Green Swan Capital Corp.
TSX VENTURE : GSW.P

September 13, 2010 16:14 ET

Green Swan Capital Corp. Announces the Signing of an Agreement in Principle With Melkior Resources Inc.

OTTAWA, ONTARIO--(Marketwire - Sept. 13, 2010) -

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Green Swan Capital Corp. ("Green Swan" or the "Corporation") (TSX VENTURE:GSW.P) a capital pool company ("CPC") is pleased to announce that it has entered into an arm's length and non-binding letter of intent ("LOI") dated September 1, 2010, with Melkior Resources Inc. ("Melkior") pursuant to which Green Swan would, subject to a number of conditions, acquire certain assets of Melkior (the "Transaction"). The assets consist of an undivided one hundred percent legal and beneficial interest in and to certain mining claims located northwest of McFaulds Lake in the James Bay Lowlands in northern Ontario (the "Broke Back Claims"), and an undivided one hundred percent legal and beneficial interest in and to certain mining claims located west of the Attawapiskat River in the James Bay Lowlands in northern Ontario (the "Riverbank Claims"). Under the terms of the LOI, Green Swan has been granted a period of exclusivity for three (3) months.

Green Swan is a Capital Pool Company under the policies of the TSX Venture Exchange ("Exchange") and it is intended that the Transaction, if completed, will constitute Green Swan's Qualifying Transaction under Exchange policies. It is anticipated that the Resulting Issuer will meet the Tier 2 listing requirements of the Exchange for a Mining Issuer upon completion of the Transaction.

The Proposed Transaction

Significant Assets

Green Swan proposes to purchase from Melkior a 100% legal and beneficial interest, subject to a 2.5% Net Smelter Return royalty in and to the Broke Back Claims and the Riverbank Claims, in consideration for the issuance to Melkior of ten million (10,000,000) shares in the capital of Green Swan. It is estimated that the net value of the Broke Back Claims and the Riverbank Claims is one million dollars ($1,000,000).

The Broke Back Claims include 837 mining claims within an area of 13,392 hectares while the Riverbank Claims include 84 mining claims within an area of 1392 hectares. 

The combined Broke Back Claims and Riverside Claims (collectively, the "Claims") represent early stage, exploration projects adjacent to the often referred to "Ring of Fire" in northern Ontario, presently one of the most active exploration regions in Canada. The areas are within the eastern portion of the Sachigo Subprovince, which is overlain to the east by a sequence of Paleozoic sedimentary rocks (dolomite, shale, sandstone) that thickens gently to the east. The Sachigo Subprovince contains various greenstone belts sitting within granitic gneiss of the Berens River Gneiss complex.

The Properties were staked because they are underlain by a major gravity high, as shown in regional data. This gravity high is postulated to be due to mafic or ultramafic intrusions or a layered mafic-ultramafic Igneous Complex. Other anomalous gravity highs in the general area are associated with layered mafic-ultramafic Igneous Complexes and include: Big Trout Lake Igneous Complex, Lansdowne House Igneous Complex, and Fishtrap Lake Igneous Complex. This anomalous gravity high and the postulated mafic-ultramafic intrusions are proximal to known nickel-copper sulphide mineralization in ultramafic rocks at the Double Eagle discovery of Noront Resources Ltd. 

The Vendor:

Melkior was formed on August 31, 1986 under the Canadian Business Corporations Act as the result of an amalgamation between Messguary Mines Inc. and Farro Resources Inc. Melkior is a junior exploration company engaged in the acquisition and exploration of mining properties located in Quebec and Ontario. Melkior has diversified properties with exposure to gold, and base metals. The main mining assets of Melkior are Carscallen West Timmins, Rim Nickel – McFaulds and Ungava.

To the knowledge of the management of Melkior, no person or company beneficially owns or exercises control or direction over directly or indirectly, common shares carrying more than 10% of the voting rights attached to all common shares of Melkior.

Terms of the proposed Qualifying Transaction:

The purchase price for the Claims is estimated at $1,000,000, satisfied through the issuance to Melkior of 10,000,000 common shares in the capital of Green Swan at an estimated issue price of $0.10 per common share.

Description of Financing Arrangements

A public offering or private placement is expected to be completed prior to or in conjunction with the closing of the Qualifying Transaction (the "Financing"). The Financing is expected to raise approximately $650,000 at a price per unit to be determined. 

The current deadline by which Green Swan must complete a Qualifying Transaction in accordance with Exchange Policies is October 7, 2010 (the "Deadline"). As it is anticipated that the Transaction and the Financing will close after the Deadline, Green Swan intends to request an extension of the Deadline from the Exchange to complete the Transaction. The parties intend to proceed to complete the Qualifying Transaction, subject to approval of the Exchange and any applicable shareholder approvals, whether or not an extension to the Deadline is granted by the Exchange.

The Resulting Issuer

Insiders of the Resulting Issuer:

Benoit Robitaille – CEO

Ottawa, Ontario

Benoit Robitaille was in product design and management with Gentec Inc. and CAE Electronics Ltd. Before joining Green Swan Capital Corporation, Mr. Robitaille was President and CEO of Kaparel Corp., and a vice-president at PixStream. Mr. Robitaille was also President and CEO at Symbium Corp. Mr. Robitaille is currently Chief Executive Officer, Axes Network Solutions Inc., Sherbrooke, Quebec. Axes Network Solutions Inc. provides electronic payment and smartcard solutions. Mr. Robitaille is also currently a board member of The Official Community Company, a stand-alone E-business for established recording artists that he helped start as its original angel investor. Mr. Robitaille earned a BSc, electrical engineering, at Laval University in Sainte-Foy, Quebec, and has also earned a diploma in science at College de Sainte-Foy.

Daniel Hilton – Director and CFO

Ottawa, Ontario

Daniel Hilton is a Chartered Accountant with a broad range of experience in strategic planning and leadership of finance and operations. He has served on the Board of Directors of Green Swan since its inception in 2008 and also serves on the Board of Directors of another CPC trading under the symbol: WHC.P. Daniel is currently Executive Director of the Conservative Party of Canada. He was previously the Director of Finance and Administration, Research and Development for World Heart Corporation and a co-founder and CFO of Kids Futures Ltd., a national loyalty program which in December of 2005 became a publicly traded entity on the TSX Venture Exchange. Daniel was formerly the Vice-President Finance and Technology and Senior Vice-President, Corporate Development & Administration of Enablence Technologies Inc., a publicly traded entity on the TSX Venture Exchange. Daniel earned his B.COMM from the University of Ottawa, and earned his professional designation with the firm Deloitte & Touche LLP. Daniel holds graduate business degrees with both Queen's University and Cornell University. 

Nathalie Hansen – Director

Ottawa, Ontario

Nathalie Hansen graduated from Carleton University with a Bachelors of Science in Electrical Engineering. Upon graduation she worked in the power electronics industry for Lucent Technologies Power Systems and Tyco Electronics Power Systems in Dallas, Texas in the Original Equipment Manufacturer ("OEM") market. Since 2005 she has been actively involved in mining exploration. She is also a board member of Melkior Resources Inc.

Chris Skaarup – Director

Ottawa, Ontario

Chris Skaarup has been with iFathom Technologies since 1999, and assumed his current role of CIO/Vice-President in 2005.

Chris earned his B.A. from Carleton University in 1987, and a M.A. from Dallas Theological Seminary in 1990 and a Diploma in Applied Information Technology from the Information Technology Institute, Halifax, N.S. 

Jim Kargakos – Director and Corporate Secretary

Ottawa, Ontario

Jim Kargakos is an Ottawa entrepreneur with extensive real estate holdings. With over 26 years engaged in actively managed real estate properties, Jim has developed a strong presence in the local Ottawa business community. Jim has also served on several community boards in the Ottawa area. 

Ian Bliss – Director and Qualified Person

Ottawa, Ontario

Mr. Bliss has over 16 years experience in the mineral exploration industry having studied geology at the University of New Brunswick. From 1995 to 2000, Mr. Bliss was an independent consulting geologist, responsible for exploration projects for NunaMinerals A/S, formerly Nunaoil A/S in Nuuk, Greenland and, in 2000, for Crew Development in Norway. In Greenland, Mr. Bliss worked in some of the most remote and rugged terrain using a model driven approach to efficiently explore large tracts of land despite short explorations seasons. He has used a similar approach to generate targets in Ontario, including the discovery of a layered intrusion on the Highbank Lake Property. Mr. Bliss has served as President of Northern Shield since its inception in 1999.

Contemplated leadership structure of the Resulting Issuer:

It is contemplated that, following the closing of the Transaction, four of Green Swan's current directors will resign from the board of directors of Green Swan (the "Board") and Nathalie Hansen, Jim Kargakos and Ian Bliss will be appointed to the Board. Daniel Hilton and Chris Skaarup will remain on the Board.

Benoit Robitaille will remain as Chief Executive Officer of Green Swan and Daniel Hilton will remain as Chief Financial Officer. Ian Bliss will serve as the Qualified Person responsible for the technical report required pursuant to NI 43-101.

Sponsorship

Sponsorship of a qualifying transaction of a capital pool company is required by the Exchange unless exempt in accordance with the Exchange's policies. Green Swan intends to apply for an exemption from sponsorship requirements based on the conduct of a brokered private placement in connection with the Transaction and/or the basis of the already prepared current geological report for the Claims, which includes recommendations for exploration work. However, no assurance can be given that Green Swan will obtain this exemption.

About Green Swan

Green Swan was incorporated under the Canada Business Corporations Act on April 28, 2008 and its fiscal year end is May 21. Green Swan is a capital pool company, as defined in Policy 2.4 of the Exchange and as such it has not commenced commercial operations and has no significant assets other than cash with which to identify and evaluate potential acquisitions or businesses with a view to completing a Qualifying Transaction. As a result, Green Swan's current business is to identify and evaluate businesses and assets with a view to completing a Qualifying Transaction.

Green Swan shares have traded on the Exchange (under the symbol "GSC.P") since October 7, 2008. Further information about Green Swan can be found in its prospectus dated effective September 2, 2008 and other filings by Green Swan with the Canadian securities regulators, which filings are available at www.sedar.com.

Exchange Approval

Completion of the Transaction is subject to a number of conditions, including but not limited to: completion of satisfactory due diligence, completion of the Financing; execution of a definitive agreement, receipt of all applicable consents to and approvals of the Transaction including 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.

Completion of the Financing and the appointment of new directors are also subject to Exchange approval.

For Investors

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.

Certain information in this press release may contain forward-looking statements that are subject to risks and uncertainties that are difficult to predict. Actual results might differ materially from results suggested in any forward-looking statements. The statements contained in this press release and all subsequent written and oral statements containing forward-looking information are based on the estimates and opinions of management on the dates they are made and expressly qualified in their entirety by this notice.

The Corporation assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those reflected in the forward looking-statements unless and until required by securities laws applicable to the Corporation. Readers are cautioned not to place undue reliance on any statements of forward-looking information that speak only as of the date of this release. Additional information identifying risks and uncertainties is contained in the Corporation's filings with the Canadian securities regulators, which filings are available at www.sedar.com.

This is not an offer for sale, or solicitation of an offer to buy, in the United States or to any U.S. Person (as defined in Regulation S under the U.S. Securities Act of 1933, as amended) of any equity shares or any other securities of Green Swan or Melkior.

Neither 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 release.

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.

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