Chesstown Capital Inc.
TSX VENTURE : FG

May 02, 2011 10:00 ET

Chesstown Capital Inc. Closes Its Qualifying Transaction

BURLINGTON, ONTARIO--(Marketwire - May 2, 2011) - Chesstown Capital Inc. (TSX VENTURE:FG) ("Chesstown"), a capital pool company, has closed its qualifying transaction previously announced on January 26, 2011 (the "Transaction") and TSX Venture Exchange (the "Exchange") issued its Final Exchange Bulletin ("FEB"). Chesstown will resume trading on May 3, 2011 as a Tier 2 mining issuer.

The Transaction resulted in Chesstown acquiring all of the issued and outstanding shares of Apex Royalty Corporation ("Apex"). Apex will be a wholly-owned subsidiary of Chess town.

Concurrently with the closing of the Transaction, Chesstown raised $ 1,235,000 by way of an equity financing. The financing is comprised of a flow-through financing of $550,000 and a hard cash financing of $685,000. The flow-through financing is comprised of 2,200,000 units at a price of $0.25 per unit, where each unit consists of one common share of Chesstown and one half share purchase warrant, where the holder of each share purchase warrant will be able to purchase one additional common share of Chesstown at a price of $0.30 for a period of 12 months from the date of the FEB, or at a price of $0.40 for a period of 13 to 24 months from the date of the FEB. The hard cash financing is comprised of 3,425,000 units at a price of $0.20 per unit, where each unit consists of one common share of Chesstown and one share purchase warrant, where the holder of each share purchase warrant will be able to purchase one additional common share of Chesstown at a price of $0.30 for a period of 12 months from the date of the FEB, or at a price of $0.40 for a period of 13 to 24 months from the date of the FEB. All warrants are subject to an acceleration clause which allows Chesstown to accelerate the warrants' expiry date in the event the closing price of trading in Chesstown's common shares is equal to or greater than $0.45 for a period of twenty (20) consecutive trading days during the first 12 months, and in the event the closing price of trading in the Common Shares is equal to or greater than $0.50 for a period of twenty (20) consecutive trading days during the subsequent 12 months from the date of the FEB. Aggregate finders' fees of $98,800 were paid on the financing, and finders were issued a total of 450,000 options having a term of 24 months and exercisable at $0.20 per common share of Chesstown. The finders' share purchase warrants have no acceleration clause.

Information about Apex

Apex's only significant asset is an option to acquire a 100% interest, subject to a 2.5% net smelter royalty ("NSR"), in the Burton Property.

The "Burton Property" includes 6 patented mining claims and 16 unpatented mining claims covering approximately 356 hectares, in Esther Township, Porcupine Mining Division, Northern Ontario. The Burton Property is located within the Swayze Greenstone Belt which is correlated with the Abitibi Greenstone Belt which hosts the Timmins and Kirkland Lake lode gold mining camps. Gold mineralization was discovered on the Burton Property in 1928 however the Burton Property has been the subject of limited exploration activity since the discovery.

The Burton Property is at the initial exploration stage. Previous exploration on the Burton Property has identified gold mineralization within sheared and altered volcanic and gabbroic rocks and associated with disseminated pyrite. None of the known mineralized zones on the Burton Property have been completely explored and delineated by drilling.

These findings have been confirmed in a National Instrument 43-101 compliant geological report of the Burton Property provided by Ms. Karen Kettles, P.Geo. Ms. Kettles is independent of Chesstown and Apex.

The NI 43-101 compliant geological report and this press release were reviewed by Mr. Jamie Lavigne, P.Geo. who is Chesstown's Qualified Person as defined within National Instrument 43-101.

Chesstown

Chesstown intends to be engaged in the exploration and, if warranted, development and mining of the Burton Property as well as the acquisition, exploration and potential development of other mineral resource properties.

The common shares of Chesstown will continue to be traded on the Exchange under the same name but new trading symbol, "FG".

The board of directors and officers of Chesstown are now comprised of the following individuals:

Edward Stringer, Garson, Ontario Director, and Chief Executive Officer
Brian Crawford, Burlington, Ontario Director, and Chief Financial Officer
Jamie Lavigne, Sudbury, Ontario Director, and Vice President, Exploration
David Beilhartz, Sudbury, Ontario Non-Executive Director
Peter Clausi, Burlington, Ontario Non-Executive Director

Edward Stringer has over forty two years of extensive experience in mining and mineral exploration. Mr. Stringer has held senior management positions in several private and public mining related companies, and is currently a director of Landdrill International Inc., a TSXV listed company. Previously Mr. Stringer has served as a director and Executive Chairman of Garson Gold Corp., and as a director and CEO of Garson Resources Ltd.

Brian Crawford, a chartered accountant, holds a Bachelor of Commerce from the University of Toronto and has over 30 years experience providing business advisory and corporate finance services to private and public companies. Mr. Crawford is a former partner with BDO Dunwoody, LLP, and currently is President of Brant Capital Partners Inc., a position which he has held since 2002, and a director and CFO of GTA Resources and Mining Inc., a TSXV listed company.

Jamie Lavigne has been involved in mineral exploration and development for over 20 years. Mr. Lavigne has a BSc (Geology) from Memorial University of Newfoundland and an MSc (Geology) from the University of Ottawa. Mr. Lavigne has held senior management and technical positions with public mining companies including Alexis Minerals Corp., Garson Gold Corp., FNX Mining Company Inc. and WMC International Ltd.

David Beilhartz has more than 25 years experience in mineral exploration throughout Canada. He holds a BSc (Geology) from Laurentian University and is a P. Geo. Mr. Beilhartz is currently VP Exploration for Trelawney Mining and Exploration Inc. and was previously VP Exploration of Lakeshore Gold Corp. Mr. Beilhartz has during his career, been involved with the discovery, definition and development of two significant gold deposits including the Timmins West gold deposit for Lakeshore Gold Corp. and Cote Lake deposit for Trelawney Mining and Exploration Inc.

Peter Clausi holds a Bachelor of Arts from Laurentian University and J.D. from Osgoode Hall Law School. Mr. Clausi has extensive experience as a business advisor to public and private companies. Mr. Clausi has served as chief compliance officer of Ascenta Finance Ltd., an exempt market dealer and has been a director and/or officer of a number of public companies listed on the Exchange and is currently CEO and a director of GTA Resources and Mining Inc.

Following the closing of the Transaction, the capital structure of Chesstown is as follows:

Common shares issued and outstanding 12,287,701
Incentive stock options 403,000
Share purchase warrants 4,525,000
Brokers options 450,000
Total 17,657,701

This press release may include statements about expected future events and/or financial results that are forward-looking in nature and subject to risks and uncertainties. Chesstown cautions that actual performance will be affected by a number of factors, many of which are beyond its control. Future events and results may vary substantially from what Chesstown currently foresees. Discussion of the various factors that may affect future results is contained in Chesstown's recent filings, including Filing Statement and 43-101Technical Report, available on SEDAR.

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.

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