Cumbre Ventures Inc.

May 04, 2007 14:34 ET

Cumbre Ventures Inc. Announces Executed Letter Agreement

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - May 4, 2007) - Cumbre Ventures Inc. (TSX VENTURE:CUB.P) (the "Corporation"), a Capital Pool Company, announced today that it has entered into a binding letter agreement (the "Letter Agreement") dated as of April 26, 2007 with Atlas Minerals Inc., a company incorporated under the laws of Alberta ("Atlas Minerals"). The Corporation shall make a take-over bid to acquire all of the issued and outstanding common shares of Atlas Minerals (the "Atlas Minerals Shares") from the current shareholders thereof in exchange for common shares of the Corporation (the "Proposed Transaction"). Pursuant to the terms of the Letter Agreement, which was negotiated at arm's length between the shareholders of the Corporation and Atlas Minerals, the Corporation has agreed to offer the Atlas Minerals shareholders one common share of the Corporation for each Atlas Minerals Share held. Based on the trading price of the Corporation's common shares of $0.65 per share and the aggregate number of Atlas Minerals Shares issued and outstanding being 20,677,576, Atlas Minerals has been ascribed a value of $13,440,424.40.

Upon completion of the Proposed Transaction, Atlas Minerals will be a wholly owned subsidiary of the Corporation, which combined entity is hereinafter referred to as the "Resulting Issuer". It is intended that the Proposed Transaction, if completed, will constitute the "Qualifying Transaction" of the Corporation within the meaning of TSX Venture Exchange Inc. (the "Exchange") Policy 2.4 - Capital Pool Companies. In connection with the Proposed Transaction, the parties intend to enter into a pre-acquisition agreement and a share purchase agreement (collectively, the "Definitive Agreements") as soon as possible.

Following the completion of the Proposed Transaction, the founders of the Corporation (the "Founders") have agreed to forthwith exercise their options (the "Founder's Options") to purchase common shares in the capital of the Corporation at an exercise price of $0.20 per share. Pursuant to another binding letter agreement dated April 26, 2007, the Founders, subject to the completion of the Proposed Transaction, have agreed to sell to certain optionholders and shareholders of Atlas Minerals, 242,500 common shares of the Corporation which will result from the exercise of the Founder's Options at a price of $0.20 per share and an additional 900,000 common shares of the Corporation held by the Founders at a price of $0.15 per share.

It is anticipated that upon completion of the Proposed Transaction and assuming the sale of the common shares of the Corporation by the Founders to certain optionholders and shareholders of Atlas Minerals, the total number of outstanding common shares of the Resulting Issuer will be approximately 25,655,076. These shares will be owned, as to approximately 15%, by the current holders of common shares in the capital of the Corporation and as to approximately 85% by the holders of Atlas Minerals Shares.

Completion of the Proposed Transaction is subject to a number of conditions, including, but not limited to, the negotiation and signing of the Definitive Agreements, satisfactory completion of due diligence, board and other requisite approvals, including Exchange approval, the execution of employment agreements for all key personnel, the tendering of no less than 90% of the Atlas Minerals Shares to the Proposed Transaction and the satisfaction of the minimum listing requirements of the Exchange. There can be no assurance that the Proposed Transaction will be completed.

The Proposed Transaction is an arm's length transaction and as such it is not anticipated that shareholder approval will be required. Further details regarding the Proposed Transaction will be announced when available.

Atlas Minerals

Atlas Minerals is a Canadian-based private corporation incorporated on April 20, 2006 pursuant to the provisions of the Business Corporations Act (Alberta). Atlas Minerals owns 100% of the issued and outstanding shares of Atlas Moly Investments Corp., a BVI corporation ("Atlas BVI"). Atlas BVI owns 100% of the issued and outstanding shares of Atlas Moly S.A. ("Atlas S.A."), an Ecuadorian company.

Since their incorporation, Atlas BVI and Atlas S.A. have been actively involved in the acquisition and exploration of mining projects in Ecuador. In September of 2006, Atlas Minerals acquired significant mineral concessions in Ecuador, in particular, the Tres-Chorreras Project. The Tres-Chorreras Project is located 135 km by road southwest of Cuenca in the Province of Azuay, Ecuador and consists of polymetallic (Cu-Mo-Au-Ag) mineralization in volcanic rocks of the Oligocene Saraguro Group. An independent technical report ("Technical Report"), dated April 22, 2007, conforming to the reporting requirements under National Instrument ("NI 43-101"), companion policy NI 43-101 CP and Form 43-101 F1 has been prepared by David R. Melling, an independent geologist, and Dale Schultz, a geologist and holder of Atlas Minerals Shares. The Tres-Chorreras Project is at an early stage of modern systematic exploration with limited drilling (15 holes), soil geochemistry, magnetometer surveys and hand trenching. In addition, 14 active tunnels have recently been excavated by a local mining co-operative. The Technical Report recommends a two phase exploration program to be completed over 24 months for the Tres-Chorreras Project at an estimated cost of $8,666,120 (USD). The program will consist of a compilation of tunnel mapping, sampling and surveying data, 24,000 m of diamond drilling, metallurgical test work and environmental baseline data collection, airborne geophysics and regional exploration. The Technical Report will be available for review on SEDAR at

As at December 31, 2006, Atlas Minerals had current assets of $102,906, current liabilities of $1,259,589, a working capital deficit of $1,156,683 and mineral exploration properties with a value of $4,119,547. The following is a summary of selected financial data in respect of Atlas Minerals for the period ended December 31, 2006, based on the audited consolidated financial statements. The foregoing dollar amounts, and those set forth below, are stated in United States currency.

Selected Financial Information Year ended December 31, 2006
USD ($)
Total Revenue Nil
Total Expenses $161,855
Net Loss $159,875
Current Assets $102,906
Property, Plant, Equipment $500,631
Mineral Exploration Properties $4,119,547
Current Liabilities $1,259,589
Long Term Debt $40,000
Share Capital $2,802,675
Contributed Surplus $780,695
Working Capital Deficit $1,156,683
Dividends Nil

No one person directly or indirectly beneficially holds a controlling interest in or otherwise controls or directs Atlas Minerals. The following persons beneficially own or control more than 10% of the common shares of Atlas Minerals:

Pinetree Resource Partnership 12.6%
Toronto, Ontario

As at the date hereof, Atlas Minerals had 20,677,576 common shares issued and outstanding, options to acquire 1,508,333 common shares of Atlas Minerals exercisable at US $0.30 per share and 15,604,493 warrants exercisable at $0.60 until December 31, 2009. It is anticipated that the Resulting Issuer will apply for the listing of the aforementioned warrants on the TSXV.

Further information about Atlas Minerals is available on its corporate website at

Resulting Issuer

Following completion of the Proposed Transaction, it is anticipated that the Resulting Issuer will have a Board of Directors comprised of five (5) members, being Messrs. Romeo D'Angela, Phil O'Neill, Barry Herring, Timothy Hoar and Nick DeMare. It is further anticipated that Barry Herring will serve as President and Chief Executive Officer, Andy Tauton will serve as Vice-President (Country Manager) and Timothy Hoar will serve as Corporate Secretary and Chairman of the Board.

Upon completion of the Proposed Transaction, the following individuals are expected to be Insiders (within the meaning of Exchange Policy 1.1): Messrs. Romeo D'Angela, Phil O'Neill, Barry Herring, Timothy Hoar, Nick DeMare and Andy Tauton. The following is a description of the backgrounds of the aforementioned Insiders:

Timothy Hoar

Mr. Hoar has extensive hands-on experience both internationally and domestically in the mining and oil and gas industries as well as in securities and corporate law. Mr. Hoar's experience includes all aspects of mining exploration and development and exploration, development and operations in the oil and gas industry. His extensive corporate experience commenced with his tenure at Chevron Standard and Home Oil, was expanded at Geocrude and continues with his current representation of public and private corporations in Alberta. Mr. Hoar's practice includes most aspects of securities law, having advised underwriters and small to intermediate publicly listed companies on the Exchange and the Toronto Stock Exchange.

Romeo D'Angela

Mr. D'Angela has worked in the investment industry for more than 20 years. Over the course of his career Mr. D'Angela has developed a broad expertise in research, financial analysis and portfolio management, while working for several large financial institutions. Most recently, Mr. D'Angela worked at Empire Financial Group as Senior Manager, Equities. Mr. D'Angela held this position for five years, during which time he co-managed a $1.3 billion family of Canadian equity funds. Under Mr. D'Angela's careful eye, the funds experienced above average results overall, with the majority performing in the first or second quartile. Moreover, these results were generated with below-average portfolio turnover and risk, as measured by standard deviation of return. In 2001, Brendan Woods cited Mr. D'Angela as a leading value/long-term investor in Canada. Mr. D'Angela graduated from the University of Toronto with a B.A.Sc. (Engineering) and obtained his MBA in Finance in 1983. Mr. D'Angela earned his CFA designation in 1988.

Philip O'Neill

Mr. O'Neill is the founder of MP1 Capital Ltd. Established in 2006, MP1 Capital is a Calgary based private equity corporation created for the purpose of identifying and investing in exciting high growth opportunities focused predominantly in the natural resource sector. Prior to establishing MP1 Capital, Mr. O'Neill worked as a research consultant for Casey Research, an American based firm advising over 25,000 clients worldwide on investments in the resource sector. Mr. O'Neill holds a Bachelor of Applied Science degree, Honours Program, from the University of Guelph.

Barry Herring

Mr. Herring is currently the President, Chief Financial Officer and Director of Atlas Minerals. Mr. Herring has a Bachelor of Business Administration and is a Chartered Accountant. He has 26 years of business experience, primarily in the Canadian Oil and Gas sector. Mr. Herring has been active in Canadian public companies for the last 7 years and is responsible for the corporate affairs of Atlas Minerals. His most recent public company experience was with Southward Energy Limited, Hawker Resources Inc and Velo Energy Inc.

Andy Taunton

Mr. Taunton is currently the President of Atlas S.A. and Chief Operating Officer of Atlas Minerals. Mr. Taunton has a Bachelors degree in Electronics Engineering, and extensive entrepreneurial international business skills on two continents. Having held the UK representation for Medtronic Medical Data Systems for 7 years and the Ecuadorian representation for Pratt and Whitney Canada for 10 years, Mr. Taunton brings knowledge of international expectations to Atlas Minerals' project in Ecuador. Mr. Taunton's versatile capability is demonstrated by his having successfully established companies in fields as diverse as medical computerized diagnostics, oil field base camp logistics services, and aviation support services. Before coming to Atlas Minerals, Mr. Taunton spent 5 years with what was Encana Corporations Ecuador subsidiary managing Security and Transportation. He has held positions as President of the Ecuadorian British Chamber of Commerce, Vice President of the Federation of Bi-lateral Chambers of Commerce, has been a consultant in security and disaster management to several embassies and is one of the founders of The British School in Quito.

Nick DeMare

Mr. DeMare, has been a director of the Corporation since April 12, 2006. Since May 1991, he has been the President of Chase Management Ltd., a private company which provides promotional, administrative, management and financial services to private and public companies engaged in mineral exploration and development, gold and silver production, oil and gas exploration and production and venture capital. Mr. DeMare also currently serves as an officer and director of other public reporting companies. He holds a Bachelor of Commerce degree from the University of British Columbia and is a member in good standing of the Institute of Chartered Accountants of British Columbia.

It is anticipated that the Resulting Issuer will have initial working capital in excess of $2,200,000. There is no financing currently contemplated by the Corporation in connection with the Proposed Transaction.

Canaccord Capital Corporation, subject to completion of satisfactory due diligence, has agreed to act as sponsor in connection with the Proposed Transaction. An agreement to sponsor should not be construed as any assurance with respect to the merits of the Proposed Transaction or the likelihood of completion.

Completion of the Proposed 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 Proposed Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Proposed 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 Proposed Transaction, any information released or received with respect to the Proposed 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 of the contents of this press release. The TSX Venture Exchange Inc. has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Cumbre Ventures Inc.
    Marc Cernovitch, President,
    Chief Executive Officer and Chief Financial Officer
    (604) 685-9316
    (604) 683-1585 (FAX)
    Atlas Minerals Inc.
    Barry Herring
    President and CEO
    (403) 630-0881
    (403) 262-4860 (FAX)