NXA Inc. Signs Letter of Intent for Proposed Business Combination With Ontario Graphite Ltd.
April 17 2014 - 1:24PM
Marketwired
NXA Inc. Signs Letter of Intent for Proposed Business Combination
With Ontario Graphite Ltd.
TORONTO, ONTARIO--(Marketwired - Apr 17, 2014) - NXA INC. ("NXA"
or the "Company") (TSX-VENTURE:NXI.H) is pleased to announce that
it has entered into a letter of intent (the "LOI") dated April 16,
2014 to complete a business combination with Ontario Graphite Ltd.
("OGL"). OGL is a privately owned Canadian mining company
incorporated under the Business Corporations Act (Ontario)
and committed to the responsible re-commissioning and operation of
the Kearney Mine in Kearney, Ontario, one of the largest confirmed
graphite mineral resource projects in North America and among the
largest individual deposits in the world.
It is currently contemplated that NXA, OGL and OGL's parent
company, Ontario Graphite, Ltd., a corporation existing under the
laws of Cayman Islands ("OGL Parent"), will complete a business
combination by way of share exchange, merger, amalgamation,
arrangement or other similar form of transaction (the "Proposed
Transaction"), which will result in OGL or OGL Parent amalgamating
with or becoming a wholly-owned subsidiary of NXA (or such other
entity that may be created for the purposes of completing the
Proposed Transaction), or otherwise combining its corporate
existence with a wholly-owned subsidiary of NXA. As part of the
Proposed Transaction, it is intended that common shares in the
capital of NXA ("Common Shares") will be issued to holders of
securities of OGL Parent at an exchange ratio based on the relative
values of NXA and OGL Parent, which will be determined.
Upon completion of the Proposed Transaction, it is proposed that
the Company will become a Mining Issuer listed on Tier 2 of the TSX
Venture Exchange (the "Exchange") and is intended to be renamed
"Ontario Graphite (Canada) Limited" (the "Resulting Issuer"). The
Resulting Issuer will carry on the business of OGL as currently
constituted.
Approval of the LOI and the terms of the Proposed Transaction
has been received from the board of directors of the Company.
Completion of the Proposed Transaction is subject to certain
conditions, including the receipt of the Exchange and regulatory
approvals, disinterested approval of the shareholders of the
Company and the shareholders of OGL Parent, completion of
satisfactory due diligence by the Company and OGL, completion of
definitive legal documentation and completion of a private
placement (the "Private Placement") by OGL or OGL Parent. The
Private Placement will involve an offering of subscription
receipts, which subscription receipts are intended to be
automatically exercisable for securities of OGL or OGL Parent, as
applicable, (the "OGL Securities") upon satisfactory completion or
waiver of all conditions precedent to the Proposed Transaction.
Each OGL Security is intended to be exchanged for securities of NXA
pursuant to, and upon completion of, the Proposed Transaction. The
net proceeds of the Private Placement are intended to be used to
further the re-commissioning process of the Kearney Mine.
It is expected that, in anticipation of the Proposed
Transaction, the Company will issue Common Shares in settlement of
certain existing debts of the Company, subject to approval of the
Exchange.
Trading of the Common Shares of the Company has been halted and
the Common Shares will remain halted in accordance with Exchange
policies until all required documentation with respect to the
Proposed Transaction has been received and the Exchange is
otherwise satisfied that the halt should be lifted.
A press release with further particulars relating to the
Proposed Transaction will follow in accordance with the policies of
the Exchange.
Completion of the Proposed Transaction is subject to a
number of conditions, including Exchange acceptance and
disinterested shareholder approval. The Proposed Transaction cannot
close until the required shareholder approval is obtained. There
can be no assurance that the Proposed Transaction will be completed
as proposed or at all.
Investors are cautioned that, except as disclosed in the
management information circular to be prepared in connection with
the Proposed Transaction, any information released or received with
respect to the Proposed Transaction may not be accurate or complete
and should not be relied upon. Trading in the securities of NXA
should be considered highly speculative.
The Exchange has in no way passed upon the merits of the
Proposed 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 policies
of the Exchange) accepts responsibility for the adequacy or
accuracy of this release.
The statements used in this press release may contain
forward-looking statements, and are based on the opinions and
estimates of management, or on opinions and estimates provided to,
and accepted by, management. These opinions and estimates are used
by management, and speak only as of the date of this press release.
Forward-looking statements in this press release include, but are
not limited to, the closing of the Proposed Transaction and the
anticipated benefits from the Proposed Transaction. Forward-looking
statements involve significant known and unknown risks,
uncertainties and assumptions, including with respect to the
closing of the Proposed Transaction, the timing and receipt of all
applicable regulatory approvals and third party consents, the
anticipated benefits from the Proposed Transaction and the
satisfaction of other conditions to the completion of the Proposed
Transaction. Forward-looking statements are subject to a variety of
risks and uncertainties and other factors that could cause actual
events or results to differ, possibly significantly. Although the
Company believes that its expectations reflected in these
forward-looking statements are reasonable, such statements involve
risks and uncertainties and no assurance can be given that actual
events or results will be consistent with these forward-looking
statements. Except as required by applicable law, the Company does
not undertake, and specifically disclaims, any obligation to update
or revise any forward-looking information, whether as a result of
new information, future developments or otherwise. Readers
are therefore cautioned not to place undue reliance on any
forward-looking statements.
NXA Inc.Paul Van DammeChief Financial Officer(416) 847-6905