From the Wires
Greenwich to Acquire AusPotash Corp.
By: Marketwired .
Jul. 20, 2009 10:04 AM
TORONTO, ONTARIO -- (Marketwire) -- 07/20/09 -- Greenwich Global Capital Inc. ("Greenwich") (TSX VENTURE: GGB.H) is pleased to announce the execution of an agreement (the "Agreement"), on July 17, 2009, with AusPotash Corporation, ("AusPotash"), for a three-cornered amalgamation as described in more detail below (the "Amalgamation"). It is anticipated that the issuer resulting from the Amalgamation (the "Resulting Issuer") will be known as "AusPotash Limited" or such other similar name, subject to TSX VENTURE Exchange approval (the "Exchange").
About AusPotash Corp.
AusPotash is a junior mining exploration and development company incorporated on July 11, 2008 in the Province of Ontario under the laws of the Business Corporations Act (Ontario). The principal business activity of the Company is the acquisition, exploration and development of potash properties in Australia.
Effective May 22, 2009, AusPotash acquired all the outstanding shares of Queensland Potash Pty Ltd ("Queensland Potash") that it did not already own (herein the "Queensland Potash Transaction").
Queensland Potash is a company duly incorporated under the laws of the State of Queensland (Australia) which company presently owns two Exploration Permits ("EPM's" or "Tenements") (with a right to acquire two additional EPM's pursuant to a transfer agreement ("Transfer Agreement") dated as of May 22, 2009 between AusPotash, Queensland Potash and certain other parties) covering a land area of approximately 160 square kilometres located in the Adavale Basin, 65 kilometres to the south west of Blackhall, Queensland, Australia. Extensive data from past exploration and information on file with the Queensland Department of Mines and Energy indicates a substantial deposit of salt and, by extension, potash present in the area covered by the four EPM permits. Further exploration is necessary to define the resource to JORC and NI 43-101 standards.
Under the terms of the Transfer Agreement, AusPotash has to meet certain conditions prior to October 31, 2009 in order to be able to acquire the remaining two EPMs. When and if such conditions are met (such conditions being the closing of the minimum Concurrent Financing (as defined below) and obtaining Exchange listing approval for the Amalgamation), AusPotash can acquire the remaining two EPMs upon the issuance of additional common shares and warrants to the former shareholder of Queensland Potash. If both EPMs are acquired under the terms of the Transfer Agreement, the former shareholders of Queensland Potash will be contractually entitled to forty percent (40%) of the fully-diluted common shares of the Resulting Issuer as well as entitled to receive warrants ("Warrants") to acquire, on exercise, up to fifty-one percent (51%) of the fully-diluted common shares of the Resulting Issuer. The Warrants will be one year warrants and will have an exercise price equal to the price in which common shares are issued in the Concurrent Financing. Assuming the completion of the minimum Concurrent Financing and further assuming AusPotash owns all four EPMs, the former shareholders of Queensland Potash will own 43.8 million of the issued common shares of the Resulting Issuer (68.3 million fully diluted). Assuming the completion of the maximum Concurrent Financing and further assuming AusPotash owns all four EPMs, the former shareholders of Queensland Potash will own 46.9 million of the issued common shares of the Resulting Issuer (73.3 million fully diluted).
AusPotash has raised, to date, $3.91 million through the sale of common shares and has expended approximately $2.25 million on property acquisitions and exploration. It currently has approximately $400,000 in cash on hand with no debt.
After giving effect to the acquisition of Queensland Potash, AusPotash currently has 44,785,006 common shares issued and outstanding and 19.7 million warrants and stock options outstanding. AusPotash currently has 23 shareholders. The current controlling shareholder of AusPotash is Transparent Holding Ltd, the majority owner of which is Walter Doyle. Transparent, a Seychelles incorporated company, currently owns 9,714,744 common shares of AusPotash (21.69%). Mr. Doyle is a resident of Australia.
About the Amalgamation
On July 17, 2009, Greenwich and AusPotash signed the Agreement pursuant to which they agreed to proceed with a three-cornered amalgamation which is expected to constitute a "Qualifying Transaction" for Greenwich as defined in Policy 2.4 of the Exchange's Corporate Finance Manual. The transaction is subject to shareholder approval from both companies as well as all required regulatory approval pursuant to laws, regulations and applicable policies. Upon completion of the Amalgamation, the Resulting Issuer (as defined in Exchange Policy 2.4) will be considered a Tier 2 mining issuer (as defined in Exchange Policy 2.1).
The Qualifying Transaction will be executed by way of three-cornered amalgamation agreement to be entered between Greenwich, a wholly-owned Ontario subsidiary of Greenwich and AusPotash (the "Merger Agreement"). Under the Merger Agreement, holders of common shares and other securities (options and warrants) of AusPotash will receive common shares and other securities (options and warrants) of the Resulting Issuer on a one-for-one basis. Under the Merger Agreement, it will be a condition that Greenwich completes a pre-merger consolidation of its securities on a 1 new for 2 old basis (the "Consolidation"). Following implementation of the Consolidation, the Merger Agreement provides that holders of common shares of Greenwich will receive one common share and one half share purchase warrant (exercisable for 2 years with an exercise price of $0.40) of the Resulting Issuer for each share owned. The existing 540,000 stock options of Greenwich will be exchanged for 270,000 options of the Resulting Issuer with an exercise price of $0.20 per share. A total of 1,400,000 existing stock options and 18,305,000 warrants of AusPotash will be exchanged on a one for one basis but otherwise remain unchanged.
The Merger Agreement requires AusPotash to complete a minimum concurrent financing (the "Concurrent Financing") of $2.1 million - to a maximum of $3 million - such financing to close on or before the completion of the Qualifying Transaction.
After completion of the Amalgamation and minimum Concurrent Financing (but without giving effect to the additional common shares and warrants issuable under the terms of the Transfer Agreement), an aggregate of 55 million common shares of the Resulting Issuer will be issued and outstanding or 80 million common shares on a fully diluted basis, assuming exercise of stock options and warrants. The pre-amalgamation shareholders of Greenwich will own 3.1 million common shares or 5.6% of the issued and outstanding common shares of the Resulting Issuer while the pre-amalgamation shareholders of AusPotash will own 51.9 million common shares or 94.3% of the issued and outstanding common shares of the Resulting Issuer.
After completion of the Amalgamation, minimum Concurrent Financing and giving effect to the additional common shares and warrants issuable under the terms of the Transfer Agreement, an aggregate of 83.7 million common shares of the Resulting Issuer will be issued and outstanding or 134.0 million common shares on a fully diluted basis, assuming exercise of all stock options and warrants. The pre-amalgamation shareholders of Greenwich will own 3.1 million common shares or 3.7% of the issued and outstanding common shares of the Resulting Issuer while the pre-amalgamation shareholders of AusPotash will own 18.6 million common shares or 96.3% of the issued and outstanding common shares of the Resulting Issuer.
AusPotash reserves a price equal to the price of the common shares issued in the Concurrent Financing for stock options on approximately 5,000,000 common shares of the Resulting Issuer (the "New Stock Options") to be granted to directors, officers, employees and consultants of the Resulting Issuer upon completion of the Amalgamation. The grant of the New Stock Options is subject to regulatory approval including shareholder approval, if required.
The Amalgamation constitutes an arm's length transaction according to the policies of the Exchange.
Conditions precedent to closing Amalgamation
The parties' obligations to complete the Amalgamation and related transactions are subject to the satisfaction of the usual conditions precedent including, among others:
- all necessary approvals to enable the Amalgamation to be carried out have been obtained from the Exchange, the shareholders of Greenwich and AusPotash, and all other regulatory authorities and third parties having jurisdiction;
- all necessary approvals to enable the name change to be effected on the closing of the Amalgamation have been obtained;
- the parties being satisfied with the results of their due diligence reviews;
- with the exception of Dan Hachey the resignation of the existing officers and directors of Greenwich in favour of nominees of AusPotash; and
- the completion of the minimum Concurrent Financing.
Haywood Securities Limited ("Haywood") has been engaged as the Sponsoring Broker and will be paid a sponsor fee of $50,000 cash and will be issued warrants to purchase up to 50,000 shares of the Resulting Issuer at $0.30 per share for a period of one year from date of closing.
Management and Directors
Upon completion of the transactions described, the Resulting Issuer's board of directors will change with the appointment of AusPotash's nominees, namely: Daniel F. Hachey will be appointed Chairman and Director, R. Bruce Duncan will be appointed President & Chief Executive Officer and Director; Richard Poulden, Director, Jonathon Harrison, Director; Roger Steiniger, Director; Olga Nikitovic, Chief Financial Officer; and Thomas A Fenton, Secretary In addition, a suitably qualified and experienced Australian based VP Exploration will be recruited.
The background of each of the proposed directors and senior officers of the Resulting Issuer are as follows:
Daniel F. Hachey, B.Sc., MBA, Chairman and Director
Mr. Hachey has a strong investment banking background with more than 20 years of experience in the capital markets, largely in the areas of public equity financings, Initial Public Offerings (IPOs) and private placements. Mr. Hachey has also been active in the area of mergers and acquisitions, fairness opinions and other advisory work. Mr. Hachey has held senior investment banking positions with a number of firms in Toronto, New York and Montreal. In addition, Mr. Hachey has served on the board of directors with both public (NASDAQ, AMEX, TSX and TSX VENTURE) and private companies.
Mr. Hachey graduated from McGill University with an MBA degree in Finance. Prior to that, he was enrolled in a Master of Science program at Universite de Montreal after earning his Bachelor of Science degree from Concordia University.
R. Bruce Duncan, President & Chief Executive Officer and Director
R. Bruce Duncan, currently the president and CEO of Bolero Resources Corp. (TSX VENTURE: BRU) has over 25 years of capital market and brokerage industry experience, including eight years with Gordon Capital Corporation. Mr. Duncan is also the President of West Oak Capital Partners Inc. West Oak provides strategic advisory services which include: identifying and qualifying merger and acquisition candidates; raising capital for clients; and advising on going public transactions. Mr. Duncan's client base has included financial services, aviation, mining, oil and gas, logistics, and retail industries.
Olga Nikitovic, CA, Chief Financial Officer
Ms. Nikitovic is a chartered accountant and management consultant with over 20 years of work experience. Ms. Nikitovic worked at PricewaterhouseCoopers for nine years in both the audit and management consulting departments. While consulting, Ms. Nikitovic specialized in re-engineering and cost management. After leaving PricewaterhouseCoopers, Ms. Nikitovic held senior management positions with two of Canada's largest retailers. At present, Ms. Nikitovic is the Chief Financial Officer for a number of publically traded mining companies.
Dr. Roger Steininger. Ph. D., Director
Dr. Roger C. Steininger Ph.D. has more than 40 years experience in the minerals industry including a senior management position with a major mineral company, Amselco Minerals and for the last 20 years has maintained a consulting geologist practice. As part of Dr. Steininger's consulting practice, he has continued his involvement in exploration and development programs in association with several major mining companies.
Dr. Steininger is a Certified Professional Geologist - having received such designation from the American Institute of Professional Geologists in 1987. Dr. Steininger received his Ph.D. in Geology from Colorado Sate University in 1986, a M.S. in Geology from Brigham Young University in 1966 and a B.S. in Geology from Western Michigan University in 1964.
Richard Poulden, Director
Following a law degree from Oxford University, Richard Poulden qualified as a Barrister, after which he moved into merchant banking where he worked for Samuel Montagu & Co Limited. Following an MBA at the London Business School, he joined the international consultancy firm, Arthur D Little, where he worked in their European strategy practice and was co-founder of their Financial Industries Group. He has worked on natural resource projects in South America and the United States in ammonia production and oil and natural gas respectively. He has advised at a corporate finance level, on the securing of natural resource projects in the Middle East and Central Asia. He served in the UK Leadership Team of Electronic Data Systems where he worked on the merger of EDS's global energy practice.
Jonathon Harrison, Director
Jonathon Harrison is a chartered accountant with experience in quoted and unquoted companies. Previously he spent 16 years at Intercontinental Hotels Corporation, where he held various positions as Vice President of Finance. In 1989 he joined Boddington Group plc, where he developed and became operations director of the Village Leisure Hotels division, responsible for the operation of six leisure hotels. Between February 1994 and September 1995, while still at the Boddington Group plc, he was finance director of the Country House Retirement Homes Limited business during which time the number of nursing homes nearly doubled to 31 nursing homes. In March 1997 he led a management buy-in of 25 hotels from Queens Moat Houses plc with Duke Street Capital. Six months later he managed the refinancing of the new group, County Hotels Group plc, through a listed bond offering and, in January 1999, successfully sold the company to Regal Hotel Group plc. In September 1999 he joined Topnotch Health Clubs plc and in March 2000 oversaw the company's listing on AIM.
Description of the Queensland Potash Exploration Permits
Queensland Potash owns a total of (2) EPM's (with an option to acquire an addition (2) EPM's under the terms of the Transfer Agreement) - with such 4 EPM's covering approximately 160 sq kilometers located approximately 65 kms southwest of Blackall in central Queensland, Australia.
Exploration drilling for oil and gas in the 1960's and 1970's in the Adavale Basin located the Boree salt member at depths in excess of 1500 meters plus. The thickness of the Boree salt member intercepted ranged from 57 meters to over 500 metres. Subsequent exploration, re-interpretation of seismic data and sampling of drill cores in the 1980's has indicated the presence of prospective potash beds within the Boree salt member.
Preliminary studies have indicated the potential for solution mining technologies followed by crystallization of the resulting brine solutions to produce salt and by extension potash products. The above information has been sourced from various public company reports and governmental information sources. The exploration properties will be subject to a National Instrument 43-101 report to be completed as part of the Amalgamation.
About AusPotash Corporation
AusPotash was incorporated in July, 2008 pursuant to the Business Corporations Act (Ontario). It has been active since July 2008 and its corporate office is located in Toronto, Ontario. AusPotash has not conducted any business other than to acquire and explore Queensland Potash.
The following is a summary of AusPotash unaudited financial information prepared by AusPotash's management for the period from inception (July 11, 2008) to May 31st, 2009:
- Total Assets $7,037,595 - Total Liabilities $123,039 - Total Revenue $ nil - Net Loss (before taxes) $870,521
A general policy of the Exchange requires that a sponsor be retained to prepare a sponsor report in compliance with Exchange Policy 2.2. Greenwich has appointed Haywood Securities to prepare the sponsor report.
Trading in the shares of Greenwich will remain halted until receipt by the Exchange of satisfactory documentation.
This press release contains forward-looking statements with respect to the Amalgamation and matters concerning the business, operations, strategy, and financial performance of Auspotash and Greenwich. These statements generally can be identified by use of forward looking word such as "may", "will", "expect", "estimate", "anticipate", "intends", "believe" or "continue" or the negative thereof or similar variations. The completion of the Amalgamation and the future business, operations and performance of Auspotash discussed herein could differ materially from those expressed or implied by such statements. Such forward-looking statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations, including that the transaction contemplated herein is completed. Forward-looking statements are based on a number of assumptions which may prove to be incorrect, including, but not limited to: the ability of Greenwich and AusPotash to obtain necessary shareholder approval to complete the Amalgamation or to satisfy the requirements of the Exchange with respect to the Amalgamation. The cautionary statements qualify all forward-looking statements attributable to Greenwich and AusPotash and persons acting on their behalves. Unless otherwise stated, all forward looking statements speak only as of the date of this press release and Greenwich and AusPotash have no obligation to update such statements except as required by law.
Completion of the transaction is subject to a number of conditions, including but not limited to, Exchange acceptance. The transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the management information circular or filing statement prepared in connection with the transaction, any information released or received with respect to the transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.
Haywood Securities Limited, subject to completion of satisfactory due diligence, has agreed to act as sponsor in connection with the transaction. An agreement to sponsor should not be construed as any assurance with respect to the merits of the transaction or the likelihood of completion.
The TSX Venture Exchange Inc. 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 TSX Venture Exchange Inc. nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange Inc.) accepts responsibility for the adequacy or accuracy of this release.
Latest AJAXWorld RIA Stories
Subscribe to the World's Most Powerful Newsletters
Subscribe to Our Rss Feeds & Get Your SYS-CON News Live!
SYS-CON Featured Whitepapers
Most Read This Week