News Agencies Becker Gold Mines Ltd.
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BECKER GOLD MINES LTD.
Suite 680 - 789 West Pender Street, Vancouver, BC V6C 1H2 Phone: 604-632-1764 Fax: 604-669-0384
NEWS RELEASE
January 21, 2011
BECKER GOLD MINES LTD. ANNOUNCES ACQUISITION OF CAP CAPITAL CORP.
BECKER GOLD MINES LTD. (NEX: BDF.H) (the “Company”) is pleased to announce that it has signed a letter of intent with Cap Capital Corp. (“Cap Capital”), a closely-held British Columbia mining exploration company, pursuant to which the Company will acquire all of the issued and outstanding shares of Cap Capital (the “Acquisition”). The purchase price for the acquisition will be payable by the issuance of a total of 12,284,782 common shares of the Company (“Shares”) at a deemed issue price of $0.20 per Share. The Acquisition will form the basis of the Company’s reactivation from the NEX Board to the TSX Venture Exchange (the “TSX-V”); subject to the Company satisfying the TSX-V that it meets the “Tier 2” listing requirements for an issuer in the Mining Issuer listing category.
Gary Freeman, the current President and a director of the Company, will step down as President of the Company and be replaced by Stephen Kenwood, P.Geo., an existing member of the Company’s board, who will now lead the Company in the Acquisition process. John LaGourgue, of Vancouver, BC, is the sole officer and director of Cap Capital, and is at arm’s length to the Company.
The principal terms of the Acquisition are as follows:
1. The Acquisition will be governed by a definitive share purchase agreement between the Company, Cap Capital and the 46 Cap Capital shareholders (the “Cap Shareholders”) that will supersede the current letter of intent documenting the parties agreement in principal.
2. The Company will undertake a non-brokered private placement up to 4.5 million units of the Company (“Units”) at a price of $0.20 per Unit for gross proceeds of up to $900,000 (the “Financing” and, together with the Acquisition, the “Transaction”). Each Unit will comprise one Share and Share purchase warrant (a “Warrant”). Each Warrant will be exercisable to acquire one additional Share at a price of $0.30 per Share for a period of two years from the closing.
3. To assist in placing the Financing, the Company proposes to pay certain arm’s length persons who will introduce subscribers to the Financing finder’s fees of 7.0% of the gross proceeds of the Financing payable in cash, and finder’s warrants equal in number to 7.0% of the Units placed (each a “Finder’s Warrants”), each Finder’s Warrant being exercisable to acquire one additional Unit (as defined above) at a price of $0.20 per Unit for a period of two years from the closing.
4. The Company expects to change its name to a new name to be determined and that is more representative of its new business in Mexico.
5. Upon completion of the proposed Transaction, the existing directors of the Company will remain in place, and such other director or directors as may be agreed between the parties.
6. The Transaction is not expected to result in the creation of any new insiders or control persons.
The Acquisition is a “related party transaction” within the meaning of Multilateral Instrument 61- 101 - Protection of Minority Security Holders in Special Transactions (“MI 61-101”) as five of the 46 Cap Shareholders are related and/or interested parties of the Company, namely: GF Consulting Corp. (“GFCC”), owned by Gary Freeman, the current President and a director of the Company; 0713708 BC Ltd. (“0713708”), owned by Stephen Kenwood, the proposed President and a director of the Company; Maureen McCann (“McCann”), wife of Chris Theodoropolous, a director of the Company; BBC Capital Corp. (“BBC”), owned by Ronald Husband, a director of the Company; and Tuareg Consulting Inc. (“TCI”), owned by Scott Kelly, the Chief Financial Officer of the Company. Relying on exemption provided in sections 5.5(b) of MI 61-101, the Company will not be required to obtain a formal valuation with respect to the Acquisition.
In connection with the Acquisition, GFCC, 0713708, McCann, BBC and TCI will receive 664,667, 707,100, 522,500, 133,333 and 643,333 Shares, respectively. Not including any securities that may be issued in the Financing, the percentage of Shares beneficially owned or controlled by Mr. Freeman, Mr. Kenwood, Mr. Theodoropolous, Mr. Husband and Mr. Kelly will change from 3% to 5%, 4% to 5%, 0% to 3%, 3% to 1% and 0% to 4%, respectively.
The principal asset of Cap Capital is its wholly-owned subsidiary Minera Mar De Plata, S.A. de C.V. (“MMP”); MMP in turn holds a 100% interest in the Chipriona and Los Pinos properties, located in Sonora State, Mexico. The Chipriona property is comprised of 3 groups of concessions, the La Chipriona, the Maria Jose, and the Chipriona Fractions. The Company considers Chipriona to be the principal property.
Company management expects that the net proceeds of the Financing will be used to finance an exploration program on the Chipriona property and for general working capital. As part of its application to the TSX-V Exchange for the Acquisition, the Company expects to file an independent technical report on the Chipriona property prepared in accordance with NI 43-101.
All Shares and Warrants issued under the Financing will be subject to a standard four-month hold period.
Completion of the Transaction is subject to a number of conditions, including TSX-V acceptance and disinterested approval of the Company’s shareholders. The Acquisition 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 to be prepared in connection with the Acquisition, any information released or received with respect to the Acquisition may not be accurate or complete and should not be relied upon. Trading in the securities of the Company should be considered highly speculative.
BECKER GOLD MINES LTD.
Gary Freeman, President
Forward-Looking Statement Caution
This press release contains certain “forward-looking statements within the meaning of Canadian securities legislation, relating to the proposed Acquisition and Financing (as defined above). Forward-looking statements are statements that are not historical facts; they are generally, but not always, identified by the words “expects,” “plans,” “anticipates,” “believes,” “intends,” “estimates,” ”projects,” “aims,” “potential,” “goal,” “objective,” “prospective,” and similar expressions, or that events or conditions “will,” “would,” “may,” “can,” “could” or “should” occur. Forward-looking statements are based on the beliefs, estimates and opinions of the Company’s management on the date the statements are made and they involve a number of risks and uncertainties. Consequently, there can be no assurances that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. The Company undertakes no obligation to update these forward-looking statements if management’s beliefs, estimates or opinions, or other factors, should change. Factors that could cause future results to differ materially from those anticipated in these forward-looking statements include, but are not limited to, the Company’s inability to secure the Exchange Approval or shareholder approval required to complete the Acquisition, or subscriptions from investors to complete the Financing.
The TSX-V has in no way passed upon the merits of the proposed Transaction and has neither approved nor disapproved the contents of this release.
THIS PRESS RELEASE, REQUIRED BY APPLICABLE CANADIAN LAWS, IS NOT FOR DISTRIBUTION TO U.S. NEWS SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.
THE SECURITIES TO BE ISSUED UNDER THE FINANCING HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933 (AS AMENDED) OR ANY STATE SECURITIES LAWS, AND UNLESS SO REGISTERED MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO U.S. PERSONS EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE UNITED STATES SECURITIES ACT OF 1933 AND APPLICABLE STATE SECURITIES LAWS. THIS PRESS RELEASE IS ISSUED PURSUANT TO RULE 135(C) OF THE UNITED STATES SECURITIES ACT OF 1933 (AS AMENDED), AND DOES NOT CONSTITUTE AN OFFER TO SELL, OR THE SOLICITATION OF AN OFFER TO BUY, NOR SHALL THERE BE ANY SALE OF SECURITIES OF THE COMPANY IN ANY JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH JURISDICTION.