Druk Capital Partners Inc

September 06, 2011 16:40 ET

Druk Capital Signs Revised Letter of Intent To Acquire TransAfrican Gold

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Sept. 6, 2011) - Druk Capital Partners Inc. ("Druk" or the "Company") (TSX VENTURE:DRU.P) announces it has signed a Revised Letter of Intent ("LOI") in which shareholders of TransAfrican Gold Inc. ("TransAfrican") will exchange 100 per cent of their outstanding securities for shares in the Company ("Transaction"). TransAfrican is a British Columbia based, privately held mineral exploration and development company whose principal assets are located in the country of Tanzania. The Transaction with TransAfrican, which remains subject to final due diligence and completion of a Definitive Agreement between the parties, is intended to be Druk's qualifying transaction under TSX Venture Exchange ("TSXV") Policy 2.4. Upon completion of the Transaction, the resulting issuer, within the meaning of TSXV policies will apply to be listed on the TSXV as a Tier 1 or 2 mining issuer.

TransAfrican is a private company incorporated under the Canada Business Corporations Act and based in Vancouver, British Columbia. Founded in 2009 to facilitate the acquisition of certain early stage to advanced gold exploration projects on the African Continent and more recently focusing in the famous gold-producing Lake Victoria Greenstone Belt in Tanzania, Eastern Africa.

The Proposed Transaction

The LOI contemplates a transaction whereby Druk may acquire all of the outstanding shares of TransAfrican via a share exchange, such that the principal shareholders of TransAfrican will become majority shareholders of the Company. The Company will issue 10,818,909 shares to TransAfrican shareholders and an additional 5,200,000 bonus shares on certain milestone events occurring.

Management and directors of the resulting company will incorporate the strengths of both Druk and TransAfrican and certain third parties who in the opinion of Druk and TransAfrican will be of maximum benefit to the Company and acceptable to applicable regulatory authorities.

Both parties are currently making best efforts to complete the due diligence process and expedite the signing of a Definitive Agreement. The contemplated Definitive Agreement between the parties and proposed transaction will be subject to several conditions including but not limited to, completion of any remaining due diligence and the receipt of required third party consents and the approval of the shareholders of TransAfrican. The transaction as proposed is an arm-length transaction under the policies of the TSXV and therefore will not require the separate approval of the shareholders of Druk.

The Properties

TransAfrican currently controls 18 mineral exploration and development licenses in Tanzania. The projects range from early stage exploration properties to former producing gold assets and advanced exploration projects. TransAfrican's properties are principally located in the Archean greenstone sequences of the Tanzania Craton in Tanzania. This extensive rock package, like the greenstone sequences of Canada, Australia, South Africa and Western Africa host a number of world class gold deposits that include the 5 million plus ounce Geita, 11 million ounce Bulyanhula, Tarkwa and North Mara deposits. The majority of TransAfrican's assets are located within the same sequences which host these major gold operations.

The area's regional geological setting is similar to Canada's largest gold camps of Ontario and Quebec. A dominant Archean granite-greenstone terrain, the Lake Victoria Greenstone Belt extends from central Tanzania northward into SW Kenya. Internal greenstone belt stratigraphy consists of basal mafic volcanic units, overlain by carbonaceous and pyritic sediments, tuffs, banded iron formations, and felsic volcanics. Greenschist facies metamorphic grade predominates. Most gold deposits and occurrences in the region lie within the Lake Victoria Greenstone Belt.

The initial focus will be on the exploration licenses in Musoma-Mara greenstone belt ("Musoma Area") in which a number of existing and former producing mines are located. Gold was discovered in the Musoma Area in the 1920's with mining beginning in a small scale during the early 1930's. Cumulative production in the Musoma Area has been over 3.5m oz of gold with a minor amount of silver.

TransAfrican has secured exploration licenses which either cover or sit adjacent to 4 former producing gold mines in the Musoma greenstone belt - namely the former producing Buhemba, Kiabakari, Simba Sirori, and Mara deposits. Included in the packages is a 65 sq km land package that surrounds the belts largest historic producer - Buhemba, which is currently owned by the State Mining Corporation of Tanzania. Additional licenses are currently in the process of being transferred which will provide Druk-TransAfrican with the dominant land position in this prolific greenstone sequence.

Private Placement

The Company has proposed a $1.60 million Special Warrant private placement priced at $0.55 per Special Warrant. The Special Warrant will be converted into shares of the Company on a one for one basis on certain conditions being met. The Company will enter into a loan agreement with TransAfrican in which $500,000 will be funded on the latter of the closing of the private placement and the signing of Definitive Agreement and a further $1 million being funded on certain milestone being achieved ("Loans"). TransAfrican will be using the proceeds of the Loans for working capital and for additional asset acquisitions. If the Transaction is not completed, holders of the Special Warrants will assume the Company's interest in the Loans.

In accordance with TSXV policies, Druk's common shares are currently halted from trading. The Druk common shares may resume trading following TSXV review of the required documentation, or the shares may remain halted until completion or termination of the transaction.

Completion of the transaction is subject to a number of conditions, including but not limited to, TSXV acceptance. The transaction cannot close until the required approval is obtained; and there is no assurance that the transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the management 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 TSXV has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this news release.

The Company is investigating whether sponsorship will be required in connection with the transaction. No agreement for sponsorship has been entered into, and any agreement to sponsor should not be construed as any assurance with respect to the merits of the transaction or the likelihood of completion.

On behalf of the board of directors of DRUK CAPITAL PARTNERS INC.

Kelly Klatik, President and CEO

This press release contains forward-looking statements and forward-looking information (collectively, "forward-looking statements") within the meaning of applicable Canadian and United States securities laws. All statements, other than statements of historical fact, included herein, including statements regarding the proposed qualifying transaction are forward-looking statements. Forward-looking statements are typically identified by words such as: believe, expect, anticipate, intend, estimate, postulate and similar expressions or are those which, by their nature, refer to future events. Although the Company believes that such statements are reasonable, there can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. The Company cautions investors that any forward-looking statements by the Company are not guarantees of future performance, and that actual results may differ materially from those in forward-looking statements. Specifically, there is no assurance the proposed qualifying transaction will close on the basis as outlined above, or at all. There is no assurance the Company's due diligence of TransAfrican will be satisfactory; or that all approvals to the transaction will be received. Druk may be required to raise additional capital in conjunction with the acquisition of TransAfrican, and there is no guarantee such funding will be available on terms acceptable to Druk, or at all. Trading in the securities of the Company should be considered highly speculative. All of the Company's public disclosure filings may be accessed via www.sedar.com.

This press release is not, and is not to be construed in any way as, an offer to buy or sell 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 press release.

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