Chrome Capital Inc.
TSX VENTURE : KRM.P

August 08, 2008 17:56 ET

Chrome Capital Announces Proposed Qualifying Transaction

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

NOT FOR DISSEMINATION IN THE UNITED STATES OF AMERICA

Chrome Capital Inc. ("Chrome" or the "Corporation") (TSX VENTURE:KRM.P) is pleased to announce details concerning a proposed Qualifying Transaction. Chrome has entered into an arm's length letter of intent dated July 28, 2008 (the "Letter of Intent") with Golden Meadow Exploration Inc. ("Golden"), pursuant to which Golden and Chrome have agreed to merge their companies in a reverse take over of Chrome by way of an amalgamation (the "Amalgamation"). The Amalgamation is expected to constitute the Qualifying Transaction of the Corporation as defined in the policies of the TSX Venture Exchange Inc. ("TSX Venture").

About Chrome

Chrome, a capital pool company ("CPC") as defined in Policy 2.4 (the "CPC Policy") of the TSX Venture, was incorporated under the provisions of the Business Corporations Act (Alberta) on October 4, 2006 and completed its initial public offering in March of 2007. Chrome currently has 2,060,000 common shares (the "Chrome Shares") issued and outstanding, of which 1,050,000 Chrome Shares are subject to a 3 year escrow agreement with releases of 10% on closing of the Qualifying Transaction and 15% every six months thereafter. In addition, Chrome has granted stock options to its directors and officers to purchase 205,000 Chrome Shares at a price of $0.20 per share and an agent's option to Blackmont Capital Inc., the agent on Chrome's initial public offering, to purchase 90,000 Chrome Shares at a price $0.20 per share for a period of 24 months after closing of the Qualifying Transaction. The current directors of Chrome are Gregory R. Harris (President, CEO and CFO), Bernie Kraft and Richard Boxer.

About Golden

Golden is a private company incorporated on January 21, 2004 under the provisions of the Business Corporations Act (Alberta). Golden was formed to operate as a mineral exploration company with a strategic goal to grow rapidly through internally generated prospects in mineral exploration and development. Golden owns 24 mining claims in the Hemlo region of north-central Ontario in the Townships of Bomby, Lecours and Mussy Lake, Ontario about 300 kilometres east of Thunder Bay, near the Town of Marathon. Golden holds 100% of two prospective properties as follows: (i) the GMX Hemlo Property, in three separate claim groups comprising approximately 6,511 acres; and (ii) the GMX Mussy Lake Property, in one claim group comprising approximately 2,357 acres. Golden has conducted mineral exploration on the Claims since June, 2004 including geological sampling, surveys, mapping and related work. In addition, Golden conducted a field work program during 2007 and 2008 using the following exploration methods: (i) Pulse EM surveys; (ii) Induced Potential (IP) surveys; and (iii) airborne electromagnetic surveys. These techniques were utilized to better define Golden's drill targets by technical interpretation of the geophysical data obtained as well as of the geology of the region.

Golden currently has 18,703,406 common shares (the "Golden Shares") issued and outstanding, and no stock options, warrants, anti dilution or other rights to purchase Golden Shares, other than warrants to purchase up to 8,458,224 Golden Shares at a price of $0.375 per share (the "Golden Warrants") and stock options to purchase up to 1,540,000 Golden Shares at a price of $0.50 per share (the "Golden Options"). Mr. Allan Mar of Calgary, Alberta, the President, Chief Executive Officer and a director of Golden, owns 2,040,000 Golden Shares (approximately 10.9%), 1,000,000 Golden Warrants and 625,000 Golden Options. Mr. Kenneth Lambert of Calgary, Alberta, owns 4,994,525 Golden Shares (approximately 26.7%) and 2,497,262 Golden Warrants. The securities owned by Mr. Mar, Mr. Lambert and other insiders of Golden will be subject to such escrow restrictions as the TSX Venture may impose.

The following is a summary of financial information of Golden for the periods indicated.



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As at and for As at and for As at and for As at and for
the year ended the year ended the year ended the year ended
December 31, December 31, December 31, December 31,
2007 2006 2005 2004
(unaudited) (audited) (audited) (audited)
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Total revenues Nil Nil Nil Nil
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Mineral property
expenditures $484,352 $1,279,976 $230,173 $104,519
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Total expenses $193,605 $212,450 $67,238 $26,722
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Net Income (Loss) ($193,605) ($212,450) ($67,238) ($26,722)
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Per share (basic) ($0.01) ($0.02) ($0.01) ($0.004)
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Per share (diluted) ($0.01) ($0.02) ($0.01) ($0.004)
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Total assets $2,788,386 $3,044,778 $916,168 $288,818
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Total long term
liabilities Nil Nil Nil Nil
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Working capital
(deficit) ($48,855) $568,733 $281,055 $63,231
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Cash dividends
declared Nil Nil Nil Nil
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Summary of the Proposed Qualifying Transaction

The Letter of Intent provides that Chrome will create a wholly-owned subsidiary (the "Chrome Subsidiary") and that Golden and the Chrome Subsidiary will amalgamate and continue as a new corporation ("Amalco"). Rather than receiving shares of Amalco, the shareholders of Golden will instead receive Chrome Shares on the basis of 1.25 Chrome Shares for each Golden Share owned. Chrome will also issue replacement stock options and warrants for the existing Golden stock options and warrants based on the same exchange ratio (1.25 for 1) while all other terms (i.e. exercise prices, vesting provisions and expiry dates) of such convertible securities will remain identical to the terms granted by Golden. Based on this exchange ratio, it is expected that Chrome will issue an aggregate of 23,379,258 Chrome Shares (subject to rounding) at a deemed price of ($0.20) per share, warrants to purchase up to 10,572,780 Chrome Shares at a price of $0.375 per share and stock options to purchase up to 1,925,000 Chrome Shares at a price of $0.50 per share. Upon completion of the Amalgamation, it is expected that the Golden shareholders will own approximately 92% of the issued and outstanding Chrome Shares (prior to the Private Placement (as defined below) or the exercise of any securities convertible into Chrome Shares).

Proposed Directors and Officers

Upon completion of the proposed Qualifying Transaction, it is expected that the board of directors of Chrome will be comprised of Messrs. Allan Mar, David Pirie, Daniel Beauchamp and Gregory R. Harris and one other individual to be mutually agreed upon by Chrome and Golden. Is is also expected that Mr. Mar will become President and Chief Executive Officer of Chrome and that Mr. Beauchamp will become the Vice-President, Exploration of Chrome. The backgrounds of these individuals are as follows:

Allan Mar (Calgary, Alberta) - Mr. Mar is the founder of Golden and has been the President and Chief Executive Officer since January 24, 2004. Mr. Mar also founded The Mar Group, a real estate development and advisory company, for which he has acted as the President for the previous 20 years. Mr. Mar also founded and served as President of Ultima Development Corporation, which began operations in March 1993 and was a major developer of a 365 acre residential, commercial and industrial subdivision known as Panorama Hills Estates and The Bluffs of Country Hills in Calgary, Alberta which was completed in October, 2004. Mr. Mar graduated with a B. Com. in Finance and Estate Management, completed the M.B.A. programme, as well as a Teaching Fellowship at the University of British Columbia.

Daniel Beauchamp (Calgary, Alberta) - Mr. Beauchamp has acted as the Vice-President, Exploration for Golden since November, 2006 and prior to that had been a Geological Consultant to Golden since November, 2005. Prior to his involvement with Golden, Mr. Beauchamp was employed from 2004 to 2006 as a GIS (Geographical Information Systems) Specialist with Intierra Ltd., a company that provides mapping, financial and technical databases for the mining industry. Mr. Beauchamp has been a geological consultant to many mineral exploration companies and has worked on projects throughout Canada from the grass roots level to early mine development from 1986 to 2007. Mr. Beauchamp has been a director of Marum Resources Inc., a mineral exploration company listed on the TSX Venture, since 2006. Mr. Beauchamp is credited with the discovery of the Mt. Skukum Gold Mine in the Yukon. Mr. Beauchamp has a B. Sc. (Honours) in Geology from the University of Ottawa and a M.B.A. in Finance from the University of Calgary. He has been a Professional Geologist, registered in Alberta with APPEGGA since 1980.

David Pirie (Kelowna, British Columbia) - Mr. Pirie has been the President of Strait Crossing Development Inc., the developer of the Confederation Bridge Project in Atlantic Canada since June, 2006. Prior to this appointment, Mr. Pirie was Secretary-Treasurer and Director of Strait since October, 1993. Mr. Pirie is also President of Verchere Investment Corp., a private investment company, a position which he commenced in October, 1993. For the past 25 years, Mr. Pirie has worked on major infrastructure projects in many countries and has provided consulting services to all levels of Government. Mr. Pirie's areas of expertise include strategic planning, contract and risk management, project finance and project management. Mr. Pirie graduated from the University of Western Ontario with a B.A. in Economics and a LL.B. from the University of Toronto. Mr. Pirie practiced law in Calgary until 1983 with a practice focused on commercial, security, real estate development and construction law.

Gregory R. Harris (Calgary, Alberta) - Mr. Harris is a lawyer in sole practise. He is the President, CEO and CFO and a director of Chrome and Brass Capital Inc., a CPC, and is a director of Poplar Creek Resources Inc., a CPC, Canadian Shield Resources Inc., a mineral exploration company with operations in Peru, and Antioquia Gold Inc., a mineral exploration company with operations in Colombia, all TSX Venture listed companies.

Financing

Chrome and Golden have agreed to use their best efforts to complete a private placement of securities of Chrome or Golden to raise gross proceeds of up to $2,500,000 (the "Private Placement"). The Private Placement will be completed concurrent with the completion of the Amalgamation. The final terms and conditions of the Private Placement will be mutually agreed upon by Chrome and Golden.

In accordance with the policies of the TSX Venture, the Letter of Intent provides that Chrome shall advance the sum of $25,000 to Golden as a non-refundable deposit in order to preserve assets of Golden.

Conditions to the Completion of the Qualifying Transaction

The obligations of the Chrome and Golden to consummate the Amalgamation shall be subject to, among other things: (i) the receipt of all necessary regulatory and TSX Venture approval, including, without limiting the generality of the foregoing, the approval of the Amalgamation as a Qualifying Transaction in accordance with the CPC Policy; (ii) the Private Placement being completed with the result that the Resulting Issuer (as defined in the policies of the TSX Venture) satisfies the minimum listing requirements of the TSX Venture for a Tier 2 Mining Issuer; (iii) the receipt of all necessary shareholder and board of director approvals; (iv) the review to the sole satisfaction of each of Chrome and Golden of the financial condition, business, properties, title, assets and affairs of the other party; and (v) the entering into of a formal agreement between Chrome and Golden in such form as is mutually agreeable to the parties. The conditions listed above are for the benefit of, and maybe waived by, Chrome and Golden as it relates to the obligations of the other party to perform or obtain same.

The completion of the Qualifying Transaction will not be subject to Chrome shareholder approval, which is in compliance with the CPC Policy for arm's length Qualifying Transactions.

Technical Report

Golden has retained Mr. Robert G. Komarechka, P. Geo., P.Geol., President of Bedrock Research Corp., to prepare a technical report (the "Report") on the Claims owned by Golden in accordance with the requirements of National Instrument 43-101. The Report will be submitted to the TSX Venture for review. When the Report is finalized and approved by the TSX Venture, it will be filed on SEDAR, concurrently with the Filing Statement which is being prepared for review by the TSX Venture in accordance with the CPC Policy.

Sponsorship

Chrome has requested that the TSX Venture waive the requirement for a Sponsorship Report in connection with the Qualifying Transaction. There are no guarantees that the TSX Venture will accept Chrome's request to waive the Sponsorship Report requirement, in which case Chrome will engage a Sponsor to prepare such a report.

Resumption of Trading and Further News

Trading of the Chrome Shares will not resume until the TSX Venture has accepted Chrome's request to waive the Sponsorship Report requirement or Chrome has engaged a Sponsor to prepare such a report. Chrome will issue a further new release as soon as further details are available regarding the resumption of trading, the Private Placement, the Report, the additional director to be appointed to the board of directors and the appointment of a Chief Financial Officer.

As indicated above, completion of the transactions is subject to a number of conditions, including but not limited to, TSX Venture acceptance. There can be no assurance that the transactions 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 transactions, any information released or received with respect to the transactions 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 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. Chrome 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 Chrome.

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

Contact Information

  • Chrome Capital Inc.
    Gregory R. Harris
    President
    (403) 777-9222
    or
    Golden Meadow Exploration Inc.
    Allan Mar
    President
    (403) 266-3883