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Colt Resources Inc. announced that one of its Portuguese wholly owned subsidiaries has acquired through the purchase of a private Portuguese limited company key surface rights covering approximately 140 hectares at its Tabuaço (São Pedro das Águias) tungsten project, located in the company’s Armamar‐Meda concession in northern Portugal.
“The acquisition of these surface rights not only provides Colt with unhindered access to the ground for exploration but more importantly, it is a crucial step for the next stages of the development of our Tabuaço tungsten project which we will be fast-tracking in the months ahead.” stated Nikolas Perrault, President and CEO. On August 24, 2011, the Company executed a purchase and sale agreement and has acquired 100% of the shares of Q.S.P.A, a Portuguese sole proprietorship limited company consisting of surface rights, an operational business and real estate in an arm’s length transaction for a total acquisition cost of 10M Euros. The surface rights are the main asset and the intrinsic value of the transaction as it is key to the Company’s planned development of this tungsten mining project. The operational business of Q.S.P.A. is a registered as an Oporto and Douro wine producer, trader, importer/exporter and bottler. Q.S.P.A was put up for sale about one year ago. The value of Q.S.P.A. is real estate consisting of land, buildings (the monastery, the winery and the cellar), valued independently for an aggregate of 4.5M Euros as well as inventories valued at 2.5M Euros. Q.S.P.A.’s unaudited statements as of May 31, 2011, show total assets of 12.7M Euros and total liabilities of approximately 8.9M Euros, of which 8.1M Euros is a shareholder loan and which Colt’s wholly owned subsidiary will become the beneficiary. Unaudited revenues and losses for the last fiscal year are 189K and 67K Euros respectively and for the period ending May 31, 2011 revenues are 1K Euros with losses of 274K Euros. The Company will maintain the seasonal employment of the business but will subcontract out the management. The Company will be paying a combination of cash and shares for these assets. The cash component consists of 5M Euros of which 3M Euros have been paid on closing. The balance of 2M Euros will be paid, in two instalments of 1M Euros, on the first and second year anniversary of the acquisition. The Company has also issued 5M restricted common shares to the seller, with each 1M common shares to become freely tradable on the date of each anniversary of the date of closing for the next five consecutive years. The Company has also issued 5M zero dividend, convertible preferred shares to the seller. Each zero dividend, convertible preferred share has a par value €0.50, a five year term. The preferred shares are convertible at the option of the holder at any time during the five year term, in whole or in part, into common shares of Colt at €0.57 per share, resulting in a potential issuance of an additional 4,385,965 common shares. The convertible preferred shares are also redeemable by Colt at its option on thirty day notice at €0.50 per share, in whole or in part, at any time during the five year term. If converted into common shares, the shares will be subject to the same five year restrictions as the common shares issued as part of this transaction. Upon closing the transaction, the seller has not become an insider of the Company. |
