99 Capital Corporation

October 06, 2010 12:51 ET

99 Capital Corporation to Acquire six African Gold Properties

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Oct. 6, 2010) - 99 Capital Corporation (the "Company") (TSX VENTURE:WDG) is pleased to announce that it has entered into an agreement (the "Transaction") to acquire a 66.5% interest in six historically past-producing gold mines located in the Giyani Greenstone belt of South Africa (the "Giyani Gold Project"). These properties include the Klein Letaba, Frankie, Horseshoe 1 & 2, Birthday, and Louis Moore and are located in an area which has historically contained high grade, near surface, multi-million ounce deposits. In connection with the Transaction, the Company also announces a non-brokered private placement offering for gross proceeds of up to CAD$9 million (the "Offering").

The Transaction will be structured as a purchase by the Company of 100% of the issued and outstanding common shares of Kytanite Development Corp. ("Kytanite") from Salina Management Holdings Corp. (the "Seller"). Kytanite owns 70% of the issued and outstanding common shares of Lexshell 837 Investments (Proprietary) Limited which owns 95% of the issued and outstanding common shares of Rock Island Trading 17 (Proprietary) Limited, ("Rock Island"). Immediately prior to closing the Transaction, Rock Island will be the registered owner of the licences at the Giyani Gold Project. Following the Transaction, the Company's ownership position will be 66.5% of the Giyani Gold Project. The remaining interest is controlled by local South African partners including the property vendor and current owners of surface rights.

The Company is also proceeding with a non-brokered private placement of gross proceeds of up to CAD$9 million. The Offering will consist of up to CAD$8 million of units, priced at CAD$0.60 per unit, each unit consisting of one common share and one-half of one common share purchase warrant. Each whole warrant is exercisable at a price of CAD$0.85 per share for a period of two years from the date of issuance. The Company has the right to accelerate the warrant exercise if the Company's volume-weighted 20-day average share price trades at CAD$1.00 or higher. The Offering will also consist of CAD$1 million of flow-through common shares, with each flow-through share priced at CAD$0.70.

US$6 million raised from the non flow-through proceeds will be held in escrow and tendered for release upon closing of the Transaction to be used for the acquisition of the Giyani Gold Project, exploration at the Company's properties and for general working capital purposes. US$2 million will be released immediately for general working capital. The proceeds from the flow-through portion of the Offering will be used for the continuing work program on the Company's existing Ontario and Saskatchewan properties. There will be limited insider participation, details of which are unknown at this time.

The Offering is being made to qualified non-U.S. purchasers, in reliance upon exemptions from the prospectus and registration requirements of applicable securities legislation. The Offering is subject to certain conditions, including regulatory approval. The securities issued upon the closing of the Offering will be subject to a four-month hold period from the date of issue, including any other resale restrictions imposed by applicable securities regulatory authorities.

The Transaction is anticipated to close on or about October 29, 2010.

As consideration for the acquisition of the interest in the Giyani Gold Project, the Company will pay to the Seller a total of US$5,000,000 and will issue to the Seller 6,000,000 common shares of the Company from treasury. In addition, the Company has also committed to future bonus payments of US$2.50 per ounce to a maximum of $10 million based on the indicated and inferred resources of the Giyani Gold Project established by the National Instrument 43-101 ("NI 43-101") compliant report.

The Transaction is subject to certain conditions, including satisfactory completion of due diligence by the Company, completion of an NI 43-101 compliant report, and various third-party, regulatory, and governmental approvals including TSX Venture Exchange approval.

Alexander Helmel, President and CEO of the Company, stated: "This new acquisition represents a significant step forward for the Company and a significant expansion of our geographic focus. The Giyani Greenstone belt has a notable history in both asset definition and production. With the application of advanced exploration techniques, it is our goal to develop this asset by rapidly delineating targets, to reconfirm the defined historical resource and to be a leader in the renewal of this prolific gold region."

About the Giyani Gold Project:

This strategic land package covers a key geologically prospective gold region of the world. Located in the northeast part of South Africa, the Giyani Greenstone Belt represents a historically under-explored region of the country and key industry development initiative for the Chamber of Mines of South Africa and the Geological Society of South Africa. The properties are all located within a 13 km long corridor of the highly prospective Giyani Greenstones that host considerable past production and exploration potential. 

All technical information contained in this release is of historical nature and has not or could not be verified by the Company. Readers are cautioned to not rely on this information.

The Company's director, Mr. James A. Turner, a Qualified Person as defined by National Instrument 43-101, has read and approved the information contained herein.

This news release contains forward-looking statements regarding the future success of the business of the Company that is subject to risk and uncertainties. Examples of such forward-looking statements including, but are not limited to, statements concerning the Company's acquisition of the interest in the Giyani Gold Project, expectations concerning the timing and success of exploration activities generally, government regulation of exploration and mining operations, indications and benefits of exploration, drilling test work and engineering assessments, environmental risks, tile disputes or claims, and the Company's intention to raise additional capital and financing. These forward-looking statements involve known and unknown risk and uncertainties that may cause the Company's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied in these forward-looking statements. These risks include risks related to dependence on key personnel, competition, risks related to newly acquired businesses, uncertainty and dilution of additional financing and ability to service debt, as well as the risk factors described in the Company's Management Discussion and Analysis filed on SEDAR at www.sedar.com, and the risks to be described in any Management Information Circular. The forward-looking statements contained herein are made as of the date of this news release and are expressly qualified in their entirety by this cautionary statement. Except as required by law, the Company undertakes no obligation to publicly update or revise any such forward-looking statements to reflect any change in its expectations or in events, conditions or circumstances on which any such forward-looking statements may be based, or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements.

On behalf of the Board of 99 Capital Corporation

Alexander Helmel, President & CEO

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.

Contact Information

  • 99 Capital Corporation
    Alexander Helmel
    President & CEO