applicable, including the Pan Terra's ability to obtain necessary approvals from the TSXV, the Alberta corporate registry, and from Pan Terra's shareholders; and (iii) a potential new stock trading symbol. All statements included herein, other than statements of historical fact, including are forward-looking information and such information involves various risks and uncertainties. There can be no assurance that such information will prove to be accurate, and actual results and future events could differ materially from those anticipated in such information. A description of assumptions used to develop such forward-looking information and a description of risk factors that may cause actual results to differ materially from forward-looking information can be found in Pan Terra’s disclosure documents on the SEDAR website at www.sedar.com. Pan Terra does not undertake to update any forward looking information except in accordance with applicable securities laws.