Argex Silver Capital Inc.
TSX VENTURE : RGX.P

November 18, 2008 11:43 ET

Argex Silver Capital Inc. Announces Proposed Qualifying Transaction With 7013833 Canada Corp.

MONTREAL, QUEBEC--(Marketwire - Nov. 18, 2008) - Argex Silver Capital Inc. (TSX VENTURE:RGX.P) announces today that it entered into an agreement in principle dated November 10, 2008 to acquire all of the assets of 7013833 Canada Corp.

About the Vendor

7013833 Canada Corp (the Vendor), is a privately held company incorporated under the Canada Business Corporations Act and controlled by Francois Dumas. The Vendor acquired iron ore claims, which are described in the section below. The preferred and common shareholders of the Vendor are the following:



Preferred Jurisdiction of Number of Preferred As a %
Shareholders Incorporation Shares Held of Total
------------------------------------------------------------------------
Fancamp British Columbia,
Exploration Ltd. Canada 2,250,000 64.29%
Sheridan
Platinum Group Ontario, Canada 750,000 21.43%
Exploration JF Inc. Quebec, Canada 500,000 14.29%
------------------------------------------------------------------------
3,500,000 100.00%


Jurisdiction of
Common Incorporation / Number of Common As a %
Shareholders Country of Residence Shares Held of Total
------------------------------------------------------------------------
DumasBancorp ULC Alberta, Canada 750,000 30.00%
Christian Wirth Panama 500,000 20.00%
Tsai Investment ULC Alberta, Canada 500,000 20.00%
G&O Energy British Columbia,
Investment Ltd. Canada 500,000 20.00%
L.A.D. Ltd. Canada 250,000 10.00%
------------------------------------------------------------------------
2,500,000 100.00%


The preferred shares have a total redeemable face value of $1 per preferred share, or a total of $3,500,000. In the event of a going-public transaction, such as the proposed Qualifying Transaction described below, the total redeemable face value of the preferred shares of the Vendor, i.e. $3,500,000, is convertible into common shares of the Corporation at the share price of the Corporation in connection with the Qualifying Transaction.

About the Assets

The Assets consist of:

1. A group of 18 claims in National Topographic System of Canada map zone 22K04, totalling approximately 995 ha (9.95 km2) in area and featuring iron ore, titanium and vanadium showings within the vicinity of the Lac La Blache area in close proximity to the Manic III hydroelectric dam on the North Shore of the Province of Quebec. Lac La Blache is situated approximately 125 km northwest of the town of Baie-Comeau; and

2. A group of 185 claims in National Topographic System of Canada map zones 22N11, 22N13 and 22N14, totalling approximately 9,845 ha (98.45 km2) in area and generally referred to as the "Hanna Mining", "Consolidated Morrison" and "Fortin" properties; these claims are located north of the Manic V hydroelectric dam reservoir, which is approximately 350 km north of Baie-Comeau on the North Shore of Quebec.

According to a report from the Quebec Ministry of Energy and Resources, dated November 12, 1981, the Lac La Blache titaniferous magnetite deposits were originally discovered in 1952 and subsequently explored by Bersimis Mining Company, a subsidiary of Price Pulp and Paper. The Lac La Blache anorthosite within which the deposits are found is approximately 20 miles by 10 miles and trends northeast - southwest. Bersimis Mining Company used airborne magnetic techniques to identify deposits near Lac Schmoo, Hervieux East, Hervieux West and La Blache East.

The Proposed Qualifying Transaction

The acquisition of the Assets, together with the Proposed Financing hereinafter described, is expected to constitute a "Qualifying Transaction" for Argex Silver Capital Inc. as set forth in the policies of the TSX Venture Exchange (the Exchange). The transaction is subject to a number of conditions precedent including regulatory approval.

The Agreement provides that Argex Silver Capital Inc. (the Corporation) will purchase the Assets for a total consideration of up to $7,030,000 payable (a) $780,000 in cash and (b) through the issuance of up to 25,000,000 common shares in the capital of the Corporation on the basis of $0.25 per share.

The Corporation and the Vendor agree to pay a finder's fee to Gemme Manicouagan Inc. in connection with the Qualifying Transaction, of an amount equal to $384,000, assuming a value of the Assets of $7,030,000. This amount will be payable in cash upon closing of the Qualifying Transaction and is conditional upon the approval of the Exchange and other regulatory authorities, as required.

After the completion of the Qualifying Transaction but prior to the issuance of any shares pursuant to the Proposed Financing as described below, an aggregate of 38,349,000 common shares of the Corporation will be issued and outstanding. The current shareholders of the Corporation will own 13,349,000 common shares (34.81%) while the Vendor will own 25,000,000 common shares (65.19%) of the Corporation. It is anticipated that, immediately upon closing, the Vendor will distribute these common shares by way of dividend to its shareholders. Consequently, Fancamp Exploration Ltd. (TSX-V: FNC) (Fancamp) will own 9,000,000 of the common shares (23.47%) of the Corporation after completion of the Qualifying Transaction but prior to completion of the Proposed Financing. In the event of the minimum Financing, the current shareholders of the Corporation will own 13,349,000 common shares (22.88%) of the Corporation after completion of the Qualifying Transaction, while Fancamp will own 9,000,000 common shares (15.42%) of the Corporation. In the event of the maximum Financing, the current shareholders of the Corporation will own 13,349,000 common shares (13.57%) after completion of the Qualifying Transaction, while Fancamp will own 9,000,000 common shares (9.15%) of the Corporation.

The acquisition of the Assets by the Corporation constitutes an Arm's Length Qualifying Transaction as defined in the policies of the Exchange.

Proposed Financing

Concurrently with the Qualifying Transaction, the Corporation will conduct a non-brokered private equity offering of units (the Units) for minimum gross proceeds of $5,000,000 and maximum gross proceeds of $15,000,000 (the Financing), the whole to be conducted on a best efforts basis. The Financing will consist of a mixed offering of Units consisting of both flow-through and common shares. Each Unit will consist of either:

(a) one flow-through common share in the capital of the Corporation and one common share purchase warrant, offered at a price of $0.25 per Unit; or

(b) one non flow-through common share in the capital of the Corporation and one common share purchase warrant, offered at a price of $0.25 per Unit.

Each warrant forming part of the Units will entitle the holder thereof to acquire one common share in the capital of the Corporation at a price of $0.40 per share at any time prior to the date that is 24 months from the date of issuance. In the event that the volume-weighted average price of the Corporation's common shares trades at or above $0.60 for 20 consecutive trading days, after the expiry of the four-month hold on the Units described above, then the Corporation will have the option to force conversion of the warrants by giving warrant holders 20 days' notice thereof.

Closing of the Financing will be conditional upon the completion of the Qualifying Transaction and acceptance hereof by the Exchange and the relevant securities regulatory authorities.

Board of Directors of the Corporation

Following the Qualifying Transaction, the Board of Directors of the Corporation will consist of the five persons named hereafter.

Mark Billings is currently President, CEO and a director of the Corporation. He is also the President and CEO of Orex Exploration Inc. (TSX VENTURE:OX), a junior gold exploration company with a property at Goldboro, Nova Scotia, and a partner at Atwater Financial Group Inc., a Montreal-based merchant banking group. Mr. Billings is also a director of Ona Energy Inc. (CNQ:OEE), a company that has a 60% interest in a coal-fired electricity plant in China. He has a BA (Honours) from Carleton University and an MBA from the Harvard Business School; he is also a Chartered Financial Analyst.

Roy Bonnell is currently CFO and a director of the Corporation. He is also the Managing Director of Atwater Financial Group, a Montreal-based merchant banking group. He is also the chairman of TI2, a Laval-based technology company and has acted as a corporate finance associate for two investment dealers in 2000 and 2001. Mr. Bonnell has an M.Sc. in Accounting and Finance from the London School of Economics, an MBA from McGill University, a law degree from the University of Western Ontario and a BA (Honours) from Queen's University.

Michael Curtis is President and CEO of Opal Energy Corp. (TSX VENTURE:OPA), an independent exploration and production company focused on developing natural gas resources in South Texas. He is also a director of Roadrunner Oil and Gas Inc. (TSX VENTURE:ROA). Mr. Curtis has over 35 years of experience in the Canadian financial industry in the areas of trading, research, corporate finance and the management of public companies. In 1998, he founded and became President and Director of Cardwell Capital Inc., a private investment and trading corporation that invests in small and mid-capitalization public companies trading in North American markets.

Anthony Garson is President and CEO of Excalibur Resources Ltd. (CNQ:XBR), which has base metal mining properties in Ontario, British Columbia and Nevada. He has a B.Sc. in Earth Sciences from the University of Waterloo and an MBA from the University of Toronto. He has been involved in the brokerage industry as a Mines and Metals Analyst, having served with the following firms, among others: Bank of Nova Scotia (TSX:BNS), Dean Witter Reynolds (Canada) Ltd. and Canaccord Capital (TSX:CCI). Mr. Garson was a principal and founding partner of Union Capital Markets (UK) Ltd. and has served as a director of several public companies.

Peter H. Smith is the President and CEO of Fancamp Exploration Ltd. (TSX VENTURE:FNC), which has an inventory of mining properties in Ontario, Quebec and New Brunswick, with potential resources of gold, iron ore, uranium and nickel. He is also on the board of directors of Golden Hope Mines Ltd. (TSX VENTURE:GNH), which is engaged in mineral exploration in the province of Quebec and the state of Maine. Mr. Smith holds a B.Sc. in geology from McGill University and an MS and Ph.D. from Northwestern University. He is a Professional Engineer in Ontario.

Upon completion of the Qualifying Transaction, Michael Curtis will act as Chief Executive Officer of the Corporation, and Mark Billings will act as Chief Financial Officer of the Corporation.

The Corporation and the Vendor have agreed that trading in the shares of the Corporation will not resume prior to the completion of the Qualifying Transaction.

Completion of the Qualifying Transaction is subject to a number of conditions, including but not limited to, satisfactory reciprocal due diligence reviews by the Corporation, Exchange acceptance, Vendor, shareholder approval and completion of the proposed offering before December 31st of this year. The transaction cannot close until the required regulatory approvals pursuant to laws, regulations and applicable policies are 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 to be 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. The Exchange has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.

Richard Kern, P.Geo., is the Qualified Person as defined in Regulation 43-101 / National Instrument 43-101, who has reviewed and approved the contents of this press release.

Contact Information

  • Argex Silver Capital Inc.
    Mr. Mark Billings
    President and Chief Executive Officer
    514-296-1641