Capo Resources Ltd.
TSX VENTURE : KPO.P

November 27, 2007 16:33 ET

Capo Resources Enters Into Letter Agreement for Qualifying Transaction With Laurentian Goldfields Ltd.

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Nov. 27, 2007) - Capo Resources Ltd. ("Capo") (TSX VENTURE:KPO.P) is pleased to announce that it has entered into a letter agreement with Laurentian Goldfields Ltd. ("Laurentian" or the "Company") dated November 19, 2007 pursuant to which Capo and Laurentian have proposed a business combination (the "Transaction") by way of an arrangement or other similar form of transaction. Pursuant to the Transaction, the shareholders of Laurentian will exchange all of their common shares of Laurentian for common shares of Capo, on the basis of one common share of Capo (the "Capo Shares") in exchange for 1.1 common shares of Laurentian (the "Laurentian Shares"). Outstanding convertible securities of Laurentian to acquire common shares of Laurentian (including stock options, obligations under property agreements, and a right of first refusal to participate in future equity financings of Laurentian granted to a third party) will become convertible securities of Capo on the same exchange ratio. As part of the Transaction, Capo will change its name to "Laurentian Goldfields Ltd.".

There are currently 1,605,625 Capo Shares issued and outstanding, and incentive stock options and share purchase warrants outstanding to acquire up to another 229,375 Capo Shares. There are currently 12,800,173 Laurentian Shares issued and outstanding, and incentive stock options outstanding to acquire up to another 1,280,000 Laurentian Shares. After completion of the Transaction, it is contemplated that additional stock options will be granted to directors and officers of the resulting issuer in accordance with Capo's stock option plan and subject to the rules and policies (the "Policies") of the TSX Venture Exchange (the "Exchange").

Capo is defined as a "capital pool company" under the Policies of the Exchange. The Transaction will represent Capo's qualifying transaction (the "QT") and is not a related party transaction under the Policies of the Exchange. All or a portion of the Capo Shares and convertible securities of Capo to be issued to holders of Laurentian Shares and convertible securities of Laurentian upon completion of the Transaction may be subject resale restrictions and escrow requirements under applicable securities laws and the Policies of the Exchange, as applicable.

Information about Laurentian

Laurentian is incorporated under the laws of British Columbia.

Laurentian is a private mineral exploration company holding an option to acquire an interest in the 40,000 hectare "Maze Lake" property, a grassroots gold exploration property located in Nunavut. Laurentian has the option to acquire a 75% interest from Terrane Metals Corp. (TSX VENTURE:TRX) by incurring exploration expenditures in the aggregate amount of $6,000,000 over a four year period. In 2007, Laurentian funded a $1,500,000 exploration program, operated by Terrane Metals Corp., which included diamond drilling, geological mapping and till sampling. Laurentian has arranged for the preparation of a National Instrument 43-101 report with respect to the Maze Lake property.

Laurentian has also entered into a strategic alliance with Australian Mineral Fields (Grenville) Pty Ltd ("Ausminfields"), a wholly-owned subsidiary of Australian Mineral Fields Ltd, a private, Perth, Australia-based company engaged in gold exploration in Western Australia. The Laurentian-Ausminfields strategic alliance is currently evaluating targets in Quebec for the purpose of staking or acquiring additional gold exploration properties for joint-venture exploration programs.

Upon the completion of the Transaction, the resulting issuer will be engaged in the acquisition, exploration and, if warranted, development and mining of mineral resource properties.

The directors of Laurentian are Brian Fowler (Chairman), Andrew Brown, Freeman Smith, Greg Hall and Derek White. Andrew Brown is the President and Chief Executive Officer, Christopher Twells is the Chief Financial Officer and Freeman Smith is the Vice-President, Corpoate Communications of Laurentian. The founders of Laurentian have approximately 100 years of combined experience associated with the exploration, exploitation and development of mineral resource properties.

There are no shareholders of Laurentian holding 10% or more of the issued and outstanding Laurentian Shares. The resulting issuer will also not have any shareholders holding 10% or more of the issued and outstanding shares of the resulting issuer.

Closing Conditions for the Transaction

Completion of the Transaction is subject to a number of conditions including, without limitation: (a) completion of satisfactory due diligence reviews by each of Capo and Laurentian, as applicable; (b) the negotiation, execution and delivery of the Formal Agreement on or before January 31, 2008; (c) receipt by Capo of a technical report on the Maze Lake Property in compliance with National Instrument 43-101 on or before January 10, 2008; (d) availability of prospectus and registration exemptions under applicable securities laws for the Transaction; (e) receipt of all required governmental, regulatory or third party consents or approvals, including the Exchange's acceptance of the Transaction and any applicable shareholder approvals; (f) Capo meeting minimum listing requirements for a Tier 1 or Tier 2 issuer for its continued listing on the Exchange; (g) completion of the Transaction on or before April 1, 2008; and (h) certain other conditions. There can be no assurance that the Transaction will be completed as proposed or at all.

There will be a finder's fee of 100,000 Capo Shares paid to Pathway Capital on the Closing, subject to regulatory approval.

Directors of Resulting Issuer Post-Transaction

It is anticipated that, upon completion of the Transaction, the board of directors of the resulting issuer will be comprised of the five current directors of Laurentian and Lenora Gates, a current director of Capo, as follows:

Brian P. Fowler, P.Geo., Chairman and Director

Mr. Fowler has over 27 years experience as an explorationist, working for junior, mid-tier and major mining companies on a global basis. Mr. Fowler's expertise includes project generation, evaluations, and management of advanced stage and pre-feasibility exploration projects. Mr. Fowler is currently the President and Chief Executive Officer of BCGold Corp. and Vice-President, Corproate Development of Oro Silver Resources Ltd. Mr. Fowler was previously a Mining Consultant with Quest Capital Corp. in Vancouver, British Columbia where he identified and evaluated exploration and mining investment opportunities for Quest and associated companies. During the period from May 2004 to November 2005, Mr. Fowler was Exploration Manager for Quadra Mining Ltd., where he oversaw advanced and pre-feasibility exploration projects in Chile and Peru. Prior to this, Mr. Fowler worked in a variety of technical and exploration managerial roles for Placer Dome Inc. based out of Kamloops and Vancouver, British Columbia for a period of 13 years.

Andrew Brown, P.Geo. M.Sc., President and CEO and Director

Mr. Brown has 12 years experience working in the mining and exploration industry and has worked for junior, mid-tier and major mining companies. Mr. Brown was most recently employed as the Exploration Manager for BCGold Corp., overseeing all aspects of the Company's exploration activities, technical services and generative program. Mr. Brown previously worked for Bema Gold Corporation, providing mineral resource evaluation expertise to Bema's exploration and mining operations in Far Eastern Russia, South Africa and North America. Prior to joining Bema in 2004, Mr. Brown was the exploration Project Geologist and later, Mine Geologist, on the team that brought FNX Mining's highly successful McCreedy West Mine from the exploration stage to production over a 14 month period. Mr. Brown has also been involved in advanced and grassroots exploration for WMC International and for Placer Dome Canada.

Freeman Smith, P.Geo., Vice President, Corporate Communications and Director

Mr. Smith has been a consulting engineering and exploration geologist in British Columbia for 15 years. Mr. Smith is currently the Vice-President, Corporate Development of BCGold Corp. He has served as a director for junior mineral exploration companies exploring in Canada. Past experience includes exploration and development of base metal and precious metal deposits in a wide range of geological environments for both large and small companies working in the Canadian Cordillera, Northwest Territories and Mexico. As a consultant, he has worked extensively throughout British Columbia with native and environmental groups and in conjunction with government agencies including the Ministry of Environment, Highways, Forestry, and Fisheries.

Derek White, CA., Director

Mr. White has over 20 years of financial experience in the mining and metals industry and currently serves as a director on two public company and four private company boards. He started his career in 1986 with Coopers & Lybrand LLC, in Vancouver and Johannesburg. In 1992, he joined Impala Platinum Ltd. and held financial management positions in both mine operations in South Africa and metals trading in London. He joined Billiton International Metals BV in 1994, as part of the Gencor Ltd. acquisition team, and held executive financial positions in The Hague, London, and Toronto where he was Chief Financial Officer of the Base Metals Division, formed after the acquisition by Billiton Plc of Rio Algom Ltd. In 2003, he served as the Chief Financial Officer of International Vision Direct Corp., an online contact lens retailer and winner of the 2003 Ernst & Young LLP - Pacific Region Entrepreneur of the Year Award. In 2004, Mr White joined Quadra Mining Limited and currently holds a position as a senior executive. Mr. White also holds an undergraduate degree in Geological Engineering.

Greg Hall, Director

Mr. Hall is the Director of Australian Mineralfields. Mr. Hall's most recent position was Chief Geologist of Placer Dome Group, a post he held for more than five years. Mr. Hall has more than 30 years experience in the exploration and mining industry, 25 years of them in Western Australia. He was directly involved in discovering Rio Tinto's Yandi iron ore mine and Barrick Gold's Granny Smith mine, and took part in the discoveries of Keringal and Wallaby in Australia's Eastern Goldfields, as well as the definition of AngloGold Ashanti's Sunrise gold mine.

Lenora Gates, Director (and current Director of Capo)

Lenora Gates had an outstanding career with a national real estate company prior to forming Gates Real Estate Services Ltd. in 1996. Lenora is the President of Gates Real Estate and also co-founded Orange National Retail Group in January 2002. Lenora is a Licensed Real Estate Agent in the Province of British Columbia and has over 19 years of retail tenant representation experience, including representing and successfully negotiating over 400 contracts for Starbucks Coffee Company over a 14 year period. Lenora has represented many noted names in the retail industry, including Whole Foods, Indigo, Chapters, Hallmark, Nash Sports Clubs, Hard Rock Cafe, Baskin Robbins, Blockbuster, Jenny Craig, Payless Shoe Source, East Side Mario's and Dairy Queen. Lenora was a Director and Corporate Secretary and Treasurer for Evolution Ventures Inc., a TSXV CPC company which went on to complete its qualifying transaction in May 2003, now trading as Bear Creek Mining. In 2000 and 2004, Lenora was nominated as "Canadian Woman Entrepreneur of the Year" and received a number of awards related to her affiliation with Starbucks. She has served on the board of the Canadian Breast Cancer Foundation since 2002 and was the key note speaker at the 8th annual "The Night of Hope 2007", a successful fund raiser for the Canadian Breast Cancer Foundation. Lenora was co-founder of Lifelines Targeted Fundraising which rose over $700,000 for the purchase of the first Digital Image Mammography Machine located and in use in the British Columbia Cancer Agency.

Upon execution of a formal agreement for the Transaction (the "Formal Agreement"), Catherine McLeod-Seltzer will be appointed as an Advisor to the Board of Directors of Laurentian. Ms. McLeod-Seltzer is the Chairman of Pacific Rim Mining Corp. and a recognized leader in the minerals industry. She has raised over $350 million in working capital for exploration to date, and has been involved in over $4 billion in corporate transactions in the mining industry. Her leadership experience, financial savvy, access to capital, and respect from the exploration and mining community has been an invaluable asset to the companies she is involved in. Ms. McLeod-Seltzer is well known in mining circles for backing proven mine finders and helping build successful mineral companies, including Arequipa Resources, Francisco Gold, Miramar Mining, Bear Creek Mining, Stornoway Diamond and Peru Copper. She was named Mining Man of the Year by the Northern Miner in 1999.

Investors are cautioned that, except as disclosed in a filing statement or other disclosure document of Capo 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 Capo should be considered highly speculative.

ON BEHALF OF THE BOARDS

Capo Resources Ltd.

Bernardus C. de Groot, President and CEO

Laurentian Goldfields Ltd.

Andrew Brown, President & CEO

No regulatory authority has in any way passed upon the merits of the proposed Transaction and has neither approved or disapproved the contents of this news release. The TSX Venture Exchange has in no way passed upon the merits of the Transaction and has not reviewed and does not accept responsibility for the adequacy and accuracy of this Release.

Contact Information

  • Capo Resources Ltd.
    Christine Gregory
    Corp. Secretary
    (604) 628-1107
    or
    Laurentian Goldfields Ltd.
    Andrew Brown
    President & CEO
    (604) 646-1599