Zoolander to Acquire South African Mineral Exploration Company
May 26 2010 - 12:52PM
Marketwired Canada
NOT FOR DISTRIBUTION TO U.S. NEWS SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
Zoolander Corporation ("Zoolander") (NEX BOARD:ZOO.H) announces that, it has
entered into an arm's length binding acquisition agreement (the "Agreement")
dated as of May 17, 2010, with Adsani Exploration (Proprietary) Limited
("Adsani"), a South African corporation, Larry Delville Hood, a South African
national, Edison Kadzombe, a Zimbabwe national, Mezzotin Investments (Private)
Limited ("Mezzotin"), a Zimbabwe corporation, and Rhoden Munyoro, a Zimbabwe
national who holds 10% of the shares of Mezzotin, pursuant to which Zoolander
will acquire all of the issued and outstanding shares of Adsani. The transaction
will constitute Zoolander's qualifying transaction (the "Qualifying
Transaction") under the policies of the TSX Venture Exchange (the "TSXV").
Following completion of the Qualifying Transaction, it is anticipated that
Zoolander will be a Tier 2 mining exploration company.
Adsani Investments (Proprietary) Limited
Adsani is a junior natural resource company based in Midrand, South Africa,
involved in the acquisition, exploration, and development of mineral properties.
Adsani, through its 90% owned subsidiary, Mezzotin holds 30 rare earth
exploration permits (the "Mezzotin Licences") covering a total of 2,348 hectares
(the "Sabi Star Property"). The Sabi Star Property is located in Eastern
Zimbabwe approximately 150 kilometers from Harare, the capital of Zimbabwe, and
approximately 250 kilometers from the border of South Africa. The Sabi Star
Property is located on the Odzi Gold Belt, a known mineralization belt having
historically produced gold, copper, tin, tantalum, niobium and diamonds.
SRK Consulting (Zimbabwe) (Pvt) Limited ("SRK") was retained to prepare a
National Instrument 43-101 ("NI 43-101") compliant technical report on the Sabi
Star Property. A field visit was carried out on February 1, 2010, by Dr. Anthony
Martin, a qualified person employed by SRK. During the site visit twenty-five
100kg samples were obtained and these samples were concentrated at the
Governmental Metallurgical Laboratory in Harare, Zimbabwe. The concentrate
samples were then analyzed by SGS South Africa in Johannesburg. Taking the top
11 samples (44% of all the samples) with grades above 250g/t of tantalite,
testing of the samples produced an average of 508g/t or (1.1lb/t) of tantalum
oxide.
Mezzotin currently owns and has onsite a gravity separation plant for extracting
tantalum. This plant was constructed several years ago before the Zimbabwe
economy dissipated and was only used a few times for bulk test sampling. Two
bulk sampling tests were undertaken by Mezzotin in 2005. In the first test,
3,000 tonnes were crushed, returning 450kg of concentrate containing 52%
tantalum oxide. Another bulk sample of 3,500 tonnes was then processed and
yielded 362kg of concentrate containing 13.8% tantalum oxide.
Following the analysis of the collected information, SRK has recommended
Zoolander undertake a systematic exploration campaign on the Sabi Star Property.
Based on several factors, including the presence of artisanal mining, the grade
of the samples extracted, the presence of old artisanal sites, the high
geological potential and the fact that known grades of tantalum recovery has
been carried out in the sector, SRK has suggested the following work program
with respect to the Sabi Star Property:
-- Reconnaissance geological mapping to outline the pegmatite and to lay
out the trenching program;
-- Trenching at initial 80-metre intervals with channel sampling over two-
metre intervals along the trenches; and
-- Samples to be concentrated on site using a mobile impact crusher and
7.5" knelson contractor with analyses of concentrate by borate
fusion/XRF in South Africa.
Once the trenching is complete, and depending on results, SRK has suggested that
drilling over the Sabi Star property would be required.
The Qualifying Transaction
Pursuant to the terms of the Agreement, Zoolander will acquire all of the issued
and outstanding shares of Adsani for an aggregate purchase price of CDN$4
million, to be satisfied by the issuance of an aggregate of 20 million
post-consolidation common shares to Messrs. Hood, Kadzombe and Munyoro. Prior to
completion of the Qualifying Transaction, Rhoden Munyoro will sell his shares of
Mezzotin (representing 10% of the issued and outstanding shares of Mezzotin not
currently owned by Adsani) to Adsani in exchange for shares of Adsani which, in
turn, will be exchanged for shares of Zoolander in connection with the
Qualifying Transaction. Following completion of the Qualifying Transaction, the
resulting corporate structure of Zoolander will result in Adsani being a
wholly-owned subsidiary of Zoolander, and Mezzotin being a wholly-owned
subsidiary of Adsani. Prior to completion of the Qualifying Transaction and as a
condition of closing of same, Zoolander will consolidate its issued and
outstanding common shares on the basis of one post-consolidation common share
for each two Zoolander common shares then outstanding, resulting in
approximately 4,900,000 post-consolidation Zoolander common shares being
outstanding prior to completion of the Qualifying Transaction.
The Private Placement
In connection with the Qualifying Transaction, Adsani will use its best efforts
to complete a non-brokered private placement of up to 10,000,000 subscription
receipts for gross proceeds of up to $2 million. Each subscription receipt will
convert, without payment of additional consideration, into one unit ("Unit") of
Adsani, each Unit being comprised of one ordinary share of Adsani and one
ordinary share purchase warrant (a "Warrant"). Each Warrant will entitle the
holder to acquire one ordinary share of Adsani at a price of $0.50 per share for
a period of two years from the date of completion of the Qualifying Transaction.
The Adsani shares and warrants will be exchanged for common shares and common
share purchase warrants of Zoolander on a one-for-one basis pursuant to the
Qualifying Transaction.
Sponsorship
Zoolander will, if necessary, engage a sponsor in connection with the Qualifying
Transaction. If an agreement to act as sponsor is entered into it should not be
construed as any assurance with respect to the merits of the Qualifying
Transaction or the likelihood of completion.
Terms and Conditions of the Qualifying Transaction
The Qualifying Transaction is an arm's length transaction as the directors and
officers of Adsani have no ownership or other interest in Zoolander. As part of
the regulatory approval process, Zoolander anticipates submitting for review to
the TSXV a filing statement. Trading in the shares of Zoolander will remain
halted until such time as permission to resume trading has been obtained from
the TSXV and submission of required documentation to the TSXV.
Conditions of closing include the receipt of TSXV approval of the Qualifying
Transaction, no material adverse change in the assets, business, financial
condition, earnings, results of operations or prospects of Adsani or Mezzotin,
the delivery of customary closing documents, the completion of the proposed
private placement of Units by Adsani and the approval of the Zoolander
shareholders for the proposed two-for-one share consolidation of Zoolander.
Summary Financial Information
The following is summary consolidated financial information with respect to Adsani:
Year Ended
Dec. 31, 2009
(unaudited)
(CAD$)
--------------------
Assets
Property, plant and equipment 1,078,575
Deferred mining & exploration expenses 1,411,040
--------------------
Total Assets 2,489,615
Liabilities 183,750
Shareholder equity 2,305,865
Management and Directors of Zoolander After the Qualifying Transaction
Upon the completion of the Qualifying Transaction, the current directors and
officers of Zoolander have agreed to resign. Following completion of the
Qualifying Transaction, the directors and senior officers of Zoolander are
expected to be the following:
Gavin Treanor, President, CEO & Director - Mr. Treanor is a degreed Aerospace
Engineer having been a principal in a Chinese Merchant Banking firm for over a
decade specifically focused on the global sourcing of current and future
strategic metals for Chinese clients. He has been lead on international
structures and assisted companies in securing capital and developing assets
through joint venture, WOFE and various merger and acquisition structures. His
international mergers and acquisition experience as well as strategic
relationships in EMEA and China will benefit Zoolander.
Sanjiv Rai, Director & Chief Financial Officer - Mr. Rai is a Chartered
Accountant having earned his designation with PricewaterhouseCoopers in 2000.
Since that time, he has spent time in commercial finance industry having worked
with both US and Canadian-based banks.
Anthony Roodenburg, Director - Mr. Roodenburg has been active in the Canadian
investment industry since 1987. His experience includes four years as an
Investment Executive with National Bank Financial and more than 15 years as an
active investor and officer/director of several public companies assisting in
the areas of corporate development and finance.
James Pirie, Director - Dr. Pirie's career as an exploration geologist spans
more than 30 years in Canada, the United States, Europe, Latin America and Asia.
Dr. Pirie has held a number of positions of increasing responsibility including
President, Gold Summit Mines Ltd., VP Exploration, Breakwater Resources Ltd., VP
Exploration, Granduc Mining Corporation and Exploration Manager, Homestake
Canada and Esso Minerals Canada.
David N. Ellison, Director - Mr. Ellison received his B.A. from Concordia
University in 1996. He then attended Osgoode Hall Law School and graduated in
1999 having completed the Business Law Intensive Program. In 2001, he joined the
Structured Finance group at the London, UK office of Clifford Chance LLP and was
admitted as a solicitor of the Supreme Court of England and Wales in 2002. In
2004, David returned to Canada and joined a Bay Street law firm and focused on
all aspects of corporate and securities laws, with particular emphasis on
mergers and acquisitions, corporate finance and public markets transactions. In
2009, Mr. Ellison opened his own law firm, Ellison Law, where he continues to
practice corporate and securities laws. Mr. Ellison has considerable experience
representing junior public companies in connection with debt and equity
financings, continuous disclosure requirements and corporate governance matters
and public listings.
Shareholder Meeting
Zoolander has called an annual and special meeting of shareholders on June 29,
2010 to seek approval for, among other things, the proposed consolidation of the
issued and outstanding Zoolander shares in connection with the Qualifying
Transaction.
The technical information in this news release has been prepared in accordance
with the Canadian regulatory requirements set out in NI 43-101 and reviewed by
Dr. James Pirie, P. Geo. for Adsani, a qualified person under NI 43-101
guidelines.
Completion of the Qualifying Transaction is subject to a number of conditions,
including but not limited to TSXV/NEX acceptance. Where applicable, the
Qualifying Transaction cannot close until the required shareholder approval is
obtained. There can be no assurance that the Qualifying Transaction will be
completed as proposed or at all.
Investors are cautioned that, except as disclosed in the filing statement to be
prepared in connection with the Qualifying Transaction, any information released
or received with respect to the Qualifying Transaction may not be accurate or
complete and should not be relied upon. Trading in the securities of Zoolander
should be considered highly speculative.
The TSXV has in no way passed upon the merits of the Qualifying Transaction.
The foregoing information may contain forward-looking statements relating to the
future performance of Zoolander. Forward-looking statements, specifically those
concerning future performance, expectations concerning the timing results,
indications and benefits of exploration, drilling test work and engineering
assessments, and other statements that are not historical fact, are subject to
certain risks and uncertainties, and actual results may differ materially from
Zoolander's plans and expectations. These plans, expectations, risks and
uncertainties are detailed herein and from time to time in the filings made by
Zoolander with the TSXV/NEX and securities regulators. Zoolander does not assume
any obligation to update or revise its forward-looking statements, whether as a
result of new information, future events or otherwise, except as required by
law.
This news release does not constitute an offer to sell or a solicitation of an
offer to buy any of the securities of Zoolander in the United States. The
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 within the United States or to U.S. Persons unless registered
under the U.S. Securities Act and applicable state securities laws or unless an
exemption from such registration is available.
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