/NOT FOR DISTRIBUTION IN THE UNITED
STATES OR THROUGH UNITED
STATES WIRE SERVICES./
All amounts in Canadian Dollars
TORONTO,
March 5, 2013 /CNW/ - SearchGold
Resources Inc. ("SearchGold" or the "Company") (TSXV:
RSG) is pleased to announce that it has entered into a letter of
intent dated March 5, 2013 with Ubika
Corp. ("Ubika") to acquire (the "Acquisition") from
the shareholders of Ubika, 100% of the issued and outstanding
shares (the "Ubika Shares") in the capital of Ubika (the
"Proposed Transaction"). It is expected that the combined
entity, after completion of the Proposed Transaction (the
"Resulting Issuer"), will qualify as a Tier 2 Industrial
Issuer pursuant to the requirements of the TSX Venture Exchange
(the "Exchange").
The Proposed Transaction will be an arm's length
transaction as the directors and officers of SearchGold presently
have no interest in Ubika. It is intended that the
Proposed Transaction shall take place by way of an amalgamation,
arrangement, share exchange or other similar form of transaction.
The Proposed Transaction will be considered a Change of Business
for SearchGold, as such term is defined in Exchange Policy 5.2.
ABOUT UBIKA CORP.
Ubika is a private, fast growing financial
services, research and analytics company providing knowledge
solutions to private and public company clients, predominately in
the mining sector. Through its portal www.smallcappower.com, it
also provides information to corporate and individual investors.
Ubika was incorporated on March 3,
2004 under the federal laws of Canada and has 2,483,333 common shares issued
and outstanding (the "Ubika Shares"). Ubika
conducts its operations from its head office in Toronto and a marketing office in Vancouver, Canada. Assuming the successful
closing of the Proposed Transaction, Ubika intends to utilize the
public company platform and enhanced access to capital to grow its
existing business and to provide new and enhanced products to its
clients. As reported in Ubika's audited financial statements for
the fiscal years ended December 31,
2010 and 2011, Ubika had revenue of $1,405,384 for year ending Dec 31, 2011 and $501,953 for year ending Dec 31, 2010. For the year ending
Dec 31, 2011 Ubika Corporation
reported a net earnings (earnings after taxes) of $384,147 and for Dec 31,
2010 Ubika reported a loss (earnings after taxes) of
$149,239. As per the unaudited
interim results for 9 months ending Sept 30,
2012, Ubika had revenue of $960,612 and reported earnings after taxes of
$218,991.
Through the Acquisition, the Resulting Issuer
will move away from the high risk, hard to finance business of
African gold exploration into a more sustainable, financial
services platform that management of SearchGold believes will add
value to and be in the best interests of its shareholders.
ABOUT SEARCHGOLD
SearchGold is a public company whose common
shares are listed on the Exchange. SearchGold is organized under
the federal laws of Canada.
SearchGold's primary mission was to target, explore and advance
gold properties of merit. The Company currently has mineral
interests in Burkina Faso,
Gabon and Guinea.
The Proposed Transaction
Pursuant to the proposed transaction, SearchGold
will be issuing 35 million common shares (the "RSG Shares")
from treasury to the holders of the Ubika Shares in exchange for
all of the issued and outstanding Ubika Shares. As a result of the
transaction, the Ubika Shares underlying Ubika's outstanding
securities exercisable or exchangeable for, or convertible into, or
other rights to acquire Ubika Shares will be exercisable into RSG
Shares on the same terms and conditions as such original
outstanding securities.
Sponsorship
SearchGold intends to make an application to the
Exchange for an exemption from the sponsorship requirements in
connection with the Proposed Transaction. There is no
assurance that such exemption will be granted. Trading in RSG
Shares is presently suspended. It is uncertain whether the
shares of SearchGold will resume trading until the Proposed
Transaction is completed and approved by the Exchange.
Stock Options
It is intended that the Resulting Issuer will
grant incentive stock options ("Stock Options") on closing
of the Proposed Transaction, subject to the approval of the
Exchange, to employees, consultants, directors, officers of the
Resulting Issuer and its subsidiaries, if any. The number of
Stock Options will equal 10% of the issued and outstanding shares
of the Resulting Issuer. The Stock Options will be issued at
a price which is the greater of the Brokered Private Placement or
the price per share of the Proposed Transaction.
Name Change
It is intended that the Resulting Issuer will be
named "Gravitas Financial Inc." or such other name as the parties
may reasonably agree upon, and the Resulting Issuer will be
governed by the Canada Business Corporations Act.
PROPOSED PRIVATE PLACEMENT
As a condition of closing the Acquisition, a
private placement (the "Offering") will be conducted of
Ubika Shares and or Ubika debt securities for gross proceeds of a
minimum of $2 million or such other
form of equity or debt securities as is determined by Ubika, in
each case to be concluded on terms and conditions satisfactory to
the market and subject to negotiations between Ubika and the
Company. Proceeds from the Offering will be used for growth,
acquisition and general working capital purposes.
Capitalization of the Resulting
Issuer
Following the completion of the Proposed
Transaction but prior to any shares issued in connection with the
Proposed Offering there will be approximately 68 million shares of
the Resulting Issuer issued and outstanding. Further updates will
be made public as soon as the terms of the Proposed Offering are
finalized.
DIRECTORS AND SENIOR MANAGEMENT OF THE
RESULTING ISSUER
Subject to and following the closing of the
Proposed Transaction, the directors of the Resulting Issuer are
expected to be the following individuals, provided such persons are
eligible to act as directors pursuant to the requirements of the
Canada Business Corporations Act and the Exchange does not
object to such persons acting as directors. Further information
concerning the officers of the Resulting Issuer will be released at
a later date.
Ernie Eves, Chairman of
the Board
Mr. Eves is the Former Premier of the Province
of Ontario. Prior to serving as
Premier, he was Deputy Premier and Minister of Finance. Mr.
Eves has had a distinguished career in both the public and private
sectors. Currently, he serves as an advisor and board member for
several firms in Canada and
the United States. Mr. Eves is a
graduate of Osgoode Hall Law School. He was called to the bar in
1972, and in 1983 was made a Queen's Counsel.
David
Carbonaro, Director and Corporate Secretary
David Carbonaro
is a partner at Heenan Blaikie LLP and practises corporate finance
and international law. He also advises public companies, securities
dealers and investment banks on corporate finance matters in what
has become a rapidly changing and demanding regulatory landscape.
As a member of a growing team of international lawyers at Heenan
Blaikie LLP, Mr. Carbonaro plays a senior role in developing the
International practice group.
Pierre
Gagnon, Director
Pierre is the President and Managing Director of
Chancery Investments Inc. He was President of IP Devco Inc., a
contract software developer and Brukar Inc., a manufacturer of
metal castings. He is a Member of the Advisory Board at The Shotgun
Fund, LP and The Succession Fund, LP and a director of a number of
publicly-listed companies and several private companies. Mr. Gagnon
was also the Chairman of Copernicus Educational Products Inc. He is
a Director of Halton Healthcare Services Foundation and Oakville
Galleries.
Vishy Karamadam,
Director
Vishy has over 15 years of management experience
in areas ranging from Investment Research, Corporate Finance,
Management Consulting and Retail Banking Strategy. Vishy is a
co-founder of Ubika Research, and smallcappower.com. His
previous experience includes work for blue chip organizations in
Toronto and Mumbai, India and has strong exposure to the
financial services industry. He holds a Bachelor in Technology
Degree in Electronics & Communication Engineering, Masters in
Management Studies (Finance) from University of Mumbai, India and an MBA from McGill University.
Vikas
Ranjan, Director
Vikas is a management and investment
professional with over 15 years of experience in diverse areas of
investment management, finance and investment research. Vikas is a
co-founder of Ubika Research, and smallcappower.com His
previous experience includes various management positions in
companies such as Bank of Montreal. He holds a BA in Economics (Hons.),
Masters in Management Studies from University of Mumbai, India and MBA in Finance from
McGill University.
Philippe
Giaro, Director
Philippe joined SearchGold as Vice-President Exploration in 2005
and was President of the Company from 2006 until 2011. He founded
Golden Share Mining Corporation in
2007 and he has served as President since its listing on the
Toronto Venture Stock Exchange in 2008. He is a Professional
Geologist registered with the Ordre des Geologues du Quebec and a
member of the PDAC.
Robert
Carbonaro, Director
Robert Carbonaro is a partner and
the Head of Investment Banking at Portfolio Strategies Securities
Inc., a national investment dealer. Mr. Carbonaro's practice
has focused on advising and financing emerging growth companies in
various sectors.
The completion of the Proposed Transaction and
the Offering are subject to the approval of the Exchange and all
other necessary approvals. The completion of the Proposed
Transaction is also subject to certain other additional conditions
precedent, including, but not limited to: (i) the entering into of
a definitive agreement by SearchGold and Ubika on or before
April 15, 2013 (the "Definitive
Agreement"); (ii) completion of satisfactory due diligence by
each of SearchGold and Ubika; (iii) the approval of the Proposed
Transaction by each of Ubika's and SearchGold's respective board of
directors; (iv) the approval of the shareholders of Ubika and
SearchGold; (v) completion of the Offering; (vi) approval from the
Exchange to list the Resulting Issuer's shares; (vii) the absence
of any material change or change in a material fact which might
reasonably be expected to have a material adverse effect on the
financial and operational conditions or the assets of each of the
parties to the Definitive Agreement; and (viii) certain other
conditions typical in a transaction of this nature.
All information contained in this news release
with respect to SearchGold and Ubika was supplied by the parties
respectively, for inclusion herein, and SearchGold and its
directors and officers have relied on Ubika for any information
concerning it.
READER ADVISORY
Statements in this press release may contain
forward-looking information including, operating costs,
administrative costs, acquisitions and dispositions, capital
spending, access to credit facilities, income taxes, regulatory
changes, and other components of cash flow and earnings. Any
statements that are contained in this press release that are not
statements of historical fact may be deemed to be forward looking
statements. Forward-looking statements are often identified
by terms such as "may", "should", "anticipate", "expects" and
similar expressions. The reader is cautioned that assumptions
used in the preparation of any forward-looking information may
prove to be incorrect. Events or circumstances may cause
actual results to differ materially from those predicted, as a
result of numerous known and unknown risks, uncertainties, and
other factors, many of which are beyond the control of
SearchGold. The reader is cautioned not to place undue
reliance on any forward-looking information. Such
information, although considered reasonable by management at the
time of preparation, may prove to be incorrect and actual results
may differ materially from those anticipated. Forward-looking
statements contained in this press release are expressly qualified
by this cautionary statement.
The forward-looking statements contained in this
press release are made as of the date of this press release, and
SearchGold does not undertake any obligation to update publicly or
to revise any of the included forward-looking statements, whether
as a result of new information, future events or otherwise, except
as expressly required by securities law.
THIS PRESS RELEASE, REQUIRED BY APPLICABLE
CANADIAN LAWS, IS NOT FOR DISTRIBUTION TO U.S. NEWS SERVICES
OR FOR DISSEMINATION IN THE UNITED
STATES, AND DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO SELL ANY OF THE SECURITIES DESCRIBED
HEREIN IN THE UNITED STATES.
THESE SECURITIES HAVE NOT BEEN, AND WILL NOT BE, REGISTERED UNDER
THE UNITED STATES SECURITIES ACT
OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY NOT BE
OFFERED OR SOLD IN THE UNITED
STATES OR TO U.S. PERSONS UNLESS REGISTERED OR EXEMPT
THEREFROM.
Completion of the Proposed 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 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 or filing
statement 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.
THE TSX VENTURE EXCHANGE HAS IN NO WAY PASSED
UPON THE MERITS OF THE PROPOSED TRANSACTION AND HAS NEITHER
APPROVED OR DISAPPROVED THE CONTENTS OF THIS PRESS RELEASE.
NEITHER THE 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 PRESS RELEASE.
SOURCE SearchGold Resources Inc.