Klondike Capital Corp.

July 15, 2008 09:00 ET

Klondike Capital Corp. Closes Qualifying Transaction, Completes Financing

CALGARY, ALBERTA--(Marketwire - July 15, 2008) - Klondike Capital Corp. (TSX VENTURE:KLC.P) ("Klondike"), a capital pool company with its shares listed on the TSX Venture Exchange (the "Exchange"), is pleased to announce that it has amalgamated with Emerald Fields Resource Corporation ("Emerald Fields") to form Pacific Iron Ore Corporation (the "Resulting Issuer"). Immediately prior to the amalgamation (the "Amalgamation"), Emerald Fields completed a brokered private placement through Blackmont Capital Inc. and Acumen Capital Finance Partners Limited, on a syndicated basis, involving the sale of an aggregate of 14,200,000 common shares in the capital of Emerald Fields ("Emerald Fields Shares") to raise gross proceeds of $6,577,900. The aforementioned 14,200,000 Emerald Fields Shares are comprised of 8,979,000 shares sold on a "flow through" basis at $0.50 per share and 5,221,000 additional shares sold at $0.40 per share. The agents received were paid commissions and recovered expenses equal to an aggregate of $474,952.29 and received 1,136,000 non-transferable broker warrants (the "Broker Warrants"), each Broker Warrant entitling the holder to acquire one Emerald Fields Shares at $0.40 per share exercisable until January 8, 2010. By virtue of the Amalgamation, the foregoing 14,200,000 Emerald Fields Shares and the Broker Warrants have been converted into securities of the Resulting Issuer having substantially the same terms and conditions as the aforementioned Emerald Fields securities. In accordance with applicable law, such securities are not subject to any hold period. Proceeds of the financing will be used to pursue exploration activities on the Resulting Issuer's iron ore prospect located near Port Renfrew, British Columbia, to repay certain indebtedness and for general corporate purposes.

The Amalgamation and the related foregoing transactions are intended to satisfy Klondike's requirement to complete a "qualifying transaction" within the meaning of Exchange Policy 2.4. The proposed qualifying transaction remains subject to receipt of Final Exchange Acceptance. All required documents have been filed with the Exchange. Assuming all requirements of the Exchange are satisfied, the Pacific Iron Ore Corporation will be listed on the Exchange as a Tier 1 mining issuer and its common shares will be listed and posted for trading on the Exchange under the trading symbol "POC".

Following completion of the Amalgamation, the Resulting Issuer granted options to acquire an aggregate of 1,266,666 common shares at $0.40 per share allocated to directors as to 308,333, officers as to 158,333, employees as to 300,000 and to the Pacheedaat First Nations Band (500,000) who are acting as consultants for the Resulting Issuer in connection with certain cultural and environmental matters. The aforementioned options were issued under the Resulting Issuer's stock option plan, will vest as to one third per year over a three year period beginning on the first anniversary of the grant of the options and are generally exercisable for a period of 5 years.

Upon the listing of the Resulting Issuer shares on the Exchange, it is anticipated that the fully diluted share capital of the Resulting Issuer will be as follows:

Resulting Issuer Shares issued and outstanding: 51,609,128

Options to Acquire Resulting Issuer Shares 2,833,333

Agent and Broker Warrants 1,236,000

Total 55,678,461

A total of 27,801,152 Resulting Issuer Shares are subject to a TSXV Form 5D Value Escrow Agreement. A further 2,909,044 Resulting Issuer Shares are subject to a voluntary pooling agreement having release terms matching the Value Escrow Agreement.

Completion of the transaction is subject to a number of conditions, including but not limited to, Exchange acceptance. 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.

Certain information in this news release, including management's assessment of future plans and operations may constitute forward-looking statements under applicable securities laws. Such forward looking statements necessarily involve risks including, without limitation, risks associated with mineral exploration, development, exploitation, production, marketing and transportation. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on these and other factors that could affect operations and financial results are included in disclosure documents on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website at www.sedar.com . The forward-looking statements contained in this news release are made as at the date of this news release and the issuer does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.

The TSX Venture Exchange Inc. does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Pacific Iron Ore Corporation
    Todd Montgomery
    (403) 228-0607
    (403) 262-4860 (FAX)
    Pacific Iron Ore Corporation
    Leonard Cornez
    Chief Financial Officer
    (403) 519-5531
    (403) 955-0380 (FAX)