GA Capital Corp.
TSX VENTURE : GAC.P

August 06, 2008 12:01 ET

GA Capital Corp.: Announcement of Kimpar Private Placement

TORONTO, ONTARIO--(Marketwire - Aug. 6, 2008) - GA Capital Corp. ("GA") (TSX VENTURE:GAC.P) is pleased to announce details concerning a private placement of securities of Kimpar Resources Inc. ("Kimpar") as previously announced in GA's news release dated July 24, 2008. As previously announced in such press release, GA intends to complete a business combination (the "Business Combination") with Kimpar, which if completed, is expected to constitute GA's qualifying transaction (the "Qualifying Transaction") for purposes of Policy 2.4 of the TSX Venture Exchange (the "Exchange" or "TSX Venture") Corporate Finance Manual.

Kimpar has engaged Union Securities ("Union") to act as agent on a commercially reasonable efforts basis in connection with a private placement ("Equity Private Placement") of up to 400,000 subscription receipts issued on a "flow-through" basis ("Flow-Through Subscription Receipts") at a price of $1.25 per Flow-Through Subscription Receipt for gross proceeds of up to $500,000, and up to 4,000,000 concurrent subscription receipts (the "Concurrent Subscription Receipts") at a price of $1.00 per Concurrent Subscription Receipt for gross proceeds of up to $4,000,000. Each Flow-Through Subscription Receipt entitles the holder to one flow-through unit of Kimpar (a "Flow-Through Unit"), with each Flow-Through Unit being comprised of one common share to be issued as a flow-through share and one half of one common share purchase warrant (each whole warrant, a "Warrant"). Each Concurrent Subscription Receipt entitles the holder thereof to one unit of Kimpar (a "Unit") to be issued on a non-flow-through basis with each Unit being comprised of one common share of the Corporation and one half of one Warrant. One half of the gross proceeds from the sale of the Concurrent Subscription Receipts of the Equity Private Placement will be held in escrow until the closing of the Qualifying Transaction. Each Warrant shall have an exercise price of $1.50 per share and will have a term of twelve (12) months from the time the Subscription Receipts and Concurrent Subscription Receipts are
exchangeable for Units.

Union will be paid a cash commission of 8% of the gross proceeds of the Equity Private Placement. In addition, Union and its sub agents, if any, will be granted an option (the "Equity Agent's Option") to purchase that number of Units equal to 8% of the aggregate number of Units and Flow-Through Units issued on exchange of the subscription receipts sold under the Equity Private Placement.

The gross proceeds of the Flow-Through Subscription Receipts will be used to incur "Canadian exploration expenses" which qualify as a "flow-through mining expenditure" for purposes of the Income Tax Act (Canada) related to Kimpar's exploration projects in Quebec. Kimpar will renounce such Canadian exploration expenses with an effective date of no later than December 31, 2008. The total gross proceeds of the Flow-Through Offering will be released to Kimpar on the closing of the Equity Private Placement (the "Closing"), one-half of the gross proceeds from the sale of the Concurrent Subscription Receipts will be held in escrow until the closing of the Qualifying Transaction and the remaining gross proceeds, net of the Union's commission and expenses will be released to Kimpar on Closing. The net proceeds of the Concurrent Subscription Receipts will be used to cover the expenses of the Equity Private Placement, as well as the expenses of the Qualifying Transaction, for exploration and development of
Kimpar's exploration projects in Quebec and for general working capital.

This press release may contain forward-looking information with respect to the Equity Private Placement and the Business Combination and matters concerning the business, operations, strategy, and financial performance of GAC and Kimpar. Such information can generally be identified by use of forward looking wording such as "may", "will", "expect", "estimate", "anticipate", "intend", "believe", and "continue" or the negative thereof and similar variations. The completion of the Equity Private Placement and the Business Combination, and the future business, operations and performance of GA discussed herein could differ materially from those expressed or implied by such statements. Such forward-looking information is qualified in its entirety by the inherent risks and uncertainties surrounding future expectations, including the risk that the Equity Private Placement and Business Combination contemplated herein is not completed. Forward-looking information is based on a number of assumptions which may prove to be incorrect, including, but not limited to the ability of GA and Kimpar to complete the Equity Private Placement and Business Combination and related transactions described therein or to satisfy the requirements of the Exchange with respect to the Business Combination. The cautionary statements qualify all forward-looking information attributable to GA and Kimpar and persons acting on their behalves. Unless otherwise stated, all forward looking information speaks only as of the date of this press release and GA and Kimpar have no obligations to update such information except as required by law.

Completion of the Business Combination 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 Business Combination cannot close until the required shareholder approval is obtained. There can be no assurance that the Business Combination 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 Business Combination, any information released or received with respect to the Business Combination 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 securities of GA being offered have not been, nor will be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons absent U.S. registration or an applicable exemption from U.S. registration requirements. This release does not constitute an offer for sale of securities in the United States.

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

Contact Information

  • GA Capital Corp.
    J. Allan Ringler
    President & Chief Executive Officer
    (647) 330-4711
    Email: ringler2805@rogers.com