Genetic Diagnostics Technologies Corp.
TSX VENTURE : GDD

Genetic Diagnostics Technologies Corp.

March 27, 2007 09:00 ET

Genetic Diagnostics Technologies Corp. Announces Reverse Takeover With Polar Mining Corporation

CALGARY, ALBERTA--(CCNMatthews - March 27, 2007) -

(NOT FOR DISSEMINATION IN THE UNITED STATES OF AMERICA)

Genetic Diagnostics Technologies Corp. ("GDD" or the "Corporation") (TSX VENTURE:GDD) is pleased to announce details concerning its proposed reverse takeover transaction with Polar Mining Corporation ("Polar").

About Polar

Polar was created to acquire advanced stage exploration properties focusing primarily on gold, and is currently participating in the acquisition, exploration and development of mineral claims. In 2006, Polar signed two option agreements with Goldeye Explorations Limited ("Goldeye"), a public company listed on TSX Venture Exchange Inc. ("TSX Venture"). The first option agreement covers 12,222 hectares in the Stewart Gold camp located near Todd Creek, British Columbia for the purpose of exploring for precious and base metals (the "Todd Creek Property"). Polar has an option to earn a 50% interest in the Todd Creek Property in exchange for cash and work commitments of $927,500 and 140,000 common shares of Polar prior to October 31, 2011. Further, Polar can earn an additional 10% (to hold a 60% interest) in the Todd Creek Property in exchange for an additional $1,000,000 in expenditures prior to October 31, 2013.

Polar has a second option to earn a 50% interest in mineral claims located near Santiago, Chile, known as the Sonia and Puma properties (the "Chile Properties") in exchange for cash and work commitments of $240,000 and 100,000 common shares of Polar prior to June 30, 2008, and can increase its interest in the Chile Properties by an additional 10% (to hold a 60% interest) by making $1,000,000 in additional expenditures, prior to June 30, 2010.

Polar's Todd Creek Property

The Todd Creek Property lies 35 km northeast of the Stewart Gold camp and consists of 30 contiguous mineral claims covering an area of 12,222 hectares. The Todd Creek mineral claims are held by Geofine Exploration Consultants Ltd. ("Geofine"). Goldeye has entered into an option agreement with Geofine pursuant to which Goldeye can earn a 100% working interest by making staged payments of cash and shares to Geofine and incurring $750,000 in exploration expenditures on the property prior to October 31, 2011. Polar has entered into an option agreement with Goldeye to earn up to 60% of Goldeye's interest in the Todd Creek Property as described above.

Polar's Chile Properties

The Chile Properties are located approximately 180 km north of Santiago and are within seven kilometres of one another. The Sonia property consists of 12 pedimentos covering 3,100 hectares and the Puma property consists of 2 pedimentos covering 600 hectares for a total of 3,700 hectares. Goldeye is party to an option agreement with Olympus Explorations Inc. ("Olympus"), a private Ontario corporation, whereby Goldeye can earn a 100% interest, subject to a 2% Net Smelter Return royalty, in the Sonia - Puma project which consists of two properties held on behalf of Olympus in Region V, Chile. Polar has an option to earn up to a 60% interest in the Chile Properties from Goldeye as described above.

Polar Corporate History and Structure

Polar was incorporated under the Business Corporations Act (Ontario) on August 14, 2003 and is extra-provincially registered in the Province of British Columbia. The registered office of Polar and its head office are located at 8 King Street East, Suite 1700, Toronto, Ontario M5C 1B5.

In December of 2006 and January of 2007, Polar completed private placements of an aggregate of 2,750,000 common shares at a price of $0.50 per Polar Share for aggregate gross proceeds of $1,375,000. Polar currently has 15,950,000 common shares (the "Polar Shares") issued and outstanding and has also issued warrants to purchase up to 1,362,500 Polar Shares at a price of $0.65 per share, agent's warrants to purchase up 234,000 Polar Shares at a price of $0.65 per share and stock options to purchase up to 200,000 Polar Shares at a price of $0.25 per share and 200,000 Polar Shares at a price of $0.50 per share.

The principal shareholders of Polar are Stephen G. Roman, and T. Douglas Willock of Gormely, Ontario and Toronto, Ontario, respectively, who each own approximately 17% of the outstanding Polar Shares.

Based on unaudited financial statements as at December 31, 2006, Polar had assets of $2,044,204, of which $1,381,901 were cash and cash equivalents, shareholders' equity of $1,946,204, current liabilities of $98,000 and no debt. For the years ended December 31, 2006 and December 31, 2005, Polar recorded losses of $63,304 and $128 (Polar was inactive in 2005), respectively, arising from administrative expenses, professional fees and stock-based compensation.

Directors and Officers of Polar

The current directors of Polar are Stephen G. Roman, H. Douglas Scharf, T. Douglas Willock and Derek C. Rance.

The current officers and key personnel of Polar are Stephen G. Roman, Chairman of the Board; T. Douglas Willock, President and Chief Executive Officer; H. Douglas Scharf, Chief Financial Officer; and George A. Flach, Vice-President, Exploration.

Stephen G. Roman is an entrepreneur/financier who has been involved in all aspects of the resource industry over the past 30 years and has successfully identified, developed, financed and brought into commercial production a number of mining and oil and gas projects. His past experience was gained as a director and senior officer of each of Denison Mines Limited, Lawson Mardon Group and Zemex Corporation. Recently, Mr. Roman's focus has been to finance and develop emerging junior, publicly-listed companies, which include: Exall Resources Limited ("Exall"), which changed its name to Gold Eagle Mines Ltd. ("Gold Eagle"), a public company listed on the Toronto Stock Exchange ("TSX") after it acquired Southern Star Resources Inc. ("Southern Star") on December 21, 2006, Gabriel Resources Limited, a public company listed on TSX, Verena Minerals Corporation ("Verena"), a public company listed on TSX Venture and Silvermet Inc. ("Silvermet"), a public company listed on TSX. Mr. Roman served as President and Chief Executive Officer of Exall from 1987 to December 21, 2006. He is currently Co-Chairman and a Director of Gold Eagle. Mr. Roman holds a Bachelor of Arts degree from the University of Guelph, Ontario in the field of Geology and Geography and is a Member of the Canadian Institute of Mining, Metallurgy and Petroleum.

T. Douglas Willock spent 21 years as an investment banker with leading international and domestic banks, the most recent of which were National Bank Financial's investment banking arm known as Levesque Beaubien Geoffrion Inc. and Deutsche Bank Securities Ltd. He joined Exall in May 2001 as Vice-President, Corporate Development and subsequently became a Director. Exall's principal business was identifying and developing opportunities in the mining, oil and gas industries. Since Exall's acquisition of Southern Star, Mr. Willock has devoted a majority of his time and effort to his role as the President and Chief Executive Officer of Polar. Mr. Willock also serves as a director of Olympus Pacific Minerals Inc., a public company listed on TSX, and as a Vice President, Corporate Development of Silvermet. Mr. Willock holds a Masters of Business Administration degree from the Ivey School of Business, a Bachelor of Arts degree from the University of British Columbia and attended the Beijing Language Institute.

H. Douglas Scharf is a Chartered Accountant with over 28 years of experience in precious metals and base metals mining. Mr. Scharf served as Chief Financial Officer of Exall from May to December 2006, Executive Vice-president, Corporate Development of HudBay Minerals Inc., a public company listed on TSX from 2003 to 2005, Chief Financial Officer and a director of Southern Cross Resources Inc., a public company listed on TSX from 1997 to 2000, a director and Chief Financial Officer of Inmet Mining Corporation, a public company listed on TSX from 1988 to 1996, Vice President, Finance of Placer Dome Inc. from 1987 to 1988 and Chief Financial Officer of the Dome Mines Group from 1978 to 1987. Mr. Scharf has been a director of Gold Eagle since December 2006 and a director of Asia Now Resources Corp., a public company listed on TSX Venture since February 2006. Mr. Scharf holds a Bachelor of Arts degree (Economics) from York University in Toronto.

Derek C. Rance, P. Eng., is a mining engineer by profession and was the President and Chief Operating Officer of the Iron Ore Company of Canada from 1989 to 1997 and the President and Chief Executive Officer of The Cape Breton Development Corporation (Devco) from 1984 to 1987. He is currently the Chairman and Senior Associate of Behre Dolbear & Company Ltd., a consulting company providing assistance to the mineral industry with due diligence, feasibility studies, optimizations, valuations and marketing studies, a position he has held since 1997. Mr. Rance received a Master of Business Administration degree from the University of Western Ontario in 1963.

George A. Flach, P. Geo., has been involved during the past 20 years with a number of significant gold discoveries, principally in Ghana, Africa. Since December 2006, Mr. Flach has been the Vice President Exploration for Verena. Mr. Flach was the Exploration Manager for St. Jude Resources Ltd. ("St. Jude") from January 1997 to December 21, 2005 when St. Jude was acquired by Golden Star Resources Ltd. ("Golden Star"), a public company listed on TSX. Mr. Flach also assisted in the development of a gold resource in Burkina Faso, Africa, as well as significant gold exploration properties in Niger, Africa adjacent to the Samira mine. From 1994 to 1996, Mr. Flach acted as a consultant to Gold Fields Limited of South Africa ("Gold Fields") on the acquisition and preliminary exploration of the Tarkwa project in Ghana which based on Gold Field's public filings now has a resource of greater than 20,000,000 ounces and annual production of more than 500,000 ounces of gold. As Chief Geologist for Billiton Bogosu Goldfields Ltd. from 1986 to 1991, Mr. Flach was involved in the development of the Bogosu mine in Ghana that has produced to date more than 1,400,000 million ounces of gold. The Bogosu mine is now being further expanded along with Golden Star's adjacent Prestea property. Mr. Flach graduated from the University of Waterloo, Ontario in 1985 with an Honours Bachelor of Science degree in Geology.

Summary of the Proposed Reverse Takeover Transaction

GDD has entered into a letter of intent dated March 12, 2007 with Polar, pursuant to which the Corporation and Polar have agreed to complete a business combination (the "Business Combination") to form a new company called Polar Mining Inc. ("Amalco"). The Business Combination is expected to constitute a Reverse Takeover Transaction of the Corporation as defined in the policies of the TSX Venture.

Pursuant to the terms of the Business Combination: (i) the holders of the Polar Shares will receive one common share of Amalco (the "Amalco Common Shares") with a deemed value of $0.50 per share for each share owned; and (ii) the holders of the GDD Common Shares will receive one Amalco Common Share for each 3.36 common shares of GDD owned. The outstanding agents' warrants, warrants and stock options of Polar shall be replaced with agents' warrants, warrants and stock options of Amalco, as applicable, with identical terms. The outstanding stock options of GDD will be exchanged for options of Amalco on a 3.36 to 1 basis with adjusted exercise prices.

After completion of the Business Combination, the Amalco Board of Directors will consist of Stephen G. Roman, David G. Speck, T. Douglas Willock, H. Douglas Scharf, Derek C. Rance and one additional nominee to be determined and the officers of Amalco will be the current officers of Polar.

After completion of the Business Combination, the current Polar shareholders will hold approximately 60% of the Amalco Common Shares and the current GDD shareholders will hold approximately 40% of the Amalco Common Shares.

After completion of the Business Combination, Polar will have approximately $4,000,000 in cash or near cash assets.

GDD has applied for an exemption from the sponsorship requirements in connection with the Business Combination, but there is no assurance a sponsorship exemption will be granted.

The completion of the Business Combination is subject to the approval of TSX Venture and all other necessary regulatory approvals. The completion of the Business Combination is also subject to additional conditions precedent, including shareholder approval of the Corporation and of Polar, satisfactory completion of due diligence reviews by the parties, board of directors approval of the Corporation and Polar, the entering into of a formal agreement, the entering into of consulting agreements with certain senior officers of Polar, and certain other usual conditions.

The Business Combination will be an arm's length transaction as the current directors and officers of GDD own no interest in Polar.

GDD announced it has reserved a price of $0.1488 per share ($0.50 per Amalco Common Share) for the grant of stock options to acquire up to 10% of the number of issued and outstanding Amalco Common Shares (the "Stock Options") in the event the Business Combination is completed. The grant of the Stock Options is subject to regulatory approval. The Stock Options will be granted to directors, officers, employees and consultants of Amalco, as determined by the Board of Directors of Amalco following the completion of the Business Combination.

Trading of the GDD Common Shares will not resume until the TSX Venture has accepted all documents required to be filed with the TSX Venture under its rules and policies and GDD has issued a further news release with respect to the Todd Creek Property and the Chile Properties.

As indicated above, completion of the Business Combination is subject to a number of conditions, including but not limited to, TSX Venture acceptance and shareholder approval. The Business Combination cannot close until the required shareholder approval is obtained. There can be no assurance that the Business Combination will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the Information Circular of the Corporation to be prepared in connection with the Business Combination, any information released or received with respect to the Business Combination may not be accurate or complete and should not be relied upon. Trading in the securities of the Corporation should be considered highly speculative.

Except for historical information contained herein, this news release contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially. Neither Polar nor GDD will update these forward-looking statements to reflect events or circumstances after the date hereof. More detailed information about potential factors that could affect financial results is included in the documents filed from time to time with the Canadian securities regulatory authorities by GDD and Polar.

The TSX Venture has in no way passed upon the merits of the Business Combination and has neither approved nor disapproved the contents of this press release.

Contact Information

  • Genetic Diagnostics Technologies Corp.
    David G. Speck
    President
    (416) 204-9788 ext. 223
    or
    Polar Mining Corporation
    T. Douglas Willock
    President
    (416) 368-3949