DeeThree Exploration Inc.
TSX VENTURE : DTX

DeeThree Exploration Inc.

June 25, 2009 18:18 ET

DeeThree Exploration Inc. (Formerly, Royal Capital Corp.) Announces Completion of Acquisition of DeeThree Exploration Ltd.

CALGARY, ALBERTA--(Marketwire - June 25, 2009) -

NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES

DEETHREE EXPLORATION INC., (FORMERLY, ROYAL CAPITAL CORP. (the "Corporation") (TSX VENTURE:DTX) has completed the previously announced acquisition of all of the issued and outstanding securities of DeeThree Exploration Ltd. ("DeeThree"). The acquisition of DeeThree (the "Transaction") constitutes the "Qualifying Transaction" of the Corporation, pursuant to the policies of the TSX Venture Exchange Inc. the ("Exchange"). Final approval of the Exchange is subject to the Corporation fulfilling all of the requirements of the Exchange.

Pursuant to the Transaction, a wholly-owned subsidiary of the Corporation incorporated solely for the purposes of participating in the Transaction, amalgamated with DeeThree, with all outstanding common shares of DeeThree (the "DeeThree Shares") being exchanged for the Corporation's common shares (the "Royal Shares") on a one for one basis at the deemed price of $2.00 per Royal Share, resulting in DeeThree becoming the wholly-owned subsidiary of the Corporation.

Immediately prior to the Transaction, the Corporation received shareholder approval to consolidate the common shares of the Corporation on a twelve for one basis and change the name of the Corporation to "DeeThree Exploration Inc."

A total of 12,964,944 DeeThree Shares were issued and outstanding immediately prior to the completion of the Transaction, which shares were exchanged for 12,964,944 Royal Shares pursuant to the Transaction, resulting in DeeThree becoming a wholly-owned subsidiary of the Corporation. Following the completion of the Private Placement and the Transaction 13,464,943 Royal Shares are issued and outstanding.

A total of 1,416,667 Royal Shares were issued pursuant to the Transaction to Henry Hamm, who now beneficially owns and has control over 1,416,667 Royal Shares representing 10.5% of the issued and outstanding shares of the Corporation.

Please refer to the joint information circular of the Corporation and DeeThree dated May 25, 2009, which is available on SEDAR at www.sedar.com, for additional information in respect of the Transaction, the Corporation and DeeThree.
Closing of the DeeThree Private Placement

Prior to the completion of the Transaction, DeeThree completed a private placement ("Private Placement") for aggregate gross proceeds of $5,679,766, through the issuance of 1,976,250 subscription receipts at a price of $2.00 per subscription receipt and 719,694 flow-through shares at a price of $2.40 per flow-through share. Each subscription receipt entitled the holder to one DeeThree Share without payment of additional consideration immediately preceding the closing of the Transaction, as all conditions precedent to the completion of the Transaction were met or waived.

Clarus Securities Inc. ("Clarus") acted as DeeThree's agent for the brokered portion of the Private Placement that resulted in gross proceeds of $5,412,766. As consideration for acting as agent for the Private Placement, Clarus received a cash commission equal to 6% of the gross proceeds of the brokered Private Placement and that number of compensation options equal to 3% of the subscription receipts and flow-through shares issued pursuant to the brokered portion of the Private Placement to acquire common shares of the Corporation at an exercise price of $2.00 per share for 24 months. The net proceeds of the Private Placement will be used to develop DeeThree's oil and gas prospects in the Lethbridge and Peace River Arch regions in Alberta, and for working capital and general corporate purposes.

Management of Resulting Issuer

Concurrent with the completion of the Transaction, the Board of Directors of the Corporation and its executive team were re-constituted. The Board of Directors of the Corporation is now comprised of Martin Cheyne, Michael Kabanuk, Dennis Nerland, Brendan Carrigy and Bradley Porter. The executive of the Corporation is now comprised of Martin Cheyne as the President and Chief Executive Officer, Gail Hannon, as the Chief Financial Officer, Brendan Carrigy as the Vice President-Exploration, Daniel Gundersen as the Vice-President- Engineering, Trevor Murray as the Vice-President - Land and Daniel Kenney as Corporate Secretary.

After giving effect to the Transaction, the directors and officers of the Corporation, as a group, beneficially own and have control over 4,120,600 Royal Shares, representing 31.8% of the issued and outstanding shares of the Corporation.

Stock Options

The Corporation granted a total of 627,500 incentive stock options ("Stock Options") following closing of the Transaction to the directors, officers, employees and consultants of DeeThree and the Corporation. Details of options granted to directors and officers are:



Name Number of Options
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Martin Cheyne 90,000
Bradley Porter 90,000
Dennis Nerland 67,500
Michael Kabanuk 80,000
Brendan Carrigy 80,000
Daniel Gundersen 85,000
Trevor Murray 85,000
Daniel Kenney 15,000
TOTAL 592,500


These stock options have an exercise price of $2.00 and expire on June 25, 2014. The Corporation has determined that exemptions from the various requirements of TSX Venture Exchange Policy 5.9 are available for the grant of these options.

The Corporation expects that its shares will trade on the Exchange under the symbol "DTX" at the opening on June 26, 2009.

Final completion of the Transaction is subject to a number of conditions, including but not limited to, final Exchange acceptance.

Investors are cautioned that, except as disclosed in the Joint Information Circular 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.

This new release shall not constitute an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction.

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

Contact Information

  • DeeThree Exploration Inc.
    Marty Cheyne
    President and Chief Executive Officer
    (403) 263-9130