Kairos Capital Corporation

February 21, 2012 12:57 ET

Kairos Capital Corporation Announces Execution of Definitive Agreement With Polar Star Mining Corporation

CALGARY, ALBERTA--(Marketwire - Feb. 21, 2012) -

NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES.

Kairos Capital Corporation ("Kairos") (TSX VENTURE:KRS.P) is pleased to announce that further to press releases dated January 5, 2012 and January 26, 2012, it has executed a definitive agreement with Polar Star Mining Corporation ("Polar Star") dated February 16, 2011 (the "Agreement"), pursuant to which Kairos has agreed to acquire an interest in certain mineral exploration properties located in Chile (the "Acquisition"). The Acquisition, when completed, will constitute the "Qualifying Transaction" of Kairos pursuant to the policies of the TSX Venture Exchange Inc. (the "Exchange") and is subject to, among other things, the approval of the Exchange.

About Kairos

Kairos is a capital pool company created to identify potential acquisitions of commercially viable businesses and/or assets that have the potential to generate profits and add shareholder value.

The common shares in the capital of Kairos ("Common Shares") are listed for trading on the Exchange under the trading symbol "KRS.P". It is currently anticipated that trading of the Common Shares will remain halted until the Exchange has reviewed, among other things, the 43-101 Report (as defined below) and all other documents required by the Exchange have been filed.

About Polar Star

Polar Star was originally incorporated under the Business Corporations Act (Ontario) as Polar Mining Corporation. Pursuant to articles of amendment dated August 1, 2007, in connection with a reverse takeover transaction, Polar Star was continued under the Canada Business Corporations Act as Polar Star Mining Corporation. Minera Polar Mining Chile Limitada ("Minera Polar") is an indirect wholly-owned subsidiary of Polar Star and is incorporated under the laws of Chile.

Polar Star is a public company listed on the Toronto Stock Exchange ("TSX") and is an emerging exploration company with a focus on building value in Chile through discovery and development. Its flagship property, Montezuma, covers 40 kilometres of the West Fault and the cross-cutting Esperanza Fault system and is located between Codelco's Radomiro Tomic - Chuquicamata - Ministro Hales (formerly known as Mansa Mina) group of copper-molybdenum porphyry deposits, and Antofagasta PLC's El Tesoro - Esperanza - Polo Sur group of copper-gold porphyry deposits. The head offices of Polar Star are located in Toronto.

The Assets

Polar Star beneficially owns 100% interest in (i) 16 mineral exploration concessions in Chile (the "Nancagua Property"); and (ii) 29 exploration concessions and has an option to acquire 100% in five (5) exploitation concessions (the "Fortuna Property"). As described below, Kairos will also have the option to acquire an interest in a non-core property of Polar Star, that as of the date of the Agreement, Polar Star owns or has a right to earn an interest in (the "Non-core Property").

Nancagua Property

Located six (6) kilometres east of the town of Nancagua and 80 kilometres north of Talca, the Nancagua Property consists of 16 exploration concessions totalling 4,800 hectares staked and owned 100% by Minera Polar. The Nancagua Property covers an epithermal gold - silver system about 700 metres wide and at least three (3) kilometres long situated on the western flank of the Chilean Central Graben. A strong system of northerly trending faults cuts this sequence and is the locus of extensive hydrothermal alteration and precious metal mineralization. At surface these mineralized faults are zones of quartz veining and silicification within an envelope of sericite - clay alteration containing limonite, hematite and goethite. At depth in drill holes and locally at surface in pervasively silicified zones l-2% pyrite and trace chalcopyrite is present. Quartz tends to be cryptocrystalline and locally drussy. Extensive geological mapping, geochemical sampling and geophysics conducted by Agate Bay Resources ("Agate") in 1994 outlined seven (7) zones of extensive gold and silver enriched veining and silicification. Surface values from these zones range from a few grams of gold and silver to over 15 g/t Au over 2.5 metres width with adjacent wall rocks grading 0.5 to 2.5 g/t Au over several to 10 metres. In 1995-96, Agate also completed two (2) short phases of reconnaissance drilling totalling about 1,600 metres in 20 shallow holes. Significant values were cut in eight (8) holes and range from 1.5 g/t Au and 6.6 g/t Ag over 31 metres to 9.2 g/t Au and 65 g/t Ag over 11 metres.

Fortuna Property

The Fortuna Property consists of 29 exploration concessions totalling 7,700 hectares owned by Minera Polar and 5 exploitation concessions totalling 1,500 hectares owned by a third party with whom Minera Polar holds an option to purchase agreement whereby it can purchase 100% interest in their properties by making staged payments totalling US$1,500,000 by May 2014. Regionally, the Fortuna Property lies within the western part of the El Indio Gold Belt, 35 kilometres west of Barrick Gold Corporation's Pascua-Lama project and covers several extensive hydrothermal alteration zones enriched in gold, silver and copper. They largest of these, the Casablanca Zone, was prospected in 1995-96 by a local Chilean company, Minera Andelá ("Andelá") and visited and check sampled by Agate during this time period. The Casablanca alteration zone covers an area of about 3.5 square kilometres and, based on Andelá and Agate's sampling, is generally auriferous in the range of 0.2-0.5 g/t. However the northern half of the zone contains stronger gold values ranging up to highs of 13.5 g/t with the average of some 50 composite rock chip samples being 1.3 g/t. This zone also shows copper and silver values with the gold in the ranges of 0.1 - 0.39% Cu and 2 - 15 g/t Ag and in this respect has strong similarities to the Cerro Casales gold-copper porphyry in the Maricunga Gold Belt.

The Acquisition

Pursuant to the terms of the Agreement:

  1. Polar Star has advanced an amount equal to $165,000 (the "Initial Work Fee") to commence an initial work program, and shall be responsible for the completion of such program. Upon closing of the Acquisition, Kairos shall reimburse Polar Star for the Initial Work Fee;
  2. Kairos shall retain an independent firm to complete a National Instrument 43-101 Standards of Disclosure for Mineral Projects compliant geology report in respect of the Nancagua Property, the Fortuna Property and/or the Non-core Property, to be determined by Kairos (the "43-101 Report"). Polar Star shall provide Kairos with access to all information necessary to enable Kairos to prepare the 43-101 Report, which report will be prepared at the cost of Kairos;
  3. Kairos shall have the option until September 30, 2013 of spending $600,000 on a drilling and exploration program on the Nancagua Property and/or spending $850,000 on a drilling and exploration program on the Fortuna Property in exchange for which Kairos shall earn a 51% working interest in each property for which it completes such a program (the "Earning Phase"). Included in the $850,000 drilling and exploration program on Fortuna shall be option payments due to a third party of US$100,000 due May 31, 2012 and US$150,000 due November 30, 2012;
  4. Kairos agrees that all annual land holding taxes, property option payments and associated costs (the "Property Costs") for the Nancagua Property, the Fortuna Property and/or the Non-core Property, as applicable, shall be paid by Kairos. Such Property Costs shall be considered part of the work commitment spending requirements. Once Kairos earns 65% of the Nancagua Property, the Fortuna Property and/or the Non-core Property, Property Costs shall be apportioned as to the participants interest;
  5. upon Kairos earning a 51% interest in the Nancagua Property, the Fortuna Property and/or the Non-core Property, as applicable, Kairos and Polar Star shall either establish a joint venture or incorporate a joint venture company, which shall be owned 51% by Kairos and 49% by Polar Star (the "Joint Venture Company"), for the purposes of the continued exploration and exploitation of the Nancagua Property, the Fortuna Property and/or the Non-core Property, as applicable. Kairos shall be the operator of the Joint Venture Company so long as it holds an interest of 51% or greater. In the event Kairos earns an interest in two or three properties, then two or three Joint Venture Companies will be established, as applicable;
  6. upon completion of the Earning Phase in respect of the Nancagua property, Kairos shall have the option of increasing its interest in the Nancagua property as follows:
    1. if Kairos spends an additional $1,100,000 on the Nancagua property on or before September 30, 2013, Kairos shall earn an additional 9% interest in the Nancagua property;
    2. if Kairos spends an additional $1,500,000 on the Nancagua property on or before September 30, 2014, Kairos shall earn an additional 5% interest in the Nancagua property;
    3. if Kairos spends an additional $3,000,000 on the Nancagua property on or before September 30, 2017 or brings the Nancagua property to production, Kairos shall earn an additional 10% interest in the Nancagua property;
  7. upon completion of the Earning Phase in respect of the Fortuna property, Kairos shall have the option of increasing its interest in the Fortuna properties as follows:
    1. if Kairos spends an additional $600,000 on the Fortuna property on or before September 30, 2013, and funds option payments to a third party of US$150,000 due November 30, 2012 and US$250,000 due May 31, 2013, Kairos shall earn an additional 9% interest in the Fortuna property;
    2. if Kairos spends an additional $600,000 on the Fortuna property on or before September 30, 2014, and funds option payments to a third party of US$300,000 due November 30, 2012 and US$600,000 due March 31, 2014, Kairos shall earn an additional 5% interest in the Fortuna property; and
    3. if Kairos completes a bankable feasibility study in respect of the Fortuna property on or before September 30, 2021, Kairos shall earn an additional 10% interest in the Fortuna property; and
  8. Kairos shall have the option until December 31, 2012 to select a Non-core Property to also earn an interest in. The selection of that property shall be determined by Kairos. Kairos shall spend $600,000, in addition to any option payments to a third party that arise after the selection date of the Non-core Property, within 20 months of the selection date to earn an initial 51% interest in the Non-core Property. The terms to earn additional working interests (in addition to the 51% initial interest) in the Non-core Property shall be structured in a similar format to earn additional working interests in either the Nancagua Property or the Fortuna Property, and will depend on the general nature of the property selected. For a Non-core Property similar to the Fortuna Property the additional expenditures levels necessary to earn additional interests will be similar to the Fortuna Property expenditures schedule in section (g) above, and similarly, if the Non-core Property is similar to the Nancagua Property then the additional expenditures levels necessary to earn additional interests will be similar to the Nancagua Property expenditures schedule in section (f) above. For greater certainty, the Non-core Property shall be in addition to the Nancagua Property and the Fortuna Property, and Kairos may continue to earn into the Nancagua Property and/or the Fortuna Property, as applicable. Also, for greater certainty, lease or option payments due to be paid on the Non-core Property will remain the responsibility of Polar Star until the date that Kairos makes the selection regarding the Non-core Property.

Upon completion of the Acquisition, Kairos intends to change its name to Kairos Exploration Inc. or such other name as is acceptable to the shareholders of Kairos.

The Offering

Kairos agrees to use its "commercially reasonable efforts" to complete the offering of securities of Kairos (the "Offering") that will become exchangeable into Common Shares at a price of $0.15 per Common Share or such other price as may be determined in the context of the market (the "Offering Price") for gross proceeds of a minimum of $600,000 and up to a maximum of $2,000,000.

The parties understand an investment dealer or a syndicate of investment dealers will be engaged to act as agent on a "commercially reasonable efforts" basis for the Offering, and in connection therewith Kairos may pay a cash commission and/or issue agent's options to purchase Common Shares at the Offering Price.

Board of Directors and Officers of Kairos

The board of directors of Kairos (the "Board") currently consists of Kenneth L. DeWyn, Charlene M. Dittmer and Jana L. Lillies. It is currently anticipated that following completion of the Acquisition, that the board of directors of the Resulting Issuer will be composed of five directors, Al Kroontje, David A. Seton, Kenneth L. DeWyn, Douglas M. Stuve and one independent director who shall be nominated by mutually agreement of the parties.

After the closing of the Acquisition, it is anticipated that the Board will appoint the following person to be officers of Kairos; Kenneth L. DeWyn as President and Chief Executive Officer, a Chief Financial Officer to be determined, Terry Walker as Vice-President, Exploration and Chief Operating Officer and Jana L. Lillies as Corporate Secretary and/or such other persons as the Board may approve.

Kenneth L. DeWyn, President, Chief Executive Officer and Director. Mr. DeWyn has been the President and Managing Director of Q Jets Aviation Ltd. since November 2006, a private company providing aircraft management and charter services. Mr. DeWyn has also been a former director of a number of CPC that were listed on the Exchange that completed their Qualifying Transactions, namely: (i) Kierland Capital Corporation, now GASFRAC Energy Services Inc.; (ii) Marco Polo Investments Ltd., now Cobalt Coal Corp.; and (iii) Luca Capital Inc., now VentriPoint Diagnostics Ltd. Mr. DeWyn has also been a former director of Quarry Oil & Gas Ltd., a public oil and gas company listed on the Exchange. Mr. DeWyn was the Manager of Customer Care for QuikAir Airline Services Inc. from January 2005 to October 2006 and General Manager of Alta Flights (Charters) Inc. from July 2002 to December 2004. Prior to July 2002, Mr. DeWyn was a director of Institutional Advancement with the Chicago Shakespeare Theatre. Mr. DeWyn holds a Bachelor of Arts degree from Calvin College in Grand Rapids, Michigan and a Master of Fine Arts from Florida State University.

Al Kroontje, Director. Mr. Kroontje is a professional engineer with 30 years of diversified experience in corporate start-ups and finance, which also include corporate re-organizations, going public transactions and merger/acquisition activities in the resource sector, mostly involving oil and gas exploration and production, oil and gas service companies or trusts, and also in mining, technology and biotechnology ventures. He is a significant shareholder of several private and public companies, for some of which he is also a board member. During the past ten years, he has been involved in numerous financings of these various ventures and in their sale on a corporate level, and in the acquisitions of divesture of properties within those entities. He is currently a director of Polar Star, Novus Energy Inc., Border Petroleum Ltd., PetroFrontier Corp. and Cobalt Coal Ltd., each of which are Exchange listed public resource exploration companies. He is also a director of EG Capital Inc., Galleria Opportunities Inc., each of which are inactive Exchange listed companies at various stages of completing business combinations and financings to become active. Mr. Kroontje holds a Bachelor of Science degree in Chemical Engineering from the University of Waterloo.

David A. Seton, Director. Mr. Seton has working in the mining industry since 1982 as a commercial lawyer and has served as a director of various mining companies over the past 25 years including Kiwi Gold NL, Kiwi International/AGF and Zedex Ltd., all of which are (or were) ASX listed companies. From 1997 to 1998, Mr. Seton served as the Chairman of IT Capital, an ASX listed company. Mr. Seton is currently the Chairman and Chief Executive Officer of Olympus Pacific Minerals Inc., a Toronto-based TSX listed mining company. He is currently a director of Polar Star and has been a director and acted in various executive roles at Olympus Pacific Minerals Inc. over the past five years.

Douglas M. Stuve, Director. Mr. Stuve has been a Partner with Burstall Winger LLP since 1998 practicing primarily in the areas of corporate finance and securities law, as well as general corporate commercial law. Mr. Stuve is currently Chairman of Athabasca Minerals Inc., and a director of Border Petroleum Corp., New Sage Energy Corp. and E.G. Capital Inc. (all Exchange listed companies). Mr. Stuve has also served as a director on a number of public companies listed on the Exchange and the Toronto Stock Exchange, including, Patfind Inc., Deepwell Energy Services Trust, Tesoro Energy Corp., Kelso Energy Inc., Colonia Energy Corp., Regal Energy Inc., Cascadia International Resources Inc., International Technologies Corporation, Sabrich Capital Corporation, Yangarra Resources Ltd., Amalfi Capital Corporation and Lime Hill Capital Corporation. Mr. Stuve holds a Bachelor of Arts degree (with distinction) from the University of Alberta and a Bachelor of Laws degree from Queen's University.

Terry Walker, Vice-President, Exploration and Chief Operating Officer. Mr. Walker has been has been the Vice President, Exploration of Polar Star since 2008. Mr. Walker is a Professional Geologist based in La Serena, Chile who has been active in mineral exploration in Chile for the past 18 years. Mr. Walker's 42 years of experience spans four continents: Europe, North and South America and Africa and covers a wide range of commodities. From 1998 to 2004, Mr. Walker served as the President of International PBX Ventures Ltd., an Exchange listed resource exploration company, and subsequently served as the Vice President, Exploration of the same company until 2007. Mr. Walker earned his geology degree from the University of London and his Masters of Applied Mineral Exploration (M. Sc.) from McGill University in Montreal. Mr. Walker has extensive geological experience with both major and smaller mining operations and has covered all aspects from grass roots project generation to pre-development deposit definition, mine geology and economic evaluation.

Jana L. Lillies, Corporate Secretary. Ms. Lillies has been a President of Jbusiness Inc., a private consulting firm since October 2002, and the Chief Financial Officer of Elkwater Resources Ltd., a public oil and gas company listed on the Exchange and a director and the Chief Financial Officer of Galleria Opportunities Inc., a public company listed on the NEX board of the Exchange. Ms. Lillies has also been the former Corporate Secretary of Telford Services Group, Inc., a private oil and gas services company. Ms. Lillies has also been a former director of a number of CPC that were listed on the Exchange that completed their Qualifying Transactions, namely, Kierland Capital Corporation, now GASFRAC Energy Services Inc. and Marco Polo Investments Ltd., now Cobalt Coal Corp.

Arm's Length Qualifying Transaction

The Acquisition was negotiated by the parties to the Agreement dealing at arm's length with each other and therefore, in accordance with the policies of the Exchange, is not a Non-Arm's Length Qualifying Transaction. As a result, approval of the Acquisition by the shareholders of Kairos is not required under the policies of the Exchange as a condition to the completion of the Acquisition. A Filing Statement in respect of the Acquisition will be filed on SEDAR prior to the close of the Acquisition.

Additional Information

Additional information regarding the Acquisition will be made publicly available by Kairos in due course. Kairos will issue a further press release when the Exchange has received the necessary documentation and trading of the Common Shares is set to resume.

Kairos will apply to the Exchange for an exemption from the sponsorship requirements in connection with the Qualifying Transaction. There is no assurance that such exemption will be granted. If such exemption is not granted, Kairos will be required to engage a sponsor for the Acquisition.

Reader Advisory

Completion of the Acquisition is subject to a number of conditions, including but not limited to, approval of the Acquisition by the board of directors of each of Kairos and Polar Star, a minimum of $600,000 in gross proceeds shall have been raised pursuant to the Offering, the Exchange acceptance and if applicable pursuant to the Exchange requirements, shareholder approval. Where applicable, the Acquisition cannot close until the required shareholder approval is obtained. There can be no assurance that the Acquisition will be completed.

Investors are cautioned that, except as disclosed in the management Information Circular or Filing Statement 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 a capital pool company 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 nor disapproved the contents of this press release.

Forward-Looking Statements

Except for historical information contained herein, this press release contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially. Neither Kairos nor Polar Star will update these forward-looking statements to reflect events or circumstances after the date hereof. More detailed information about potential factors that could affect financial results is included in the documents filed from time to time with the Canadian securities regulatory authorities by Kairos and Polar Star.

The securities of Kairos being offered have not been, nor will be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons absent U.S. registration or an applicable exemption from U.S. registration requirements. This release does not constitute an offer for sale of securities in the United States.

Neither the TSX Venture Exchange nor its Regulation Service 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

  • Kairos Capital Corporation
    Kenneth DeWyn
    President, Chief Executive Officer and Director
    (403) 274-5387