VANCOUVER, BRITISH COLUMBIA / ACCESSWIRE / April 24, 2014 / Aston Bay Holdings Ltd. (TSX-V: BAY) ("Aston Bay" or the "Company") is pleased to announce that it has signed a Memorandum of Understanding ("MOU") with Lyncorp International Ltd. ("Lyncorp"), a company wholly-owned by David Mullen, to purchase equipment including, but not limited to, four Christensen CS10 Core Drills and all associated equipment (the "Equipment"), comprising approximately eight shipping containers of equipment in full.
"In a tight capital market, this agreement puts a large quantity of valuable equipment on Aston Bay's balance sheet, enabling us to prepare to drill for the 2015 season," said the CEO, Benjamin Cox. "In addition, this win-win transaction shows that the Lyncorp group places value on the Storm Copper project, and we welcome them as a shareholder."
The MOU will be superseded by a definitive agreement that will be entered into by the parties, which will provide that payment for the Equipment will consist of 2,700,000 shares of Aston Bay subject to receipt of TSX Venture Exchange approval. Additional payment will consist of $325,000 CDN being payable to Lyncorp in 12 months from the closing date of acquisition payable as negotiated by the parties in the definitive agreement and which amount will be secured against a portion of the Equipment, all subject to approval of the TSX Venture Exchange. Lyncorp and the Company agree they will have up to 45 days from the date of the MOU to the time of closing of the transaction, which shall be the later of the date of the share issuance to Lyncorp or the date when Aston Bay takes possession of the Equipment. Closing of the acquisition is also subject to, among other things, receipt of an appraisal for the Equipment and confirmation that title to the Equipment is in good standing. A submission for TSX Venture Exchange approval of the acquisition of the Equipment will be made when a definitive agreement has been entered into and the appraisal as noted above has been obtained.
"This agreement demonstrates that the Company is working creatively in a challenging capital market," said the COO, Bruce Counts. "Board member Cliff Boychuk's extensive experience with exploration drilling gives Aston Bay confidence that a drill program can be managed in-house."
"Considering the cost of mobilizing a drill contractor to take advantage of the sealift, this acquisition will let us mobilize an extra drill for next year so that we can work in the Arctic with a shorter season, and more efficiently; we can share a chopper, camp, and other fixed costs between multiple drills," said Cliff Boychuk. "Ideally, you want to go with extra equipment so that when something breaks, you are not forced to fly up spare parts at short notice. This transaction, when completed, will provide the Company with the bits, hoses, heaters, and pumps so we are prepared to keep on drilling, which will reduce our cost per meter while allowing us to drill Storm."
SHARE ISSUANCE TO SATISFY SHORTFALL PENALTY
Subject to receipt of final approval by the TSX Venture Exchange, Aston Bay proposes issuing an aggregate 203,777 common shares to Commander Resources Ltd. ("Commander") in satisfaction of a shortfall penalty of $35,407.75 payable in accordance with the terms of the Letter of Agreement, as amended, between the Company and Commander, the shortfall penalty arising as a result of a shortfall of $141,631 in minimum exploration expenditures by Aston Bay during the 2013 calendar year. In accordance with the terms of the Letter of Agreement, Commander has granted Aston Bay the sole and exclusive option to acquire a 70% right, title and interest in and to the Storm Copper Target Area and the Seal Zinc Target Area located on Somerset Island, Nunavut, Canada, and satisfaction of the shortfall penalty is to maintain the option in good standing.
The common shares to be issued to Commander in satisfaction of the shortfall penalty will be subject to a hold period of four months and one day from the date of issuance of the shares in accordance with applicable securities legislation, as well as subject to the "Exchange Hold Period" as defined in and required by applicable Exchange policy.
Commander owns or exercises control or direction over more than 10% of the voting rights attached to Aston Bay's issued and outstanding common shares, and issuance of shares to Commander in satisfaction of the shortfall penalty constitutes a related party transaction pursuant to TSX Venture Exchange Policy 5.9 and Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"). The Company intends to rely on Section 5.5(a) of MI 61-101 for an exemption from the formal valuation requirement and Section 5.7(1)(a) of MI 61-101 for an exemption from the minority shareholder approval requirement of MI 61-101 as the fair market value of the transaction insofar as the transaction involves interested parties will not exceed 25% of the Company's market capitalization.
About Aston Bay Holdings
Aston Bay Holdings Ltd. (TSX-V: BAY) is a publicly traded mineral exploration company focused on the 345,033 acre Storm Property located on northwest Somerset Island, Nunavut. The property hosts the Storm Copper and Seal Zinc prospects. Aston Bay holds the right to earn or buy up to a 100% undivided interest in the Storm Property from Commander Resources Ltd. (TSX-V: CMD).
On behalf of the Board of Directors,
Benjamin Cox, Chief Executive Officer
Telephone: (360) 262-6969
For further information about Aston Bay Holdings Ltd or this news release, please visit our website at www.astonbayholdings.com.
Neither the TSX Venture Exchange Inc. 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.
This news release contains certain statements that may be deemed "forward-looking statements". Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects", "plans", "anticipates", "believes", "intends", "estimates", "projects", "potential" and similar expressions, or that events or conditions "will", "would", "may", "could" or "should" occur. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results may differ materially from those in forward-looking statements. Forward-looking statements are based on the beliefs, estimates and opinions of the Company's management on the date the statements are made. Except as required by law, the Company undertakes no obligation to update these forward-looking statements in the event that management's beliefs, estimates or opinions, or other factors, should change.
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SOURCE: Aston Bay Holdings Ltd.