Benz Capital Corp.
TSX VENTURE : BZ

December 02, 2014 16:12 ET

Benz Capital Corp. Announces Amending Agreement to Definitive Agreement With Tusk Exploration for the San Javier Copper Project

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Dec. 2, 2014) -

NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES AND DOES NOT CONSTITUTE AN OFFER OF THE SECURITIES DESCRIBED HEREIN.

Benz Capital Corp. (TSX VENTURE:BZ) (the "Corporation" or "Benz") announced that it has signed an Amending Agreement (the "Amending Agreement") with Tusk Exploration Ltd., a private British Columbia company ("Tusk") for the option to acquire a 100% interest (the "Transaction") in the San Javier Copper Project (the "Property"), located approximately two hours driving time east of the capital city of Hermosillo, Sonora, Mexico, and immediately adjacent to Mexican Highway 16 and near the village of San Javier, Sonora.

Transaction Overview

The Amending Agreement gives Benz an additional 30 day period (by Dec. 31, 2014) to obtain all necessary approvals and close the Transaction and provides for an additional stage on the option earn-in in regards to the Property.

The terms of the Amending Agreement provide for an aggregate purchase price of C$9.2 million comprised of a cash payment of C$4.7 million payable in instalments (C$200,000 on or before July 15, 2014 and C$2.25 million on or before each of January 2, 2018 and 2019), and the issuance of such number of Benz common shares (the "Consideration Shares") having a value equal to C$4.5 million at a deemed price per Consideration Share of $0.35 as to 8,571,428 Consideration Shares for $3.0 million and for the balance of $1.5 million, at an issuance price equal to the weighted average issuance prices per common share for all arms-length equity (or convertible debt) financings to be completed by Benz for a minimum amount of $2.0 million on or before June 30, 2016.

Upon issuance, the Consideration Shares will be restricted from trading in accordance with the escrow policies of the TSX Venture Exchange (the "Exchange").

The cash payment of C$200,000 on or before July 15, 2014, that is paid, and the issuance of 8,571,428 Consideration Shares, with a deemed issuance price of $0.35 per share for a deemed value of $3 million, on or before the date that is five business days following December 31, 2014 will grant Benz a 30% interest in the Property.

The issuance of Consideration Shares with a value of $1.5 million based upon the average weighted issuance price for all arms-length equity (or convertible debt) financings completed by Benz prior to such issuance for a minimum financing amount of $2 million, on or before June 30, 2016, will grant Benz an additional 15% interest in the Property.

The cash payment of C$2.25 million on or before January 2, 2018 will grant Benz an additional 30% interest in the Property, with the final payment of C$2.25 million on or before January 2, 2019 granting Benz a 100% interest.

The Transaction is subject to requisite regulatory approval, including the approval of the Exchange and standard closing conditions, including, approval of the shareholders of Benz, if required.

"Moreover, terms of the Amending Agreement provide Benz opportunity to obtain required approvals, avoid contract extensions and additional payments, and maintain tight share structure during the current market conditions," said Miloje Vicentijevic, President and CEO of Benz.

In regards to the private placement (the "Private Placement") announced on November 25, 2014, Benz has closed the Private Placement in trust pending the receipt of final approval. A total of 300,000 Units were issued pursuant to the Private Placement. Each Unit consists of one common share (each, a "Common Share") and one Common Share purchase warrant (each, a "Warrant") which is exercisable to acquire one additional Common Share at a price of $0.55 until November 27, 2019.

Subject to the approval of the Exchange, the proceeds of the private Placement will be used for funding and development under the Corporation's option agreement with Tusk, as amended, as well as for general corporate purposes.

There can be no assurances the Transaction will close.

This news release contains forward-looking statements or information (collectively referred to herein as "forward-looking statements") about the Corporation's expectations regarding the Transaction and the Property's mineral resources that are forward-looking in nature and, as a result, are subject to certain risks and uncertainties. Although the Corporation believes that the expectations reflected in these forward-looking statements are reasonable, undue reliance should not be placed on them as actual results may differ materially from the forward-looking statements and there can be no assurance that such expectations will prove to be correct. Risks, uncertainties and factors that could cause the actual results to differ materially from those in forward-looking statements include failure to complete the Transaction for any reason whatsoever, including that the shareholders and/or the Exchange may not approve the Transaction or the Corporation may not be able to complete the Financing, the mineral resource estimate for the Property may be substantially less than as indicated in the technical report and the potential development of the Property to a producing mine may not occur as planned or at all. Readers are cautioned that the foregoing list of risks, uncertainties and other factors is not exhaustive. Unpredictable or unknown factors not discussed could also have material adverse effects on forward-looking statements. The impact of any one factor on a particular forward-looking statement is not determinable with certainty as such factors are dependent on other factors, and the Corporation's course of action would depend on its assessment of the future considering all information then available.

The forward-looking statements contained in this news release are made as of the date hereof, and the Corporation undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, except as required by applicable securities laws. The forward-looking statements contained in this news release are expressly qualified by this cautionary statement.

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.

Contact Information

  • Benz Capital Corp.
    Miloje Vicentijevic
    President and Chief Executive Officer
    604.689.9266
    604.689.9232 (FAX)