JJR II Acquisition Inc.
TSX VENTURE : JJR.P

June 16, 2009 17:42 ET

JJR II Acquisition Inc. and Wellkan Resources Limited Announce Closing of Qualifying Transaction

CALGARY, ALBERTA--(Marketwire - June 16, 2009) -

NOT FOR DISSEMINATION IN THE UNITED STATES OR THROUGH U.S. WIRE SERVICES

JJR II ACQUISITION INC. ("JJR" or the "Corporation") (TSX VENTURE:JJR.P) and WELLKAN RESOURCES LIMITED ("Wellkan") are pleased to announce, that further to their previous releases of December 12, 2008 and April 22, 2009, the acquisition of all issued and outstanding securities of Wellkan by JJR by way of share exchange (the "Transaction") pursuant to an Acquisition Agreement dated April 19, 2009 has been completed. The Transaction constitutes the qualifying transaction of JJR as such term is defined by Policy 2.4 of the TSX Venture Exchange (the "TSXV") and the Corporation will be listed for trading on the TSXV as a Tier 1 company under the symbol JJR. For the purposes of this press release, the combined entity of JJR and Wellkan is herein referred to as the "Resulting Issuer".

For more information regarding the Transaction, the Resulting Issuer, its property and related matters please see the filing statement of the Corporation dated May 29, 2009 (the "Filing Statement") on SEDAR.

Upon completion of the Transaction, the Corporation issued 50,000,000 common shares (the "JJR Shares") to the shareholders of Wellkan. Of the 50,000,000 JJR Shares issued pursuant to the Share Exchange, an aggregate of 27,000,000 JJR Shares are subject to escrow in accordance with a TSXV Form 5D Value Security Escrow Agreement. Concurrent with the closing of the Transaction, the Resulting Issuer completed a non-brokered private placement (the "Private Placement") of 5,714,285 JJR Shares at price of $0.35 per share for gross proceeds of $2,000,0000. Following completion of the Transaction and the Private Placement, the Resulting Issuer has 69,339,286 JJR Shares issued and outstanding (on a non-diluted basis).

The Resulting Issuer granted a total of 4,600,000 incentive stock options ("Stock Options") following closing of the Share Exchange to the directors, officers, employees and consultants of the Resulting Issuer. These Stock Options have an exercise price of $0.35 and expire on June 16, 2014. The options vested immediately upon closing of the Share Exchange. It was anticipated that 700,000 previously issued stock options of the Corporation would be exercised, however, as a result of agreement among the parties these options have not been exercised. These 700,000 stock options, if not exercised, will expire one year following the date of the TSXV final bulletin. Additionally, 232,500 stock options issued to an agent of the Corporation were anticipated to be exercised upon closing of the Transaction as disclosed in the Filing Statement however those options were not exercised. As a result, 932,500 previously issued stock options of the Corporation remain outstanding with the same terms as disclosed in the Filing Statement. The total number of options to acquire JJR Shares currently issued and outstanding is 5,532,500. It is anticipated that 118,500 stock options will be exercised following issuance of the TSXV final bulletin.

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 Ma Zhaoyang, Liu Bingqiang, Murray Atkins and Roy Hudson. The executive of the Corporation is now comprised of Ma Zhaoyang (Chairman), Liu Bingqiang (Chief Executive Officer) and Elena Masters (Chief Financial Officer and Corporate Secretary).

It is anticipated that the Resulting Issuer will hold a shareholder meeting in August at which time the shareholders will be asked to approve, among other items, a name change of the Corporation to Sino Vanadium Inc. and to elect James Currie to the board of directors as disclosed in the Filing Statement.

Early Warning Disclosure and Escrow

Further to disclosure requirements of applicable securities laws, Ma Zhaoyang and Liu Bingqiang hereby disclose that, pursuant to the Transaction and the related seed share transfer as disclosed in the Filing Statement, they have indirectly acquired 19,222,500 JJR Shares and 16,277,500 JJR Shares respectively, representing 27.7% and 23.5% of the total issued and outstanding JJR Shares respectively. All of these JJR Shares will be held in escrow pursuant to TSXV policy with such shares being releasable as to 25% on the date of the final TSXV bulletin regarding the transaction and an additional 25% being released every 6 months thereafter. Additionally, Ma Zhaoyang and Liu Bingqiang have each been granted 1,250,000 options to acquire JJR Shares.

These acquisitions of JJR Shares were made for investment purposes. Ma Zhaoyang and Liu Bingqiang may increase or decrease their respective investment in the Resulting Issuer depending on market conditions or any other relevant factors.

This portion of the press release is issued pursuant to Multilateral Instrument 62-104 which also require a report to be filed with regulatory authorities in each of the jurisdictions containing additional information with respect to the foregoing matters (the "Early Warning Reports"). A copy of the Early Warning Reports will appear with the Resulting Issuer's documents on the SEDAR website.

Neither the TSXV nor its regulation Services Provider (as that term is defined in the policies of the TSXV) accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • JJR II Acquisition Inc.
    Lena Masters
    CFO
    (416) 972-6294