Green Park Capital Corp.
TSX VENTURE : GRP.P

June 20, 2008 08:30 ET

Green Park Signs Letter of Intent to Acquire Over 100,000 Hectares in 8 Claim Blocks in Mexico From Continuum Resources

VANCOUVER, BRITISH COLUMBIA--(Marketwire - June 20, 2008) - Green Park Capital Corp. (TSX VENTURE:GRP.P) ("Green Park" or the "Company") is pleased to announce that it has entered into an agreement in principle with Continuum Resources Ltd. ("CNU"), a British Columbia company listed on the TSX Venture Exchange (the "Exchange"), dated June 11, 2008 (the "Agreement") to acquire all of the issued and outstanding securities of Continuum Resources S.A. de C.V. (the "Target"), CNU's wholly-owned Mexican subsidiary (the "Proposed Acquisition"). The Target has no dilutive securities outstanding. Haywood Securities Inc. (the "Agent") has agreed to act as sponsor of the Proposed Acquisition, should same be required by the Exchange policies.

Pursuant to the terms of the Agreement, the Company intends to acquire from CNU all of the outstanding shares of the Target (the "Shares") as well as certain assets (the "Assets") consisting of a Hydrocore model 1800 (reproduced) man-portable drill and spare drill parts (including three 4-cylinder diesel engines), the total net book value of which is estimated to be US$500,000. This, and all other financial information pertaining to CNU and the Target, is derived from the audited financial statements of CNU and the Target for the year ended December 31, 2007 which financial statements are prepared in accordance with Canadian GAAP. All of the Assets are currently located near CNU's properties in Oaxaca, Mexico. As consideration for the Shares and the Assets, Green Park will pay CNU CAD$150,000 and issue 2,500,000 of its common shares having a deemed value of $0.20 per share. Green Park has also agreed to take an assignment of the convertible debentures (the "Debentures") announced by CNU on May 29, 2008, which will have a face value of up to $350,000. Following closing of the Proposed Acquisition, the Debentures will be convertible into common shares of Green Park at a price of $0.20 per share. As an inducement to convert the Debentures in a timely fashion, holders of Debentures who convert their Debentures into common shares of Green Park within 45 days of the closing of the Proposed Acquisition will receive one-half of one share purchase warrant of Green Park on conversion. Each whole warrant will entitle the holder thereof to purchase a further share of Green Park at a price of $0.25 per share for a period of two years from the date of issue. The shares of Green Park issued pursuant to the Proposed Acquisition will be subject to a four-month hold period and may be subject to escrow provisions imposed by the Exchange. A finder's fee will be paid to the Agent in connection with this transaction.

Concurrent with the Proposed Acquisition, Green Park will undertake a brokered private placement (the "Financing") through the Agent for gross proceeds of up to CAD$2.0 million to fund exploration programs on the Target's mineral properties (see "Proposed Financing" below).

Both the Proposed Acquisition and the Financing will be subject to a due diligence review of the Target and the Claims (defined below) by the Company, and the approval of the Exchange. Green Park is a capital pool company and intends for the Proposed Transaction to constitute its Qualifying Transaction as such term is defined in the policies of the Exchange. In compliance with Exchange policies, Green Park has requested a halt in the trading of its securities and trading shall remain halted until further notice. The Proposed Acquisition is an arm's length transaction and upon completion of the Proposed Acquisition, Green Park expects to be a Tier 2 Mineral Exploration Issuer. Green Park is of the position that the Proposed Acquisition does not require shareholder approval according to Exchange policies.

Summary of the Target's Significant Assets

The Target holds mining claims over eight distinct claim blocks in the State of Oaxaca, Mexico, and are known as Tres Hermanas, Silacayoapan, Parian - Paras, Cuatro Venados, Nino Perdido, Lachiguiri, Teri and Talea (the "Claims"). The Claims host a variety of precious and polymetallic metals, including gold, silver, lead, zinc and others. The Tres Hermanas claim block will be Green Park's "Principal Property" under Exchange policies following the Proposed Acquisition, and is described below. The Claims are listed and described on CNU's website at www.continuumresources.com, and in CNU's news release dated February 12, 2008 filed on www.sedar.com.

Tres Hermanas

The Tres Hermanas claim block comprises 3671 hectares, covering a mountainous area in the vicinity of the village of San Sebastian Rio Dulce, some 50 kilometers southwest of the City of Oaxaca. The property consists of three contiguous claims, each owned 100% by the Target since as early as June 2004. The center of interest is the old Tres Hermanas Mine, which was exploited on five levels for silver prior to the Mexican War of Independence in 1810. These adits were mapped and sampled in 1926, but are no longer accessible. Studies in 1926 demonstrated that the deposit yielded average grades of 8.24 oz/t Ag, 4.67% Pb and 10.77% Zn, and these studies also concluded that that the average ore contained 5.4% Galena, 16.2% sphalerite and 13.7% pyrite, with minor copper sulfides. This data is NOT compliant with the standards set out by the CIM or with National Instrument 43-101 ("NI 43-101"), and should be viewed as historical in nature. A technical report under NI 43-101 is currently being prepared. To date, approximately US$725,000 has been spent in exploration on the Tres Hermanas claims. Further information regarding CNU's work at Tres Hermanas may be found in CNU's news releases dated February 4, February 12, and April 15, 2008, on www.sedar.com.

Board of Directors and Management of Green Park on Closing

Concurrently with the completion of the Proposed Acquisition, a number of changes in the composition of the current directors and officers of the Company will take place. Anthony Dutton will remain on the Board and assume the role of Vice-President, Corporate Development going forward. The other four members of the current Board of Green Park will resign, and will be replaced by Mr. Allan Bassham, who will also assume the role of President of Green Park, Robert McMorran and Warren McIntyre, all currently directors of CNU. A fifth director will be proposed in coming weeks, who will sit as an independent director of the resulting issuer along with Mr. McIntyre and Mr. McMorran. The proposed board is subject to Exchange approval. Further information for each of the above-mentioned directors and officers is set out below and has been provided by each such director and officer.

Allan Bassham - President and Director

Mr. Bassham has been with CNU since April of 2007, and has over 32 years of experience in mining, milling and exploration, with an active focus on mine planning and design. His work history includes Vice President of Mining for Gammon Lake Resources Inc. (now Gammon Gold, a TSX listed Company) in Chihuahua Mexico, Project Manager for Shore Gold Inc.'s (a TSX listed Company) Star Diamond Project, and many other junior resource companies.

Anthony Dutton - Vice-President, Business Development and Director

Mr. Dutton has been a principal of Primary Capital Group since 2006, where he advises small and medium-sized businesses on corporate finance issues. He has also been a director or officer of several publicly-listed issuers including International Beryllium Corporation (listed on the Exchange) and XML Global Technologies Inc. (listed on the OTC Bulletin Board). Anthony holds a BA in Economics from the University of British Columbia, a Masters of Architecture from Dalhousie University, and a joint MBA from the Cranfield School of Management in the United Kingdom and Groupe ESC in Lyon, France.

Warren McIntyre - Director

Mr. McIntyre provides business development consulting services to both publicly traded and private companies. He has been a director and the corporate secretary of CNU since March of 2003. He is also the President and CEO of Atomic Minerals Ltd., a junior exploration Company listed on the Exchange. Mr. McIntyre was a director and the Chief Financial Officer of Evolving Gold Corp., a junior exploration company listed on the Exchange and CNQ, from June 2004 to February 2007. He was also a former director of Pallaum Minerals and Cloudbreak Resources, both listed on the Exchange.

Robert McMorran - Director

Mr. McMorran has been a director and officer of CNU since July 2000, and is president of Malaspina Consultants Inc., a private company that provides accounting and administrative services to junior public companies. He has over 20 years experience dealing with financial reporting and the administration of public companies, the last 11 years through Malaspina. He has also served as an officer and/or director of several public companies including Terra Ventures Ltd., Wave Exploration Corp., Roxgold Inc., Merit Mining Corp. and the Canada Dominion Resources Group family of flow-through limited partnerships. Mr. McMorran has been a member of the Institute of Chartered Accountants of B.C. since 1981. He received his Bachelor of Science in Mathematics from Simon Fraser University in 1976.

Proposed Financing

In connection with the Proposed Acquisition and subject to Exchange approval, Green Park has retained the Agent to raise up to CAD$2.0 million by way of a private placement of units (the "Units") on a best efforts basis to fund the Company's proposed exploration agenda for the Claims. The Units will be priced at $0.25 and will each consist of a common share and one-half of one share purchase warrant, with each whole warrant exercisable for an additional common share at a price of $0.30 for two years from the date of issue. The private placement will be to accredited investors in Canada, the United States and overseas, and the securities making up the Units will be subject to a four-month hold period.

As consideration for their efforts, the Agent will receive a cash commission of 7.5% of the total gross proceeds raised, as well as warrants (the "Agent's Warrants") equal to 7.5% of the total number of Units sold under the Proposed Financing. Each Agent's Warrant will be exercisable for one common share of Green Park at a price of $0.25 for two years from the date of issue. The Agent will also receive a corporate finance fee of $50,000 plus G.S.T. and a further 100,000 Agent's Warrants. The Agent will have a right of first refusal on all future brokered financings proposed by Green Park for a period of one year.

The proceeds from the financing are projected to be used as follows: $850,000 for exploration of the Tres Hermanas claims, $650,000 for general exploration of the remaining claim blocks, $100,000 for expenses and fees relating to the Proposed Acquisition and the Financing, and $400,000 for general corporate working capital purposes although the Company may reallocate such proceeds if it determines it to be in the best interests of the Company to do so.

Finder's Fee

As consideration for their efforts in introducing Green Park and CNU, Green Park will pay to the Agent a finder's fee of 300,000 Units, subject to Exchange Approval.

Description of Significant Conditions to Closing

Completion of the transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable pursuant to Exchange Requirements, majority of the minority shareholder approval. 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 management information circular 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.

Haywood Securities Inc., subject to completion of satisfactory due diligence, has agreed to act as sponsor, if necessary, 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.

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

  • Green Park Capital Corp.
    Anthony Dutton
    (604) 689-1515 ext 111
    (604) 687-8678 (FAX)