540 Capital Corp.
TSX VENTURE : FA.P

January 08, 2008 17:45 ET

540 Capital Corp. Announces Proposed Qualifying Transaction

CALGARY, ALBERTA--(Marketwire - Jan. 8, 2008) -

(NOT FOR DISSEMINATION IN THE UNITED STATES OF AMERICA)

540 Capital Corp. (TSX VENTURE:FA.P) ("540" or the "Corporation") today announced that it has entered into an arm's length letter of intent dated effective December 4, 2007 (the "LOI") with Golden Dory Resources Limited ("Dory") pursuant to which 540 intends to acquire 100% of the outstanding common shares and warrants of Dory in exchange for an equal number of shares and warrants of 540 (the "Qualifying Transaction").

Pursuant to the terms of the Qualifying Transaction: (i) the holders of the Dory common shares (the "Dory Common Shares") will receive one common share of 540 (the "540 Common Shares") with a deemed value of $0.45 per share for each Dory Common Share owned; and (ii) the holders of the Dory warrants (the "Dory Warrants") will receive share purchase warrants of 540 (the "540 Warrants") having the same terms as the Dory Warrants. In conjunction with the closing of the Qualifying Transaction, certain shareholders of 540 (the "Selling 540 Shareholders") have agreed to sell to certain shareholders of Dory, a total of 2 million common shares of 540 at a price of $0.10 per share and to five other individuals a total of 392,000 common shares of 540 at a price of $0.15 per share, the shares to be sold at $0.15 to be issued as a result of the Selling 540 Shareholders first exercising stock options in 540 held by them (collectively referred to as the "Private Securities Acquisition").

The Qualifying Transaction and the Private Securities Acquisition will be completed in conjunction with the completion of a private placement by 540, to close concurrently with the Qualifying Transaction to be completed by Canaccord Capital Corporation (the "Agent") on a "best efforts" basis (the "Private Placement"). The Private Placement will raise up to $2,350,000 and will consist of: (i) up to 3 million units (the "Units") at a price of $0.45 per Unit, each Unit consisting of one common share and one warrant exercisable at $0.60 to purchase a further common share for 18 months after closing; and (ii) up to 2 million flow-through shares at a price of $0.50 per flow-through share. The Agent will receive a cash commission equal to 8% of the proceeds raised in the Private Placement plus a broker's warrant to purchase that number of common shares equal to 10% of the Units and flow-through shares sold in the Private Placement, such broker's warrants to be exercisable at $0.45 for 18 months from the closing of the Private Placement.

After completion of the Qualifying Transaction, the Private Securities Acquisition and the Private Placement, there will be 19,453,000 common shares of 540 outstanding of which the current Dory shareholders will hold approximately 60% of 540's common shares, the current 540 shareholders will hold approximately 14% of 540's common shares and the subscribers to the Private Placement will hold approximately 26% of 540's common shares.

540 and Dory continue to prepare certain materials required to be filed with the TSX Venture Exchange (the "TSX Venture") in connection with the Qualifying Transaction. Trading of the common shares of 540 will not resume until the TSX Venture has received and accepted all documents required by the TSX Venture. 540 will issue a further news release at such time as the TSX Venture has received the necessary documentation and trading of the 540 common shares is to resume.

The completion of the Qualifying Transaction is subject to a number of conditions, including but not limited to TSX Venture acceptance. The Qualifying Transaction cannot close until the required TSX Venture 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 of the Corporation 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 the Corporation should be considered highly speculative.

Except for historical information contained herein, this news release contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially. Neither Dory nor 540 will update these forward-looking statements to reflect events or circumstances after the date hereof. More detailed information about potential factors that could affect financial results is included in the documents filed from time to time with the Canadian securities regulatory authorities by 540 and Dory.

The TSX Venture has in no way passed upon the merits of the Qualifying Transaction and has neither approved nor disapproved the contents of this press release.

Contact Information

  • 540 Capital Corp.
    David Rutt
    President and CEO
    (403) 234-0623
    or
    Golden Dory Resources Limited
    Kevin D. Keats
    President and CEO
    (709) 674-4200