Himalayan Capital Corp.
TSX VENTURE : HIM.P

September 23, 2011 15:03 ET

Himalayan Capital Corp. Announces Proposed Qualifying Transaction

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Sept. 23, 2011) -

NOT FOR DISSEMINATION IN THE UNITED STATES OF AMERICA

Himalayan Capital Corp. (TSX VENTURE:HIM.P) ("Himalayan" or the "Company"), a Capital Pool Company, has entered into a letter of intent dated September 22, 2011, with Minera Azul Ventures Limitada ("Minera Azul"), a private Chilean partnership, pursuant to which Himalayan has agreed, subject to certain conditions, to acquire Minera Azul as its Qualifying Transaction under the policies of the TSX Venture Exchange (the "Exchange") (the "Transaction"). The Transaction is an arm's length transaction and on completion thereof, it is expected that the Company will be a Tier 2 Mining Issuer.

Pursuant to the letter of intent, Himalayan has agreed to offer to purchase all of the issued and outstanding securities of Minera Azul in exchange for an aggregate of 10,000,000 common shares in the capital of Himalayan ("Himalayan Shares") at a deemed price of $0.25 per Himalayan Share, for a total acquisition price of $2,500,000.

Assuming satisfactory completion of due diligence by Himalayan, it is anticipated that the definitive agreement will be entered into by October 30, 2011. The definitive agreement will provide for conditions precedent that are standard for a transaction of this nature, including receipt, by both Minera Azul and Himalayan, as required, of all regulatory, partner and third party approvals including Exchange approval. It will also be a condition precedent of the transaction that Minera Azul arrange a financing (the "Financing") to raise gross proceeds of not less than $1,500,000 through the issuance of common shares of Himalayan (or securities convertible into common shares of Himalayan), at a price of not less than $0.25 per common share (or at a conversion price of not less than $0.25 per common share). The proceeds of the Financing will be held in escrow until the closing of the Transaction. There can be no assurance that the Transaction will be completed as proposed or at all.

The Transaction is an arm's length transaction and therefore will not be subject to approval of the shareholders of Himalayan.

In connection with the Transaction, it is expected that the members of Himalayan's current board of directors will be replaced with nominees of Minera Azul, being David O'Connor, Mike Hoffman and Tony Wonnacott. It is expected that David O'Connor will also become the President and Chief Executive Officer of Himalayan, post-Transaction, Brad Boland will become the Chief Financial Officer and Francisco Schubert will become Country Manager, with Himalayan post-Transaction.

As part of the Transaction, the certain existing holders of escrow shares of the Company have agreed to transfer within escrow, subject to Exchange approval, 750,000 Himalayan Shares currently held in escrow to the proposed new directors and officers of the Company on completion of the Transaction.

Currently, there are 2,350,000 Himalayan Shares outstanding. Upon completion of the Transaction, the Financing and the issuance of initial shares required under the property agreements with the current mineral rights holders, it is anticipated that the resulting issuer will have 19,350,000 common shares outstanding. The current holders of Himalayan Shares will own approximately 8.3% of the issued and outstanding common shares of the resulting issuer. Securities holders of Minera Azul together with participants in the Financing will own approximately 91.7% of the combined entity. The shares to be issued pursuant to the proposed Transaction will be subject to the escrow requirements of the Exchange, if applicable.

Upon completion of the Transaction and the Financing, it is expected that only the following persons will own 10% or more of the issued and outstanding common shares of the Company on a fully diluted basis: David O'Connor and Francisco Schubert.

Each party has agreed to pay for their own costs in connection with the Transaction.

Completion of the Transaction is also subject to the satisfactory completion of due diligence and the completion of definitive documentation.

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.

The shares of Himalayan are currently halted from trading and shall remain so until completion of the Transaction, or until satisfactory documentation to allow a resumption of trading is filed with and reviewed by the Exchange.

The Company intends to apply for an exemption from the sponsorship requirement. There can be no assurance that the Exchange will grant such exemption.

About Minera Azul Ventures Limitada

Minera Azul Ventures Limitada is a mineral exploration company with the rights to acquire a prospective copper-gold property in La Higuera, Chile (about 600 kilometres north of Santiago). The La Higuera Property was assembled as a result of the first-time consolidation of mining rights in a historical copper-gold mining center and is located in a prolific I.O.C.G. ("Iron Oxide Copper-Gold") belt surrounded by excellent infrastructure in a mining friendly jurisdiction. To date, mineral property payments of US$230,000 have been made under the property acquisition agreements. The remaining payments to complete the acquisition of the properties (to be made over the next 3 years) total US$4,200,000 and will require the issuance of 2,000,000 Himalayan Shares and the issuance of 300,000 options (full details of the acquisition terms will be provided in the filing statement).

The La Higuera Property covers a historic copper mining district with mining activity dating back to at least the late 18th century; however, there has been no known modern exploration conduct on the property. Since the consolidation of the mining rights in June 2011, Minera Azul has initiated a rock sampling program and completed geophysical work. Part of the proceeds from the Financing would be used to fund an initial drill program currently being developed by Minera Azul.

It is expected that upon completion of the Transaction, the management of Himalayan would be reconstituted with David O'Connor being appointed as President and Chief Executive Office, Brad Boland being appointed as Chief Financial Officer and Francisco Schubert would be appointed as Country Manager. Similarly, following the Transaction, the Board of Directors of Himalayan would be reconstituted with the appointment of Mike Hoffman, David O'Connor and Tony Wonnacott (with Tony Wonnacott being appointed as non-executive chairman).

David O'Connor is a geologist with a Masters degree in Mineral Exploration from the Imperial College in London, England. He has over 30 years' experience in mineral exploration in various countries, 19 years of which in South America. He has held senior positions in major companies, including Officer in Charge of Olympic Dam I.O.C.G. deposit in its' discovery phase, as well as Chief Geologist of Geopeko (Peko-Wallsend), both in Australia. Additionally, he has initiated and been President of several junior TSX-V listed exploration companies in South America, with the most recent being Explorator Resources Inc., with its 230 million tonne I.O.C.G. deposit in Chile which was acquired by Sociedad Punta del Cobre in May 2011.

Brad Boland has over 15 years' experience in the mining industry. He was the Chief Financial Officer of Crocodile Gold from June 2009 until March 2011. Mr. Boland was the Chief Financial Officer of Consolidated Thompson Iron Mines Limited from August 2007 until July 2009. From May 2005 to September 2007, he was at Kinross Gold Corp., most recently serving in the position of Vice President, Corporate Controller. Prior to that, from August 1998 to February 2005, Mr. Boland was at Goldcorp Inc., as Corporate Controller and the Vice President, Finance. Mr. Boland is a Certified Management Accountant Francisco Schubert is a Mechanical Engineer who graduated from the Technical University in Santiago, Chile. He has over 30 years' experience working for a number of industrial contractors and mines in South America (primarily Chile). Additionally, he has worked as Country Manager for a number of TSX-V listed exploration companies in Chile.

Mike Hoffman is a professional mining engineer with over 25 years' of experience in mine operations, projects, engineering and corporate development. He has held senior executive positions at Crocodile Gold Corp., Crowflight Minerals Inc., Goldcorp Inc., Desert Sun Mining Corp. and Yamana Gold Inc. He also serves on the Board of Directors of Crocodile Gold Corp., Castillian Resources Inc., Trevali Mining Corporation, Aberdeen International Inc. and Largo Resources Inc.

Tony Wonnacott is a corporate securities lawyer in Toronto, Ontario with over 15 years' of experience. He is a member of the Law Society of Upper Canada and holds a B.Comm (cum laude) from Saint Mary's University and an LL.B. from Dalhousie University. He began his career working at a major Toronto law firm in the banking and securities field before moving to work as a legal consultant to a number of companies, primarily in the mining and resource industry. As a consultant, officer and director of several of these companies, Tony has been involved with the successful listings of private companies, the outright sale of a company for approximately $750 million and capital raisings in excess of $3 billion.

Financial statements for Minera Azul will be disclosed at a future date.

Cautionary Statements

Certain statements contained in this press release constitute forward-looking information. These statements relate to future events or future performance. The use of any of the words "could", "intend", "expect", "believe", "will", "projected", "estimated" and similar expressions and statements relating to matters that are not historical facts are intended to identify forward-looking information and are based on the Corporation's current belief or assumptions as to the outcome and timing of such future events. Actual future results may differ materially. In particular, this release contains forward-looking information relating to the intention of the parties to complete the Qualifying Transaction. Various assumptions or factors are typically applied in drawing conclusions or making the forecasts or projections set out in forward-looking information. Those assumptions and factors are based on information currently available to the Corporation. The material factors and assumptions include the parties to the Acquisition Agreement being able to obtain the necessary director, shareholder and regulatory approvals; Exchange policies not changing; and completion of satisfactory due diligence. Risk Factors that could cause actual results or outcomes to differ materially from the results expressed or implied by forward-looking information include, among other things: conditions imposed by the Exchange, the failure to obtain the required approval for the Acquisition; changes in tax laws, general economic and business conditions; and changes in the regulatory regulation. The Corporation cautions the reader that the above list of risk factors is not exhaustive. The forward-looking information contained in this release is made as of the date hereof and the Corporation is not obligated to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable securities laws. Because of the risks, uncertainties and assumptions contained herein, investors should not place undue reliance on forward-looking information. The foregoing statements expressly qualify any forward-looking information contained herein.

This press release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

Completion of the Transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable pursuant to Exchange Requirement. 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.

Not for distribution to U.S. Newswire Services or for dissemination in the United States. Any failure to comply with this restriction may constitute a violation of U.S. Securities laws.

Neither the TSX Venture Exchange, Inc. nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) has in any way passed upon the merits of the Transaction and neither of the foregoing entities has in any way approved or disapproved of the contents of this press release.

Contact Information

  • Himalayan Capital Corp.
    K. Peter Miller
    President and Chief Executive Officer
    (604) 689-1428