Benz Capital Corp.
TSX VENTURE : BZ

November 04, 2014 20:26 ET

Benz Capital Corp. Announces Amending Agreement to Definitive Agreement With Tusk Exploration for the San Javier Copper Project and Announces Non-Brokered Private Placement

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Nov. 4, 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 further amending agreements (collectively, 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 Nov 30, 2014) to obtain all necessary approvals and close the Transaction. If the approvals are not obtained by (1) November 30, 2014, Benz shall pay Tusk $50,000 and issue to Tusk 200,000 common shares, or (2) January 31, 2015, Benz shall pay Tusk $75,000 and issue to Tusk 300,000 common shares, in which case the Definitive Agreement shall remain in full force and effect until April 30, 2015, following which either Party may terminate it.

The terms of the Amending Agreement provide for an aggregate purchase price of $9.2 million comprised of a cash payment of $4.7 million payable in installments ($200,000 on or before July 15, 2014 and $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 equal to the lesser of $0.50 and the price per common share in a private placement to be completed by Benz on or before November 30, 2014.

The Amending Agreement now provides that the option to acquire the Property shall be earned in three stages, as opposed to the two stages previously. The payment of $200,000 on or before July 15, 2014, that has been paid, and the issuance of Consideration Shares on or before the date that is five business days following November 30, 2014 will grant Benz a 30% interest in the Property. The cash payment of $2.25 million on or before January 2, 2018 will grant Benz an additional 30% interest in the Property, with the final payment of $2.25 million on or before January 2, 2019 granting Benz the remaining 40% interest, for a 100% interest in the Property.

Upon issuance, the Consideration Shares will be restricted from trading and certificates for the Consideration Shares will bear legends providing for such restrictions on trading until the earlier of (i) the dates and in the amounts as follows:

Legend Expiry Date Percentage of Consideration Shares
Released
October 31, 2015 16.67%
October 31, 2016 16.67%
October 31, 2017 16.67%
October 31, 2018 50.00%

and (ii) the date Tusk's shareholdings in Benz decrease to below 20% as a result of dilution.

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

"Terms of the Amending Agreement will provide Benz with the opportunity to obtain required approvals, avoid contract extensions and additional payments, and maintain a modest and conservative share structure during the current market conditions," said Miloje Vicentijevic, President and CEO of Benz.

In connection with the Transaction, Benz announces a non-brokered private placement of up to 300,000 units at a price of $0.50 per unit, totaling gross proceeds of up to $150,000. Each unit will consist of one common share of Benz and one share purchase warrant (the "Warrants"), with each Warrant entitling the holder thereof to purchase one additional common share at a price of $0.55 per share for a period of five years.

Proceeds from the financing will be used for San Javier project payment obligations and general corporate purposes. No commission or finder's fees will be payable in connection with this private placement.

The private placement financing is also subject to approval of the Exchange.

Closing of the Transaction is expected to complete by November 30, 2014. There can be no assurances the Transaction or the private placement financing will close, or close upon the terms currently contemplated.

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, the private placement 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)