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Axmin Spins Off Sierra Leone Assets Into New Public Company |
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Wednesday, 02 March 2011 08:50 |
AXMIN Inc. (AXM-TSX Venture) announced that it has signed a letter of intent dated February 28, 2011 with Fuller Capital Corp., a capital pool company, to complete a business combination that will result in FCC, directly or indirectly, acquiring from AXMIN a wholly-owned subsidiary of AMXIN, that will own AXMIN’s assets in Sierra Leone, including the Nimini Hills East and West Exploration Licences, which contain the Komahun Gold Project and AXMIN’s Matotoka Exploration Licence, in exchange for the issuance by FCC of common shares of FCC to AXMIN.
It is expected that upon completion of the Proposed Transaction AXMIN will distribute a portion of its FCC common shares to AXMIN shareholders, such that after giving effect to such distribution AXMIN will retain an approximate 40 percent interest in FCC.
The Proposed Transaction enables the development of AXMIN’s assets in Sierra Leone without diverging from AMXIN’s core strategy of developing the Passendro Gold Project in the Central African Republic (“CAR”).
In conjunction with the Proposed Transaction, MergerCo intends to complete a concurrent private placement of approximately $5 million in order to provide FCC with capital to develop the Sierra Leone assets to be acquired by it pursuant to the Proposed Transaction.
AXMIN is working with its legal counsel, Fasken Martineau DuMoulin LLP, and its investment advisor, Paradigm Capital Inc., to facilitate an efficient execution of the Proposed Transaction.
If completed, the Proposed Transaction will constitute FCC’s Qualifying Transaction (as defined in Policy 2.4 of the TSX Venture Exchange Corporate Finance Manual). A comprehensive press release with further particulars relating to the Proposed Transaction will be issued by FCC in accordance with the policies of the TSX Venture Exchange (the "Exchange") upon execution of a definitive agreement in respect of the Proposed Transaction.
Completion of the Proposed Transaction is subject to a number of conditions, including, but not limited to, the execution of a definitive agreement between AXMIN and FCC in respect of the Proposed Transaction, completion of satisfactory due diligence and the receipt of all required regulatory approvals, including the approval of the Exchange
President and CEO of AXMIN, Mr. George Roach, comments, “As it is our belief that the Sierra Leone assets are significantly undervalued within AXMIN, this spin-off will allow AXMIN to take advantage of the current market conditions and further build on the Komahun Gold Project through a meaningful independently funded exploration program. It will also afford us the opportunity to monetize the asset, if required, to support the development of the Passendro Gold Mine, and enable FCC to independently fund the exploration and drilling program necessary to prove the potential of the resource. This transaction is consistent with our strategy to focus AXMIN’s resources on developing the Passendro Gold Project in CAR.” |
