Nevado Resources Corporation
TSX VENTURE : NVD.P

Nevado Resources Corporation

December 07, 2009 09:00 ET

Nevado Venture Capital Corporation: Qualifying Transaction for Mining Assets, Completion of a Private Placement of $600,000 and Flow-Through Private Placement

MONTREAL, QUEBEC--(Marketwire - Dec. 7, 2009) - Nevado Venture Capital Corporation (the "Corporation" or "Nevado")(TSX VENTURE:NVD.P) is proud to announce, as a complement to its press release dated November 11, 2009 by which it disclosed it has entered into letters of intent dated November 11, 2009 for the purchase of five (5) properties comprising 764 mining claims (hereinafter, the "Properties") in the Thetford Mines and Baie-Comeau regions, that it has received subscription commitments enabling it to reach the financing of $600,000, the whole subject to the completion of its Qualifying Transaction. Consequently, the Corporation is in line to complete its Qualifying Transaction within the timeframe indicated in the Exchange's bulletin issued on November 27, 2009.

Once the Qualifying Transaction is completed, namely the acquisition of the Properties, the Corporation intends to complete a non-brokered flow-through private placement of a maximum of $1,500,000 with several investors, subject to the Exchange and other regulatory authorities' approval.

Proposed Qualifying Transaction

The acquisition of the Properties (hereinafter, the "Acquisition") and the first private placement of $600,000 at $0.10 per common share will constitute for the Corporation its arm's length Qualifying Transaction under Policy 2.4 Capital Pool Companies of the Exchange's Corporate Finance Manual, and will be subject to a number of conditions, including but not limited to, the closing of the Acquisition as well as the 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 100% interest in the following Properties:

- The Chester, Nicolet and Harvey Hill Properties are located in the city of Thetford Mines (hereinafter, the " Thetford Mines Properties ") and comprise a total of 208 mining claims, of which the Nicolet Property is the Qualifying Transaction property, as described hereafter. The Chester Property consists of 39 claims for 1,991 hectares or 19.9 km2; whereas the Harvey Hill Property consists of 25 claims for 560 hectares or 5.6 km2;

- The La Blache property #1 (hereinafter, " La Blache Property #1), located north of the city of Baie-Comeau, comprises a total of 25 mining claims for 1,357 hectares or 13.6 km2;

- The La Blache property #2 (hereinafter, " La Blache Property #2), peripheral to La Blache Property #1, also located north of Baie-Comeau, comprises a total of 531 mining claims for 30,140 hectares or 301.4 km2.

The Nicolet Property

The Corporation commissioned PJLEXPL Inc. to prepare a technical report (hereinafter, the "Technical Report") regarding the Nicolet Property, according to National Instrument 43-101 Standards of Disclosure for Mineral Projects (hereinafter, the "NI 43-101"). Mr. Jean Lafleur, geologist for PJLEXPL Inc. and its President and Chief Executive Officer, is the author of the Technical Report dated November 15, 2009. Mr. Lafleur is a "Qualified Person" for the purposes of NI 43-101 and is considered independent of the Corporation thereunder. The following information regarding the Nicolet Property is derived from the Technical Report which will be available for viewing under Nevado's profile on SEDAR at www.sedar.com.

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.

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

The Historic Works Over the Last Three Financial Years

Pursuant to the Technical Report, the Vendors have completed, over the last three years, approximately $188,000 in exploration work on the Nicolet Property. The exploration work included data compilation, synthesis and evaluation of the Nicolet Property's potential ($29,000); lithological, lineament and structural studies using satellite imagery ($40,000); geological field work using prospecting, geological mapping and sampling ($63,000); and a helicopter-born magnetics geophysical survey covering magnetics and electromagnetic ($56,000). The details of all expenditures are provided in the assessment report filing document with the Ministere des Ressources naturelles et de la Faune du Quebec, with the exception of the helicopter-born magnetics geophysical survey.

The Recommended Work Program

The Corporation intends, following the recommendations stated in the Technical Report, to execute an exploration program which consists of two phases with the minimum expense level of $200,000 required to confirm or validate the work history in phase 1 and, to establish priority targets for the delimitation of mineral resources in phase 2.

The minimum work requirement for phase 1 includes:

(i) completion of the data compilation and their synthesis to delineate the priority targets for follow up surface work;

(ii) completion of the airborne geophysical survey combing magnetic and electromagnetics, followed by ground truthing of the compilation and geophysical work using detailed surface prospecting, geological mapping, sampling and assaying;

(iii) tractor outcrop stripping for channel and/or trench sampling with ultimate sampling locations to be finalized based on assay results to be received; followed by data synthesis and the reporting of results;

all to confirm the geological model and with success planning of the next phase or exploration work.

The phase 2 would include:

(i) diamond drilling to delineate NI 43-101 compliant mineral resources; and

(ii) synthesis of the latest drilling data and the reporting of results.
The Other Properties

The other properties consist of the Harvey Hill Property and the Chester Property of the Thetford Mines Properties and the La Blache Property #1 and the La Blache Property #2.

The Harvey Hill Property consists of quartz-sericte schists and talc-bearing schists, in part altered ultramafic rocks, crosscut by mineralized quartz veins and pervasive carbonate and copper sulphides and oxides (chalcopyrite, chalcocite and bornite) up to 5% in total with occasional molybdenite (Ministere des ressources naturelles et de la faune Quebec Deposit File 21L/06-0021). The Chester Property hosts the Heon Occurrence (Ministere des ressources naturelles et de la faune Quebec Deposit File 21E/13-0015) consisting of copper (chalcopyrite) bearing quartz veins. In 2010, Nevado plans on compiling and synthesizing the historic data from both the Harvey Hill Property and the Chester Property, as well as initiating prospecting, geological mapping, sampling and assaying of main target areas, including the known occurrences to confirm/validate the historic work for an estimated cost of $50,000.

At the La Blache Property #1 and the La Blache Property #2, Nevado is seeking magnetite-ilmenite mineralization associated with the La Blache Anorthositic Complex (Ministere des ressources naturelles et de la faune Quebec Deposit File 22K/04-0001). In 2010, Nevado plans a minimum work program to cover a geological and historic exploration work compilation and synthesis, field reconnaissance visit and a property perimeter survey totalling $50,000.

Flow-Through Private Placement

Prior to the end of the current year, the Corporation aims to complete a non-brokered flow-through private placement with no minimum and of a maximum of $1,500,000 with several individual investors, subject to the Exchange and other regulatory authorities' approval (hereinafter, the "Flow-Through Private Placement"). Each subscriber will subscribe at its choice to unit A at a subscription price of $400 each (hereinafter, the "Units A") or to unit B at a subscription price of $250 each (hereinafter, the "Units B").

Each Unit A will consist of i) 800 flow-through common shares at a price of $0.399 per common share; ii) 200 non-flow-through common shares at a price of $0.399 per common share; and iii) 500 non-flow-through common share purchase warrants of the Corporation (hereinafter, the "Warrant A"). Of the subscription price, the Corporation intends to allocate $0.001 to the price of the Warrant A comprised in each Unit. Each Warrant A will entitle the holder thereof, during a period of 12 months from the date of issuance of the Warrant A, to purchase, subject to adjustment in certain events one (1) common share at an exercise price of $0.60 per common share. All the common shares issued will be subject to an obligatory 4 month holding period.

Each Unit B will consist of i) 1,000 non-flow-through common shares at a price of $0.249 per common share; and ii) 1,000 non-flow-through common share purchase warrants of the Corporation (hereinafter, the "Warrant B"). Of the subscription price, the Corporation intends to allocate $0.001 to the price of the Warrant B comprised in each Unit. Each Warrant B will entitle the holder thereof, during a period of 12 months from the date of issuance of the Warrant B, to purchase, subject to adjustment in certain events one (1) common share at an exercise price of $0.40 per common share. All the common shares issued will be subject to an obligatory 4 month holding period.

Each subscriber must subscribe to a minimum of four thousand Canadian dollars ($4,000 CAD), that is a minimum of ten (10) Unit A or sixteen (16) Unit B.

The proceeds of the Flow-Through Private Placement shall be used for exploration works and increase the working capital of the resulting issuer. The completion of the Flow-Through Private Placement is not a condition to the closing of the Qualifying Transaction.

Pro Forma Capitalization

Once the Qualifying Transaction and the Flow-Through Private Placement completed, a maximum aggregate of 19,850,000 common shares shall be issued and outstanding. The current shareholders of Nevado shall hold an aggregate of 5,500,000 common shares (27.71% of the issued and outstanding common shares), the Vendors shall hold an aggregate of 2,250,000 common shares (11.34% of the issued and outstanding common shares), a maximum of 100,000 common shares will be issued as finder's fees to an arm's length finder (0.50% of the issued and outstanding common shares), the investors subscribing under the first private placement of $600,000 shall own 6,000,000 common shares (30.23% of the issued and outstanding common shares), and the investors subscribing under the second private placement, namely the Flow-Through Private Placement, shall own a maximum of 6,000,000 common shares (30.23 % 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, 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 at an average exercise price of $0,10 per option. 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.

Board of Directors and Upper Management following the Qualifying Transaction

Upon closing of the Qualifying Transaction, the current members of the Board of Directors, with the exception of Mr. Denis Hamel and Mr. Jacques Denis, will remain in place, namely Mr. Andre Bergeron, Mr. Philippe Frere and Mr. Pierre-Hubert Seguin.

Furthermore, the Corporation is proud to announce new nominations for its management team and Board of Directors, effective upon closing of the Qualifying Transaction:

- Guy Girard will join the Board of Directors and act as Chief Executive Officer;

- Marcel Bergeron will join the Corporation as Chief Financial Officer in replacement of Denis Hamel; and

- Bertrand Brassard will join the Board of Directors of the Corporation.

Mr. Guy Girard, holds a finance degree (obtained in 1985) and a master's degree in finance from Universite Laval (obtained in 1992). From 1985 to 1998, Mr. Girard worked as a representative, director and Vice-President for various Canadian securities firms. In 1998, Mr. Girard co-founded Avensys Corporation Inc. and was its Vice-President of Finance until August 2003. During this period, while being responsible for the financial operations of Avensys Corporation Inc. and of its five subsidiaries, Mr. Girard realized many acquisitions and financing transactions and organized the sale of the company to a U.S. based entity. From 2003 to 2004, Mr. Girard was President of Cogivar Corporation and Vice-President of Pamerica Corporation, two capital pool companies which have completed their qualifying transactions in order to qualify under the TSX Venture Exchange regulations. Mr. Girard is presently a partner of Sugarhill Capital, a merger, acquisition and financing consulting firm and member of many audit and compensation committees of public companies. He has been also Vice-President of Finance and director of Jourdan Resources Inc. since June 14, 2006 and a director of Wanted Technologies Corporation since September 20, 2005, all corporations listed on the TSX Venture Exchange. Finally, Mr. Girard was director and officer of Uragold Bay Resources Inc. (formerly Uranium Bay Resources Inc.) from June 2007 to July 2009, director of Kree Tech International Corporation from April 2004 to March 2008 and director of Glen Eagle Resources Inc. from March 2006 to November 2006, all corporations listed on the TSX Venture Exchange.

Mr. Marcel Bergeron, is a Chartered Accountant and Chartered Management Accountant, and began his career with the accounting firm Petrie Raymond specialized in the SME sector. Following almost 30 years of practice and having held significant management positions, Mr. Bergeron left the firm to join Devimco Inc., a commercial real estate development corporation, as General Director. In addition to his accomplished accounting career, Mr. Bergeron also sits on the Board of Directors and Audit Committees of mining corporations, namely Strateco Resources Inc. and Matamec Explorations Inc., and sat on the Board of Directors and Audit Committees of two other mining corporations, namely MDN Inc. and Fairstar Explorations Inc.

Mr. Bertrand Brassard, an experienced and accomplished geologist, will join the Corporation as Director. Mr. Bertrand greatly contributed to geology through his involvement in research, by teaching prospection courses at College de la region de l'Amiante, by working alongside various associations and by drafting erudition works on the subject including numerous articles and publications. In addition to his contribution to geology, Mr. Bertrand held several management positions and sat on numerous Boards of Directors, namely Gold Finch Explorations Inc., Andromede Mining Resources Inc., Valmont, Mining Exploration Inc., Groupe Geoconseil Phenix Inc., GHK Company, Kennecott Canada, North Coast Mineral Exploration Fund, Services miniers du Nord Inc., Allican Resources Inc., Mirabel Resources, Canadian Royalties Inc. and Niogold Mining Corporation. Today, he is senior consultant for the firm Bertrand Brassard Geo-Conseil Inc.

Significant Conditions to Closing

Completion of the Qualifying Transaction 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 Qualifying Transaction cannot close until the required shareholder approval is obtained. 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 Qualifying 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.

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.

The technical information contained in this press release has been prepared, revised and approved by Mr. Jean Lafleur, M.Sc., P. Geo., consulting geologist with Nevado and a Qualified Person under NI 43-101 standards.

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