BHK Resources Inc. (the "Company"), a capital pool company pursuant to Policy 2.4 of the TSX Venture Exchange (the "TSX-V"), announces that it has entered into a binding letter agreement dated December 13, 2013 with Silver Bull Resources. Inc. ("Silver Bull")(SVB.TO)(SVBL.NYSE MKT) to acquire all of the issued and outstanding securities of Dome International Global Inc. (the "Dome Securities"), a private British Virgin Islands company which holds, indirectly, a 100% interest in and to the Ndjole manganese and gold project (the "Project"), located in Gabon.
Upon completion of the proposed acquisition of the Dome Securities (the "Transaction"), the Company will be listed as a Tier 2 mining issuer on the TSX Venture Exchange, carrying on the further exploration and development of the Project.
As consideration for the Dome Securities, the Company will pay to Silver Bull an aggregate of USD$1,500,000, payable in cash, of which USD$25,000 was paid as a non-refundable deposit upon the execution of the letter agreement. Upon the completion of the Transaction, Dome International Global Inc. (the "Target") will become a wholly owned subsidiary of the Company (the Company after the Transaction being referred to as the "Resulting Issuer")
The Transaction is an arm's length transaction.
The Company currently has 13,100,000 common shares issued and outstanding, as well as 1,050,000 stock options and 300,000 brokers warrants to acquire common shares, each exercisable at $0.10 per share.
The proposed Transaction is subject to a number of terms and conditions, including the entering into by the parties of a definitive agreement with respect to the Transaction (such agreement to include representations, warranties, conditions and covenants typical for a transaction of this nature), the completion of satisfactory due diligence investigations, the completion of a financing of the Company generating minimum proceeds of $4.0 million from the sale of securities, on terms to be determined and the approval of the TSX-V and other applicable regulatory authorities.
Trading in the common shares of the Company will remain halted pending the satisfaction of all applicable requirements of the TSX-V. There can be no assurance that trading in the common shares of the Company will resume prior to the completion of the Transaction. Further details concerning the Transaction, the Target (including additional financial information and technical information respecting the Project) and other matters will be announced if and when a definitive agreement is reached.
Upon completion of the Qualifying Transaction, a finders fee is payable to David Underwood in the amount of 3.25% of the value of the Transaction for a finders fee of $48,750, payable 50% in cash and 50% in shares of the Resulting Issuer at a deemed price equal to the price of the concurrent financing once determined.
Information Concerning the Target
The Target is a wholly owned subsidiary of Silver Bull incorporated in the British Virgin Islands which beneficially owns all of the issued and outstanding shares of Dome Ventures SARL Gabon which holds a 100% interest in and to the mining license representing the Project.
As of September 30, 2013, the Target had approximately USD$513,000 in cash and commitments of approximately USD$331,000 (unaudited).
Information Concerning the Project
The license representing the Project lies 120 kilometres east of the capital city of Libreville and is accessed via a paved road directly to site and is located less than 25 kilometres from a functioning railway. The area is prospective for gold and manganese and the property has had approximately USD $5.7 million spent on exploration to date.
Work programs completed on the Project include 5,300 meters of diamond drilling, a 3,660 line kilometer airborne electro-magnetic survey, 1:20,000 geological mapping and basin analysis for the Ndjole area, and 20,000 soil samples.
A National Instrument 43-101 compliant technical report will be completed for the Company on the Project, which will be filed on SEDAR in due course.
Management and Board of Directors of Resulting Issuer
All of the current members of the Company board of directors will continue to act as directors of the Resulting Issuer and the Resulting Issuer will additionally appoint George Read as a director.
Claus Andrup will be appointed as the Resulting Issuer's President and CEO. Blair Lockhart will be appointed as the Resulting Issuer's Corporate Secretary, with the result that the board and management of the Resulting Issuer will comprise the following persons:
Claus Andrup, President, Chief Executive Officer and Director
Mr. Andrup has been the President of Andrup Corporate Consultants Inc. since 1981. Andrup Corporate Consultants Inc. provides corporate communications and business development services to companies in the resources and land development industries. He has over thirty years' experience of working with public companies in Canada and the United Kingdom and has been a director of Western Wind Energy Corp. (formerly, Minera Cortez Resources Ltd.) (TSXV) from 1999 to 2013. Western Wind is a vertically integrated renewable energy production company and has been privatized in 2013, since Brookfield Renewable Energy Partners acquired it. Mr. Andrup has been a Director of Greenbriar Capital Corp. (TSXV) from April 2009 to March 2013. Greenbriar's investment objective is to maximize returns to its shareholders through the acquisition, management, improvement and eventual sale of its real estate and any other properties it acquires in the future.
Peter Hughes, Director
Mr. Hughes has 25 years business experience including senior-level executive and director positions in both private and public companies specializing in pharmaceuticals, alternative energy and mining. Mr. Hughes' experience includes; corporate structuring, public and private financing, marketing, strategic planning, negotiating agreements and public company management. Mr. Hughes is a Director of Kelso Technologies Inc. (TSX.V) and a Director of Naturally Splendid Enterprises Ltd. (formerly Race Capital Corp.) (TSX.V). Mr. Hughes has a Bachelor of Science degree and completed the Canadian Securities Course and Directors and Officers Program.
Candrawijaya Kartorahardjo, Director and Chairman
Mr. Kartorahardjo has been in the tax consulting business since 1996, commencing when he joined the Tax Division of Arthur Andersen SC in Indonesia. When Arthur Andersen SC in Indonesia split up, he joined Prijohandojo, Boentoro & Co and stayed with the company until 2001 before leaving to join Ernst & Young in their tax division.
After a short service with Ernst & Young in 2002 Mr. Kartorahardjo co-founded what is currently known as Pentatrust, a tax consulting company. During his career, he has advised various clients, mostly foreign owned companies, in various industries. He specializes in mergers and acquisitions, restructuring and cross border transactions. Mr. Kartorahardjo is a Registered State Accountant and a Certified Tax Consultant with C Level Certification.
Brian A. Richardson, Chief Financial Officer and Director
Mr. Richardson has been VP Finance of J. Proust and Associates, a management company, and CFO of three public companies including Southern Arc Minerals Inc., a TSX-V listed mineral exploration company with exploration properties in Indonesia. He holds a Bachelor of Commerce degree from Queen's University in Kingston, Ontario, and a Masters of Business Administration degree from IMD in Lausanne, Switzerland. Mr. Richardson became a Chartered Accountant in 1987 and is a director of Royal Oak Ventures Inc., an investment holdings company since January 2000. Over the past 22 years he has served as a CFO or as a financial advisor to a number of public and private companies and served as CFO of Dynamotive Energy Systems Ltd, an alternative energy company listed on the OTCBB, from August 2003 until September 2009.
George Read, Director
Mr. Read is a diamond exploration geologist with some 29 years of international experience. He is currently Senior Vice President Exploration and Development of Shore Gold Inc. Prior to immigrating to Canada in early 1997, George spent 12 years with De Beers, where he worked on diamond exploration projects in South Africa, Botswana, Zimbabwe, Mali and Canada. Since 1997 George has worked on many Canadian diamond projects in Alberta, the NWT (Slave and Victoria Island), Saskatchewan, Manitoba, Ontario and Quebec, in addition to projects in Greenland and Brazil. Mr. Read is a graduate of the University of Cape Town (BSc. Hons., 1983), a Fellow of the Geological Association of Canada, a member of the American Geophysical Union and a Professional Geoscientist registered in the Provinces of Saskatchewan and British Columbia.
Blair Lockhart, Corporate Secretary
Ms. Lockhart is a lawyer and a geologist and is currently the Faculty Lead, Centre for Mine Economics and Business at the British Columbia Institute of Technology. She obtained her LLB at the University of British Columbia and has practiced law since 1991. She completed her LLM in the field of international environmental law at the University of London, England in 1998. Ms. Lockhart has been working for exploration companies since 2002. She is an Associate of the Institute of Chartered Secretaries and also a geologist, with a BSc (Hons) and MSc from the University of Manitoba and the University of Alberta respectively. Ms. Lockhart has experience dealing with a wide range of corporate and regulatory issues including stock exchange listings and listings maintenance, public and private financings, timely and continuous disclosure, and stock option and share compensation plans.
Pursuant to the letter agreement, it is a condition of the completion of the Transaction that the Company complete a financing generating minimum gross proceeds of $4.00 million on terms to be determined (the "Financing"). Further details concerning the Financing will be announced by way of press release once determined.
The proposed Transaction is subject to the sponsorship requirements of the TSX-V, unless an exemption from those requirements is granted by the TSX-V. The Company intends to apply for an exemption from the sponsorship requirements; however, there can be no assurance an exemption will be obtained. If an exemption from the sponsorship requirements is not obtained, a sponsor will be identified at a later date. An agreement to act as sponsor in respect of the Transaction should not be construed as any assurance with respect to the merits of the Transaction or the likelihood of its completion.
This news release contains certain "forward looking statements" including, for example, statements relating to the completion of the proposed Transaction, the Resulting Issuer's anticipated share capital. Such forward-looking statements involve risks and uncertainties, both known and unknown. The results or events depicted in these forward-looking statements may differ materially from actual results or events. In addition to other factors and assumptions which may be identified herein, assumptions have been made regarding and are implicit in, among other things: receipt of government and third party approvals in respect of transferring assets, the state of the capital markets; tax issues associated with doing business internationally, the ability of the Resulting Issuer to successfully manage the political and economic risks inherent in pursuing business opportunities in Gabon; and the ability of the Resulting Issuer to obtain qualified staff, equipment and services in a timely and cost efficient manner to develop its business. Any forward-looking statement speaks only as of the date of this news release and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking statement, whether as a result of new information, future events or results or otherwise.
On behalf of the Board of Directors
President, Chief Executive Officer
For further information contact:
Telephone: 604 341 4691
All information contained in this press release relating to the Target was provided by Silver Bull to the Company for inclusion herein. The Company has not independently verified such information and shall bear no liability for any misrepresentation contained therein.
Qualified Person Statement.
George Read, P.Geo, has prepared or supervised the preparation of the scientific or technical information contained in this news release as it relates to the Project.
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 TSX-V has in no way passed upon the merits of the proposed transaction.
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.
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