Midnight Sun Capital Corp.

May 12, 2009 13:47 ET

Midnight Sun Capital Corp. Proposed Qualifying Transaction

Agreement to acquire a 50% interest in Rosy property, Yukon Territory

VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 12, 2009) - Midnight Sun Capital Corp. (the "Corporation") (TSX VENTURE:MMA.P) is pleased to announce that it has entered into a mineral property option agreement dated May 8, 2009 with ATAC Resources Ltd. ("ATAC"). Under the terms of the agreement, the Corporation can acquire an undivided 50% interest in and to certain mineral claims known as the Rosy property, located in the Whitehorse Mining District, Yukon Territory (the "Acquisition").

The terms of the Acquisition are subject to TSX Venture Exchange (the "Exchange") acceptance and if accepted for filing, the Acquisition will constitute the Corporation's "Qualifying Transaction" as that term is defined in the Capital Pool Company Listing Policy of the Exchange. Upon the completion of the Acquisition, the Corporation will be listed as a Tier 2 mining issuer.

ATAC is a British Columbia corporation and a reporting issuer in Alberta and British Columbia. ATAC's common shares are listed and trade on the Exchange.

The Acquisition is a related party transaction. Three of the four directors of the Corporation are also officers or directors of ATAC. Strategic Metals Ltd., a major shareholder of ATAC, is the largest shareholder of the Corporation. Completion of the Acquisition will be subject to the approval of a majority of the shareholders of the Corporation who are not related parties (ie - disinterested shareholders).

Property Highlights

The Rosy property is located in the southern Yukon Territory, approximately 75 kilometres northeast of the city of Whitehorse. The property covers an area of 1,700 hectares and is comprised of 90 contiguous mineral claims. ATAC holds a 100% interest in the property and there are no underlying royalties or other interests.

The Rosy property hosts two types of mineralization: (i) a series of gold and silver bearing quartz-carbonate veins; and (ii) precious metals deficient sulphide mineralization. The veins represent the distal portion of a large hydrothermal system associated with the Red Mountain molybdenum bearing porphyritic intrusion, located approximately 5 kilometres north of the Rosy property. The veins are recessively weathering linear features and are rarely exposed in bedrock at surface.

Sampling of mineralized vein material on talus slopes produced several assays exceeding 3 g/t gold, including one sample of 35.92 g/t gold. The highest silver assay from rock samples was 650 g/t.

The precious metal deficient mineralization is hosted in porphyry dykes and early Jurassic granodiorite, diorite and monzodiorite of the Aishihik Suite. This mineralization typically consists of trace to 1% pyrite and rare arsenopyrite. No anomalous gold or silver values have been reported from this mineralization.

The first reported work in the area of the Rosy property occurred in 1935 and was focused on the quartz-carbonate veins. The porphyry style mineralization in the region was not recognized until the 1960s. ATAC staked 30 of the Rosy claims in 1999 to cover numerous silt geochemical anomalies. In 2008, ATAC staked the remaining 60 Rosy claims based on the favourable results from a program of geological mapping, prospecting and soil sampling.

A geological report dated May 2009 and entitled "Technical Report" describing Geology, Mineralization, Geochemistry and Geophysical Surveys at the Rosy Property (the "Technical Report") has been prepared for the Corporation with respect to the Acquisition. The Technical Report has been prepared in compliance with the provisions of National Instrument 43-101, Standards of Disclosure for Mineral Projects ("NI 43-101"). The author of the Technical Report is William A. Wengzynowski, P. Eng., who is a qualified person as defined in NI 43-101.

The Technical Report contains a recommendation for a two phased helicopter supported exploration program. Phase 1 will consist of geological mapping, prospecting, soil sampling, hand trenching and drill site preparation at a cost of $216,340. Phase 2, contingent upon the results from Phase 1, will consist of a 1,000 metre diamond drill program at a cost of $629,960.

The Corporation will undertake the recommended Phase 1 work program upon the completion of the Acquisition.

Acquisition Highlights

Pursuant to the terms of the Acquisition, the Corporation may acquire a 50% interest in the Rosy property by: (i) paying ATAC an aggregate $50,000; (ii) incurring an aggregate $600,000 in exploration expenditures on the Rosy property; and (iii) issuing ATAC an aggregate 1,500,000 Corporation shares, all on or before February 1, 2012.

The right of the Corporation to acquire a 50% interest in the Rosy property is an option only. Except for a $5,000 cash payment to ATAC upon Exchange acceptance of the Acquisition, the Corporation is not required to complete any cash payment, exploration expenditures or share issuances under the Acquisition. The Corporation may terminate its option at any time without further obligation to ATAC under the option agreement.

ATAC will act as operator for all exploration expenditures to be incurred by the Corporation in respect of the Acquisition.

Officer, Directors and Insiders

Save that Robert C. Carne will replace W. Douglas Eaton as the Chief Executive Officer of the Corporation in conjunction with the Acquisition, there are no changes to the officers, directors or insiders of the Corporation contemplated as part of the Acquisition. Following the completion of the Acquisition, the officers, directors and insiders of the Corporation will be:

(a) Robert C. Carne, President, Chief Executive Officer and Director

Mr. Carne is a professional geoscientist and worked as a geologist with Archer, Cathro & Associates (1981) Limited, Consulting Geological Engineers from 1977 to 2002. Mr. Carne obtained a Bachelor of Sciences degree in Geology from the University of British Columbia in 1974, and a Master of Sciences degree in Geology from the University of British Columbia in 1979. Mr. Carne has been a director and an officer of a number of reporting issuers for many years and is the President and a director of ATAC.

(b) James M. Stephen, Director

Mr. Stephen is a self-employed businessman through a wholly-owned private British Columbia corporation. He has been actively involved in the mineral exploration industry since the early 1970s and has been a director and an officer of many junior mineral exploration companies for over 20 years.

(c) Graham N. Downs, Director

Mr. Downs has been employed by Archer, Cathro & Associates (1981) Limited, Consulting Geological Engineers since June 2003. He is also the Chief Executive Officer of ATAC and provides investor relations services to Strategic Metals Ltd.

(d) Glenn R. Yeadon, Secretary and Director

Mr. Yeadon is a barrister and solicitor in British Columbia, practicing mainly in the field of securities law. He has been associated in the practice of law with Tupper, Jonsson & Yeadon and predecessor firms since 1980. Mr. Yeadon obtained a Bachelor of Commerce degree from the University of British Columbia in 1975 and a Bachelor of Laws degree from the University of British Columbia in 1976. Mr. Yeadon has been a director and an officer of a number of reporting issuers for over 20 years. Mr. Yeadon is the Secretary and a director of ATAC and Strategic Metals Ltd.

(e) W. Douglas Eaton, Chief Financial Officer

Mr. Eaton is a geologist and has been a partner and a director of Archer, Cathro & Associates (1981) Limited, Consulting Geological Engineers, since 1981. Mr. Eaton obtained a Bachelor of Arts degree from the University of Alberta in 1971 and a Bachelor of Sciences degree in Geology from the University of British Columbia in 1980. Mr. Eaton has been a director and an officer of a number of reporting issuers for many years. He is the President, Chief Executive Officer and a director of Strategic Metals Ltd.

(f) Strategic Metals Ltd.

Under British Columbia securities law, Strategic Metals Ltd. is designated as an "insider" of the Corporation as it holds greater than 10% of the issued and outstanding shares of the Corporation. Strategic Metals Ltd. is a British Columbia corporation and is listed on the Exchange as a Tier 1 mining issuer. The Corporation and Strategic Metals Ltd. have one common director and two common officers.

Private Placement

Concurrent with the closing of the Acquisition, the Corporation expects to complete a private placement (the "Private Placement"), the terms of which are yet to be settled. The Corporation will formally announce the Private Placement in a separate news release. The net proceeds of the Private Placement will be added to the Corporation's current working capital and used to: (i) fund the proposed work program on the Rosy property; (ii) make the required payments under the option agreement; and (iii) provide the Corporation with sufficient working capital to satisfy Exchange listing requirements.

Sponsorship of Qualifying Transaction

The Corporation intends to seek an exemption from the sponsorship requirements of the Exchange, but will appoint a sponsor if required to do so.

Trading Halted

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 otherwise, which, depending on the policies of the Exchange, may not occur until the completion of the Acquisition.

Completion of Acquisition

Completion of the Acquisition is subject to a number of conditions including, but not limited to, the completion of the Private Placement, Exchange acceptance and disinterested shareholder approval. 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.

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

On behalf of the Board of Directors

Robert C. Carne, President

Midnight Sun Capital Corp.

For further information, please visit the website at www.sedar.com to view the Corporation's profile.

The technical information in this news release has been reviewed and approved by William A. Wengzynowski, P.Eng., a qualified person for the purposes of National Instrument 43-101. Mr. Wengzynowski is independent from the Corporation.

WARNING: This news release may contain forward looking statements based on assumptions and judgments of management regarding future events or results that may prove to be inaccurate as a result of exploration and other risk factors beyond its control, and actual results may differ materially from the expected results.

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 news release.

Contact Information

  • Midnight Sun Capital Corp.
    Robert C. Carne
    (604) 688-2568
    (604) 688-2578 (FAX)