Nevado Resources Corporation
TSX VENTURE : NVD.P

Nevado Resources Corporation

November 11, 2009 09:04 ET

Nevado Venture Capital Corporation Announces the Signing of Agreements in Principle for Mining Assets Constituting its Qualifying Transaction

MONTREAL, QUEBEC--(Marketwire - Nov. 11, 2009) - Nevado Venture Capital Corporation (the "Corporation" or "Nevado") (TSX VENTURE:NVD.P) is proud to announce that it has entered into letters of intent for the purchase of five (5) properties comprising 764 mining claims (hereinafter, the "Properties") in the Thetford Mines and Baie-Comeau regions. This acquisition constitutes, along with a private placement of a maximum of $600,000, the Corporation's qualifying transaction (hereinafter, the "Qualifying Transaction"). The Corporation is a capital pool corporation listed on the TSX Venture Exchange (the "Exchange"). The Qualifying Transaction is as follow and a more detailed description of it is to be provided later on.

Proposed Qualifying Transaction

The acquisition of the Properties (the "Acquisition") and the Private Placement (as hereinafter defined) will constitute for the Corporation its arm's length Qualifying Transaction under Policy 2.4 of the Exchange's Corporate Finance Manual, and will be subject to a number of conditions, including but not limited to, the completion of a due diligence on the Properties, as well as Exchange acceptance and other necessary regulatory and corporate approvals. The Qualifying Transaction will not require the approval of Nevado's shareholders.

Pursuant to the Acquisition, the Corporation will acquire the following Properties:

- The Chester, Nicolet et Harvey Hill Properties are located in the city of Thetford Mines (the " Thetford Mines Properties ") and comprise a total of 208 mining claims. The Corporation will pay for the purchase of the Thetford Mines Properties an aggregate purchase price of (i) $20,000 in cash payable on the closing date of the Acquisition, (ii) the issuance of 750,000 Class "A" shares of the Corporation (the "Common Shares") at a value of $0.10 per share payable on the closing date of the Acquisition, and (iii) a 2% Net Smelter Return ("NSR") of which 1% is redeemable by the Corporation for a sum of $1,000,000, the other 1% will be negotiable subsequently;

- The Lablache property #1 (" Lablache Property #1), located in the north of the city of Baie-Comeau, comprises a total of 25 mining claims. The Corporation will pay for the purchase of the Lablache Property #1 an aggregate purchase price of (i) $3,000 in cash payable on the closing date of the Acquisition; (ii) the issuance of 500,000 Common Shares at a value of $0.10 per share payable on the closing date of the Acquisition, and (iii) a 2% Net Smelter Return ("NSR") of which 1% is redeemable by the Corporation for a sum of $1,000,000, the other 1% will be negotiable subsequently;

- The Lablache property #2 (" Lablache Property #2), located in the north of Baie-Comeau, comprises a total of 531 mining claims. In consideration of the purchase of Lablache Property #2, the Corporation will (i) reimburse a sum of $30,000 in cash payable on the closing date of the Acquisition; (ii) a 2% Net Smelter Return ("NSR") of which 1% is redeemable by the Corporation for a sum of $1,000,000, the other 1% will be negotiable subsequently; (iii) assume a debt of a maximum of $71,000 related to the Properties, and (iv) issue 1,000,000 Common Shares at a value of $0.10 per share payable at the closing date of the Acquisition.

The Vendors - Finder

The vendors (hereinafter, the "Vendors") are the only true owners of the Properties, the principal Vendor being Mr. Bertrand Brassard. A finder's fee, which will not exceed a value of $10,000, payable either in shares at a deemed value of $0.10 per share or in cash, is to be expected.

The Properties

Nicolet Property

The Nicolet Property is composed of 155 mining claims covering an area of 8,567.03 hectares or 86.7 km2, located approximately 30 km southwest of the mining town of Thetford Mines, situated adjacent to the southernmost segment of the Thetford Mines Ophiolitic Complex, some 200 km northeast of Montreal, Quebec. The Thetford Mines region is well suited to provide any logistical support required or service necessary for future exploration or mining activity.

Early prospecting and exploration in the area were generally for gold (in placers) in 1835, followed by copper and chrysotile asbestos. Asbestos was first discovered in the Thetford Mines region in 1876 and still mined today. The Nicolet Property was principally worked for asbestos since the beginning of the 19th century right up until the 1960's. Then, several companies (SEREM, Finneth) initiated work on base metals and gold starting in the 1960's until the 1990's. Finneth completed 11 diamond drill holes near Coulombe Lake yielding anomalous copper and zinc. In 1995, Disraeli Copper Ltd. (GM-53012) and L. Venditelli were the last operators of exploration programs (prospecting, mapping) on the Nicolet Property.

Based on the metallogeny of the Thetford Mines region, the Property has potential to host Ordovician massive sulphide (copper-zinc-lead-gold) mineralization and possibly precious metals (gold, silver). The Nicolet Property and the Thetford Mines region host 22 metal showings.

The Other Properties

A more detailed description of the other properties will be provided later on.

Private Placement

Concurrently with the closing of the Acquisition, the Corporation intends to complete a financing of a maximum of 6,000,000 Common Shares at a subscription price of $0.10 per Common Shares, for a maximum gross proceed of $600,000 (hereinafter, the "Private Placement"). The proceeds of the Private Placement as well as the current cash-on-hand of Nevado shall be used to exploration works and increase the working capital of the resulting issuer.

Pro Forma Capitalization

Once the Qualifying Transaction completed, a maximum aggregate of 13,750,000 Common Shares shall be issued and outstanding. The current shareholders of Nevado shall hold an aggregate of 5,500,000 Common Shares (40.00% of the issued and outstanding Common Shares), the Vendors shall hold an aggregate of 2,250,000 Common Shares (16.36% of the issued and outstanding Common Shares), the investors subscribing under the Private Placement shall own a maximum of 6,000,000 Common Shares (43.63% of the issued and outstanding Common Shares). The existing stock option plan of Nevado (hereinafter, the "Stock Option Plan"), whereby 550,000 options have been granted to certain officers and directors of the Corporation, will remain in force. In addition, options as part of the Acquisition, the resulting issuer intends to reserve 825,000 additional Common Shares within the scope of its stock option plan to issue as much as options. The distribution of the 825,000 options is subject to the approval of the proper authorities and of the Board of Directors of the Corporation on the closing date of the Acquisition.

Sponsorship

Sponsorship of a qualifying transaction of a capital pool company is required by the Exchange unless exempt in accordance with Exchange policies. The Corporation intends to apply for an exemption from sponsorship requirements. However, there is no assurance that Nevado will be able to obtain this exemption.

Significant Conditions to Closing

Completion of the Qualifying Transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and competent regulatory acceptance. There can be no assurance that the Qualifying 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 Qualifying Transaction may not be complete. Trading in the securities of a capital pool company should be considered highly speculative.

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 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

  • Nevado Venture Capital Corporation
    Andre Bergeron,
    President
    514-990-7234