Black Hat Capital Inc.
TSX VENTURE : BHC.P

October 27, 2005 18:03 ET

Black Hat Capital Inc. Announces Execution of Amalgamation Agreement and Completion of the First Tranche of the Guardian Private Placement

CALGARY, ALBERTA--(CCNMatthews - Oct. 27, 2005) -

(Not for dissemination in the United States of America)

Black Hat Capital Inc. (TSX VENTURE:BHC.P) ("Black Hat" or the "Corporation") is pleased to announce that further to its press releases of September 22, 2005 and October 3, 2005, Black Hat has entered into a formal amalgamation agreement (the "Amalgamation Agreement") with Guardian Exploration Inc. ("Guardian"), pursuant to which the parties have agreed that Guardian and Black Hat will amalgamate (the "Business Combination") and continue as a new company ("Amalco"). Pursuant to the terms of the Amalgamation Agreement:

(a) each common share of Guardian shall be exchanged for one fully-paid and non-assessable common share of Amalco;

(b) each common share purchase warrant of Guardian shall be replaced with one common share purchase warrant of Amalco;

(c) each common share of Black Hat shall be exchanged for one fully-paid and non-assessable common share of Amalco;

(d) each outstanding agent's option of Black Hat shall be replaced with one replacement agent's option of Amalco with identical terms; and

(e) each outstanding stock option of Black Hat shall be replaced with into one replacement stock option of Amalco with identical terms.

The completion of the Business Combination is subject to, among other things, the approval of the TSX Venture and all other necessary regulatory approvals, the approval of the shareholders of Black Hat and Guardian and the satisfaction of certain other conditions precedent typical for a transaction of this nature.

Black Hat is also pleased to announce that Guardian has completed the first tranche of a previously announced private placement, which when completed, will be for up to 6,666,667 units (the "Units") at a price of $0.45 per Unit for total gross proceeds of up to $3,000,000.15. Each Unit consists of one common share of Guardian and one-half of one common share purchase warrant (a "Warrant"), each whole Warrant entitling the holder to acquire, subject to adjustment, one common share of Guardian at a price of $0.75 per share on or before the date that is one year from the date of issuance of the Warrant. In connection with the private placement, Guardian paid a cash commission to Linear Capital Corporation, a limited market dealer that is controlled by Mark Brennan, a director of Black Hat.

As indicated above, completion of the Business Combination is subject to a number of conditions, including but not limited to, TSX Venture acceptance and shareholder approval of Black Hat. The Business Combination cannot close until the required shareholder approval is obtained. There can be no assurance that the Business Combination will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the Information Circular of the Corporation to be prepared in connection with the Business Combination, any information released or received with respect to the Business Combination may not be accurate or complete and should not be relied upon. Trading in the securities of the Corporation should be considered highly speculative.

Except for historical information contained herein, this news release contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially. Factors that might cause a difference include, but are not limited to the impact of general economic conditions, industry conditions, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other industry participants, the lack of availability of qualified personnel or management, stock market volatility and ability to access sufficient capital from internal and external sources. Neither Black Hat nor Guardian will update these forward-looking statements to reflect events or circumstances after the date hereof. More detailed information about potential factors that could affect financial results is included in the documents filed from time to time with the Canadian securities regulatory authorities by Guardian and Black Hat.

The TSX Venture Exchange Inc. has in no way passed upon the merits of the Business Combination and has neither approved nor disapproved the contents of this press release.

Contact Information

  • Black Hat Capital Inc.
    Anthony M. Croll
    President
    (514) 399-9952