Brass Capital Corp.

November 03, 2009 11:44 ET

Brass Capital Updates Acquisition of Heatherdale Resources Ltd.

CALGARY, ALBERTA--(Marketwire - Nov. 3, 2009) -


Brass Capital Corp. ("Brass" or the "Corporation") (TSX VENTURE:BRZ.P), a Calgary based Capital Pool Company ("CPC") listed on the TSX Venture Exchange Inc. (the "Exchange") (symbol: BRZ.P) provides the following update with respect to its proposed acquisition (the "Acquisition") by way of Plan of Arrangement (the "Arrangement") of Heatherdale Resources Ltd. ("Heatherdale"), a private Vancouver based mineral exploration company initially announced in the press release dated September 17, 2009. The Acquisition, if completed, will constitute the Corporation's "Qualifying Transaction" under Exchange Policy 2.4 relating to CPCs.

The Corporation and Heatherdale have entered into a definitive Arrangement Agreement dated October 13, 2009 (the "Arrangement Agreement") and have filed requisite documents with the Exchange for approval of the Acquisition.

Shareholder Approvals

At a Special General Meeting of the shareholders of Heatherdale held in Vancouver, BC on October 30, 2009, the Heatherdale shareholders approved the Arrangement by special resolution as required under the British Columbia Business Corporations Act.

At a Special Meeting held on November 2, 2009 in Calgary, AB, Brass shareholders approved certain matters in support of, and incidental to the Acquisition, including a 2.5 for 1 share consolidation, the continuation of the Corporation out of Alberta and into British Columbia, the increase of the number of directors of the Corporation to six and a change of the Corporation's name to "Heatherdale Resources Ltd".

Proposed Private Placement

The parties have further clarified the terms of the proposed concurrent private placement originally announced on September 17, 2009 and intend that Heatherdale will complete, concurrently with the closing of the Acquisition, a brokered private placement of common shares to raise gross proceeds of a minimum of $10 million and a maximum of $15 million at a price of $1.00 per share (the "Private Placement").

Raymond James Ltd. has been engaged as lead agent for the Private Placement and for its services will receive a cash fee equal to 6% of the gross proceeds and broker warrants entitling the agent to purchase that number of shares as is equal to 3% of the securities issued in the Private Placement for $1.00 per share for a period of 18 months from the closing of the Private Placement. No broker warrants are issuable in connection with shares issued to investors sourced by Heatherdale.

Securities Issued on Closing

On the closing of the Acquisition and the Private Placement, the Corporation expects to be classified as a Tier 1 Mining Issuer and will have approximately 33,420,001 issued common shares, excluding the common shares to be issued in connection with the Private Placement, but including the 820,000 post consolidation shares held by current shareholders of the Corporation (of which 420,000 shares will be subject to applicable Exchange escrow requirements).

In accordance with the terms of the Arrangement, in addition to applicable Exchange escrow requirements, upon closing, the 32,600,001 common shares of the Corporation issued to the current Heatherdale shareholders (the "New Common Shares") will be deposited into voluntary escrow ("Escrow") and released from Escrow pursuant to an escrow agreement (the "Escrow Agreement") between the escrow agent ("the Escrow Agent") and the Corporation as to 25% on each of the 6, 12, 18 and 24 month anniversaries of the date of closing. Certificates representing the New Common Shares will be delivered to and held by the Escrow Agent on the closing of the Acquisition. Upon surrender to the Corporation of a validly completed and duly executed Letter of Transmittal, the Escrow Agent will mail to each Heatherdale shareholder a letter which confirms the number of New Common Shares that each such shareholder holds in Escrow and the release dates of the New Common Shares from Escrow. The Escrow Agent will effect the release and delivery to the former Heatherdale shareholders of the number of New Common Shares that have been released from Escrow in accordance with the terms of the Escrow Agreement.

Conditions of Closing

With the satisfaction of the shareholder approval conditions outlined above, the closing of the Acquisition remains subject to the remaining conditions precedent originally outlined in the September 17, 2009 press release set out below:

  1. the receipt of all regulatory and third party approvals, including the conditional approval of the Exchange;
  2. the maintenance of the Corporation's listing on the Exchange;
  3. the representations and warranties of the Corporation and Heatherdale as set out in the Arrangement Agreement being true and correct at the time of closing of the Acquisition with the same force and effect as if made at and as of such time;
  4. the absence of any material adverse effect on the financial and operational condition or the assets of the Corporation and Heatherdale; and
  5. the completion of the Private Placement.


There can be no assurance that the Acquisition will be completed as proposed or at all. Under Exchange rules, trading in the common shares of the Corporation has been halted, and will remain halted pending completion of the Qualifying Transaction.

For further information concerning the Acquisition and this press release, please contact Mr. Gregory R. Harris, Director, President, Chief Executive Officer and Chief Financial Officer of Brass Capital Corp. or Mr. Shawn Wallace, Heatherdale Investor Relations.

Completion of the transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable pursuant to Exchange Requirements, majority of the minority shareholder approval. Where applicable, 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 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.

Except for statements of historical fact, this news release contains certain "forward-looking information" within the meaning of applicable securities law. Forward-looking information is frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those anticipated in the forward-looking statements. The Corporation undertakes no obligation to update forward-looking information if circumstances or management's estimates or opinions should change except as required by law. The reader is cautioned not to place undue reliance on forward-looking statements. 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 the Corporation.

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 the TSX Venture Exchange nor its Regulation Services Provide (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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