VANCOUVER,
Feb. 25, 2013 /CNW/ - Plains Creek
Phosphate Corporation (the "Company") (TSX‐V: PCP) is
very pleased to announce that it has signed a share purchase and
exchange agreement (the "Agreement") for the
acquisition by the Company of the remaining 49.9% of the shares of
its 50.1%-owned subsidiary, GB Minerals AG ("GB"),
which owns 100% of the Farim Phosphate Project mineral property in
Guinea-Bissau, West Africa. The Agreement will allow the
Company to consolidate ownership of its phosphate mineral property
and open up opportunities for further advancing the project.
The Company's Executive Chairman, Owen Ryan commented, "This strategic
transaction is a key step required to significantly enhance the
ability of the Company to accelerate the development of the Farim
phosphate deposit. We welcome the confidence of our
shareholders and partners who have acted with us to help facilitate
this objective. We also thank the Government of Guinea Bissau who have endorsed this
transaction."
Highlights of the transaction underlying the
Agreement (the "Transaction") and certain related
transactions include:
- acquisition of the remaining 49.9% of the shares of GB from
Aterra Investments Limited ("Aterra") and WAD Consult AG
("WAD") in exchange for issuing common shares of the
Company;
- the issuance of additional common shares of the Company to WAD
to eliminate third party indebtedness of approximately CHF806,000 owed by GB to WAD;
- entering into a settlement agreement with a main creditor of
the Company to free-up capital and increase the working capital
available to the Company;
- prior to the completion of the Transaction, a name change of
the Company to "GB Minerals Ltd." and a 20-to-1
consolidation of its issued and outstanding shares to provide a
more suitable share structure for future financings and strategic
initiatives to advance the Company's Farim Phosphate Project;
and
- the seeking of shareholders' approval of the Transaction, and
the contemplated name change and share consolidation, at the annual
meeting of the Company's shareholders to be held on March 25, 2013.
The Transaction
On February 22,
2013, the Company entered into the Agreement for the
Transaction with its wholly-owned subsidiary, Plains Creek Mining
Limited, GB, Aterra and WAD. Under the Agreement, the Company
agreed to: (i) acquire the remaining 49.9% ownership of GB from
Aterra (as to 24.9% that it will acquire from WAD immediately prior
to its sale thereof to the Company) and WAD (as to the remaining
25.0%), by issuing post-consolidation common shares of the Company
(the "Shares") comprised of 9,661,200 Shares to Aterra (the
"Aterra Shares") and 9,700,000 Shares to WAD
(the "WAD Shares"); and (ii) to issue 1,250,000 Shares
to WAD in connection with eliminating third party indebtedness of
approximately CHF806,000 owed by GB
to WAD. Before entering into the Agreement, the Company reached a
settlement agreement with its main creditor, GBM Minerals
Engineering Consultants Limited, deferring payments for up to three
years. In connection with the Transaction, the Company is
proposing to consolidate its issued and outstanding securities on a
20-to-1 basis (the "Consolidation") to provide a more
suitable share capital structure for future financings and
strategic initiatives. Likewise, the Company is also
proposing to change its name to "GB Minerals Ltd." (the "Name
Change") to more closely identify it with its operations and
ownership of the Farim Phosphate Project.
The closing of the Transaction is anticipated on
April 4, 2013, but is subject to
several conditions precedent, including: (a) completion of the
Consolidation; (b) shareholder and regulatory approval of the
Transaction; (c) delivery to the Company from its financial
advisor, Ross Glanville &
Associates Ltd. (the "Financial Advisor"), of a final
written fairness opinion confirming the Financial Advisor's
previous advice to the Company's board that the Transaction is fair
to the Company and its shareholders, from a financial point of view
(the "Fairness Opinion"); (d) the Company
continuing to conduct is business in the ordinary course consistent
with past practice pending the closing; (e) the Company entering
into a lockup agreement with WAD prohibiting WAD's sale of any of
the WAD Shares for one year after completion of the Transaction and
restricting sales thereafter for a further 9 months, and (f) the
Company entering into a registration rights agreement with
Aterra.
The foregoing is merely a summary of certain
material commercial terms of the Agreement, and so the reader
should review the Agreement directly for greater detail.
Accordingly, the summary is qualified by the full text of the
Agreement which shall be available for review under the Company's
profile at www.sedar.com.
Shareholders' Meeting and
Approvals
Annual Meeting
The Company has scheduled an annual general and
special meeting for March 25, 2013
(the "Meeting"), notice of which was filed on SEDAR on
February 6, 2013. At the Meeting, the
Company will attend to customary annual general meeting matters,
including receiving the financials for the most recently completed
year end, appointing the Company's auditor and approving such
auditor's remuneration, fixing the number of directors, appointing
directors and approving the Company's stock option plan. In
connection with the approval of the Company's stock option plan,
the Company will also be seeking disinterested shareholder approval
of the proposed grant of certain stock options to the Company's new
Executive Chairman, interim CEO and President, Mr. Owen Ryan.
Approval of Consolidation & Name Change
In addition to the annual general meeting
matters, the Company also intends to seek shareholder approval for
the Consolidation and Name Change. The Consolidation is being
carried out on a 20-to-1 basis, such that all of the Company's
issued and outstanding securities will be consolidated from the
currently outstanding 387,877,088 common shares to 19,393,854
common shares (not including the common shares to be issued in
connection with the Transaction), warrants to acquire 22,750,000
common shares will become warrants to 1,137,500 common shares and
options to acquire 26,390,000 common shares will become options to
acquire 1,319,500 common shares.
The Consolidation and name Change are subject to
shareholder approval and TSX Venture Exchange
(the "Exchange") acceptance. As indicated above,
the Consolidation is fundamental to the overall structure of the
Transaction contemplated in the Agreement and, together with having
100% ownership of the Farim Phosphate Project, will provide a more
suitable share capital structure for future financings to help
develop the Company's Farim Phosphate Project in Guinea Bissau and to allow the Company to
capitalize on strategic transactions and opportunities going
forward.
Approval of the Transaction
At the Meeting, the Company will also seek
shareholder approval for the Transaction.
The Transaction constitutes a "related party
transaction" as that term is defined under Multilateral Instrument
61-101 Protection of Minority Security Holders in Special
Transactions ("MI 61-101"). Therefore, pursuant to
MI 61-101 and Exchange Policy 5.9 Related Party
Transactions, the Company must obtain approval of the majority
of the minority of its shareholders in accordance with the minority
shareholder approval requirements of MI 61-101 and in order to
obtain Exchange acceptance to complete the Transaction.
The details of the Transaction, the
Consolidation and Name Change, and other aspects of the Meeting,
including the background to the Transaction and disclosure required
by MI 61-101 and National Instrument 51-102 Continuous
Disclosure Obligations ("NI 51-102") are included in the
Company's information circular for the Meeting, which will be
delivered to shareholders and filed on SEDAR (the
"Information Circular").
As the Transaction constitutes a "significant
acquisition" as that term is defined under Part 8 of NI 51-102, pro
forma financial statements giving effect to the Transaction,
comprised of a pro forma balance sheet as at December 31, 2012 and income statements for the
six months ended December 31, 2012
and the twelve months ended June 30,
2012 will be attached to the Information Circular. The
Information Circular will also include a complete copy of the
Fairness Opinion provided by the Financial Advisor.
ON BEHALF OF THE BOARD
"Owen Ryan"
Owen Ryan
Executive Chairman, Director, and
Interim President and Chief Executive Officer
About Plains Creek Phosphate
Corporation
Plains Creek Phosphate Corporation is a Canadian
mining exploration and development company focused on advancing its
Farim Phosphate Project in Guinea‐Bissau, West Africa through its subsidiary, GB
Minerals AG. On January 17, 2013, the
Company filed on SEDAR its feasibility study dated effective
December 19, 2012 for the Farim
Phosphate Project as its single current technical report (the
"Report") in accordance with National Instrument 43-101
Standards of Disclosure for Mineral Projects.
The Company's shares are listed on the Exchange
under the trading symbol "PCP". For additional information, please
visit us at www.plainscreek.com.
Cautionary Statement
Statements in this release may be viewed as
forward‐looking statements. Such statements involve risks and
uncertainties that could cause actual results to differ materially
from those projected. There are no assurances the Company can
fulfill such forward‐statements and the Company undertakes no
obligation to update statements. Such forward looking statements
are only predictions; actual events or results may differ
materially as a result of risks facing the Company, some of which
are beyond the Company's control.
The reader should be cautioned that there are
risks that could affect the potential development of the Farim
Phosphate Project's (the "Project") mineral resources, which
include: the political instability in Africa and Guinea‐Bissau in particular, which
is where the Project is located; and that additional financing will
be required to ultimately develop the Project and the ability to
obtain such financing on favorable terms will be affected by
prevailing market conditions. A more detailed discussion of such
risks are outlined in the Company's Management's Discussion &
Analysis and the Report, all of which are filed under the Company's
profile on SEDAR at www.sedar.com.
NEITHER 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.
SOURCE Plains Creek Phosphate Corp.