Ketchum Capital Corporation
TSX VENTURE : KET.P

December 12, 2008 15:48 ET

Ketchum Capital Corporation Announces Closing of Qualifying Transaction and Private Placement

CALGARY, ALBERTA--(Marketwire - Dec. 12, 2008) -

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Ketchum Capital Corporation ("Ketchum" or the "Corporation") (TSX VENTURE:KET.P), a capital pool company listed on the TSX Venture Exchange (the "Exchange"), is pleased to announce that it has completed its previously announced acquisition (the "Acquisition") of all of the issued and outstanding common shares (the "Ammonite Shares") of Ammonite Energy Ltd., a private Alberta company engaged in oil and gas development and exploration activities in Alberta and Saskatchewan. Ketchum is also pleased to announce that Ammonite completed its previously announced private placement (the "Private Placement") immediately prior to the closing of the Acquisition. The Acquisition and the Private Placement collectively constitute Ketchum's "Qualifying Transaction" as defined in the policies of the Exchange. For further details on the Qualifying Transaction and related matters, please see the Amended Filing Statement of Ketchum dated November 25, 2008 (the "Filing Statement") available for review at www.sedar.com. Final approval of the Qualifying Transaction will occur upon the issuance by the Exchange of its Final Exchange Bulletin (as defined in the policies of the Exchange), which is expected to occur during the week of December 15, 2008. Pursuant to the issuance of the Final Exchange Bulletin Ketchum will be listed as a Tier 1 issuer of the Exchange and its common shares ("Common Shares") will trade under the symbol "KET".

The Acquisition

Pursuant to the Acquisition, Ketchum acquired all of the Ammonite Shares by way of a "three-cornered" amalgamation in which Ketchum Acquisition Corporation, a wholly-owned subsidiary of Ketchum, amalgamated with Ammonite (the "Amalgamation"). Upon the Amalgamation, Ketchum issued 4.4 Common Shares for each one (1) Ammonite Share issued and outstanding immediately prior to the Amalgamation, for an aggregate of 130,784,689 Common Shares being issued to former shareholders of Ammonite. Ammonite's previously issued common share purchase warrants were also exchanged on the same basis into common share purchase warrants of Ketchum. All of the outstanding 1,900,000 "in-the-money" Ammonite share purchase options, which had exercise prices ranging from $0.40 to $0.54, were exercised on a "cashless" basis at a deemed share price of $0.70. Upon the cashless exercise, holders of these "in-the-money" Ammonite options received an aggregate of 634,286 Ammonite Shares, which were then exchanged for an aggregate of 2,790,857 Common Shares in accordance with the foregoing exchange ratio. The 200,000 "out-of-the-money" Ammonite share purchase options, and all the outstanding 900,000 Ketchum common share purchase options were terminated for nominal consideration.

The Private Placement

Immediately prior to the closing of the Acquisition, Ammonite completed its Private Placement, whereby it issued an aggregate of 4,756,633 Ammonite Shares on a "flow-through" basis ("Flow-Through Shares") pursuant to the Income Tax Act (Canada) at a price of $0.75 per Flow-Through Share for gross proceeds of $3,567,475. Ammonite intends to use the proceeds from the Private Placement to incur, on or before December 31, 2009, Canadian exploration expenses ("CEE") or Canadian development expenses ("CDE") that qualify as CEE, which expenses shall be renounced to the purchasers of flow-through shares effective on or before December 31, 2008.

Board of Directors and Management

The board of directors of Ketchum now consists of Allen Lone, Hank Swartout, Stephen Ewaskiw, A.F. (Tony) Boogmans and John Gee. The senior officers of Ketchum are now Stephen Ewaskiw, President and Chief Executive Officer, John Gee, Vice President of Engineering and Chief Operating Officer, Patricia Taguchi, Chief Financial Officer, A.F. (Tony) Boogmans, Vice President of Operations and Sanjib (Sony) Gill, Corporate Secretary.

Post-Transaction Share Capital

Following the completion of the Qualifying Transaction (including the Private Placement) Ketchum has issued and outstanding 139,784,689 Common Shares (basic) and 149,566,580 Common Shares (on a fully diluted basis). Of the 139,784,689 issued and outstanding Common Shares, 25,911,531 Common Shares will be subject to a Value Security Escrow Agreement pursuant to the policies of the Exchange.

Ketchum has called a special meeting of the Ketchum shareholders, which is expected to be held on or about January 19, 2009, for the purposes of seeking approval to change the Corporation's name to "Ammonite Energy Ltd.", and to complete a share consolidation, pursuant to which existing Ketchum securities will be consolidated on a five (5) for one (1) basis. An information circular and related materials for this special meeting will be mailed to Ketchum shareholders shortly.

Cautionary Statements

The Qualifying Transaction is subject to the final approval of the Exchange.

The TSXV has in no way passed upon the merits of the Qualifying Transaction and has neither approved or disapproved the contents of this press release.

Except for statements of historical fact, this news release contains certain "forward-looking information" within the meaning of applicable securities law. Forward-looking information is frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur. There are uncertainties inherent in forward-looking information, including factors beyond Ammonite's and Ketchum's control, and no assurance can be given that the Qualifying Transaction will be completed on time, or at all. The reader is cautioned not to place undue reliance on forward-looking statements. Additional information identifying risks and uncertainties that could affect financial results is contained in Ketchum's filings with Canadian securities regulators, which filings are available at www.sedar.com.

The TSXV has not reviewed and does not accept responsibility for the adequacy or accuracy of this press release.

Contact Information

  • Ketchum Capital Corporation
    Mr. Stephen N. Ewaskiw
    President and Chief Executive Officer
    or
    Ketchum Capital Corporation
    520 - 5th Avenue S.W.
    Calgary, Alberta T2P 3R7
    (403) 263-9505
    (403) 263-9568 (FAX)