VANCOUVER, BRITISH COLUMBIA--(Marketwired - Sept. 30, 2013) - Gainey Capital Corp. (TSX VENTURE:GNC.P) ("Gainey" or the "Company") is pleased to announce that it has completed the acquisition from Golden Anvil, S.A. de C.V. ("Golden Anvil") of certain assets (the "Assets") comprising of certain mineral concessions, a concentration plant located in Huajicori, Nayarit, and other associated assets and equipment (the "Acquisition") which served as Gainey's qualifying transaction ("QT") pursuant to the policies of the TSX Venture Exchange.
In completing the Acquisition, the Company has paid aggregate consideration as follows:
- issued 12,000,000 common shares in the capital of the Company to Golden Anvil nominees ("Consideration Shares"); and
- issued a special warrant of the Company (the "Special Warrant") to Golden Anvil. The Special Warrant is convertible, for no additional consideration, from time to time, into that number of common shares of the Company equal to the number of ounces of gold or gold equivalent, categorized as "measured and indicated mineral resources" (as such terms are defined by the Canadian Institute of Mining, Metallurgy and Petroleum), upon receipt by the Company and/or Golden Anvil of a technical report prepared in accordance with National Instrument 43-101 Standards of Disclosure for Mineral Projects ("NI 43-101")by an independent qualified person (as defined in NI 43-101) in relation to the El Colomo Concessions on or before September 27, 2019, subject to an aggregate maximum of 3,000,000 common shares.
The Consideration Shares and Special Warrant issued are subject to surplus escrow agreements. The Consideration Shares will be released as follows:
- 5% of the Consideration Shares will be released from escrow on the date of the Final Exchange Bulletin;
- 5% of the Consideration Shares will be released from escrow on the date which is 6 months following the Final Exchange Bulletin;
- 10% of the Consideration Shares will be released from escrow on the date which is 12 months following the Final Exchange Bulletin;
- 10% of the Consideration Shares will be released from escrow on the date which is 18 months following the Final Exchange Bulletin;
- 15% of the Consideration Shares will be released from escrow on the date which is 24 months following the Final Exchange Bulletin;
- 15% of the Consideration Shares will be released from escrow on the date which is 30 months following the Final Exchange Bulletin; and
- 40% of the Consideration Shares will be released from escrow on the date which is 36 months following the Final Exchange Bulletin.
Any shares issued on the conversion of the Special Warrant are subject to the same release schedule.
In addition, the Consideration Shares and the 2,000,000 common shares held by Skaha One Holdings Ltd. (collectively, the "Voluntary Pooled Securities") of which David Coburn, President and CEO of the Company is the principal, will be subject to a Voluntary Pooling Agreement. The Voluntary Pooling Agreement provides that none of the Voluntary Pooled Securities may be traded for a period of one year from the date of the Final Exchange Bulletin expected to be October 2, 2013.
All the securities issued have been issued pursuant to exemptions to the prospectus requirements under applicable Canadian securities laws and are subject to a four month hold period.
In connection with the transaction, at closing, the Company agreed to pay approximately $225,000 in taxes, duties and costs on Golden Anvil's behalf (the "Loan"). The Loan is secured by 800,000 Consideration Shares and personally guaranteed by Marco Antonio Rincon-Valdes and Francisco Rolando Rincon-Romo. Golden Anvil agreed to repay fifty percent of the Loan on or before September 27, 2014 and the remaining fifty percent on or before March 27, 2015. If payment is not made, the Company may take action pursuant to the personal guarantees and if necessary, the Company may realize on the pledged shares.
The Company issued 665,000 common shares to Avonlea Ventures Inc., an arm's length party, as a finder's fee with respect to the QT. Based on the finder's fee agreement with Avonlea Ventures Inc., these shares are subject to resale restrictions such that 10% of the shares are free of voluntary resale restrictions on the date of the Final Exchange Bulletin and an additional 15% of the shares are free of voluntary resale restrictions each six month period thereafter.
In conjunction with the QT completion, two transfers within escrow of a total of 2,000,000 common shares of non-Principals of Gainey, which are held in escrow under the CPC Escrow Agreement, were completed. The 2,000,000 common shares transferred will continue to be held in escrow pursuant to the CPC Escrow Agreement.
On September 3, 2013, the Company received cash proceeds of $34,800 from Wolverton Securities Ltd., its Sponsor, from the exercise of warrants. The exercise price of these warrants was $0.10 per common share.
At the closing of the transaction, the board of directors of the Company consists of David Coburn, Edward Farrauto, Barry Lee and Marco Antonio Rincon-Valdes. David Coburn will remain as Chief Executive Officer and Kristian Dagsaan will remain as Chief Financial Officer and corporate secretary of the Company. Marco Antonio Rincon-Valdes was appointed as a director in connection with the QT.
Upon the resumption of trading of the common shares of Gainey and subject to regulatory approval, the Company has agreed to issue to Marco Antonio Rincon-Valdes 658,000 stock options exercisable at a price of $0.50 per common share for a period of five years.
Additional information on the Company's QT is found in its Filing Statement dated August 1, 2013 as filed on SEDAR.
The common shares of Gainey are expected to commence trading on Tier 2 of the Exchange with the symbol GNC on October 3, 2013.
During the closing process, the Company was made aware of a dissenting position of a certain Golden Anvil minority shareholder, who has protested his respective Gainey common share allocation from the Acquisition. As at the date of this news release, the Company is not aware of any formal claim or threat of a formal claim being brought by this shareholder.
ON BEHALF OF THE BOARD
David Coburn, Chief Executive Officer
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) has reviewed or accepts responsibility for the adequacy or accuracy of this Release.