Boost Capital Corp.
TSX VENTURE : BST.P

February 22, 2012 15:05 ET

Boost Capital Corp. Announces Proposed Qualifying Transaction With Holle Potash Corp.

TORONTO, ONTARIO--(Marketwire - Feb. 22, 2012) -

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.

Boost Capital Corp. ("Boost") (TSX VENTURE:BST.P), a capital pool company as defined under Policy 2.4 of the TSX Venture Exchange (the "Exchange"), is pleased to announce that it has entered into an agreement (the "Letter Agreement") dated February 12, 2012 for the arm's length acquisition of 100% of the common shares (the "Holle Shares") of Holle Potash Corp. ("Holle"), a company incorporated under the Canada Business Corporations Act. Pursuant to the terms of the Letter Agreement and subject to completion of satisfactory due diligence and receipt of all necessary regulatory and Exchange approvals, the proposed acquisition of Holle will qualify as Boost's "qualifying transaction" as defined in Policy 2.4.

About Holle Potash Corp.

Holle is a mining exploration corporation, formed by amalgamation on September 2, 2008, that has more than fifty shareholders, but is not a reporting issuer, headquartered in Longueuil, QC, whose primary business is potash exploration and development projects in the Republic of Congo ("ROC").

In 2010, Holle entered the Republic of Congo with the objective of acquiring potash explorations targets, with a strong focus on the Koilou region located in Point-Noire. According to Holle, the region represents one of the most prospective areas for potash (Carnallite) in the world (potash basin) based on historical data provided by the Ministry of Mines of ROC and the NI 43-101 Technical Report (the "Report") completed for Holle on June 22, 2011 and subsequently revised. The Report was prepared by geologist Doug F. Hambley from Agapito and Associates Inc. Holle has entered into a share purchase agreement on August 27, 2010 with Afrimines S.A. (a Congolese corporation) ("Afrimines") whereas Holle purchased all the issued and outstanding shares of Afrimines, Afrimines thus becoming a wholly-owned subsidiary of Holle. By this acquisition, Holle acquired an interest in two mining Exploration Licenses (Manenga and Tchitondi) in the ROC (the "Licenses"). The Licenses cover 681 km2 and are valid until June 2013.

Financial Information

On the basis of the consolidated audited financial statements for the year ended October 31, 2010, Holle had total assets of $3,562,351, liabilities of $2,230,012, a shareholders' equity of $1,332,339 and working capital of $13,937 (as of the date of the present press release, Holle has a cash position of $600,000).

About the Proposed Transaction

Boost and Holle have agreed to combine their businesses by means of a triangular amalgamation (the "Amalgamation"). The Amalgamation will effectively provide for the acquisition of all of the outstanding equity interests of Holle by Boost indirectly through a wholly owned federally incorporated subsidiary of Boost (the "Amalgamation Entity") in a transaction in which the shareholders of Holle will receive shares of Boost (the "Boost Shares") and, if applicable, convertible securities of Boost. As a result of the Amalgamation of Amalgamation Entity and Holle (the "Amalgamated Corporation"), Boost will become the sole beneficial owner of all of the outstanding shares of Amalgamated Corporation.

The Amalgamation will result in Boost issuing to Holle shareholders one Boost Share for each Holle Share held, and the convertible securities of Holle will be exchanged for convertible securities of Boost on the same terms and conditions attached to such convertible securities prior to the Amalgamation.

As at the date hereof, there are 6,000,000 Boost Shares issued and outstanding and convertible securities (options) exercisable for 760,000 Boost Shares, and 112,997,985 Holle Shares issued and outstanding and convertible securities exercisable for 27,560,200 Holle Shares, not taking into account the Holle Shares to be issued pursuant to the Private Placement (defined below). Accordingly, if the Amalgamation were to be completed today, Boost would issue an aggregate of 112,997,985 Boost Shares at a price of $ 0.35 per share to the shareholders of Holle.

Following completion of the Amalgamation and the Private Placement (assuming the maximum Private Placement is achieved (not including the Over-allotment Option (defined below)) the former shareholders of Holle will own approximately 71.07% of the Boost Shares, current shareholders of Boost will hold approximately 3.77% of the Boost Shares and subscribers in the Private Placement will hold approximately 25.16% of the Boost Shares. Accordingly, the Amalgamation will constitute a reverse take-over of Boost.

The Amalgamation is an arm's length transaction and therefore is not a related party transaction. As a result, no meeting of Boost shareholders is required as a condition to completion of the Amalgamation.

Following completion of the Amalgamation, the Amalgamated Corporation will be a wholly owned subsidiary of Boost. The parties also agreed that, subject to Exchange approval, a finder's fee of $40,000 will be payable to EAM Inc. ("EAM") in connection with the Amalgamation, the whole as provided for in the Exchange's policies. EAM is an entity which acts at arm's length with both Boost and Holle.

All parties shall use their good faith efforts to complete and be in a position to execute a definitive agreement relating to the Amalgamation on or before March 15, 2012 (or such other date as may be mutually agreed to by Boost and Holle).

Concurrent Private Placement

Concurrently with the execution of the Amalgamation, Holle has engaged Salman Partners Inc. (the "Agent") to act as lead agent in connection with a brokered "best efforts" private placement of subscription receipts (the "Subscription Receipts") of Holle at an issue price of $0.35 per Subscription Receipt (the "Issue Price") to raise aggregate gross proceeds of up to $14,000,000 (the "Private Placement"). The Agent has the option (the "Over- allotment Option") to increase the size of the Private Placement by up to 15% by giving notice to Holle prior to the closing of the Private Placement. The gross proceeds of the Private Placement, less the expenses of the Agent payable by Holle, are to the deposited in escrow pending satisfaction of all conditions precedent to the Amalgamation and the obtaining of all required director and third party approvals for the Amalgamation, in each case to the satisfaction of the Agent and Holle not being in breach of various covenants (collectively, the "Escrow Release Conditions").

Each Subscription Receipt will automatically be exercised without payment of any additional consideration and without any further action by the holder thereof, into one unit (each, a "Unit") of Holle upon satisfaction of the Escrow Release Conditions, subject to adjustment in certain events. Each Unit shall be comprised of one Holle Share and one-half of one common share purchase warrant (each whole common share purchase warrant, a "Warrant"). Each Warrant will entitle the holder thereof to purchase an additional Holle Share (each, a "Warrant Share") at an exercise price of $0.45 per Warrant Share at any time prior to the date that is two (2) years from the date of trading of the Boost Shares on the Exchange following the completion of the Amalgamation, subject to adjustment in certain events.

The Private Placement is anticipated to close in mid-to-late April 2012. If the Escrow Release Conditions are not satisfied prior to 5:00 pm on June 29, 2012 (the "Escrow Deadline"), the Escrowed Funds plus accrued interest shall be used by Holle to repurchase the Subscription Receipts for cancellation at a price per Subscription Receipt equal to the issue price.

For the Agent's services in connection with the Private Placement, Holle has agreed to pay to the Agent a cash commission equal to 6.0% of the gross proceed (the "Commission") realized by Holle in respect of the sale of Subscription Receipts. As additional consideration for the services of the Agent, Holle has agreed to the Agent compensation options (the "Compensation Options") entitling the Agent to subscribe for that number of Holle Shares as is equal to 6.0% of the total number of Subscription Receipts sold pursuant to the Private Placement. Each Compensation Option will be exercisable for a period of two (2) years following the date of trading of the Boost Shares on the Exchange following the completion of the Amalgamation at an exercise price equal to the Issue Price.

The net proceeds from the Private Placement will be used for the drilling of ten (10) wells in two (2) phases; three (3) wells to determine the optimal location and a further seven (7) wells to confirm preliminary brine field potential. A portion of the funds raised will also be used for general working capital and general corporate purposes.

Completion of the Amalgamation is conditional upon all necessary regulatory approvals, including the approval of the Exchange, closing of the concurrent Private Placement, and other conditions which are typical for a business combination transaction of this type.

After giving effect to the Amalgamation, it is expected that Boost will carry on business under the name "Holle Potash Corp." (or such other name as may be acceptable to applicable authorities) and the Boost Shares are expected to be listed on the Exchange under a new trading symbol.

Proposed Management

The proposed management of Boost following the completion of the Amalgamation will include:

CHRISTIAN OKOUNA (DIRECTOR / CHAIRMAN)

Christian Okouna is presently the Chairman of the Board of Holle. Mr. Okouna has extensive experience in business ventures worldwide accompanied with strong ties to the ROC government. He is responsible for the founding of the Company Zanaga Iron Ore., which is listed on the London Stock Exchange and is performing strongly to-date. Previously, Mr. Okouna was with MagIndustries as its business development manager and as General Manager of MagAlloy Congo S.A. Mr. Okouna was responsible for assembling all of Magindustries' assets in ROC. Other outstanding accomplishments include the formation of such companies as Congo Gold S.A., Cominvest S.A. (partner of Sundance, an Australian venture) and MPD Congo S.A. Mr. Okouma currently resides in Johannesburg, South Africa.

JOËL GERBORE (CEO AND DIRECTOR)

Joël Gerbore is currently the President of Holle. Having a strong amount of relationships and being well- connected in the West African political sphere, as well as Europe and North America, Mr. Gerbore has been in the consultation field for more than twenty years. Major companies like Hydro Québec, National Bank of Canada and D.M.R. have benefited from his expertise in project management as well as business planning and re-engineering of business processes. His business acumen covers the European marketplace as well as North America. Mr. Gerbore has a Masters degree in Arts from the University of Montreal, in Canada and a university degree from the Université de Bordeaux in France. Mr. Gerbore resides in Varennes, Quebec.

CLAUDE AYACHE (CFO)

Claude Ayache is presently the vice-president of finances of Holle. With over 25 years of experience, including at the CFO and Director level of public companies in Canada and the United States. Claude provides public companies and reporting issuers with the necessary support to meet the increasing demand of the regulators. In addition, Exadyn provides assistance in developing financial projections and business plans for entrepreneurs seeking the support of a strong financial executive with extensive public company experience as well as turn- around and operational experience on an as needed basis.

Mr. Ayache's approach has always been to merge his capital markets expertise with that of his financial accounting knowledge to help clients meet their goals and supply the services they require. Claude's expertise spans the following industries: Asset-based Lending, Distribution, Life/Health Sciences, Film & Entertainment, Financial Services, Forestry, Manufacturing, Mining (exploration and extraction), Oil & Gas, Technology as well as not for profit, with projects that have led him to all continents, with the exception of Australia and Antarctica. Mr. Ayache holds an accounting degree from Concordia University and is a qualified CMA. Mr. Ayache resides in Toronto, Ontario.

In addition to the foregoing, one or more additional directors will be appointed in compliance with the polices of the Exchange.

Sponsorship of Qualifying Transaction

Boost intends to make application to Exchange that the Qualifying Transaction should be exempt from sponsorship requirements in accordance with Policy 2.2 of the Exchange. However, there can be no assurance that Boost will obtain such exemption.

The information in this press release related to Holle, its business and the proposed management of Boost following the completion of the Amalgamation was provided to Boost by Holle.

Completion of the transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable pursuant to Exchange Requirements, majority of the minority shareholder approval. Where applicable, the transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the transaction 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 transaction, 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 a capital pool company should be considered highly speculative.

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

The information in this news release includes certain information and statements about management's view of future events, expectations, plans and prospects that constitute forward looking statements. These statements are based upon assumptions that are subject to significant risks and uncertainties. Because of these risks and uncertainties and as a result of a variety of factors, the actual results, expectations, achievements or performance may differ materially from those anticipated and indicated by these forward looking statements. Although Boost believes that the expectations reflected in forward looking statements are reasonable, it can give no assurances that the expectations of any forward looking statements will prove to be correct. Except as required by law, Boost disclaims any intention and assumes no obligation to update or revise any forward looking statements to reflect actual results, whether as a result of new information, future events, changes in assumptions, changes in factors affecting such forward looking statements or otherwise.

This press release does not constitute and the subject matter hereof is not, an offer for sale or a solicitation of an offer to buy, in the United States or to any "U.S Person" (as such term is defined in Regulation S under the U.S. Securities Act of 1933, as amended (the "1933 Act")) of any equity or other securities of Boost. The securities of Boost have not been registered under the 1933 Act and may not be offered or sold in the United States (or to a U.S. Person) absent registration under the 1933 Act or an applicable exemption from the registration requirements of the 1933 Act.

Neither 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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