Kirkcaldy Capital Corp.
TSX VENTURE : KRK.P

September 15, 2014 14:16 ET

Kirkcaldy Capital Corp. and Tigris Resources Limited Announce Letter of Intent

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Sept. 15, 2014) -

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.

Kirkcaldy Capital Corp. (the "Corporation") (TSX VENTURE:KRK.H) is pleased to announce that it has entered into a letter of intent dated September 8, 2014 (the "Letter of Intent") with Tigris Resources Limited ("Tigris"), a private company incorporated pursuant to the laws of Jersey, Channel Islands, wherein the Corporation, Tigris and a to be incorporated subsidiary of Tigris ("Subco") will complete a transaction which will result in the shareholders of the Corporation holding shares of Tigris and the Resulting Issuer (as described below) holding assets in the country of Turkey (the "Acquisition"). Concurrent with the Acquisition, Tigris intends to consolidate its ordinary shares ("Tigris Shares") on a 2 for 1 basis (the "Consolidation"), change its name, and complete the Private Placement (as defined and described below). Tigris currently holds interests in properties throughout Turkey (the "Properties").

The Corporation was incorporated under the laws of the Province of Alberta and has a head office in Vancouver, British Columbia. The Corporation is a "capital pool company" under the policies of the TSX Venture Exchange (the "Exchange") and it is intended that the Acquisition will constitute the "Qualifying Transaction" of the Corporation, as such term is defined in the policies of the Exchange. The Corporation is a reporting issuer in the provinces of British Columbia, Alberta and Ontario.

The Acquisition will be considered to be a "Non-Arm's Length Qualifying Transaction", as such term is defined under the policies of the Exchange because direction and control over 2,000,000 of the common shares of the Corporation ("Kirkcaldy Shares") held by Exploration Capital 2006 Limited Partnership and 13,333,334 of the Tigris Shares held by Exploration Capital Partners 2012 Limited Partnership (representing approximately 49.84% and 23.2% of the issued and outstanding Kirkcaldy Shares and Tigris Shares, respectively), is exercised by certain entities that are or may be considered to be under common control. It is expected that upon completion of the Qualifying Transaction, the Resulting Issuer will meet the initial listing requirements for a Tier 2 Mining issuer under the policies of the Exchange.

The Corporation and Tigris will provide further details in respect of the Acquisition including a summary of financial information and the controlling shareholders of Tigris, in due course once available by way of press release.

Highlights of the Acquisition

Under the terms of the Letter of Intent, the Corporation and Tigris will negotiate and enter into a definitive agreement incorporating the principal terms of the Acquisition as described in this press release, and in addition, such other terms and provisions of a more detailed structure and nature as the parties may agree upon after receiving tax, legal and financial advice from their respective advisors. However, there is no assurance that a definitive agreement will be successfully negotiated or entered into.

The Corporation, Tigris and Subco intend to complete a business combination under the Business Corporations Act (Alberta). As a result of the business combination Tigris will become the listed issuer resulting from the Acquisition (the "Resulting Issuer") owning directly or indirectly 100% of the securities of the Corporation and Subco, and the Resulting Issuer will continue to carry on the business of Tigris (as described below). Under the terms of the Letter of Intent, all of the outstanding Kirkcaldy Shares will be exchanged for Tigris Shares following the Consolidation ("Tigris Post Consolidation Shares") with each holder of Kirkcaldy Shares receiving 0.5 of a Tigris Post Consolidation for each Kirkcaldy Share held (the "Share Exchange Ratio"), resulting in the issuance of approximately 2,006,300 Tigris Post Consolidation Shares. Tigris is also expected to issue 75,000 economically equivalent replacement options and warrants to the holders of stock options to purchase Kirkcaldy Shares ("Kirkcaldy Options") in exchange for all outstanding Kirkcaldy Options exercisable into Kirkcaldy Shares, the rate of exchange being equal to the Share Exchange Ratio. The Tigris Post Consolidation Shares will be issued at a deemed price of CDN $0.40 per share. Completion of the Acquisition is subject to regulatory approval including, but not limited to, the approval of the Exchange and may be subject to approval of the shareholders of the Corporation and Tigris.

Upon completion of the Acquisition, the Resulting Issuer will be engaged in the business of mineral exploration and development of the Properties. In addition, the Resulting Issuer may explore and develop such other properties and interests as may be subsequently acquired by the Resulting Issuer.

The Corporation currently has issued and outstanding 4,012,458 Kirkcaldy Shares and 150,000 Kirkcaldy Options. Tigris currently has issued and outstanding 57,555,680 Tigris Shares, 2,000,000 stock options to purchase Tigris Shares and 17,502,531 warrants exercisable for Tigris Shares.

Assuming completion of the proposed Consolidation, closing of the Acquisition and subscriptions for the maximum amount of the Private Placement (as described below), it is expected that the Resulting Issuer will have approximately 38,284,069 Tigris Post Consolidation Shares issued and outstanding, options to acquire 1,075,000 Tigris Post Consolidation Shares and warrants to acquire 14,251,265 Tigris Post Consolidation Shares.

The Properties

Tigris holds a number of mineral interests in western and eastern Turkey. A majority of the Tigris's exploration activities to date have been carried out in the south-east region of Turkey close to the towns of Pertek and Bingöl, where Tigris has a 100% interest in the Pertek gold project (the "Pertek Property") and the Bingol copper gold project, which have been explored by Tigris since 2010. The work on these projects and has included surface geochemistry, geophysics and mapping and drilling at the Pertek Property. The parties currently intend to designate the Pertek Property as the qualifying property for purposes of meeting the listing requirements of the Exchange.

The Pertek Project is comprised of five exploration licenses totaling an area of approximately 7,971 hectares in Turkey's Tunçeli province. Vein-style and vein-stockwork style gold and copper mineralization occurs over an area of approximately 4km2 and is hosted in dioritic rocks close to the contact with a quartz-monzonitic intrusion. Surface grab rock-chip grades from 1-3m wide vein bodies have returned from below detection to up to 65.8 g/t gold. A 7-hole scout diamond drilling program conducted on the Pertek Property in 2012 returned a best intersection of 10m at 6.4g/t gold (from 56-66m, downhole width) from a blind (non-outcropping) sulphide dominated body located subjacent to outcropping gold mineralized veins. The true thickness of the mineralization is not known since detailed work to define the orientation of the mineralization is currently incomplete. A combined electromagnetic and induced polarization survey was conducted across the area of veins and sulphide mineralization in 2013 and has identified several geophysical anomalies which may represent further blind sulphide bodies. Metallurgical tests conducted on a bulk composite drill sample (comprising the 10m sulphide intersection) returned gravity recoverable gold of 41.1%, at a concentrate grade of 22.86g/t gold and flotation of a bulk sulphide concentrate recovered 93.5% gold and 85.9% copper in the feed to a rougher concentrate.

Tigris also holds an interest to earn a 50% interest in two projects held by VTG Holdings A.S., the Gomeç epithermal-porphyry gold project located in Balikesir, and its Ugur Tepe porphyry copper gold project located in Canakkale province in western Turkey. Further, Tigris is conducting gold and copper exploration in strategic alliance with a local company over a remote and under explored region of the East Anatolian Plateau in the Eastern Turkish provinces of Tunceli and Bingol.

Details of the Pertek Property and other gold and copper-gold interests held by Tigris can be found in Tigris' National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101") independent geological report located on Tigris' website (www.tigrisresources.com).

Dr. Timothy Coughlin, BSc (Geology), MSc (Exploration and Mining), PhD (Structural Geology), FAusIMM, President and Chief Executive Officer of Tigris is a qualified person as defined by NI 43-101, and has verified and approved the disclosure of the technical information in this news release.

Proposed Directors and Officers

It is currently proposed that the board of directors and the senior officers of the Resulting Issuer will be the current directors and senior officers of Tigris. The following is a description of each of the proposed individuals:

Dr. Timothy Coughlin - Chief Executive Officer and Director

PhD (Structural Geology), MSc Exploration and Mining Geology, BSc Geology, FAusIMM, MSEG. 25 years of wide-ranging experience, senior positions with major mining companies, specialist in frontier mineral exploration and mining investment in emerging and transitional environments including the Caucasus, the Balkans, Colombia and Russia. Co-founded and until recently the President & Chief Executive Officer of Lydian International.

Sol Thacker - Chief Financial Officer

Mr. Thacker is a member of the Institute of Chartered Accountants in Australia. He was previously an auditor for Ernst & Young (Brisbane), focusing primarily on clients in the retail, construction and tourism industries. He has also served as a commercial accountant for finance and mining companies. Mr. Thacker is a director of Moroccan Minerals Ltd.

Peter Mullens - Director and Chairman of the Board

BSc Geology, FAusIMM; 30 years of extensive mining and exploration industry experience. Successfully developed 4 Canadian listed exploration companies. Credited with the discovery of Pico Machay in Peru and the acquisition of Navidad and Calcatreu in Argentina and Westmoreland in Australia. Strong experience of commercial aspects, ore reserves, financial evaluations, mine planning, JV negotiations, and financing of junior exploration companies. Serves on the Board of Moroccan Minerals Ltd.

Dr. Kerim Sener - Director

PhD (gold metallogenesis), MSc Mineral Exploration, BSc Geology. MIMM, MSEG, A Fellow of The Geological Society of London, Member of the Chamber of Geological Engineers in Turkey. CEO of Turkish gold exploration and development company Ariana Resources plc.

Vernon Arseneault - Director

BSc Geology. 30 years of experience in exploration and project management in South America principally in Peru, Chile and Argentina. 20 years with Noranda in Canada and South America. He is responsible for the reactivation of the El Pachon project in Argentina. Vice President Exploration for Zincore Metals and responsible for the recent discovery of the promising Dolores Cu-Mo porphyry located in Peru.

Hugh Devlin - Director

Over 20 years security experience in a variety of operational and planning roles around the world. In 2005 he co-founded Lydian Resources and as Chief Operations Officer was responsible for project management, logistics, land and community relations and risk management. Has worked in post-conflict and transitional settings including Kosovo and Georgia and also in Armenia and Ethiopia accumulating significant experience in country-entry and in early stage project and corporate development.

Private Placement

The Acquisition is subject to the completion of a private placement to raise gross proceeds of a minimum of CDN $1,000,000 and a maximum of CDN $3,000,000 through the issuance of subscription receipts in Subco (the "Subscription Receipts") at a price of $0.20 per Subscription Receipt (the "Private Placement"). Each Subscription Receipt will entitle the holder to acquire a Unit (as described below) of Subco for no additional consideration. Each Unit shall consist of one common share of Subco ("Subco Share") and one-half Subco Share purchase warrant ("Warrants"). Each Warrant shall entitle the holder to acquire a Subco Share at an exercise price of $0.30 per Subco Share, expiring on the date that is 36 months from the date of issuance.

The gross proceeds from the Private Placement shall be placed with a subscription receipt agent and held until immediately prior to the completion of the Acquisition at which time the Subscription Receipts will be automatically converted into Subco Shares and Warrants and the gross proceeds shall be released to Subco. If the Acquisition is not completed within 150 days from the date of completion of the Private Placement, the subscription receipt agent shall return the gross proceeds from the Private Placement, plus accrued interest, to the holders of the Subscription Receipts and the Subscription Receipts shall be cancelled and rendered null and void. In conjunction with the Acquisition, the Subco Shares will be exchanged such that each holder of Subco Shares will receive 0.5 of a Tigris Post Consolidation Share for each Subco Share held, and the Warrants will be exchanged such that each holder of Warrants will receive 0.5 of a warrant to purchase a Tigris Post Consolidation Share for each whole Warrant held at an exercise price equal to $0.60, reflecting a post-Acquisition price of $0.40 per Tigris Post Consolidation Share.

It is also anticipated that, in connection with the Acquisition, the net proceeds from the Private Placement will be used: (i) to advance the Gomec Property of Tigris in Balikesir, Turkey to second stage drilling, (ii) to drill-test specific bulk tonnage targets at Pertek and Bingol, (iii) to acquire new gold and copper gold license areas in the East Anatolian Plateau, (iv) for expenses in connection with the Acquisition, and (v) for general working capital purposes. The securities issued pursuant to the Private Placement may be subject to restricted resale periods in Canada pursuant to applicable securities law and Exchange policy and escrow pursuant to Exchange policy.

The Parties agree and acknowledge that Subco may engage certain finders ("Finders") in connection with the Private Placement. The commission payable to the Finders is expected to be 6% of the aggregate gross proceeds raised from subscriptions by subscribers to the Private Placement introduced by the Finders, 50% of which will be payable from the working capital of Tigris on closing of the Private Placement with the balance to be released to the Finders on completion of the Acquisition. The Finders are also expected to be issued non-transferable finder's warrants ("Finder's Warrants") equal to 6% of the number of Subscription Receipts issued to subscribers to the Private Placement introduced by the Finders, each Finder's Warrant entitling the holder to acquire one additional Subco Share at a price of $0.20 for a period of 24 months from the closing of the Private Placement. If the Acquisition is not completed and the gross proceeds from the Private Placement are returned to the Subscription Receipt holders, then Subco may cancel 50% of the Finder's Warrants issued to the Finder.

None of the Subscription Receipts to be offered or sold in the Private Placement or securities acquired upon conversion of the Subscription Receipts, or acquirable upon exercise of such securities, have been or will be registered under the United States Securities Act of 1933, as amended, or the securities laws of any state. The securities may not be offered or sold in the United States or to, or for the account or benefit of, a U.S. person. This press release does not constitute an offer to sell or a solicitation of an offer to buy these securities in the United States or to a U.S. person.

Sponsorship of the Acquisition

Sponsorship of a qualifying transaction of a capital pool company is required by the Exchange unless exempt in accordance with the policies of the Exchange.

Additional Information

In accordance with Exchange policy, the Corporation's shares are currently halted from trading and will remain so until such time as the Exchange determines, which, depending on the policies of the Exchange, may not occur until the completion of the Acquisition.

If and when a definitive agreement between the Corporation and Tigris is executed, the Corporation will issue a subsequent press release in accordance with the policies of the Exchange containing the details of the definitive agreement and additional terms of the Acquisition, including information relating to sponsorship, summary financial information in respect of Subco and Tigris, and to the extent not contained in this press release, additional information with respect to the Properties, Private Placement, and insiders of the Resulting Issuer upon completion of the Acquisition.

Completion of the Acquisition is subject to a number of conditions including but not limited to, the closing of Private Placement, Exchange acceptance and if required by Exchange policies, majority of the minority 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 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 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.

A further press release will be prepared and disseminated regarding the Acquisition and related transactions, in due course, in compliance with the policies of the Exchange as information becomes available.

The 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.

Cautionary statements

This news release contains "forward-looking information" within the meaning of applicable securities laws relating to the proposal to complete the Acquisition, the Consolidation, the Private Placement and associated transactions, including statements regarding the terms and conditions of the Acquisition, the Consolidation, the Private Placement, and the use of proceeds of the Private Placement. Readers are cautioned to not place undue reliance on forward-looking information. Actual results and developments may differ materially from those contemplated by these statements depending on, among other things, the risks that the parties will not proceed with the Acquisition, the Consolidation, the Private Placement and associated transactions, that the ultimate terms of the Acquisition, the Consolidation, the Private Placement and associated transactions will differ from those that currently are contemplated, and that the Acquisition, the Consolidation, the Private Placement and associated transactions will not be successfully completed for any reason (including the failure to obtain the required approvals or clearances from regulatory authorities). The statements in this press release are made as of the date of this release. The Corporation undertakes no obligation to comment on analyses, expectations or statements made by third-parties in respect of the Corporation, Tigris, Subco, their securities, or their respective financial or operating results or (as applicable).

Neither 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

  • Kirkcaldy Capital Corp.
    Michael Atkinson
    President
    (604) 689-1428