McGregor Capital Corp.
TSX VENTURE : MCP.P

February 22, 2011 09:00 ET

McGregor Capital Corp. Announces Proposed Qualifying Transaction by Way of Amalgamation With Canadian Platinum Corp.

CALGARY, ALBERTA--(Marketwire - Feb. 22, 2011) - McGregor Capital Corp. – (TSX VENTURE:MCP.P) ("McGregor"), a capital pool company with its common shares listed on the TSX Venture Exchange (the "Exchange"), is pleased to announce that it has reached an agreement in principle to amalgamate with Canadian Platinum Corp. ("Canadian Platinum"), an Alberta corporation actively engaged in mineral exploration and development. The parties have entered into a letter of intent (the "Letter Agreement") dated as of January 24, 2011 with respect to the proposed amalgamation (the "Amalgamation") which, if completed, will constitute McGregor's "qualifying transaction" under Exchange Policy 2.4.

The Letter Agreement

The Letter Agreement contemplates that McGregor and Canadian Platinum will amalgamate to form a new corporation (the "Resulting Issuer"). The current holders of Canadian Platinum common shares will receive, in exchange for each Canadian Platinum common share held, 1 common share of the Resulting Issuer. The current holders of McGregor common shares will receive one (1) common share of the Resulting Issuer for each one and one (1) share of McGregor held. Outstanding stock options issued by either of the two corporations will be treated in the same manner. It is anticipated that the total number of outstanding common shares of the Resulting Issuer following the Amalgamation will be approximately 101,259,720 common shares, prior to taking into account shares issued in connection with the private placement financing (the "Private Placement") described below. The aforementioned 101,259,720 shares will be owned, as to approximately 2.7%, by the former holders of McGregor and as to approximately 97.3% by the former holders of Canadian Platinum common shares. Accordingly, the Amalgamation will constitute a reverse takeover of McGregor. Post Amalgamation, it is anticipated that the Resulting Issuer will carry on business as a Mining Issuer on the Exchange under the name "Canadian Platinum Corp.".

The Amalgamation remains subject to, among other things, all applicable regulatory, shareholder and directors' approvals, the execution of a formal agreement and the completion of satisfactory due diligence. McGregor and Canadian Platinum expect to hold meetings of their respective shareholders as quickly as practicable in the circumstances in order to obtain approval for the Amalgamation, and currently anticipate holding such meetings on or before April 30, 2011. 

The Amalgamation will be a Non-Arm's Length Qualifying Transaction, in that Messrs. Todd Montgomery and Brent Walter are directors and/or officers of both McGregor and Canadian Platinum, and beneficially own or control, directly or indirectly, shares in both McGregor and Canadian Platinum. The conflicts of interest have been disclosed to the respective Boards of Directors, and are being dealt with in accordance with the requirements of the Business Corporations Act (Alberta) (the "ABCA"). Shareholder approval for McGregor will accordingly sought on a "majority of the minority" basis.

Canadian Platinum Corp.

Canadian Platinum was incorporated on November 1, 2000 under the ABCA. Canadian Platinum's head office and registered office are located in Calgary, Alberta. Since March of 2009, it has been actively involved in business of exploring and developing mineral concessions, and has amassed numerous Crown mineral concessions located in north-eastern Saskatchewan. Canadian Platinum's primary focus, and assuming the completion of the Amalgamation, the Resulting Issuer's primary focus over the 12 months following the Amalgamation, will be the Peter Lake Project (the "Peter Lake Project") located in Northern Saskatchewan.

The Peter Lake Project consists of 48 mineral claims covering 229,776 hectares located approximately 240 kilometers north-northeast of the community of La Ronge, Saskatchewan and approximately 110 kilometers south of Point North Landing. The Peter Lake Project focuses on the Platinum Group Element and copper potential of the Swan River Complex in north-central Saskatchewan, the second largest layered mafic/ultramafic complex in North America. PGE mineralization has been identified on the Project, generally in or near areas of varitextured, pegmatitic and/or brecciated gabbros which is typical for PGE bearing mafic/ultramafic complexes.

Canadian Platinum has had a National Instrument 43-101 ("NI 43-101") compliant technical report (the "Technical Report") in respect of the Peter Lake Project prepared by Mr. John Pearson, M. Sc. P. Geo., dated January 15, 2011. Mr. Pearson is an independent "qualified person" within the meaning of NI 43-101. The Technical Report recommends a $3.6 million exploration program based on, among other things, expanding with new targets identified in the airborne magnetic and VLF-EM survey. Copies of the report will be available for review without charge on the SEDAR website at www.sedar.com and at the offices of ProVenture Law LLP at Suite 2, 880 – 16th Avenue SW, Calgary, AB T2R 1J9.

Since March of 2009, Canadian Platinum has raised in excess of $11 million through equity offerings and has spent approximately $5 million on the exploration of the Peter Lake Project. Canadian Platinum continues to have cash on hand and a current working capital surplus in excess of $5 million as at today's date. A more detailed summary of financial information in respect of Canadian Platinum, and audited financial statements, will be included in the CPC Information Circular which will be prepared and filed by McGregor on SEDAR in connection with the proposed Qualifying Transaction.

Private Placement

Canadian Platinum and/or McGregor anticipates entering into engagement letters with one or more members of the exchange in the immediate future pursuant to which those parties will act as selling agents, on a commercially reasonable efforts basis, in connection with the sale of Canadian Platinum or Resulting Issuer shares by way of private placement to raise gross proceeds of up to $3.0 million. The Offering may be comprised of both "flow through" and regular common shares, with pricing to be determined based on market conditions and other factors. The selling agents will be paid a commission of up to 7% of the amount raised in the Offering, will be entitled to recover their expenses and may receive broker warrants entitling them to acquire common shares. It is anticipated that the Offering will close immediately prior to or concurrently with the Amalgamation. Proceeds of the Offering will be used by the Resulting Issuer for the exploration and development of the Peter Lake Project, to pay for the costs of the transactions described herein and for general working capital.

Resulting Issuer

Following completion of the Amalgamation, it is anticipated that the Resulting Issuer will have a Board of Directors comprised of 5 members, being Messrs. Todd D. Montgomery, Brent J. Walter, Randy Ludwar, Mason Douglas and Gary Billingsley. It is also anticipated that the Resulting Issuer's Board of Directors will appoint officers from among the aforementioned individuals at the closing of the Amalgamation. The business experience of these individuals is as follows:

Todd D. Montgomery

Mr. Montgomery is currently serving as CEO of Pacific Iron Ore Corporation and Anglo Canadian Oil Corp. Mr. Montgomery served on the board of PanWestern Energy Inc., which was purchased by Northern Hunter Energy in 2010. Mr. Montgomery is the founder and former, President and CEO of Anglo Potash Ltd., a Canadian mining exploration company. This corporation was purchased by BHP Billiton Diamonds in 2008 for approximately $286 million. Mr. Montgomery co-founded and served as President and COO of SynEnco Energy Inc., an oilsands development corporation. In addition, he has acted as an independent mining consultant in both the mining and energy sectors.

Brent J. Walter

Mr. Walter is a lawyer practicing primarily in the areas of securities and corporate/commercial law in Calgary, Alberta. He presently serves as a director, senior officer and member of the audit committee of a number of public and private corporations, including Pacific Iron Ore and Anglo Canadian Oil Corp. Mr. Walter was previously a director of Anglo Potash Ltd. and a member of the joint venture management committee with BHP Billiton. He is a member of the Law Societies of Alberta and Saskatchewan, as well as the Canadian Bar Association.

Randy Ludwar

Mr. Ludwar received a B.Sc. (1977) in Business Administration from Yale University. Mr. Ludwar was a director on Anglo Potash Ltd. He has been a private consultant to the Montgomery group of companies for the past fifteen years.

Mason Douglas

Mr. Douglas is currently President and a director of Infrastructure Materials Corp. He is also a director of Anglo Canadian Oil Corp. Mr. Douglas received an MBA from the University of Saskatchewan in 2000. He received his LL.B from the University of Calgary in 2007. He served as Vice-President of Operation of Western Petrochemicals Corp. from 2001-2004. In addition he has operated as independent consultant providing business plans, economic modeling and project management.

Gary Billingsley

Mr. Billingsley is a professional engineer and geoscientist with more than 30 years' experience in the mineral industry. Gary Billingsley has been an officer and director of several public mining and mineral exploration companies during the past 18 years. In addition to his experience with uranium and base-metal exploration, Gary has been directly involved with putting Saskatchewan's largest gold mine into production and, on three separate occasions, has played a major role in the discovery of diamond-bearing kimberlite.

Upon completion of the Amalgamation, the following individuals are expected to be Insiders (within the meaning of Exchange policies): Messrs. Montgomery, Walter, Ludwar, Douglas and Billingsley.

Todd Montgomery and Brent Walter serve as a directors and officers, of both McGregor and Canadian Platinum, and are proposed directors and/or officers of the Resulting Issuer. Messrs. Montgomery and Walter beneficially own or control, directly or indirectly, an aggregate of 750,000 common shares of McGregor and 40,516,304 common shares of Canadian Platinum representing approximately 27% and 41% of the issued and outstanding shares of McGregor and Canadian Platinum, respectively.

McGregor has made application to the Exchange for an exemption from the sponsorship requirements applicable to the Amalgamation in accordance with Exchange Policy 2.2. The common shares of McGregor will not resume trading until either the aforementioned application for an exemption has been accepted by the Exchange or a sponsor has been retained in accordance with Exchange Policies 2.2 and 2.4.

Mr. John G. Pearson, M.Sc. P.Geo. of Saskatoon, Saskatchewan, an independent geological consultant, is the Qualified Person on the Peter Lake Project within the meaning of NI 43-101. Mr. Pearson has reviewed and approved the technical disclosure contained in this press release relating to that Project.

For further information concerning the Amalgamation and this Press Release, please see contact information below.

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.

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.

Contact Information

  • McGregor Capital Corp
    Todd Montgomery
    President
    (403) 228-0607
    (403) 262-4860 (FAX)
    or
    McGregor Capital Corp
    Brent Walter
    Director
    (403) 294-5710
    (403) 262-4860 (FAX)