CALGARY, ALBERTA--(Marketwired - April 11, 2013) - Jinhua Capital Corporation (TSX VENTURE:JHC) (the "Corporation" - "JHC.H"), a capital pool company trading on the NEX board of the TSX Venture Exchange (the "Exchange"), announces that it has entered into a sale and purchase agreement (the "Acquisition Agreement") dated April 10, 2013 with Alan Brent Hemingway of Surrey, British Columbia (the "Vendor") with respect to the proposed purchase by the Corporation of certain mining claims located in the Nanaimo Mining District of British Columbia (the "Property").
The Property consists of four mineral claims located in the Nanaimo Mining Division of British Columbia, including the Steele Creek claim, the Bonanzabob claim, the Bonanza claim and the Bob claim.
Terms of the Proposed Transaction and Financing
Under the Acquisition Agreement, the Vendor agrees to sell to the Corporation and the Corporation agrees to purchase, subject to acceptance by the TSX Venture Exchange (the "Exchange") and meeting other regulatory requirements, the the entire right, title and interest (being an undivided 100% legal and beneficial interest) of the Vendor in and to the Property, subject to a net smelter royalty of 1.0% of the net smelter returns on all mineral commodities. The Corporation has agreed to: (a) issue to the Vendor a total of 850,000 common shares of the Corporation (150,000 of which are to be issued 36 months from the date (the "Effective Date") that the Exchange issues the Final Exchange Bulletin accepting the acquisition of the Property by the Corporation as the Qualifying Transaction of the Corporation; 200,000 of which are to be issued by not later than the date that is 48 months from the Effective Date; and 500,000 of which are to be issued at the start of commercial production of minerals from the Property by the Corporation); and (b) pay to the Vendor a total of $890,000 ($3,000 of which has been paid; $2,000 of which is to be paid not later than 10 days following the date that the Exchange accepts the NI43-101 report in relation to the Property; $5,000 of which is to be paid not later than 10 days following the Effective Date; $100,000 of which is to be paid not later than 24 months after the Effective Date; $130,000 of which is to be paid not later than 36 months after the Effective Date; $150,000 of which is to be paid not later than 48 months after the Effective Date; and $500,000 of which is to be paid at the start of commercial production of minerals from the Property by the Corporation).
The Corporation proposes to raise up to $600,000 (the "Financing") by way of a private placement of 12,000,000 units at a price of $0.05 per unit, each unit consisting of one Common Share and one full warrant to purchase one Common Share at an exercise price of $0.10, during an exercise period of five years from the date of closing of the Financing. The Financing will close concurrently with the closing of the Acquisition. The net proceeds of the Financing will be used to pay outstanding liabilities, to carry out an exploration program and for general working capital.
It is intended that the purchase of the Property by the Corporation (the "Acquisition") will constitute the Qualifying Transaction of the Corporation in accordance with Policy 2.4 of the Exchange.
The closing of the Acquisition is subject to, among other things, the following conditions:
- the Corporation and the Vendor shall have received the requisite regulatory approvals to the transactions contemplated in the Acquisition Agreement including receipt of the conditional acceptance by the Exchange of the acquisition of the Property by the Corporation as a Qualifying Transaction of the Corporation;
- all of the conditions of the conditional acceptance of the Exchange shall have been met; and
- the Corporation shall be satisfied, in its sole discretion, as to the title of the Property held by the Vendor.
A finder's fee, payable in Common Shares of the Corporation, in the maximum amount allowed by the policies of the Exchange will be paid to Haafiz Bhalji who is at arm's length to the Corporation.
The proposed Qualifying Transaction will be at arm's length, and accordingly, will not require approval by the majority of the minority shareholders of the Corporation; however, detailed information on the Qualifying Transaction, the Property and the Resulting Issuer (as defined in the Exchange policies) will be included in a Filing Statement to be filed on SEDAR.
A National Instrument 43-101 technical report (the "43-101 Report") in relation to the Property is being prepared.
Further information, including results of the 43-101 Report and information relating to the proposed directors, officers and other insiders of the Resulting Issuer, will be provided in a subsequent press release.
Trading in the shares of the Corporation will be halted until such time as the Qualifying Transaction is completed.
Upon completion of the Qualifying Transaction, the Corporation will be classified as a mining issuer on the Exchange.
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.
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 RELEASE.
Statements in this press release contain forward-looking information within the meaning of applicable securities law. Forward-looking information is frequently characterized by words such as "contemplates", "intends", "plan", "expect", "project", "believe", "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur. In particular, forward-looking information in this press release includes, without limitation, statements with respect to: meeting the conditions contained in the Acquisition Agreement and completion of the Financing.
Forward-looking information is subject to a variety of risks and uncertainties and other factors (many of which are beyond the control of the Corporation) that could cause actual events or results to differ materially from those anticipated in the forward-looking information. Some of the risks and other factors could cause results to differ materially from those expressed in the forward-looking information include, but are not limited to, risks that the conditions in the Acquisition Agreement are not met; risks that conditional and final acceptance of the Exchange is not obtained; risks that the Financing is not completed; risks associated with the mining industry; and risks of general economic conditions in Canada and globally. Readers are cautioned that this list of risk factors should not be construed as exhaustive.
The forward-looking information contained in this news release is expressly qualified by this cautionary statement. The Corporation undertakes no obligation to update or revise any forward-looking statements to conform such information to actual results or to changes in its expectations except as otherwise required by Exchange Requirements and applicable securities legislation. Readers are cautioned not to place undue reliance on forward-looking information.
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.