Kent Exploration Inc.
TSX VENTURE : KEX

Kent Exploration Inc.

January 20, 2011 16:05 ET

Kent-Archean Plan of Arrangement Completed; Jan. 28, 2011 Effective Date Set for Spin-Out

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Jan. 20, 2011) - Kent Exploration Inc. (TSX VENTURE:KEX) (the "Company" or "Kent") reports that the TSX Venture Exchange (the "Exchange") has given its final approval to establish an effective date for the Kent plan of arrangement, which provides for the creation of a new company, Archean Star Resources Inc. ("Archean") and contemplates the listing of the shares of Archean on the Exchange. Listing of the common shares of Archean will be the subject of a separate filing with the Exchange. Shareholder and final court approval for the plan of arrangement were obtained on April 30, 2010 and May 5, 2010, respectively. Refer to the Kent Information Circular dated March 26, 2010, for additional information concerning the plan of arrangement.

Under the plan of arrangement, Kent retains ownership of its interests in all existing mineral properties except for Kent's interest in the Gnaweeda property located in Western Australia which will be owned, indirectly, through Archean Star Resources Australia Pty Ltd. ("ASA"), by Archean.

On or before the effective date of the plan of arrangement, a private placement financing for gross proceeds of $724,050 shall be completed by 0877072 B.C. Ltd. ("NewCo"). Under the plan of arrangement, NewCo shall amalgamate with an existing subsidiary of Kent to form Archean and the proceeds of the private placement shall be used to fund the current work program on the Gnaweeda property and for the general and administrative expenses of Archean for 12 months. Kent has subscribed for $285,000 worth of Newco subscription receipts.

The effective date for the plan of arrangement has been set as January 28, 2011, which has also been determined as the record date for shareholders to participate in the plan of arrangement. Shareholders of record on January 28, 2011, will subsequently receive one (1) share of Archean for every four (4) shares of Kent that they own while retaining their Kent shares. The shares of Kent will trade ex-distribution on January 26, 2011, meaning that purchasers of Kent shares after January 25, 2011, will not receive Archean shares pursuant to the plan of arrangement.

There are currently 60,223,187 issued and outstanding shares in the capital of Kent, therefore, assuming no additional shares of Kent are issued before the effective date, a total of 15,055,797 shares in the capital of Archean shall be issued on a pro-rata basis to the Kent shareholders. Kent shall also receive 1,000,000 Archean common shares under the plan of arrangement. In addition, Archean shall issue a further:

(i) 7,081,413 common shares at a deemed price of $0.15 per share to Kent in settlement of $1,062,212 of inter-company loans made by Kent to ASA in order to fund operations in Australia since March 2010;

(ii) 4,827,000 common shares and warrants to purchase 4,827,000 additional common shares in connection with the Newco financing. Each warrant shall entitle the holder to purchase one Archean common share at $0.25 per share for a period of 12 months; and

(iii) up to 5,273,125 common shares upon the exercise by the holders of 21,092,500 outstanding Kent Warrants on the effective date of the plan of arrangement (the "Kent Warrants") on the basis that one (1) share of Archean will be issued for every four (4) Kent Warrants that have been exercised. Kent shall pay Archean 26% of the proceeds to be received by Kent upon the exercise of the Kent Warrants.

Immediately following the effective date of the plan of arrangement audited financial statements of Archean shall be prepared in support of its application for listing of the Archean common shares on the Exchange, which is expected to be completed in the first quarter of 2011.

Both Archean and Kent will be exhibiting at Booth 816 at the Vancouver Resource Investment Conference, Jan. 23-24, 2011 at the Vancouver Conference Center.

The Company has granted 300,000 incentive stock options exercisable at $0.18 for three years to consultants, officers and directors of the Company.

Kent Exploration Inc is a junior exploration company that has an Option Agreement to earn 100% of Teck Australia Pty Ltd.'s interest in Chalice Gold Mines Limited's Gnaweeda Gold Project in West Australia, subject to a 75% back-in right to Teck, and has acquired the Alexander River, Paparoa and Lyell gold projects in the highly prolific Reefton gold field in New Zealand.

The Company has an option to earn a 100% interest in the Silver Hills property, a silver/lead/zinc prospect in south-eastern British Columbia, and has a 100% interest in the Courtney Lake property, a silver/lead/zinc prospect in north-east Saskatchewan. The Company has a 100% interest in Coal Prospecting Permits covering approximately 92,000 ha in east-central Saskatchewan, a 100% interest in a mining lease option on the Flagstaff Mountain property, a gold/silver/zinc/barite prospect in eastern Washington state, a 100% interest in the mining lease option on the Ivanhoe Creek property, a Midas-style gold/silver target in Nevada's Carlin Trend, and 50% of a 100% interest in the Ivanhoe Creek placer claims covering a bentonite deposit.

This News Release has been prepared on behalf of the Kent Exploration Inc. Board of Directors, which accepts full responsibility for its contents.

ON BEHALF OF THE BOARD

Graeme O'Neill, President

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.

Contact Information

  • Kent Exploration Inc.
    Graeme O'Neill
    President
    604-684-3394 or Toll Free: 1-866-399-6539
    1-888-282-7763 (FAX)
    www.kent-exploration.com