Terra Ventures Inc. (TSX VENTURE:TAS) ("Terra") and Terrex Energy Inc.
("Terrex") would like to announce the following updates in respect to the
previously announced spin-out of Terrex pursuant to a plan of arrangement (the
"Arrangement"), listing of the Terrex common shares on the TSX Venture Exchange
(the "Exchange"), the Terrex private placement and additions to the Terrex board
and management.
Terrex Spin-out Transaction, Private Placement and Listing on the Exchange
Terra's previously announced special meeting of shareholders to consider the
Arrangement to give effect to the spin-out of Terrex as a public company will be
held on June 4, 2010. If the Arrangement is approved by shareholders and the
applicable court, Terra expects that the Arrangement would be completed on or
about June 9, 2010.
It is a condition to completion of the Arrangement that the shares of Terrex be
approved for listing on the Exchange. It is a condition to listing that Terrex
raise sufficient proceeds in its previously announced private placement so as to
satisfy Exchange minimum listing requirements. Terrex had originally expected to
complete the private placements concurrent with the completion of the
Arrangement on June 9, 2010, but now plans to complete an initial closing of
approximately $4,500,000 in proceeds from the private placement on June 9, 2010
(the "First Closing") and complete the listing of the Terrex shares on or about
June 23, 2010 so as to allow Terrex to complete a second closing of its private
placement on or before June 22, 2010 (the "Second Closing"). The proceeds of
both closings would be held in escrow pending completion of the listing of the
Terrex shares on the Exchange. On this basis, the spin-out of Terrex will be
completed prior to the listing of the Terrex common shares on the Exchange.
Participation of Macquarie in Terrex Private Placements
Terrex has reached an understanding with Macquarie Resource Capital Canada Ltd.
("Macquarie"), an indirect, wholly owned subsidiary of Macquarie Group Limited,
whereby Macquarie, subject to the satisfaction of certain conditions, would
participate in the First Closing by subscribing for 9.9% of the issued and
outstanding shares of Terrex as at closing, at a price of $0.185 per share, and
would participate in the Second Closing to maintain its 9.9% share ownership at
a price of $0.185 per share. The proceeds received from Macquarie as part of the
First Closing and Second Closing would be held in escrow pending satisfaction of
the conditions noted above.
Macquarie would also have the right to subscribe for such additional amount of
shares at a price equal to the 10-day volume weighted average trading price of
the common shares (the "Trading Price") (less the permitted market discount rate
of 25%), subject to a minimum price of $0.185, such that their total investment
will equal $4,000,000, which is to be completed by August 20, 2010. Macquarie's
participation in this subsequent private placement would be subject to
satisfaction of certain conditions, including completion of definitive
documentation, Terrex's receipt of gross proceeds of at least $6,500,000 from
the private placements completed on or before June 23, 2010, listing of Terrex
shares and Macquarie's being satisfied with the purchase price.
Concurrent with closing of the subsequent private placement, Terrex would issue
to Macquarie purchase warrants (the "Purchase Warrants") to acquire up to
2,000,000 common shares of Terrex at an exercise price equal to the greater of
the Trading Price or $0.185. The Purchase Warrants will be subject to vesting
conditions (and will vest and become exercisable as to one-third on each of the
first, second and third six month periods from the date of grant) and will
expire five years from the date of grant.
In addition, concurrent with closing of the subsequent private placement, Terrex
would provide Macquarie with the right, but not the obligation, to appoint a
person as a director of Terrex or to have an observer attend Terrex Board
meetings, so long as Macquarie's equity investment represents 15% or greater of
the issued and outstanding shares. Macquarie has advised Terra and Terrex that
it does not currently intend to appoint a director to sit on the Board.
Assuming completion of the private placements as contemplated, Macquarie is
expected to hold in excess of 25% of the issued and outstanding shares of
Terrex. Accordingly, Macquarie will be deemed by the Exchange to be a "Control
Person" of Terrex, as defined in the Exchange Corporate Finance Manual.
Shareholders of Terra will be asked to approve Macquarie as a potential new
"Control Person" at the June 4, 2010 shareholders meeting in accordance with the
requirements of the Exchange.
Terrex will pay a finder's fee of 5% to certain persons in connection with the
private placements, including any finder who introduced a subscriber to the
private placements, payable in cash at the time of closing, provided that no
finder's fee shall be payable in respect of any amount subscribed for by the
directors and officers of Terrex and, for certainty, excluding subscriptions
introduced to the private placement by Terrex. In addition, Terrex has agreed to
pay a fee equal to 2% of the gross proceeds from the private placements to Nova
Bancorp Securities Ltd. for the provision of management and financial adviser
services to Terrex in connection with the private placements. Harry Knutson, a
director of Terrex, is the Chairman and Chief Executive Officer of Nova Bancorp
Securities Ltd.
Terrex intends to use the net proceeds from the private placements to satisfy
the minimum listing requirements of the Exchange and also intends to use the net
proceeds to acquire, through acquisitions, joint ventures or participation
arrangements, interests in properties where improved oil recovery and enhanced
oil recovery potential has been identified by management. The Corporation will
apply the improved oil recovery and enhanced oil recovery technologies and
procedures as dictated by the by logistics and characteristics of each
reservoir, to improve or enhance production and access additional recoverable
reserves.
Completion of the private placements is subject to final acceptance of the Exchange.
Update to Terrex Board of Directors and Management Team
In addition, Terrex is pleased to announce the following additions to its Board
of Directors:
Tony Angelidis, B.Sc., P.Geol., Director, Calgary, AB:
Mr. Angelidis is a professional geologist with over 25 years experience in the
oil and gas industry. He is a co-founder and currently acts as a Director, and
Senior Vice President Exploration of Delphi Energy Corp. During his career, Mr.
Angelidis has founded and held senior executive positions with a number of
publicly listed exploration and production companies including Renata Resources
Inc. and Prize Energy Inc.
R. James Brown, B.Comm., C.A., Director, Calgary, AB:
Mr. Brown is a Chartered Accountant and has held senior financial positions with
a variety of resource based corporations during his 35 year career. He has held
the position of Vice President and Chief Financial Officer of Fording Canadian
Coal Trust, High Point Resources Inc., Terraquest Energy Inc., and Richland
Petroleum Corporation among others. Currently Mr. Brown serves as a Director and
Chairman of the Audit Committees of Culane Energy Corp. and Twin Butte Energy
Ltd.
Jonathan A. Lexier, B.Sc., M.B.A., P.Eng., Director, Calgary, AB:
Mr. Lexier is an independent businessman and a professional engineer with 27
years experience in the oil and gas industry. Most recently he served as
President and Chief Executive Officer of Highpine Oil & Gas Ltd, prior to which
he was the Chief Operating Officer of NAL Resources Management Ltd.
Additionally, Mr. Lexier was employed with Mobil Oil Canada Ltd. for
approximately 20 years during which he held a variety of positions.
In addition to the above noted additions, the following individuals are also
members of the Terrex Board of Directors:
Kim N. Davies, B.Sc., P.Geoph., Director, President & CEO, Calgary, AB:
Ms. Davies is a professional geophysicist with 29 years experience in the oil
and gas industry. She was the founder and president of Martin Head Oil & Gas
Ltd., a private company formed in 2007 to focus on unconventional oil resources
in the WCSB. Prior to Martin Head, from 1996 through 2006, Ms. Davies was Vice
President Exploration and New Ventures of Compton Petroleum Corporation.
Additionally, she has held positions as a Senior Geophysicist at Penzoil Canada
Inc and Petro Canada Inc. with a focus on new concepts and exploration.
James Hutton, B.Sc., M.B.A., Director, Vancouver, BC
Mr. Hutton has spent his career in the financial services industry and for the
past 20 years has specialized in structured and resource company finance. He is
currently the Chairman of the Board of Directors of Terra Ventures Inc. and also
serves as President and Chief executive officer of Hutton Capital Corporation,
Hutton Capital Management and Hutton Development Corp, companies engaged in
investment banking and real estate development. Additionally, Mr. Hutton was the
founder, President and Chief Executive officer of the Canada Dominion Resources
group.
Harry L. Knutson, B.A., C.C.D., Director and Chairman, Vancouver BC:
Mr. Knutson founded Nova Bancorp Group (Canada) Ltd., a private investment
company with a focus on the energy sector, and has served as its Chairman and
Chief Executive Officer since the company's inception in 1982. Previously he
held senior management positions with a number of financial services and
investment companies. Mr. Knutson is currently a director of Bonavista Energy
Trust, Pure Energy Services Ltd., Novus Energy Inc., and Canadian Phoenix
Resources Corp. among others.
In addition to the above, Mr. Robert G. McMorran, C.A., and Chief Financial
Officer of Terra Ventures Inc. is currently a member of the Terrex Board.
Concurrent with the closing of the Arrangement, Mr. McMorran intends to resign
from the Board.
The Board of Directors of Terrex is comprised of individuals with a broad range
of experience and expertise in the energy and resource sector, capital markets,
finance and corporate governance. They have held senior positions within a range
of successful organizations and are recognized for their technical and
management abilities. Their combined experience and expertise will provide
Management with invaluable advice, direction and support.
Key Personnel
In addition to Kim Davies, President and CEO referred to above, key members of
the Terrex Management Team are:
Norman G. Knecht. B.Ed., C.A., VP Finance and CFO, Calgary, AB:
Mr. Knecht is a Chartered Accountant with over 35 years management, finance, tax
and accounting experience. He was VP Finance & CFO of Compton Petroleum
Corporation a TSX and NYSE listed company from 1997 through 2008 prior to which
he was a partner with a national accounting firm.
Kurt Miles, B.Sc., VP Land, Calgary, AB:
Mr. Miles is a landman with over 30 years of management, comprehensive land
contract and negotiation experience. Most recently, Mr. Miles was a cofounder
and VP Land of Cobalt Energy Ltd.
Keenon Jang, B.Sc., P.Geol., Manager of Geology, Calgary, AB:
Mr. Jang is a professional geologist with 26 years technical play generation
experience in multiple reservoirs in western Canada. Mr. Jang was the founder
and President of Fury Energy Co. Ltd, a private prospecting company from 2004
through 2009 prior to which he was Vice President, Exploration of Jurassic Oil
and Gas Ltd. Mr. Jang has also held Senior and Area Geologist positions with
Renata Resources Inc. and Gulf Canada Resources Ltd.
Dr. John D. M. Belgrave, M.B.A., Ph.D., P.Eng., Director of Technology, Calgary, AB:
Dr. Belgrave is a professional engineer with 29 years management and reservoir
engineering experience specializing in Enhanced Oil Recovery, relating to
conventional and heavy oil operations, in Canada and throughout the world. Dr
Belgrave has designed and managed significant recovery projects for EnCana
Corporation, BP Canada Inc., Triton-Vuko Energy Group (Nations Energy), among
others. Until 1997, Dr. Belgrave was a tenured associate professor at the
University of Calgary, Department of Chemical & Petroleum Engineering. Currently
Dr. Belgrave is President of Belgrave Oil & Gas Corp., a private enhanced oil
recovery company.
About the Companies
Terra Ventures Inc. is a Vancouver, British Columbia based junior exploration
company focused principally on acquiring and developing quality uranium projects
which have world class potential. The company is dedicated to building
shareholder value by acquiring strategic uranium properties in this period of
strengthening global demand for uranium supply. The Company's combination of
strategic land positions, advanced stage projects and no risk carried interest
projects - combined with technical expertise and management's fundraising
ability - are the foundation for growth in the uranium business. The Company's
common shares are listed and trade on the TSX Venture Exchange under the trading
symbol "TAS".
Terrex Energy Inc. is a newly formed Calgary, Alberta based company engaged in
the exploration for, and development and production of petroleum and natural gas
in the Western Canadian Sedimentary Basin. The Company is primarily focused on a
strategy of growing reserves and production through applying proven, improved
and enhanced oil recovery technologies to existing under-exploited, large
original oil in-place medium and light oil reservoirs. Terrex has received
conditional approval to list its common shares for trading on the TSX Venture
Exchange.
This News Release contains forward-looking statements. Forward-looking
statements are statements which relate to future events. In some cases, you can
identify forward-looking statements by terminology such as "may", "should",
"expects", "plans", "anticipates", "believes", "estimates"' "predicts",
"potential", or "continue"' or the negative of these terms or other comparable
terminology. In particular, this news release contains the following
forward-looking statements: timing of the meeting approving the Arrangement,
timing of completion of the Arrangement (and spin-out of Terrex), listing of the
Terrex common shares on the Exchange, Exchange approval of the private
placements, participating by Macquarie in the private placements, the terms,
conditions and timing of the private placements, Macquarie becoming a "Control
Person", Macquarie's intention to elect to have a representative director on the
Terrex Board, and the terms and conditions of the Purchase Warrants. These
statements are only predictions and involve known and unknown risks,
uncertainties and other factors that may cause our or our industry's actual
results, levels of activity, performance or achievements to be materially
different from any futures results, levels of activity, performance or
achievements expressed or implied by these forward-looking statements
With respect to forward-looking statements contained in this news release, Terra
and Terrex have made assumptions regarding, among other thing, the entering
into, and terms, of a definitive subscription agreement with Macquarie and the
listing of Terrex on the TSX Venture Exchange. Although Terra and Terrex believe
that the expectations reflected in the forward-looking statements contained in
this document, and the assumptions on which such forward-looking statements are
made, are reasonable, there can be no assurance that such expectations will
prove to be correct. Readers are cautioned not to place undue reliance on
forward-looking statements included in this document, as there can be no
assurance that the plans, intentions or expectations upon which the
forward-looking statements are based will occur. By their nature,
forward-looking statements involve numerous assumptions, known and unknown risks
and uncertainties that contribute to the possibility that the predictions,
forecasts, projections and other forward-looking statements will not occur,
which may cause actual results in future periods to differ materially from any
estimates or projections of future performance or results expressed or implied
by such forward-looking statements. These risks and uncertainties include, among
other things, the following: that the Arrangement may not close when planned or
at all or on the terms and conditions set forth herein; the failure of Terrex
and Macquarie to enter into a definitive subscription agreement; the ability of
Terra and Terrex to obtain the necessary shareholder, court, Exchange,
regulatory and other third party approvals required in order to proceed with the
Arrangement; the ability of Terrex to obtain regulatory and Exchange approvals
required to proceed with the private placements and the other factors described
under "Risk Factors" in Terra's management information circular dated May 5,
2010 in respect of the shareholders meeting to be held on June 4, 2010, a copy
of which is available at www.sedar.com. Readers are cautioned that this list of
risk factors should not be construed as exhaustive. These statements are made as
at June 3, 2010, and except as required by applicable law, neither Terra nor
Terrex intends to update any of the forward-looking statements to confirm these
statements or actual results.
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