Klondike Capital Corp.

June 13, 2008 17:06 ET

Klondike Capital Corp. Corporate Update

CALGARY, ALBERTA--(Marketwire - June 13, 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 the Exchange has conditionally accepted Klondike's previously announced proposed amalgamation (the "Amalgamation") with Emerald Fields Resource Corporation ("Emerald Fields"), an Alberta corporation actively engaged in mineral exploration and development. The meetings of the shareholders of both Klondike and Emerald Fields are scheduled for July 3, 2008. The Joint Management Proxy and Information Circular of Klondike and Emerald Fields has been filed with the securities regulatory authorities and may be reviewed with other relevant materials under Klondike's "Company Profile" at the SEDAR website, www.sedar.com.

The proposed Amalgamation is intended to satisfy Klondike's requirement to complete a "qualifying transaction" within the meaning of Exchange Policy 2.4. Post Amalgamation, it is anticipated that the surviving entity (the "Resulting Issuer") will carry on business under the name "Pacific Iron Ore Corporation". It is anticipated that the Resulting Issuer will adopt a December 31 year end. Klondike has applied for and received a waiver of the Exchange's sponsorship requirements pursuant to Exchange Policy 2.2. The Amalgamation remains subject to satisfaction of a number of conditions precedent, including shareholder approval, financing and satisfaction of regulatory requirements. The common shares of Klondike and/or the Resulting Issuer will not be reinstated for trading on the Exchange before the Amalgamation has occurred and all requirements of the Exchange have been satisfied.

Private Placement

Klondike has entered into an engagement letter with Blackmont Capital Inc. and Acumen Capital Finance Partners Limited pursuant to which Blackmont and Acumen have agreed to use commercially reasonable efforts to sell, on a syndicated basis, a minimum of 10,000,000 Resulting Issuer Shares ($4,000,000) and up to a maximum of 16,250,000 Resulting Issuer Shares ($7,637,500 - subject to a maximum $5,687,500 raised through the sale of Resulting Issuer Shares on a "flow-through" basis) at an offering price of not less than $0.40 per share ($0.50 if issued on a "flow-through" basis). This private placement is anticipated to be closed concurrently with the Amalgamation. In exchange for their commercially reasonable efforts to complete this financing, the Blackmont and Acumen will receive (i) a non-refundable corporate finance fee of $50,000 plus GST which will be offset against any commissions payable; (ii) reimbursement for their costs and expenses including legal fees; (iii) cash commission equal to 3.5% of the total number of shares sold to subscribers on the Resulting Issuer's "President List"; (iv) cash commission equal to 8% of the total number of shares sold to subscriber's who are not included in the Resulting Issuer's "President's List"; and (v) non-transferable broker warrants equal in number to 8% of the total shares sold under the offering, each such broker's warrant entitling the holder thereof to acquire one Resulting Issuer Share for a period of eighteen (18) months following the date of closing at an exercise of $0.40 per share.

Completion of the transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable pursuant to Exchange Requirements, majority of the minority shareholder approval. Where applicable, the transaction cannot close until the required shareholder approval is obtained. 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.

The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.

Contact Information

  • Klondike Capital Corp.
    Todd Montgomery
    (403) 228-0607
    (403) 262-4860 (FAX)
    Emerald Fields Resource Corp.
    Leonard Cornez
    (403) 519-5531
    (403) 955-0380 (FAX)