Giga Capital Corporation
TSX VENTURE : GIG.P

May 18, 2010 13:10 ET

Giga Capital Corporation Enters Into a Qualifying Transaction and Announces Common Share Financing

CALGARY, ALBERTA--(Marketwire - May 18, 2010) -

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Giga Capital Corporation ("Giga") (TSX VENTURE:GIG.P) is pleased to announce that it has signed a letter of intent dated May 11, 2010 (the "LOI") whereby Giga has agreed with GSL Mining Investments Limited, a Hong Kong company, subject to a formal agreement (the "Acquisition Agreement") to acquire all the issued and outstanding shares of its wholly owned subsidiary, Join Pacific Investment Ltd. ("Join Pacific"), a Hong Kong Company which indirectly holds a mining license for sand and gravel in the Yunnan Province of China. GSL Mining Investments Limited is controlled by Hong Kong shareholders: Abundant Resource (HK) Ltd. (beneficial owner Fu Yuesheng) as to 24%, Respectful Group Ltd. (beneficial owner Law Shiu Chur) as to 20%, Clear Treasure Holdings Ltd. (beneficial owner Sui Ting Cheong Robert) as to 20%; Pearl Way Holdings Ltd. (beneficial owner Ho Chak Pan He Zewen) as to 20% and HeZewen of China as to 16%. Giga will issue 14,117,294 common shares to GSL as consideration for the acquisition.

The acquisition is an arm's length transaction and is expected to constitute the Qualifying Transaction (as such term is defined in the policies of the TSX Venture Exchange Inc. ("TSXV")) or "QT" for Giga. The QT and all related transactions remain subject to the approval of the TSXV. It is anticipated that on completion of the QT, Giga will be classified as a Tier 2 Mining Issuer on the TSXV.

Prior to the completion of the QT Giga will complete a non-brokered or brokered private placement of a minimum of 11,500,000 and maximum of 20,000,000 common shares at a price of $0.05 per share for gross proceeds of a minimum of $575,000 and maximum of $1,000,000 (the "Financing"). 

The QT

Pursuant to the terms of the LOI, Join Pacific will capitalize its debt to GSL into shares and Giga will acquire all of the issued and outstanding shares of Join Pacific and will issue as consideration therefor 14,117,194 common shares as fully paid and non-assessable.

It is anticipated that upon completion of the QT and assuming a minimum financing of $575,000, Giga will have the following securities issued and outstanding:

  Currently Issued Issued on Minimum Financing Issued on QT Total
Common Shares 8,700,000 11,500,000 14,117,194 34,317,194
Options 600,000 - - 600,000

Financing

Prior to the completion of the QT Giga will complete a non-brokered private placement of a minimum of 11,500,000 (maximum 20,000,000) common shares at a price of $0.05 each for minimum gross proceeds of $575,000 and maximum of $1,000,000. If an agent is retained by Giga in connection with the Financing, a cash commission will be payable by Giga to such agent. The completion of the Financing is a condition precedent to the completion of the QT.

Highlights of the QT

Summary of the Business

Upon completion of the QT, Giga will be a publicly listed Tier 2 Mining Issuer. Giga will be the sole shareholder of Join Pacific, which in turn will own all the shares of a People's Republic of China company named Kunming Dongchuan River Sand Quarrying Ltd. ("KDR"). KDR holds a sand and gravel mining license and a business license at Tongdu Town which is approximately 157 KM from Kunming city in Yunnan Province China and KDR intends to buy the necessary equipment to commence mining of sand and gravel and to sell the product for on going construction projects in Kunming City and other areas in Yunnan. The concession area of the sand and gravel mining license is 20 km along 2 rivers, which have an average of 150m in width, up to the junction point where 3 rivers combine to one exit channel. The sand and gravel mining license period is granted for 15 years, and is subject to further extension upon expiry of the 15 year period. The annual sand production from the concession is initially targeted for 500,000 cubic meters per year; however, a feasibility study has not been completed and there is no certainty the proposed operation will be economically viable. The sand in this area is categorized as fine to medium coarse grade, containing small quantity of mud, only traces of mica, organic substance and other impurities. It is clean, solid, natural and high-quality sand. Compared to other sand available in Kunming City at present, the concrete produced by the river sand in this area can decrease the cracking trend of concrete and further enhance the service, durability and wear resistance of concrete.

Directors and Officers

Upon competition of the QT and pursuant to the Acquisition Agreement, the directors and officers of Giga will be:

Name and Title Residence Background During the Five Preceding Years
Frank Boyd Chairman of the Board of Directors Calgary, Alberta CEO & President of Apex Limited Partnership
     
Robert Siu Director & CEO Hong Kong Since 2008, Chief Executive Officer and Managing Director GSL Mining Investments Limited – a private company that invests and operates various mining projects in China including Gansu, Shanxi and Yunnan Provinces.
     
    From 2006 to 2007, Chief Executive Officer and Vice-Chairman A-Max Holdings Limited, a publicly listed company on the Hong Kong Stock Exchange under the stock code 00959, a company involved in the investment of hotel and entertainment business in Macao.
     
Michael Poon Chief Financial Officer & Director Calgary, Alberta Chartered Accountant in public practice as a sole practitioner.
     
David Ross Director & Corporate Secretary Calgary, Alberta Partner with Burnet, Duckworth & Palmer LLP (law firm).
     
Stephen Law Director Calgary, Alberta Civil engineer by professional in Canada, UK, HKG. Principal shareholder of GSL Group of Companies for 20 years. Mr. Law is a Licensed Broker in GSL Realty Ltd. and is a land developer under the GSL Group of companies.

Selected Financial Information for Join Pacific

The following table sets forth selected audited historical financial information for Join Pacific for the years ended December 31, 2009 and December 31, 2008 and selected balance sheet data as at such periods. Such information is derived from the financial statements of Join Pacific.

  Audited   Audited
  Year Ended December 31, 2009   Year Ended December 31, 2008
       
Revenue nil   nil
Operating Expense nil   nil
Net Income (Loss) nil   nil
       
Total Assets 259,446   nil
Total Liabilities 560,017   nil
Cash Dividends Declared nil   nil
Total Shareholders Equity (Deficit) (300,571 ) nil

Conditions to Completion of the QT

At this time, and subject to TSXV confirmation, shareholder approval will not be required for the acquisition and a filing statement for the QT is expected to be filed with the TSXV in June 2010. The closing of the QT is anticipated to occur when the filing statement has been approved by the TSXV. The filing statement will contain detailed information in respect of Giga and Join Pacific, operational, historical and pro-forma financial information, and will be accessible on the SEDAR profile for Giga at www.sedar.com.

The Acquisition Agreement will contain customary representations, warranties and conditions, and will include non-solicitation covenants and mutual non-completion expenses payable in certain circumstances. Upon execution, a copy of the Acquisition Agreement will be accessible on the SEDAR profile for Giga at www.sedar.com.

Completion of the QT is subject to a number of conditions, including but not limited to, TSX Venture Exchange acceptance. There can be no assurance that the QT will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the filing statement to be prepared in connection with the QT, any information released or received with respect to the QT 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.

Wolverton Securities Ltd., subject to completion of satisfactory due diligence, has agreed to act as sponsor in connection with the transaction. An agreement to sponsor should not be construed as any assurance with respect to the merits of the transaction or the likelihood of completion.

Recommendations of the Boards of Directors of Giga

The Board of Directors of Giga have determined that the QT is in the best interests of the company and shareholders and have unanimously approved the QT and the issuance of shares contemplated thereby. 

Trading Halt of Shares of Giga

Trading of the shares of Giga has been halted and will not resume until the TSXV has accepted all requisite documentation in connection with the proposed QT.

Subject to all necessary regulatory approvals, including approval of the TSXV, upon completion of the QT it is anticipated that the Giga Shares will be resume trading on the TSXV. 

Cautionary Statements

Certain statements contained in this news release constitute forward-looking statements, including, without limitation, Cumberland's management's assessment of future plans and operations, future financial position, the performance characteristics of the sand and gravel property, production estimates, expectations of future production, operating costs and capital costs, expectations regarding the ability to raise capital, expectations of debt levels and credit facilities, Giga's future plans, operations and objectives, completion of the QT and receipt of all required approvals thereto and the timing thereof, and the completion and use of proceeds of the Financing. By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond the party's control including the impact of general economic conditions, industry conditions, volatility of commodity prices, currency fluctuations, environmental risks, competition from other industry participants, the lack of availability of qualified personnel or management, stock market volatility and ability to access sufficient capital from internal and external sources, inability to meet or continue to meet listing requirements, the inability to obtain required consents, permits or approvals, failure to realize the anticipated benefits of the QT and the risk that actual results will vary from the results forecasted and such variations may be material. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. Giga's actual results, performance or achievement could differ materially from those expressed in or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits Giga will derive therefrom. There is no assurance that the necessary approvals for completion of the QT will be obtained or that some other condition to the closing of the QT will not be satisfied. Even if such conditions are satisfied, there is risk that closing of the QT could be delayed and may not meet the timelines anticipated. 

The forward-looking statements contained in this news release are made as of the date of this news release. Except as required by law Giga disclaims any intention and assume no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable securities laws.

The TSX Venture Exchange has in no way passed upon the merits of the proposed QT and has neither approved nor disapproved the contents of this news release. 

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 news release.

Contact Information

  • Giga Capital Corporation
    (403) 716-2230 or Cell: (403) 554-6241
    (403) 263-0502 (FAX)