Vancouver, British Columbia --(September 7, 2011) - Pembroke Capital Corp. (TSX-V: PBK.P) ("Pembroke" or the "Company"), a capital pool company, is pleased to announce that it has entered into a definitive share exchange agreement (the "Share Exchange Agreement") in respect of its previously announced acquisition of all the issued and outstanding shares of Minfocus International Inc. ("Minfocus") which proposed transaction (the "Proposed Transaction") is intended to constitute the Company's "qualifying transaction" under the policies of the TSX Venture Exchange (the "TSX-V"). The Share Exchange Agreement and the Proposed Transaction remain subject to the approval of the TSX-V and are described in greater detail below.
On June 6, 2011, the Company entered into a letter of intent with Minfocus with respect to the Proposed Transaction (the "Letter of Intent"). The Letter of Intent was amended on August 25, 2011 to provide for an increase in the number of common shares of Pembroke ("Pembroke Shares") issuable to Minfocus under the Proposed Transaction. Trading of Pembroke's Shares on the TSX-V was halted on June 9, 2011 in connection with the announcement of the Proposed Transaction and trading of the Pembroke Shares may not resume until completion of the Proposed Transaction.
Minfocus, a private corporation incorporated pursuant to the Business Corporations Act (Canada), is a mining exploration stage company principally engaged in the business of exploring and developing base (copper, nickel) and platinum-group element (PGE) metal mineral properties. Minfocus currently holds an interest in several properties in the Thunder Bay Mining Division of Northwestern Ontario, including the Nipigon Reefs Property and Weese-Luella Lake Property (the "Properties"), each of which have a recent 43-101 report recommending phased work programs of $1,191,000 and $1,360,000, respectively. The 43-101 reports were prepared by Mr. David Burga, P.Geo. The Qualified Person who has reviewed the technical content contained in this release is Dr. Gerald Harper, P.Geo.(Ont).
The Nipigon Reefs Property is located approximately 80 kilometers north-northeast of Thunder Bay and is accessible by road. The overall property covers 1,161 claim units representing approximately 18,576 hectares. The focus of the Nipigon Reefs Property is an extensive sheet of mid Proterozoic diabase that has been shown to contain ultramafic feeder zones within. Two of these zones, the Springlet Lake Prospect and the Seagull Prospect, have been shown to be associated with copper, nickel and PGEs, The Springlet Lake area had an initial twelve drill holes completed in 2010 of which eight of these holes intersected a flat lying altered ultramafic sill of mid Proterozoic age which showed slightly anomalous value for copper, nickel and PGE in assayed samples of the sill but only one hole had a more substantial value with that hole intersecting one meter grading 0.22% Cu. The more explored Seagull Prospect has more than 30 documented drill holes prior to 2009 completed into the Seagull intrusion which have outlined an extensive area of near flat lying reefs with platinum and palladium mineralization. Additional holes were drilled in 2009 and 2010 and have been filed for assessment work but are not yet included in the compilation. It is most significant that the Pt:Pd ratio averages 0.88 which is similar to the 1.05 average at the nearby Current Lake deposit of Magma Metals which recently had an independent Preliminary Economic Assessment filed outlining a Diluted Indicated Resource of 9.70 Mt containing 0.92 g/t Pt, 0.87 g/t Pd, 0.22% Cu and 0.17% Ni.
The Weese Lake Property is located about 320 kilometers north-northeast of Thunder Bay and is comprised of 368 claim units representing approximately 5,888 hectares. The focus of the Weese Lake Property is a confirmed extensive mafic-ultramafic intrusion into an Archean volcanic sequence into which mafic intrusions of Proterzoic age are expected to cut the Archean unit, based on aeromagnetic data. Old drill holes from work in the 1960’s and 1970’s have shown semi-massive to massive sulphide interceptions of up to 10 meters long associated with mafic to ultramafic rocks at several drill hole locations over a strike length of more than 10 kilometers. Combined copper and nickel assays from these drill holes exceeded one percent in multiple holes. Assays for minor elements (i.e. PGEs) associated with copper and nickel were not reported.
In addition, to these principal properties, Minfocus holds claims and interests in four other groups of claims in the Nipigon Lake region of northwest Ontario. The total number of claims held by Minfocus, including the Nipigon Reefs Property and the Weese Lake Property, is 1,757 claims representing approximately 27,600 hectares.
Mr. Gerald Harper of Toronto, Ontario, the President of Minfocus, currently controls, directly or indirectly, approximately 17.5% of the issued and outstanding shares of Minfocus on a fully diluted basis.
Information Concerning the Proposed Transaction and the Share Exchange Agreement
The Company and Minfocus entered into the Share Exchange Agreement on September 2, 2011 in order to implement the Proposed Transaction. The Company, on a post-Proposed Transaction basis, is referred to in this news release as the "Resulting Issuer".
Pursuant to the Share Exchange Agreement, Pembroke will issue an aggregate of 23,221,301 Pembroke Shares in exchange for all the issued and outstanding shares of Minfocus, which will comprise approximately 2.1186 Pembroke Shares for each of the Minfocus Shares acquired. Upon completion of the Proposed Transaction, Minfocus will be a wholly-owned subsidiary of the Resulting Issuer and will continue to carry on the business currently conducted by it.
Concurrently with the Proposed Transaction, the Company expects to complete a non-brokered private placement of common shares of the Resulting Issuer (the "Private Placement") for minimum gross proceeds of $2,000,000 or maximum gross proceeds of $5,000,000 at a price per share which remains subject to negotiation as at the date of this news release but is expected to be in the range of $0.30 and $0.60. It is also currently expected that a portion of the common shares to be issued, for up to a maximum of $1,000,000 of the gross proceeds of the Private Placement, will be qualified as flow-through shares pursuant to the Income Tax Act (Canada). The Private Placement is conditional upon TSX-V approval and completion of the Proposed Transaction.
The Resulting Issuer intends to use its available funds (including the net proceeds from the Private Placement) for, among other things, the costs and amounts incurred in connection with the closing of the Proposed Transaction, the costs of the work program for the Nipigon Reefs Property and for the work program at Weese-Luella Lake Property and general working capital costs of the Resulting Issuer.
Prior to completion of the Proposed Transaction, the Company intends to change its name to "Minfocus Exploration Corp." or another name acceptable to regulatory authorities.
Upon completion of the Proposed Transaction, it is expected that the Resulting Issuer will meet the listing requirements of the TSX-V for a Tier II Mining Issuer.
Arm's Length Transaction
The Proposed Transaction will not constitute a Non-Arm’s Length Qualifying Transaction under the applicable policies of the TSX-V. The approval of the shareholders of Pembroke is not required for the Proposed Transaction.
Insiders of the Resulting Issuer
It is expected that the board of directors and management of the Resulting Issuer will be comprised of the following individuals:
Gerald Harper, Ph.D.,P.Eng. (Ont.), P.Geo. (Ont.) – President, Chief Executive Officer and Director of the Resulting Issuer – Mr. Harper is a geologist and senior international mineral resource industry executive with experience in senior and junior resource companies. Mr. Haper is the founder and President of Minfocus and of an international geological consulting firm, Gamah International Inc. Mr. Harper has previously served as a Board Member and Past President of Prospectors and Developers Association of CanadaMr. Harper is also a co-discoverer of Magma Metals’ Current Lake PGE deposit in Ontario.
Gavin Cooper, C.A. – Chief Financial Officer and Secretary of the Resulting Issuer – Mr. Cooper is the founder and principal of Gavin Cooper Associates, a private company providing consulting and financial and corporate administration services to primarily reporting issuers. Prior thereto, from 2002 until 2009, he was the Chief Financial Officer and Corporate Secretary of VRB Power Systems Inc., a company formerly listed on the Exchange. Mr. Cooper currently holds, and has since July 2007, the positions of Chief Financial Officer and Secretary of Nevaro Capital Corporation, the successor company to VRB Power Systems Inc. Mr. Cooper is a member of the Canadian Institute of Chartered Accountants.
Kenneth de Graaf, M.A.Sc. (Met. Eng.) – Senior Vice President and Director of the Resulting Issuer – Mr. de Graaf is a Chemical/Metallurgical Engineer and senior international mineral resource industry executive with extensive experience in mineral resource development and evaluation consulting and in junior resource companies. Mr. de Graaf is a co-discoverer Centerra Gold's Gatsuurt deposit in Mongolia and Western Prospector Group’s Gurvanbulag Uranium deposit. Mr. de Graaf has broad experience in MA and Public/Private Financings in the mineral resource industry.
Graham Wilson – Ph.D.,P.Geo (Ont.) – Director of the Resulting Issuer – Mr. Wilson is a senior independent consultant geologist/mineralogist with wide experience serving resource exploration and mining development companies, and various government agencies. Mr. Wilson is a founder and Principal of Turnstone Geological Services Ltd. and a specialist in geology/mineralization of gold, PGE and base metals. Mr. Wilson is also a co-discoverer of Magma Metals' Current Lake PGE deposit in Ontario.
Mark Selby – B.Comm (Honours) – Director of the Resulting Issuer – Mr. Selby is currently the Senior Vice-President, Business Development of Royal Nickel Corporation, a private mining company, and a director of Kiska Metals Corporation. From August 2008 until March 2010, he was the Vice President, Business Planning Market Research for Quadra FNX Mining Ltd., formerly Quadra Mining Ltd., a leading mid-tier copper mining company listed on the Toronto Stock Exchange. Previously, from January 2007 to August 2008, he was a principal of Selby Co., providing consulting advice to mining companies with respect to base metals and resource equity valuation. Between October 2001 to January 2007, he held the positions of Director, Market Research (2001-2004) and Assistant Vice President Strategic Planning Business Development (2005-2007) with Inco Limited. Mr. Selby holds a Bachelor of Commerce (Hons.) from Queen's University in Kingston, Ontario.
Completion of the Proposed Transaction is subject to a number of conditions, including but not limited to, approval of the TSX-V. The Company has made its initial filing with TSX-V for review and approval of the Proposed Transaction and will continue to provide further details in respect of the Proposed Transaction, as necessary, by way of news release.
Further information concerning Minfocus, the Proposed Transaction and the Resulting Issuer will be contained in a filing statement, to be prepared in accordance with the policies of the TSX-V, and filed on the Company's SEDAR profile at www.sedar.com prior to the completion of the Proposed Transaction.
For further information please contact:
Chief Executive Officer
Statements in this press release regarding Pembroke's business which are not historical facts are "forward-looking statements" that involve risks and uncertainties, such as terms and completion of the Transaction. Since forward-looking statements address future events and conditions, by their very nature, they involve inherent risks and uncertainties. Actual results in each case could differ materially from those currently anticipated in such statements.
COMPLETION OF THE TRANSACTION IS SUBJECT TO A NUMBER OF CONDITIONS, INCLUDING BUT NOT LIMITED TO, EXCHANGE ACCEPTANCE AND IF APPLICABLE PURSUANT TO EXCHANGE REQUIREMENTS, MAJORITY OF THE MINORITY SHAREHOLDER APPROVAL. WHERE APPLICABLE, THE TRANSACTION 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 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 A CAPITAL POOL COMPANY SHOULD BE CONSIDERED HIGHLY SPECULATIVE.
THE EXCHANGE HAS IN NO WAY PASSED UPON THE MERITS OF THE TRANSACTION AND HAS NEITHER APPROVED NOR DISAPPROVED THE CONTENTS OF THIS PRESS RELEASE. NEITHER THE 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.