Mantra Capital Inc.
TSX VENTURE : MTR.P

September 03, 2013 16:45 ET

Mantra Capital Announces Agreement for Qualifying Transaction, Private Placement and Stock Split

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Sept. 3, 2013) - (TSX VENTURE:MTR.P). Mantra Capital Inc. ("Mantra" or the "Company"), a capital pool company, is pleased to announce that it has entered into an option agreement dated August 29, 2013 (the "Option Agreement") with David Piggin (the "Optionor"), a resident of British Columbia. Pursuant to the Option Agreement, Mantra will, upon the approval of the TSX Venture Exchange (the "Exchange"), have the option (the "Option") to acquire from the Optionor an undivided 100% interest in and to certain mineral claims in British Columbia known collectively as the Honeymoon Property. The Honeymoon Property is an early stage gold-silver-copper property located on the west side of Adams Lake, British Columbia.

Mantra is a capital pool company and the grant of the Option to Mantra is intended to constitute the Company's qualifying transaction (the "Qualifying Transaction") under Policy 2.4 of the Exchange. The Company intends to be listed on the Exchange as a Tier 2 mining issuer following completion of the Qualifying Transaction.

The grant of the Option is arm's length transaction and Mantra does not expect shareholder approval to be required in accordance with Exchange policies.

In connection with its Qualifying Transaction, the Company plans to sub-divide its outstanding common shares on a four-for-one basis and complete a non-brokered private placement.

Honeymoon Property

The Honeymoon Property is an early stage gold-silver-copper property. The property is located on the west side of Adams Lake, approximately 85 km northeast of Kamloops, British Columbia. It is comprised of 43 mineral claims which total approximately 19,772 hectares. Technical information with respect to the Honeymoon Property will be included in the Company's Filing Statement.

Honeymoon Property Option Terms

Upon and subject to receipt of Exchange acceptance of the Option Agreement as Mantra's Qualifying Transaction, Mantra will have the right to acquire a 100% interest in the Honeymoon Property by:

  1. paying a total of $90,000 to the Optionor on or before the dates specified below:
    1. $10,000 on or before the later of: November 12, 2013, and receipt of final Exchange acceptance;
    2. $15,000 on or before November 12, 2014;
    3. $35,000 on or before November 15, 2015; and
    4. $30,000 on or before November 12, 2016; and
  2. incurring a total of $765,000 in expenditures on the Honeymoon Property on or before the dates specified below:
    1. $200,000 on or before July 31, 2014;
    2. $250,000 on or before July 31, 2015; and
    3. $315,000 on or before July 31, 2016.

The Optionor will retain a 0.5% net smelter returns royalty on the property. This royalty may be purchased by Mantra at any time for $1,500,000.

Subdivision of Common Shares

Subject to Exchange acceptance and in connection with its Qualifying Transaction, Mantra plans to subdivide its outstanding common shares on a four-for-one basis (the "Subdivision"). The Company does not expect the Subdivision to require shareholder approval.

Private Placement

Subject to Exchange acceptance and in connection with its Qualifying Transaction, Mantra proposes to complete, on a non-brokered basis, a private placement (the "Private Placement") comprised of up to 7,000,000 common shares at a price of $0.05 per share for gross proceeds of up to $350,000. The Company expects that up to 3,500,000 of the shares will be issued on a flow-through basis. The common shares issued in the Private Placement will be issued after giving effect to the Subdivision.

The proceeds from the Private Placement will be used by Mantra to finance the recommended work program on the Honeymoon Property and for general working capital. All securities issued pursuant to the Private Placement will be subject to a four month hold period from the date of issue and may be subject to escrow in accordance with the policies of the Exchange.

Management of Resulting Issuer

The current directors of the Company will remain as directors of the Company following completion of the Company's Qualifying Transaction.

Upon completion of its Qualifying Transaction, Raj Chowdhry will remain the Chief Executive Officer of the Company. The Company plans to appoint Wylie Hui as the Chief Financial Officer of the Company and Tiffany Konings as the Corporate Secretary of the Company upon completion of the Qualifying Transaction. Accordingly, the following people will be directors or officers of the Resulting Issuer.

Raj Chowdhry

Mr. Chowdhry, a Chartered Accountant, is the principal of Futura Capital Ltd., a Vancouver based venture capital company. Having over 25 years of experience in the capital markets, Mr. Chowdhry has been the founder, director and/or officer of several public companies in the mining, technology, hospitality and entertainment sectors trading on stock exchanges in the United States and Canada, including Tintina Resources Inc., and AsiaBaseMetals Inc.

Steven Khan

Mr. Khan received his Bachelor of Science and Masters of Business Administration degrees from the University of British Columbia. He holds a Chartered Financial Analyst designation and is a member of the CFA Institute. Mr. Khan previously spent close to twenty years in many aspects of the investment industry, including retail, institutional, corporate finance, capital markets and investment banking areas. Mr. Khan has held senior management roles, including serving as Executive Vice-President, President, CEO and Chairman of a number of regional and national Canadian investment brokerage houses. Mr. Khan is currently a principal of Sona Capital Limited, acting as a consultant to public and private companies for the past 10 years. He has been involved in strategic development and raising venture capital for many resource and non-resource companies. He is an officer and/or director of a number of public and private companies.

Rick Van Nieuwenhuyse

Mr. Van Nieuwenhuyse is the President, CEO and director of NovaCopper Inc. From 1998 to 2012, Mr. Van Nieuwenhuyse was the President, CEO and Director of NovaGold Resources Inc. He has over 30 years of worldwide experience in the natural resource sector, including time as Vice President of Exploration at Placer Dome Inc. Mr. Van Nieuwenhuyse holds a degree in Science from the Universite de Louvain in Belgium, and a M.Sc. in Geology from the University of Arizona. He also serves on the Boards of Alexco Resource Corp., Tintina Resources Inc. and AsiaBaseMetals Inc.

Joseph Piekenbrock

Mr. Piekenbrock is the Senior Vice President Exploration of NovaCopper Inc. He has over 30 years of experience in the minerals exploration and development sector. Mr. Piekenbrock has managed exploration projects from grassroots discovery through advanced acquisitions. He has worked extensively in South America, and he brings northern experience through years of exploration for both Teck Cominco Ltd. and Placer Dome Inc. in Alaska. Joe holds a B.A in Geology from the University of Colorado and a M.Sc. in Geology from the University of Arizona. Mr. Piekenbrock is a director of AsiaBaseMetals Inc.

Wylie Hui

Mr. Hui is the Chief Financial Officer of Tintina Resources Inc. and AsiaBaseMetals Inc. He has over 15 years of professional experience. He served as the Senior Manager of Ernst & Young's Transaction Support team based in San Francisco, USA, providing services to corporate and private equity clients. Mr. Hui completed his Chartered Accountant designation in 1998 and is a Certified Public Accountant (Illinois).

Tiffany Konings

Ms. Konings is the Corporate Secretary of Tintina Resources Inc. She has experience in many industries, including entertainment, mining and retail.

Sponsorship

Sponsorship of a Qualifying Transaction of a capital pool company is required by the Exchange unless exempt in accordance with Exchange policies. Mantra intends to apply for an exemption from sponsorship requirements; however, there is no assurance that it will be able to obtain this exemption.

Trading Halt

In accordance with Exchange policies, the Company's common shares are currently halted from trading and will remain so unless the documentation required by the Exchange for the proposed Qualifying Transaction is provided to the Exchange, and may remain halted until completion of the proposed Qualifying Transaction.

About the Company

The Company is designated as a Capital Pool Company by the Exchange. The Company has not commenced commercial operations and has no assets other than cash. The only business of the Company is the identification and evaluation of assets or businesses with a view to completing a "Qualifying Transaction" in accordance with Exchange Policy 2.4 - Capital Pool Companies.

Further details concerning the Honeymoon Property, the Option Agreement, the Subdivision and the Private Placement will be disclosed in a filing statement to be prepared by the Company and filed on SEDAR.

ON BEHALF OF THE BOARD

Raj Chowdhry, CA

Chief Executive Officer, Chief Financial Officer, Corporate Secretary and Director

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, 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-V has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.

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.

This news release includes certain forward-looking statements and forward-looking information (together, "forward-looking statements"). All statements other than statements of historical fact included in this release, including, without limitation, statements regarding completion of the grant of the Option, the Private Placement (including the use of the proceeds of the Private Placement), the Subdivision and other future plans and objectives of the Company. There can be no assurance that such statements will prove to be accurate and actual results and future events may vary from those anticipated in such statements. Important risk factors that could cause actual results to differ materially from the Company's plans or expectations include risks related to Exchange acceptance of the transactions described above, regulatory changes, other risks normally associated with equity financing and Qualifying Transactions, and risk associated with mineral exploration, including the risk that actual results of exploration will be different from those expected by management. The forward-looking statements in this news release were developed based on the expectations of management, including that Exchange acceptance for the proposed transactions will be provided and the other risks described above will not materialize. The Company expressly disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as otherwise required by applicable securities legislation.

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