Hedger Capital Inc.
TSX VENTURE : HEC.P

May 14, 2009 18:55 ET

Hedger Capital Inc. Enters Into Letter of Intent for Acquisition of Oretech Resources Inc.

VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 14, 2009) - Hedger Capital Inc. ("Hedger") (TSX VENTURE:HEC.P), a Vancouver-based Capital Pool Company listed on the TSX Venture Exchange (the "Exchange") is pleased to announce that it has entered into a letter of intent (the "LOI") dated May 14, 2009 with Oretech Resources Inc. ("Oretech" or the "Company"), a Vancouver-based private company incorporated under the British Columbia Business Corporations Act, to purchase all of the issued and outstanding common shares of Oretech or otherwise complete a business combination with Oretech (the "Acquisition").

The Acquisition, if completed, will constitute Hedger's "Qualifying Transaction" under the policies of the Exchange. The Acquisition is an arm's length transaction and it is not anticipated that shareholder approval of the Acquisition will be required by the Exchange. Trading of Hedger's shares on the Exchange has been halted and will remain halted until the Exchange approves the recommencement of trading.

Oretech has entered into a non-binding letter of intent (the "Condor LOI") with Condor Resources Inc. ("Condor") (TSXV: CN), an Exchange-listed company, which sets out the proposed terms of an option agreement pursuant to which Oretech may acquire up to a 70% interest in Condor's Becker gold property, located in southern Chile. Oretech and Condor are proceeding with the negotiation of a binding option agreement containing the terms of the Condor LOI and the Condor LOI contains a binding exclusivity provision in effect until the execution of such agreement. It is a condition of the closing of the Acquisition that Oretech enter into a binding option agreement with Condor in respect of the Becker property substantially on the terms of the Condor LOI.

Share Exchange

Under the terms of the LOI, Hedger will acquire all of the issued and outstanding common shares of Oretech ("Oretech Shares") in exchange for the issuance of common shares of Hedger ("Hedger Shares") on the basis of one Hedger Share for each Oretech Share outstanding. There are currently 7,483,33 Oretech Shares issued and outstanding and, pursuant to the terms of the LOI, up to 2,400,000 additional Oretech Shares will be issued by way of a private placement which will take place prior to the closing of the Acquisition. This will result in Hedger issuing an aggregate of 9,883,333 Hedger Shares to acquire Oretech. In addition, subject to Exchange approval, Hedger will issue 100,000 Hedger Shares to an arm's length party to Hedger and Oretech as a finder's fee in respect of the Acquisition . Upon completion of the Acquisition, Oretech will become a wholly-owned subsidiary of Hedger. Hedger is expected to change its name in conjunction with the Acquisition to such name as may be acceptable to applicable regulatory authorities. Assuming completion of the Acquisition, Hedger expects that it will be a Tier 2 Mining Issuer.

Concurrently with the execution of the LOI, Oretech is advancing Hedger a non-interest bearing unsecured bridge loan in the amount of $20,000 (the "Bridge Loan"). Upon the closing of the Acquisition or the termination of the Acquisition, the Bridge Loan will be converted into 400,000 Hedger Shares.

There are currently 3,203,000 Hedger Shares issued and outstanding, as well as incentive stock options of Hedger exercisable into an additional 320,000 Hedger Shares. Upon completion of the Acquisition and the conversion of the Bridge Loan, and not including those securities to be issued in the Hedger Private Placement as defined and discussed below, there are expected to be 13,586,333 Hedger Shares issued and outstanding.

Upon completion of the Acquisition, all Hedger Shares issued to holders of Oretech Shares upon completion of the Acquisition may be subject to resale restrictions under applicable securities laws and the policies of the Exchange. In addition, all Hedger Shares held by Principals of Hedger (as such term is defined in the policies of the Exchange) may be subject to escrow restrictions in accordance with the policies of the Exchange. The new Principals of Hedger will include former shareholders of Oretech.

Proposed Private Placement

As a condition of the Acquisition, Hedger is required to complete, concurrently with the closing of the Acquisition, an equity private placement (the "Hedger Private Placement") to raise aggregate gross proceeds sufficient to meet the Exchange's minimum listing requirements upon the closing of the Acquisition. The number, type and price of the securities to be issued in the Hedger Private Placement will be determined by Hedger and Oretech in the context of market conditions and the minimum listing requirements.

The proceeds of the Hedger Private Placement will be used to fund the costs associated with completing the Acquisition, the initial work program on the Becker gold property and for general working capital purposes.

Stock Options

Subject to the rules, policies and approval of the Exchange, it is contemplated that concurrently with the completion of the Acquisition, Hedger will issue additional stock options to directors, officers, employees and consultants of Hedger as approved by Oretech and in accordance with Hedger's 10% rolling stock option plan. The options will have an exercise price equal to the price of the securities issued in the Hedger Private Placement and will be exercisable over a period of five years from the completion of the Acquisition.

Conditions Precedent

The parties' obligations to complete the Acquisition are subject to the satisfaction of customary conditions precedent including:

(a) all necessary approvals of the Exchange and all other regulatory authorities and third parties to the Acquisition and the Hedger Private Placement being obtained;

(b) the completion of the Hedger Private Placement;

(c) Oretech having entered into a binding option agreement with Condor substantially on the terms of the Condor LOI; and

(d) the parties being satisfied with the results of their respective due diligence reviews in connection with the Acquisition.

Directors, Officers and Insiders

On completion of the Acquisition, the directors, officers and insiders of the Resulting Issuer (as such term is defined in the policies of the Exchange) are anticipated to be:

Brett Whitelaw, Chief Executive Officer and Director

Mr. Whitelaw is presently a vice-president and director of Conquest Resources Limited (TSXV: CQR ). Mr. Whitelaw is also president of Whitelaw Enterprises Ltd., a consulting services provider. Mr. Whitelaw has over 25 years of international and domestic business experience, including 12 years in the financing of junior resource companies. From 1979 to 1999 Mr Whitelaw was an insurance and retirement advisor to high net worth executives in Vancouver.

Jeremy Ford, President and Director

Mr. Ford is an independent business man with 27 years experience in the financial services industry in Canada and abroad. Mr. Ford has been involved in the procurement of financing for junior resource based public and private mining companies.

Gavin Cooper, Chief Financial Officer and Director

Mr. Cooper is a chartered accountant with over 35 years of experience in all aspects of financial and general management. He holds an Hons. Bachelor of Accounting from the University of South Africa. Mr. Cooper is the Chief Financial Officer of VRB Power Systems Inc. (TSXV: VRB), was formerly the President and CEO and a Director of Catamaran Ferries International Inc, Director of Finance & Administration at Yarrows Ltd, Vice President and Director Pacific Engineered Materials Inc., and Senior Manager at Ernst & Whinney in Vancouver, BC, London, UK and Cape Town, South Africa. Mr. Cooper is an accomplished executive with a significant record of achievement in the areas of strategic change, financial management and working closely with key external stakeholders in a diversity of leading private sector domestic and international organizations.

Douglas Willock, Director

Mr. Willock spent 21 years as an investment banker with leading international and domestic banks before founding Polar Star Mining Corporation (TSXV: PSR) in 2003. From 1996 to 1999 he co-led the mining department of National Bank Financial's investment banking arm known as Levesque Beaubien Geoffrion Inc. From 1992 to 1996, he was Vice President and Director of Deutsche Bank Securities Ltd., spending much of his time arranging mine financings, delivering fairness opinions and acting in mergers and acquisitions. He was with Exall Resources Limited, a mining and oil and gas company, from May, 2001 as Vice- President, Corporate Development and subsequently became a director until December 2006. Mr. Willock served as Vice-President of Corporate Development of Silvermet Inc. (TSXV: SYI), a mining company based in Toronto, from January 2005 to June 2007. Since January 2007, Mr. Willock has devoted nearly all of his time and effort to his role as President and Chief Executive Officer of Polar Star Mining. Mr. Willock serves as a lead director of Olympus Pacific Minerals Inc. (TSX: OYM), a Toronto based mining company, which he joined February 2006. Mr. Willock holds a Master of Business Administration degree with a major in finance from the Richard Ivey School of Business, a Bachelor of Arts degree from the University of British Columbia and attended the Beijing Language Institute on a joint Government of Canada and China scholarship from 1976 to 1977.

In addition, on the closing of the Acquisition, it is anticipated that one further nominee of Oretech will be appointed to the board of directors of the Resulting Issuer.

Becker Gold Property

The Becker gold property is located in southern Chile, approximately 250 kilometre south of Santiago and 20 kilometres west of Talca. The property consists of eight mining concessions comprising a 20 square kilometre area.

The Becker gold property was discovered in the early 1990's by Minera Arauco Resources Limitada ("Arauco"), a wholly owned Chilean subsidiary of a consortium of Canadian companies, including Princeton Mining Company, Teck Corporation and the Northair Group. In 1995 Arauco completed a float sampling and trenching program on the Becker gold property which discovered a zone measuring some 1500 by 1200 metres within which occurs a significant number of quartz fragments and boulders up to four metres in diameter. Follow-up work encountered six quartz veins with strike lengths up to 350 metres and widths varying from 0.5 to 4 metres. Sampling on the veins returned anomalous gold values along the entire vein lengths.

Hedger and Oretech advise that a National Instrument 43-101 technical report on the Becker gold property is being prepared and will be submitted to the Exchange when it is available.

Sponsorship

Hedger will apply to the Exchange for an exemption from the requirement to obtain a sponsor in connection with the Acquisition; however, there can be no assurances that an exemption from sponsorship will be granted.

General

Completion of this transaction is subject to a number of conditions, including but not limited to Exchange acceptance. The transaction cannot close until the required Exchange 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 a filing statement or other disclosure document of Hedger to be prepared in connection with the Acquisition, any information released or received with respect to the Acquisition may not be accurate or complete and should not be relied upon. Trading in the securities of Hedger should be considered highly speculative.

The TSX Venture Exchange has in no way passed upon the merits of the proposed Acquisition and has neither approved or disapproved the contents of this news release.

ON BEHALF OF THE BOARDS

HEDGER CAPITAL INC.

Mark Orsmond, Chief Financial Officer

ORETECH RESOURCES INC.

Brett Whitelaw, President

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.

Contact Information

  • Hedger Capital Inc.
    Mark Orsmond
    Chief Financial Officer
    (604) 488-1251
    or
    Oretech Resources Inc.
    Brett Whitelaw
    President
    (604) 662-8633