Colonnade Capital Corp.

April 13, 2010 18:20 ET

Colonnade Files 43-101 Report and Filing Statement

TORONTO, ONTARIO--(Marketwire - April 13, 2010) - Further to its news release of January 4, 2010 and April 9, 2010, Colonnade Capital Corp. ("Colonnade") (TSX VENTURE:COO.P), is pleased to provide an update regarding its proposed "qualifying transaction" (the "Proposed Transaction") pursuant to the policies of the TSX Venture Exchange (the "Exchange"). Colonnade has entered into an option agreement with Canasia Industries Corporation ("Canasia"), whereby Colonnade can earn a fifty-one percent (51%) beneficial interest in the Eyehill Creek Potash Property (the "Property"). The Exchange has conditionally accepted the Proposed Transaction subject to Colonnade fulfilling all of the requirements of the Exchange. Colonnade has received a waiver from the sponsorship requirement. Colonnade expects to close the Proposed Transaction on or about April 23, 2010.

Filing of Filing Statement and NI 43-101 Report and Filing Statement

Colonnade is also pleased to announce that it has filed, under Colonnade's corporate profile, on SEDAR ( a Filing Statement dated April 9, 2010 with respect to the Proposed Transaction (the "Filing Statement") and a National Instrument 43-101 compliant Report (the "Technical Report") of Neil McCallum of Dahrouge Geological Consulting Ltd. (the "Qualified Person") dated February 23, 2010 in respect of the Property.

Description of Report and Recommendation

The Property consists of 21 metallic and industrial minerals ("MAIM") permits encompassing approximately 1,833 km2 (183,346 ha), within east-central Alberta. The Property is located approximately 225 km southeast of Edmonton, Alberta along the Alberta - Saskatchewan border and is roughly centered on the town of Provost.

The Property is considered prospective for potash mineralization and is located within the Western Canada Sedimentary Basin ("WCSB"), which is a vast sedimentary basin extending from the southeast corner of Yukon to southern Manitoba, and extending into the northern United States. The WCSB is host to the Lower to Middle Devonian Elk Point Group, which includes carbonates, evaporites, redbeds and clastics that unconformably overlie either lower Paleozoic or Precambrian basement rocks. Within the Elk Point Group, the Middle Devonian Prairie Evaporite Formation includes near flat-lying sequences of interbedded halite, sylvite, carnallite and clay, with minor anhydrite and dolomite that can be traced from east-central Alberta to Manitoba, south to Montana and North Dakota.

The Property is directly underlain by thin Quaternary glacial deposits, which directly overlie Upper Cretaceous sediments. The geologic unit of interest, the Devonian Prairie Evaporite Formation, ranges in depth from 1,000 to 1,450 metres below surface and does not outcrop at or near the Property. A total of 14 drill holes completed for oil and gas exploration have penetrated the Devonian Prairie Evaporite Formation (or undivided Elk Point Group) either within the boundaries of the Property, or within a few kilometres thereof. Of these, only drill cores from two wells have been previously analyzed for potash. The first, Provost No. 2, is located within the southwest part of the Property and chemical analyses returned values between 4.03 to 4.06% potassium oxide ("K2O") across 11 feet from a depth of 4,610 to 4,622 feet. The second, Petcal Dina, is located at the northern tip of the Property and contains a 35 metres interval (1,049 to 1,084 metres depth) with 1 to 8% K2O as analyzed by a portable X-Ray Fluorescence ("XRF") analyzer. The XRF instrument provides semi-quantitative data only, and the results should not be relied upon until standard laboratory analysis is performed.

Two additional wells, Renaissance Provost 7-15-40-2 and NCL Provost 8-14-40-3, located within the central parts of the Property, have strong responses on gamma ray logs to indicate the presence of significant concentrations of potash.

An interpretation of historic seismic data from the central part of the Property showed that the Prairie Evaporite Formation is relatively free of collapse anomalies. No Winnipegosis mounds were identified along the surveyed lines. However, these features may exist between the line spacing of the survey. Two of the seismic lines show evidence of faulting, although they are not likely conduits of fluid flow because the thickness of the Prairie Evaporite Formation appears to remain constant. There is no indication of halite in the Souris River Formation. Where present, the salt layer within the Souris River Formation is interpreted to lower the risk of brine inflow to the mining level from the Dawson Bay Formation.

The Property is an early stage exploration project with good potential to host potash deposits, as evidenced by historic wells Provost No. 2, Petcal Dina, Renaissance Provost 7-15-40-2 and NCL Provost 8-14-40-3. In addition, other wells located in close proximity to the Property indicate the potential for potash mineralization. Currently, there is insufficient information to estimate potash resources for the Property.

The author of the Technical Report recommends two phases of exploration for continued development of the Property. The first phase is to acquire and interpret any additional available seismic data to the north and south of the surveyed lines included in this Technical Report. Contingent on the results of Phase 1, the Prairie Evaporite Formation should be tested by two drill holes at locations with good potential to host significant concentrations of potash. In order to test the full thickness of the potash-bearing horizons, the wells should be completed to an approximate depth of 1,500 metres. The approximate cost of Phase 1 is $250,000; Phase 2 would consist of an additional $2.4-million in expenditures. The work should be concentrated at the south end of the Property.

The Qualified Person responsible for the technical content of this news release is Neil McCallum, P.Geol.

Appointment of New Chief Financial Officer

Colonnade is also pleased to announce that it has appointed Mr. Jason Reid, C.A. as its Chief Financial Officer effective as of April 1, 2010. Mr. Reid is a Chartered Accountant in Ontario and also currently acts as Chief Financial Officer of Fuel Industries. Mr. Reid is also a former director and Chief Financial Officer of JumpTV Inc. Mr. Reid has seven years experience as senior finance executive with public companies and venture backed start-ups. Mr. Reid succeeds Richard Kehmeier, who has served as Colonnade's Chief Financial Officer since its inception. Mr. Kehmeier will continue his involvement with Colonnade as Chief Executive Officer, President, Corporate Secretary and a director.

In connection with Mr. Reid's appointment as the new Chief Financial Officer of Colonnade, Mr. Reid will be granted stock options to acquire up to 50,000 common shares of Colonnade. The stock options will be granted five (5) business days following the closing of Colonnade's Proposed Transaction and shall be exercisable for a period of five years at the closing price of Colonnade's common shares on the Exchange on the date of grant.

Completion of the Proposed Transaction is subject to a number of conditions, including but not limited to, Exchange acceptance of regulatory filings. There can be no assurance that the Proposed Transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the Filing Statement prepared in connection with the Proposed Transaction, any information released or received with respect to the Proposed 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.

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

  • Colonnade Capital Corp.
    Richard Kehmeier
    President and Chief Executive Officer
    (303) 279-7533