Arapaho Capital Corp.

Arapaho Capital Corp.

November 02, 2009 08:30 ET

Arapaho and Malbex Complete Business Combination Transaction



Arapaho Capital Corp. (TSX VENTURE:AHO) ("Arapaho") and Malbex Resources Inc. ("Malbex") are pleased to announce that they have completed their previously announced business combination transaction (the "Transaction") effective as of October 30, 2009 (the "Effective Date"). The Transaction was effected by way of a three-cornered amalgamation (the "Amalgamation") whereby Malbex amalgamated with a wholly-owned subsidiary of Arapaho and shareholders of Malbex received common shares of Arapaho ("Arapaho Shares") in exchange for their common shares of Malbex ("Malbex Shares") on the basis of one Arapaho Share for every 1.5 Malbex Shares (the "Exchange Ratio"). The Transaction resulted in a change of control of Arapaho and constitutes a reverse take-over under the policies of the TSX Venture Exchange.

As a result of the completion of the Amalgamation, Arapaho indirectly holds all of the assets of Malbex, including the Del Carmen, Despoblados, and Los Amarillos exploration projects located in the Province of San Juan, north-western Argentina. In addition, $7.8 million, representing the escrowed portion of the gross proceeds raised by Malbex in the previously announced $10.6 million private placement of 21,275,000 subscription receipts (the "Malbex Subscription Receipts"), was released from escrow upon completion of the Amalgamation. Following completion of the Transaction, the Arapaho management team consists of the following individuals:

  • Tim Warman, President and Chief Executive Officer
  • Derrick Weyrauch, Chief Financial Officer
  • Joseph Hamilton, Secretary
  • Peter Stewart, Vice President, Exploration
  • Ignacio Cellorio, President of Malbex San Juan S.A.
  • Carson Noel, General Manager of Malbex San Juan S.A.

Arapaho has scheduled a special meeting of the shareholders of Arapaho on December 3, 2009 to, among other things, (i) approve the continuation of Arapaho under the Business Corporations Act (Ontario) with the name "Malbex Resources Ltd.", (ii) confirm a new general by-law of Arapaho effective upon the continuance, (iii) authorize the directors of the Corporation to fix the number of directors of Arapaho, and (iv) approve the adoption of a new share option plan of Arapaho.

Immediately prior to completion of the Amalgamation, each Malbex Subscription Receipt was automatically exchanged, without the payment of any additional consideration, for one unit of Malbex. Each unit consisted of one Malbex Share and one-half of one common share purchase warrant of Malbex (each whole warrant a "Malbex Warrant"). At the effective time of the Amalgamation, among other things, outstanding Malbex Shares (including those Malbex Shares issued upon the deemed exchange of the Malbex Subscription Receipts) and Malbex Warrants were exchanged for Arapaho Shares and common share purchase warrants of Arapaho ("Arapaho Replacement Warrants"), respectively, on the basis of the Exchange Ratio. Each Arapaho Replacement Warrant entitles the holder thereof to purchase one Arapaho Share at an exercise price of $1.125 per Arapaho Share until April 29, 2011, provided that if the closing price of the Arapaho Shares on a stock exchange in Canada is higher than $1.50 per Arapaho Share for a period of 20 consecutive trading days, Arapaho may accelerate the expiry date of Arapaho Replacement Warrants by giving notice to the holders thereof and in such case the Arapaho Replacement Warrants will expire on the 30th day after the date on which such notice is given by Arapaho. In addition, under the Amalgamation outstanding broker warrants of Malbex were exchanged for broker warrants of Arapaho ("Arapaho Replacement Broker Warrants") on the basis of the Exchange Ratio. Outstanding options ("Malbex Options") to purchase Malbex Shares granted under the share option plan of Malbex entitle the holders thereof to acquire Arapaho Shares, on the basis of the Exchange Ratio, upon the exercise thereof.

As a result of the Amalgamation, there are 56,308,301 Arapaho Shares outstanding, of which 49,383,301 Arapaho Shares, representing approximately 87.7 per cent of the outstanding Arapaho Shares, are held by the former Malbex shareholders. In addition, an aggregate of 9,755,908 Arapaho Shares have been reserved for issue upon the exercise of outstanding options of Arapaho, Malbex Options, Arapaho Replacement Warrants and Arapaho Replacement Broker Warrants.

For further information regarding the Transaction, Malbex and Arapaho, please see the filing statement of Arapaho dated October 16, 2009 which is available at and on SEDAR at

About Arapaho Capital Corp.

Arapaho Capital Corp., through it wholly-owned subsidiary Malbex Resources Inc., is a gold exploration company led by several former executives and directors of Aurelian Resources Inc. Malbex holds an indirect 100% interest in three exploration projects in the Province of San Juan, Argentina, two of which are in close proximity to Barrick's Veladero and Pascua-Lama gold deposits.

Investors are cautioned that, except as disclosed in the filing statement dated October 16, 2009 of Arapaho, 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 Arapaho should be considered highly speculative.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION: This news release includes certain "forward-looking information" under applicable Canadian securities legislation. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: general business, economic, competitive, political and social uncertainties; delay or failure to receive regulatory approvals; the price of gold; and the results of current exploration and testing. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Arapaho disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

The TSX Venture Exchange has in no way passed upon the merits of the Transaction and neither the 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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