Gemini Acquisitions Inc.

Gemini Acquisitions Inc.

May 04, 2007 12:08 ET

Gemini Acquisitions Inc. Announces Details of Qualifying Transaction With Silver Shield Resources Inc.

TORONTO, ONTARIO--(CCNMatthews - May 4, 2007) - Gemini Acquisitions Inc. ("Gemini" or the "Company")(TSX VENTURE:GQI.P), a capital pool company, is pleased to announce that it has entered into an arm's length binding letter agreement (the "Agreement") dated April 27, 2007 with Silver Shield Resources Inc. ("SSR"), pursuant to which Gemini will, subject to a number of conditions, acquire all of the issued and outstanding securities of SSR. The transaction will constitute the Company's qualifying transaction (the "Qualifying Transaction") under the policies of the TSX Venture Exchange (the "Exchange").

Under the terms of the Agreement, Gemini has agreed to form a new corporation ("Newco") for the purpose of amalgamating with SSR. Newco will be a wholly-owned, Ontario incorporated, subsidiary of the Company. As consideration for the amalgamation of SSR and Newco, holders of common shares in the capital of SSR ("SSR Shares") will be entitled to receive 1.3 common shares in the capital of Gemini (a "Gemini Share") for each one (1) SSR Share. The foregoing Gemini Shares will be issued at an ascribed price of $0.18 per Gemini Share. The principal stakeholders of SSR, who as a group, own beneficially, directly or indirectly, or exercise control or direction over 6,000,000 SSR Shares representing approximately 57.6% of the issued and outstanding shares, are: Timothy Towers (of Burlington, Ontario), who holds approximately a 14.4% interest in the issued and outstanding SSR Shares; Stephen Mlot (of Richmond Hill, Ontario), who holds approximately a 14.4% interest in the issued and outstanding SSR Shares; Raymond Lashbrook (of Callander, Ontario) who holds approximately a 14.4% interest in the issued and outstanding SSR Shares; and Foundation Opportunities Inc. ("FOI"), a private company, incorporated under the Business Corporations Act (Ontario), which holds approximately a 14.4% interest in the issued and outstanding SSR Shares. Each of Jeremy Goldman (of North York, Ontario) and The Goomie Trust, a trust formed under the laws of the Province of Ontario, indirectly holds a 50% interest in FOI. The remaining 4,410,000 SSR Shares are owned, beneficially, directly or indirectly, by 28 stakeholders of SSR, none of whom individually owns beneficially, directly or indirectly, or exercises control or direction over more than 10% of the issued and outstanding SSR Shares.

SSR currently has 10,410,000 shares issued and outstanding. Before and concurrently with the Qualifying Transaction, SSR is expecting to complete two private placements and raise an aggregate of up to $2,950,000 worth of SSR securities as follows:

- Before the Qualifying Transaction closes, SSR expects to complete a private placement of up to $750,000 worth of SSR securities. The private placement will comprise of up to 3,750,000 of units ("Units") at an issue price of $0.20 per Unit, each Unit being comprised of one share and one share purchase warrant (a "Warrant"), each Warrant is exercisable into one share at an exercise price of $0.35, for 24 months from the completion date the Qualifying Transaction (the "Initial Financing"). SSR has engaged Foundation Markets Inc. ("Foundation"), a limited market dealer and a related party to FOI, to act as agent to SSR for the Initial Financing, and as compensation for its services SSR has agreed to provide Foundation a cash commission of 10% of the gross proceeds of the Initial Financing and a number of broker warrants (the "Broker Warrants") equal to 10% of the number of Units subscribed for pursuant to the Initial Financing. Each Broker Warrant is exercisable into one fully paid and non-assessable common share in the capital of SSR at a price of $0.35 per common share for 24 months from the closing of the Qualifying Transaction.

- It is expected that SSR will also complete a financing of up to $2.2 million worth of SSR securities (the "QT Financing") concurrent with the completion of the Qualifying Transaction. The QT Financing will be comprised of (a) flow-through shares at an issue price of $0.39 per share (which after giving effect to the exchange ratio is an effective price of $0.30 per Gemini flow-through share); and (b) units ("QT Units") at an issue price of $0.26 per QT Unit (which after giving effect to the exchange ratio is an effective price of $0.20 per Gemini QT Unit), each QT Unit being comprised of one share and one-half of one share purchase warrant (a "QT Warrant"). Each whole QT Warrant is exercisable into one share of SSR at an exercise price of $0.45 (which after giving effect to the exchange ratio is an effective exercise price of $0.35 per Gemini Share) for 24 months from the completion date of the Qualifying Transaction.

Upon completion of the Qualifying Transaction, all securities convertible into SSR Shares will become securities convertible into Gemini Shares and such convertible securities will be adjusted to reflect the conversion ratio described above.

The closing of the Qualifying Transaction with SSR is subject to a number of conditions, including, but not limited to the following:

1. receipt of gross proceeds of not less than $1 million pursuant to the Initial Financing and QT Financing;

2. completion or waiver of sponsorship;

3. receipt of all required regulatory approvals, including the approval of the Exchange, of the Qualifying Transaction;

4. completion of all due diligence reviews;

5. receipt of all director and shareholder approvals as may be required under applicable laws or regulatory policies; and

6. execution of a formal amalgamation agreement.

In connection with entering into the Agreement, Gemini has provided a refundable payment of $25,000 to SSR (the "Deposit"). The Deposit will become non-refundable upon confirmation or waiver by Gemini of certain due diligence condition set forth in the Agreement, provided however, that SSR will be obliged to repay the Deposit to Gemini if the Agreement is terminated by SSR or is terminated by Gemini as a result of any material default thereunder on the part of SSR or if the formal amalgamation agreement is not entered into on or before May 31, 2007.

Sponsorship of a qualifying transaction of a capital pool company is required by the Exchange unless exempt in accordance with Exchange policies. Gemini intends to apply for an exemption from sponsorship requirements, however, there is no assurance that Gemini will obtain this exemption.

A filing statement in respect of the proposed Qualifying Transaction will be prepared and filed in accordance with Policy 2.4 of the Exchange on SEDAR at no less than seven business days prior to the closing of the proposed Qualifying Transaction. A press release will be issued once the filing statement has been filed as required pursuant to Exchange policies.

Silver Shield Resources Inc.

SSR is a private company that was incorporated under the Business Corporation Act (Ontario) on May 2, 2006. Based on SSR's unaudited financial statements for the financial year ended December 31, 2006, its total assets at December 31, 2006 were $377,608, total liabilities were $9,158 and it had no revenue. Its weighted average number of common shares outstanding in 2006 was 9,053,750, with net loss per share of $.0001 in 2006.

SSR holds a 100% interest in certain mining claims located in Mickle Township in the Larder Lake mining district of Ontario (the "Welsh Property"), which were acquired pursuant to the option agreement with Welsh Silver Mines Inc. ("WSM"). The Welsh Property is subject to 2% net smelter return ("NSR") royalty to WSM.

The Welsh Property comprises one mining lease (TR 224, EB21) and nine mining claims (298253, 298256, 442494, 442495, 476294, 495454, 495455, 1239146 and 1242018) in the Elk Lake-Gowganda silver area of Ontario. An independent technical report on the Welsh Property was prepared on January 4, 2007 in compliance with National Instrument 43-101 and will be filed with the Exchange for review.

In addition to the Welsh Property, SSR holds options on the Wilder-Duggan ("Wilder-Duggan") and Morris ("Morris") mining properties in the Elk Lake-Gowganda area and an option on the Gore ("Gore") mining property in South Lorrain, Ontario. SSR plans to carry out preliminary evaluations of these properties.

Furthermore, SSR also holds a 100% interest in certain concessions located in the state of Guerrero, Mexico (the "Mexican Property"). The Mexican Property is subject to a NSR of US$1.00 per tonne of milled ore to Hector Gonzalez Flores. The Mexican Property is comprised of one claim of 400 hectares surrounded by a second claim of an additional 3,600 hectares.

Funds raised from the Initial Financing will be used to initiate exploration programs on the Welsh and Mexican Properties and perform preliminary evaluation of the Wilder-Duggan, Morris and Gore Properties.

Proposed Management and Directors

As part of the completion of the Qualifying Transaction, SSR's current management will assume responsibility for Newco and Newco board of directors will be comprised of the current SSR board of directors, being Messrs. Timothy D. Towers, Stephen G. Mlot, and Raymond Lashbrook, two additional SSR nominees, being Adam Szweras and Peter Hawley and one Gemini nominee, to be determined. The following are brief descriptions of SSR's management team and its proposed nominees that will, collectively, assume management responsibility for Pisces upon completion of the Qualifying Transaction:

Timothy Daniel Towers - President

Mr. Towers has 30 years experience in accounting, administration and business management. Since 1991 he has been the President, the Chief Executive Officer and a Director of First Place Express Inc., a private courier company. Prior thereto, from 1995to 1998, Mr. Towers was the President and the Chief Executive Officer of Conquest Yellowknife Resources Ltd. (now known as Conquest Resources Limited), a mining exploration and development company listed on the Exchange. Prior to that, Mr. Towers served as the Chief Accountant, Assistant Controller and Controller for various industrial concerns in Southwestern Ontario and was also a corporate secretary and accountant for Temex Resources Corp., an Exchange listed company, and YGC Resources Ltd., a mining exploration listed on the Toronto Stock Exchange ("TSX").

Raymond Lashbrook - Vice-President, Exploration

Mr. Lashbrook has 38 years experience in mineral exploration, mine engineering and geology. He worked for Geophysical Engineering (later Teck Exploration Ltd.), Kidd Creek Mine, Sherrit-Gordon Mines in Leaf Rapids, Manitoba, Falconbridge, and Noramco Exploration Ltd. Since 1986 Mr. Lashbrook has operated Lashex Ltd., a private contract mineral exploration company, with projects in Ontario, Quebec, Nevada, Arizona and Mexico carrying out geological, geophysical and geochemical exploration for precious and base metal deposits. He currently serves as the Vice President, Exploration and a Director of Claim Nickel Inc., a private Ontario-based mineral exploration company, and as a Director of Vencan Gold Corporation, a mining exploration company listed on the Exchange.

Stephen G. Mlot - Director

Mr. Mlot is registered as a Professional Engineer in Ontario. He received his Engineering (Mining) degree from McGill University, Montreal, Quebec (1977). Mr. Mlot has significant experience in the mining industry, with particular emphasis in planning and management of mine development and operations, and minesite construction projects. He also has extensive experience in mining project evaluation and feasibility analysis. Mr. Mlot is currently the Chief Executive Officer and a Director of Carlisle Goldfields Limited, a mining exploration company listed on the TSX. Prior thereto, from April 2004 to May 2006, Mr. Mlot was a director of Claim Lake Resources Inc. a reporting issuer in Ontario from 2001 until 2004, and was a director of Leitrim Group Inc., a company listed on the Exchange, from April 1, 2004 until May, 2006. Furthermore, from 1996 to 2002, Mr. Mlot served as a director of Patricia Mining Corp. in addition to being its President between 1996 and 1999, and was involved in all aspects of corporate management.

Adam K. Szweras - Director

Mr. Szweras is a partner at Fogler, Rubinoff LLP, Toronto, Ontario, and a founding partner of a Toronto Investment Bank. He joined Fogler, Rubinoff LLP in 2006, and prior thereto practiced securities and corporate law with another major Canadian firm. Prior to that he was the managing partner of a prominent Bay Street securities law boutique where he represented public issuers and investment dealers. His legal practice and investment bank activities have been focused on corporate finance and going public transactions.

Peter Hawley - Director

Mr. Hawley has 25 years mining-industry experience that spans grassroots exploration through to development and production. He has worked extensively as a consulting geologist to a large number of intermediate and senior mining companies including Teck Corp, Noranda Inc, Placer Dome Inc and Barrick Gold Corp., as well as being President and Chief Executive Officer of Scorpio Mining Corporation, a mining exploration company listed on the TSX. In addition, Mr. Hawley is also experienced in private and public company financing and corporate administration.

Completion of the transaction is subject to a number of conditions, including but not limited to, Exchange acceptance. Where applicable, the transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the or 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 TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.

Contact Information

  • Gemini Acquisitions Inc.
    Randy Koroll
    Chief Financial Officer
    (416) 662-9455