Forbes & Manhattan Coal Corp.
TSX VENTURE : NRU

Forbes & Manhattan Coal Corp.

September 24, 2010 16:05 ET

Forbes & Manhattan Coal Corp. Announces Closing of Business Combination

TORONTO, ONTARIO--(Marketwire - Sept. 24, 2010) - Forbes & Manhattan Coal Corp. (formerly Nyah Resources Corp.) (TSX VENTURE:NRU) (the "Corporation") announces that as of September 20, 2010, it completed its previously announced business combination (the "Business Combination") with Forbes & Manhattan (Coal) Inc. ("Forbes Coal"), a private company. The Business Combination was completed by way of a three-cornered amalgamation pursuant to which a wholly owned subsidiary of the Corporation amalgamated with Forbes Coal (the "Amalgamation"), to form a new amalgamated company ("Amalco"), which now holds Forbes Coal's assets as a wholly-owned subsidiary of the Corporation.

Effective market open on Monday, September 27th, 2010, the common shares of the Corporation will begin trading on the Toronto Stock Exchange under the symbol "FMC" and will consequently be delisted from the TSX Venture Exchange.

Prior to the effective time of the Business Combination, the Corporation filed articles of amendment to complete a consolidation (the "Consolidation") of its issued and outstanding common shares on the basis of one new common share of the Corporation (each, a "New Share") for each 39.8 existing common shares of the Corporation and changed its name to "Forbes & Manhattan Coal Corp." (the "Name Change").

Prior to the effective time of the Business Combination, each special warrant of Forbes Coal issued pursuant to the previously announced Forbes Coal financing converted into one Forbes Coal common share. At the effective time of the Business Combination, shareholders of Forbes Coal received one New Share for each Forbes Coal common share so held.

The Business Combination, the Consolidation and the Name Change were approved by shareholders of the Corporation at a special meeting held on September 20, 2010. In the case of the Business Combination, minority shareholder approval was obtained. The shareholders of the Corporation also approved a new stock option plan (the "New Stock Option Plan") and the sale of the Corporation's current uranium properties to Valencia Ventures Inc. ("Valencia") (the "Agnew Lake Transaction"). The Business Combination, the Consolidation, the Name Change, the New Stock Option Plan and the Agnew Lake Transaction were each approved by approximately 100% of the votes cast by shareholders and disinterested shareholders, respectively, as required and set out in management information circular of the Corporation dated August 20, 2010 (the "Circular"). The Circular is accessible under the SEDAR profile of the Corporation at www.sedar.com.

David Stein and Grant Davey have been appointed to the board of directors of the Corporation, joining David Gower, Stan Bharti, the Executive Chairman, and Stephan Theron the new President and Chief Executive Officer, replacing George Faught. The Corporation would like to take this opportunity to thank Mr. Faught for his invaluable contributions to the Corporation. Deborah Battiston will continue to serve as Chief Financial Officer of the Corporation and Johan Louw has joined the management team as Vice President, Africa Operations. Jennifer Wagner has been appointed as the Corporate Secretary of the Corporation. 

As a result of the Business Combination there are 25,590,723 common shares of the Corporation issued and outstanding. Pursuant to the Consolidation, shareholders of Nyah Resources Corp. hold 1,279,390 common shares of the Corporation, representing approximately 5% of the issued and outstanding shares of the Corporation. Shareholders of Forbes Coal currently hold 24,311,333 common shares of the Corporation, representing approximately 95% of the issued and outstanding common shares of the Corporation. No common shares of the Corporation are subject to escrow or resale provisions.

The Business Combination represents a Reverse Take-Over for the Corporation under the policies of the TSX Venture Exchange. Further, it constituted a Non-Arm's Length Transaction as, prior to the effective time of the Business Combination, the following relationships between the Corporation and Forbes Coal; (i) Stan Bharti, an Ontario resident, is a director of both companies, held 2,830,000 common shares of the Corporation (on a pre-consolidation basis), 1,000,000 common shares of Forbes Coal (on a post-consolidation basis), 1,000,000 Performance Special Warrants of Forbes Coal and is a director of Aberdeen International Inc. ("Aberdeen"), a company that holds approximately 11% of the Corporation and as a result of the Business Combination, Mr. Bharti holds approximately 8.1% of the Corporation; and (ii) George Faught was the President and Chief Executive Officer and a director of the Corporation and holds 1,070,000 common shares of the Corporation (on a pre-consolidation basis), 5,000 common shares of Forbes Coal (on a post-consolidation basis), 5,000 Performance Special Warrants of Forbes Coal and is the Chief Executive Officer and a director of Aberdeen; (iii) David Stein is a director of Forbes Coal and holds 75,000 common shares of Forbes Coal (on a post-consolidation basis), 75,000 Performance Special Warrants of Forbes Coal, is the President and a director of Aberdeen and holds 100,000 common shares of the Corporation (on a pre-consolidation basis); (iv) Stephan Theron, the President and Chief Executive Officer of Forbes Coal, holds 125,000 common shares of Forbes Coal (on a post-consolidation basis), 100,000 Performance Special Warrants of Forbes Coal, and also is the Chief Financial Officer of Aberdeen; (v) Michael Hoffman, P. Eng., a director of the Corporation prior to the effective time of the Business Combination, holds 10,000 common shares of Forbes Coal (on a post-consolidation basis), 10,000 Performance Special Warrants of Forbes Coal, and is a director of Aberdeen; (vi) Mr. Bernie Wilson, a director of the Corporation prior to the effective time of the Business Combination, is also a director of Aberdeen; and (vii) Deborah Battiston is the Chief Financial Officer of both the Corporation and Forbes Coal.

Sale of Agnew Lake Project

In addition, the Corporation announces that it has completed the sale to Valencia of the Agnew Lake properties held by the Corporation in consideration of a cash payment of $500,000 and two additional payments valued at $500,000 in cash or common shares of Valencia, at the election of Valencia (See Press Releases dated September 20, 2010 and September 23, 2010). The sale of the Agnew Lake properties represents a non-arm's length transaction for the purposes of the TSX Venture Exchange as prior to the effective time of the Business Combination, the Corporation and Valencia had a common officer and directors. Prior to the effective time of the Business Combination, Stan Bharti and Bernie Wilson were both directors of the Corporation and Valencia. Patrick Gleeson was the Corporate Secretary of the Corporation and Valencia prior to the effective time of the Business Combination.

About the Corporation 

The Corporation holds a 53.5% interest in Slater Coal (Pty) Ltd., a South African company ("Slater Coal") which has a 70% interest in Zinoju Coal (Pty) Ltd. ("Zinoju"). Zinoju holds a 100% interest in certain coal mines in South Africa (the "Slater Coal Properties"). The Slater Coal Properties comprise the operating Magdelena bituminous mine (the "Magdelena Property") and the Aviemore anthracite mine (the "Aviemore Property") and have a substantial resource base of bituminous and anthracite coal. The Slater Coal Properties are located in the Klipriver coalfield, near Dundee, in the KwaZulu Natal Province of South Africa and can be accessed via the N3, N11 Ladysmith and R102 Dundee tarred national highways that run between Johannesburg and Durban, South Africa. The other 46.5% of Slater Coal is beneficially owned by members of the Slater family. The directors of Slater Coal are Norman Slater, Peter Slater, Stephan Theron and Johan Louw, and its officers are Norman Slater (Managing Director), Peter Slater (Chairman), Alistair Will (Financial Manager), Bob Bentleyl (Mining Manager), Tim Swanepoel (Processing Manager) and Frank Talbot (Resource Manager).

The Corporation received approval from the South African Reserve Bank ("SARB") of the acquisition by Forbes Coal of all of the issued and outstanding shares of Slater Coal (Pty) Ltd. ("Slater Coal") pursuant to the sale agreement between Forbes Coal and the Slater Coal vendors dated April 13, 2010 in respect of Slater Coal, as amended (the "Slater Coal Agreement"), all as more particularly described in the management information circular of the Corporation dated August 20, 2010 (the "Circular") (See Press Releases dated September 16, 2010 and September 20, 2010). As part of granting the approval, Forbes Coal has agreed to undertake to list the common shares of the Corporation on the Johannesburg Stock Exchange within 12 months of the date hereof. In addition, SARB requested that the mechanics of the transfer of the issued and outstanding shares of Slater Coal (the "Slater Coal Shares") to Forbes Coal as set out in the Slater Coal Agreement be revised. Under the previous structure, Forbes Coal held 100% of the Slater Coal Shares and all of the Slater Coal Shares have been pledged back to the Slater Coal vendors pending completion of the remaining two payments of the purchase price pursuant to the Slater Coal Agreement. SARB requested that the Slater Coal Shares be transferred in tranches in proportion to the amount of the aggregate purchase price paid for such shares in accordance with the Slater Coal Agreement. To date, Forbes Coal has paid ZAR320 million of the aggregate ZAR600 million purchase price. As such, the Corporation will now hold 53.5% of the Slater Coal Shares, with the remaining 47.5% to be transferred to the Corporation incrementally and proportionately upon payment to the Slater Coal vendors of the remaining instalments of the purchase price. Although the mechanics for the transfer of the Slater Coal Shares to the Corporation have been modified by the parties in order to obtain SARB approval, the revenue derived from the Aviemore property and the Magdalena property (together, the "Slater Coal Properties") will continue to be for the benefit of the Corporation.

Cautionary Note Regarding Forward-Looking Information This press release contains "forward-looking information" within the meaning of applicable Canadian securities legislation. Forward-looking information includes, but is not limited to, statements with respect to the future financial or operating performance of the Corporation and its projects, statements regarding the prospects for the business of the Corporation, statements regarding synergies and financial impact of the proposed transaction, the terms and conditions of the transaction, the benefits of the proposed transaction, the costs of and capital for harvesting projects, harvesting expenditures, timing of future acquisitions of additional properties and applicable licences, requirements for additional capital, government regulation of the mineral exploration industry, environmental risks, acquisition of mining licences, title disputes or claims, limitations of insurance coverage and the timing and possible outcome of pending litigation and regulatory matters. Generally, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". 
Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Corporation to be materially different from those expressed or implied by such forward-looking information, including but not limited to: general business, economic, competitive, foreign operations, political and social uncertainties; a history of operating losses; delay or failure to receive board or regulatory approvals; timing and availability of external financing on acceptable terms; not realizing on the potential benefits of the proposed transaction; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; future prices of mineral products; failure of plant, equipment or processes to operate as anticipated; accidents, labour disputes and other risks of the mining industry; and, delays in obtaining governmental approvals or required financing or in the completion of activities. Although the Corporation has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking information. The Corporation does not undertake to update any forward-looking information, except in accordance with applicable securities laws.

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.

Contact Information

  • Forbes & Manhattan Coal Corp.
    Stephan Theron
    President and Chief Executive Officer
    (416) 861-5912
    stheron@forbescoal.com