Prelim Capital Inc.
TSX VENTURE : PLM.P

December 23, 2009 16:34 ET

Prelim Capital Signs Binding Agreement for Qualifying Transaction with Hudson River

TORONTO, ONTARIO--(Marketwire - Dec. 23, 2009) - Prelim Capital Inc. ("Prelim" or the "Company")(TSX VENTURE:PLM.P), a capital pool company, is pleased to announce it has signed a binding Amalgamation and Qualifying Transaction Agreement (the "QT Agreement") dated December 18, 2009, with Hudson River Minerals Ltd. ("Hudson River"), relating to the Company's proposed qualifying transaction (the "Qualifying Transaction") under the policies of the TSX Venture Exchange (the "Exchange") originally announced on October 6, 2009 and referred to in the press release of December 7, 2009. Certain shareholders of Hudson River have entered into or will enter into Support Agreements agreeing to approve the proposed Qualifying Transaction which will require approval of a two-thirds majority of the votes cast at a Hudson River shareholders meeting to be called to approve the Qualifying Transaction.

Prelim is also pleased to announce that Hudson River has closed a private placement financing for aggregate gross proceeds of $1,353,225. 

On November 25, 2009, Hudson River closed the first tranche of a brokered private placement with IBK Capital Corp. acting as agent ("IBK") (the "IBK Financing") for aggregate gross proceeds of 686,225. Hudson River issued (i) 6,979,599 flow-through units (the "Flow-Through Units") at $0.0625 (Canadian) per Flow-Through Unit for gross proceeds of $436,225, each Flow-Through Unit being comprised of one common share in the capital of Hudson River as presently constituted to be issued as a "flow-through share" as defined in the Income Tax Act (Canada) (a "Flow-Through Unit Share") and one-half of one non-transferable non-flow-through common share purchase warrant (a "Warrant"); and (ii) 5,000,000 units (the "Units") at $0.05 (Canadian) per Unit for gross proceeds of $250,000, each Unit being comprised of one common share in the capital of Hudson River as presently constituted (a "Unit Share") and one Warrant. Each whole Warrant will entitle the holder to acquire one additional common share of Hudson River as presently constituted at an exercise price of $0.10 (Canadian) to the extent exercised at any time prior to the date that is 24 months after Closing.

On December 17, 2009, Hudson River closed the second tranche of the IBK Financing for aggregate gross proceeds of $67,000. Hudson River issued an additional 1,340,000 Flow-Through Units at $0.0625 (Canadian) per Flow-Through Unit to subscribers sourced by IBK and its sub-agents.

IBK and its sub-agents received (i) an aggregate cash commissions of $67,790 from the first and second tranches of the IBK Financing and (ii) 1,331,959 compensation options. Each compensation option issued under the IBK Financing is exercisable into one Unit of Hudson River as set out above at an exercise price of $0.10 (Canadian) per Unit to the extent exercised at any time prior to the date that is 24 months after Closing.

On December 17, 2009, Hudson River also closed a brokered private placement with the MineralFields Group (the "MineralFields Financing") for aggregate gross proceeds of $600,000. Hudson River issued 9,600,000 Flow-Through Units at $0.0625 (Canadian) per Flow-Through Unit to subscribers sourced by MineralFields.

Under the MineralFields Financing, Hudson River paid MineralFields Group and IBK Capital Corp. (i) aggregate cash commissions of $54,000 and (ii) 960,000 compensation options. Each compensation option issued under the MineralFields Financing is exercisable into one common share of Hudson River as presently constituted at an exercise price of $0.0625 (Canadian) per common share to the extent exercised at any time prior to the date that is 24 months after Closing.

Hudson River will use the proceeds from the Flow-Through Units issued pursuant to the IBK Financing and the MineralFields Financing for exploration and development of its mineral properties in the "Ring of Fire," situated in the McFauld's Lake region of the James Bay Lowlands in Northern Ontario. Proceeds from the Units issued pursuant to the IBK Financing will cover general and administrative expenses and the expenses of the Qualifying Transaction and private placements.

The securities issued pursuant to the private placements will be subject to a hold period of four months and a day from the later of the applicable date of closing and the date Hudson River becomes a reporting issuer in any province or territory of Canada. 

"Hudson River is pleased to be entering into relationships with IBK Capital Corp. and MineralFields Group", said Stephen Balch, President. "This is an important milestone in the growth of Hudson River Minerals Ltd. and we look forward to working with IBK Capital Corp. and MineralFields Group as we develop our holdings in the Ring of Fire.

Prelim is also pleased to announce that Hudson River has retained Aeroquest Limited to conduct an airborne electromagnetic and magnetic survey on Hudson River's claims in the Ring of Fire area which is expected to begin immediately. A National Instrument 43-101 report on Hudson River's property will be prepared as soon as is practicable to satisfy the requirements of the proposed Qualifying Transaction.

Hudson River intends to focus its efforts on discovering the next major nickel-copper-platinum group element (Ni-Cu-PGE) deposit in an area known as the "Ring of Fire", an emerging multi-metals district located in the James Bay Lowlands of Northern Ontario.

After giving effect to the IBK Financing and the MineralFields Financing, Hudson River has 39,794,599 common shares issued and outstanding. Pursuant to the terms of the QT Agreeement, each two (2) Hudson River common shares will be exchanged for one (1) Prelim common share and the number and price of all convertible securities of Hudson River will be amended accordingly. On the closing of the Qualifying Transaction, Prelim shareholders will hold 4,800,000 common shares of the resulting entity (19.4%) and Hudson River shareholders will hold 19,897,299 common shares of the resulting entity (80.6%). 

About IBK Capital Corp.

IBK Capital Corp. is an exempt market dealer based in Toronto, Ontario. IBK Capital has acted as lead manager for total financings of approximately $130 million for the Ring of Fire exploration companies over the last three years. IBK Capital is an independent and privately owned investment banking firm which offers a full range of financial advisory services. Such services include private placement of equity and debt, going public by way of initial public offering or reverse takeover of a public shell corporation, merger, acquisition and divestiture advisory services, valuations, fairness opinions and take-over defense planning. The Firm's corporate objective is to provide the highest quality independent financial advisory services to its clients. Additional information about IBK Capital Corp. is available at http://www.ibkcapital.com.

About MineralFields, Pathway and First Canadian Securities ®

MineralFields Group (a division of Pathway Asset Management), based in Toronto, Vancouver Montreal and Calgary, is a mining fund with significant assets under administration that offers its tax-advantaged super flow-through limited partnerships to investors throughout Canada as well as hard-dollar resource limited partnerships to investors throughout the world. Pathway Asset Management also specializes in the manufacturing and distribution of structured products and mutual funds (including the Pathway Multi Series Funds Inc. corporate-class mutual fund series). Information about MineralFields Group is available at www.mineralfields.com. First Canadian Securities ® (a division of Limited Market Dealer Inc.) is active in leading resource financings (both flow-through and hard dollar PIPE financings) on competitive, effective and service-friendly terms, and offers investment banking, mergers and acquisitions, and mining industry consulting, services to resource companies. MineralFields and Pathway have financed several hundred mining and oil and gas exploration companies to date through First Canadian Securities ®.

In this news release, all information relating to Hudson River has been provided by Hudson River and all information relating to Prelim has been provided by Prelim.

Completion of the transaction is subject to a number of conditions, including but not limited to, Exchange acceptance. Where applicable, the transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the filing statement to be 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.

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.

Forward Looking Statements

Some of the statements contained herein may be forward-looking statements which involve known and unknown risks and uncertainties. Without limitation, statements regarding potential mineralization and resources, exploration results, and future plans and objectives of the Company are forward looking statements that involve various risks. The following are important factors that could cause the Company's actual results to differ materially from those expressed or implied by such forward looking statements: changes in the world wide price of mineral commodities, general market conditions, risks inherent in mineral exploration, risks associated with development, construction and mining operations, the uncertainty of future profitability and the uncertainty of access to additional capital. There can be no assurance that forward-looking statements will prove to be accurate as actual results and future events may differ materially from those anticipated in such statements. Prelim undertakes no obligation to update such forward-looking statements if circumstances or management's estimates or opinions should change, except as required by law. The reader is cautioned not to place undue reliance on such forward-looking statements.

 

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.

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