Chrome Capital Inc.
TSX VENTURE : KRM.P

September 15, 2009 11:45 ET

Chrome Capital Inc. and Blacksteel Oil Sands Inc. Announce Signing of Agreement in Principle

CALGARY, ALBERTA--(Marketwire - Sept. 15, 2009) - Chrome Capital Inc., (TSX VENTURE:KRM.P) ("Chrome" or the "Corporation"), a capital pool company, announces that it has executed an arm's length agreement in principle dated September 14, 2009 with Blacksteel Oil Sands Inc., ("Blacksteel") a corporation incorporated under the Business Corporations Act (Alberta), to enter into a business combination by way of amalgamation or other similar form of transaction (the "Amalgamation") between Blacksteel and a newly formed Chrome subsidiary ("AcquireCo"). Chrome and Blacksteel (together, the "Companies") intend that the Amalgamation will constitute Chrome's "Qualifying Transaction" for the purpose of Policy 2.4 of the TSX Venture Exchange Inc. (the "Exchange").

Under the terms of the Agreement in Principle, Chrome will exchange five (5) Chrome shares at a deemed price of $0.10 per Chrome Share for each issued and outstanding Blacksteel share at the time of the transaction (the "Pre-financing Shares"). Chrome will also exchange all Blacksteel options and warrants for Chrome options and warrants on the same terms. The major shareholder of Blacksteel is Firesteel Resources Inc., a TSX Venture Exchange listed company, which owns 24.9% of the issued and outstanding Blacksteel shares.

The obligation of Blacksteel and Chrome to complete the transaction is subject to the approval of the respective boards of directors of the Companies, the shareholders of Blacksteel, and the Exchange. Completion of the Amalgamation is also subject to completion of due diligence by the Companies, execution of a formal amalgamation agreement in form and substance satisfactory to the Companies, the absence of any material adverse changes in the assets, business, liabilities, financial condition or prospects of the Companies prior to the completion of the Amalgamation, compliance with all laws, regulations and Exchange policies by the Companies and acceptance by the Exchange that the resulting issuer upon completion of the Amalgamation will meet the minimum listing requirements of the Exchange. On closing of the Amalgamation the Chrome directors will resign in favour of Blacksteel's nominees.

An additional condition to the transaction is that Chrome close a financing of Chrome shares by way of a private placement concurrently with the closing of the Amalgamation (the "Concurrent Financing"). The Chrome shares issued pursuant to the Concurrent Financing are to be issued at a price of $0.10 per Chrome share for proceeds of no less than $1.8 million. The funds will be used to satisfy the minimum listing requirements of the Exchange and to fund the exploration and development program of AcquireCo. Upon completion of the Amalgamation and Concurrent Financing it is anticipated that there will be approximately 95,238,145 Chrome shares and 16,011,020 options and warrants issued and outstanding.

Blacksteel Oil Sands Inc. is a private Calgary-based oil and gas exploration company whose principal business activity is in the exploration, exploitation, development and production of petroleum and natural gas resources in Alberta. Blacksteel was incorporated under the Business Corporations Act (Alberta) on May 24, 2007. It owns a 100% working interest in Crown leases over 5 sections (3,200 acres) of land, approximately 35 kms northeast of Peace River, Alberta, which lands are contiguous with an oil and gas project of a major exploration and production company. This project, named Raven, targets the Bluesky bearing regional sands. In 2008, Blacksteel drilled an exploratory well on its Raven property. Blacksteel also owns a 100% working interest in Crown leases over 17 sections (10,880 acres), approximately 35 kms north of Peace River, Alberta. This project, named, Whitemud, targets the Mississippian Debolt carbonates.

Further details of the proposed transaction will be announced as they become available, including further details about Blacksteel, its properties, as well as information on the Concurrent Financing and the directors and officers of the post-closing Corporation. It is anticipated that the transaction will be completed no later than December 31, 2009.

Sponsorship of a Qualifying Transaction of a capital pool company is required by the Exchange unless exempt in accordance with Exchange policies by the Exchange. Chrome intends to apply for an exemption from sponsorship requirements in accordance with Exchange policies; however, there is no assurance that Chrome will be able to obtain this exemption.

Chrome has requested a halt on the trading of its common shares, until certain documents relating to the transaction have been filed and approved by the Exchange.

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.

Advisory Regarding Forward Looking Statements

This press release contains forward-looking statements which include, but are not limited to: anticipated closing of the Amalgamation and the Concurrent Financing, anticipated share capital following completion of the Amalgamation and Concurrent Financing, maximum proceeds of the Concurrent Financing, projected timing of closing, expectations, opinions, forecasts, projections, guidance or other statements that are not statements of fact. Although the Corporation believes that the expectations reflected in such forward-looking statements are reasonable, it cannot give any assurance that such expectations will prove to be correct. Results of the Corporation and the ability to complete the Amalgamation, the Concurrent Financing and carry out the other matters contained in this press release may be affected by a variety of variables and risks including those associated with oil and gas exploration, production and transportation in the event that the Amalgamation is completed, such as loss of market, volatility of oil and gas prices, currency fluctuations, environmental risks, competition from other producers, ability to access sufficient debt and equity capital from internal and external sources, ability to generate sufficient cash flow from operations to meet current and future obligations, and risks associated with existing and potential future lawsuits and regulatory actions made against the Corporation; as a consequence, actual results could differ materially from those anticipated or implied in the forward-looking statements.

The Corporation's forward-looking statements are expressly qualified in their entirety by this cautionary statement and are made as of the date of this new release. Unless otherwise required by applicable securities laws, the Corporation does not intend nor does it undertake any obligation to update or review any forward-looking statements to reflect subsequent information, event, results or circumstances or otherwise.

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 Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • Chrome Capital Inc.
    Gregory R. Harris
    President, CEO and CFO
    (403) 777-9222
    or
    Blacksteel Oil Sands Inc.
    Jacques Soroka
    President and CEO
    (403) 453-0060