Blackburn Ventures Inc.

December 10, 2009 13:14 ET

Blackburn Ventures Corp. Announces Financing and Updates Proposed Qualification Transaction

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Dec. 10, 2009) - Blackburn Ventures Corp. ("Blackburn" or the "Corporation") (TSX VENTURE:BBV.P) is pleased to announces a financing and to update its proposed qualifying transaction involving a business combination (the "Business Combination") with Morumbi Capital Inc. ("Morumbi"), as previously announced in its press release dated August 27, 2009. Morumbi is a private company that was formed to participate in the exploration and development of oil and gas assets. Upon completion of the Business Combination, Blackburn will be an oil and gas exploration and development company (the "Resulting Issuer").

Private Placement

Morumbi has entered into a letter agreement with Byron Securities Ltd. (the "Agent") to offer, on a private placement basis, up to 1,666,666 units of Morumbi ("Units") at a price of $0.30 per Unit and up to 5,000,000 common shares of Morumbi ("Flow-Through Shares"), to be issued on a "flow-through" basis pursuant to the Income Tax Act (Canada), at a price of $0.30 per Flow-Through Share, for aggregate gross proceeds of up to CDN$2,000,000 (the "Offering"). Each Unit will consist of one common share of Morumbi and one common share purchase warrant (a "Warrant"), with each whole Warrant entitling the holder thereof to purchase one common share of the Morumbi at a price of $0.40 per common share for a period of 12 months following the closing of the Offering. As compensation for the Agent's services in connection with the Offering, the Agent will be paid a cash commission and will be issued non-transferable warrants ("Agent's Warrants") entitling the agent to purchase that number of common shares of Morumbi as is equal to 6.5% of the total number of Units and Flow-Through Shares issued under the Offering, at a price of $0.30 per common share for a period of 12 months following the closing of the Offering. Upon the closing of the Business Combination, the Agent's Warrants will entitle the Agent to acquire the equivalent number of Blackburn Common Shares.

The Offering is expected to close on or about December 15, 2009. The net proceeds from the sale of Units will be used for general corporate purposes and the net proceeds from the sale of Flow-Through Shares will be used to incur qualifying expenditures.

Each subscriber under the Offering will enter into a share purchase agreement, pursuant to which the subscriber will exchange the Morumbi Common Shares acquired pursuant to the Offering for Blackburn Common Shares upon the closing of the Business Combination, on the same terms as described above. Upon the closing of the Business Combination, the Warrants will entitle the holders thereof to acquire the equivalent number of Blackburn Common Shares.

Qualifying Transaction

Blackburn has entered into share purchase agreements dated effective October 30, 2009 (the "Purchase Agreements") with the holders of all common shares of Morumbi (the "Morumbi Common Shares") and the holders of all preferred shares of Morumbi (the "Morumbi Preferred Shares") to acquire all of the issued and outstanding Morumbi Common Shares and Morumbi Preferred Shares. Pursuant to the Purchase Agreements, each of the holders of Morumbi Common Shares will receive one common share in the capital of Blackburn (the "Blackburn Common Shares") for each Morumbi Common Share held, and each of the holders of Morumbi Preferred Shares will receive $1.00 cash for each Morumbi Preferred Share held. As at the date hereof, Morumbi has 3,100,000 Morumbi Common Shares and 175,000 Morumbi Preferred Shares outstanding.

Completion of the Business Combination is subject to a number of conditions, including but not limited to, TSX Venture acceptance and if applicable pursuant to TSX Venture requirements, majority of the minority shareholder approval. Where applicable, 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 management information circular or filing statement 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.

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

Except for historical information contained herein, this news release contains forward-looking statements that involve risks and uncertainties that may cause actual results, performance or achievements to be materially different from those expressed or implied by such forward-looking statements. Readers are cautioned that the assumptions used in preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. The forward-looking statements contained herein are made as of the date hereof and Blackburn does not undertake any obligation to update publicly or revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws. 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 Blackburn.

The securities of Blackburn being offered have not been, nor will be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons absent U.S. registration or an applicable exemption from U.S. registration requirements. This release does not constitute an offer for sale of securities in the United States.

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

  • Blackburn Ventures Corp.
    Colin Watt
    (604) 684-6535
    Thomas Loch
    (403) 263-8420