Naples Capital Corp.
TSX VENTURE : NAP.P

April 17, 2007 13:29 ET

Naples Announces Proposed Qualifying Transaction -Arizona Uranium JV

CALGARY, ALBERTA--(CCNMatthews - April 17, 2007) -

THIS PRESS RELEASE IS NOT FOR DISTRIBUTION IN THE UNITED STATES OR TO U.S. NEWS AGENCIES

Naples Capital Corp. (TSX VENTURE:NAP.P) ("Naples") is pleased to announce that it has entered into an arm's length letter agreement (the "Letter Agreement") dated April 16, 2007 with respect to the proposed acquisition (the "Proposed Acquisition") of 0754545 B.C. Ltd. ("075"). 075 is a private company, incorporated under the laws of British Columbia, for the purpose of acquiring mineral assets, primarily uranium. The founders of 075 are Jennifer Boyle and Pamela Strand. 075 has entered into a joint venture agreement with a private US corporation enabling 075 to earn up to a 90% interest in the joint venture project (the "Kaibab Joint Venture"), initially comprised of forty-seven lode mining claims prospective for uranium mineralization (breccia pipes) located in Arizona, as described herein. Apex Geoscience Ltd. of Edmonton, Alberta, has been retained to prepare a National Policy 43-101 compliant technical report (the "Technical Report") on the properties underlying the Kaibab Joint Venture. The Proposed Acquisition is intended to constitute the "Qualifying Transaction" of Naples pursuant to the policies of the TSX Venture Exchange (the "Exchange"). The Letter Agreement contemplates the parties completing a definitive agreement, based on tax, corporate and securities legal advice, on or about May 2, 2007. Additionally, Naples will be required to post a $25,000 non-refundable deposit in order that 075 can continue to preserve its assets and be able to meet its ongoing obligations under the Kaibab Joint Venture, in particular obtaining a National Instrument 43-101 technical report on the properties that are the subject of the Joint Venture.

Terms of the Proposed Acquisition

Pursuant to the terms of the Letter Agreement, Naples will, directly or indirectly, acquire all of the issued and outstanding shares of 075 (the "075 Shares") in consideration for the issuance of common shares of Naples, on a share for share basis, at a deemed price of $0.225 per share. It is anticipated that up to 15,000,000 common shares of Naples will be issued for the acquisition by way of a share exchange, as a result of which 075 will become a wholly owned subsidiary of Naples. It is anticipated that Naples shares issued for 075 shares, that are not already restricted from trading, will be subject to a voluntary hold period of four months from the closing of the QT.

Description of 075 and the Properties

075 was incorporated on May 11, 2006, and currently has approximately 68 shareholders. The controlling shareholders of 075 are Jennifer Boyle, of Toronto, Ontario, who holds, directly and indirectly, an aggregate 3,000,000 shares, Pamela Strand, of Edmonton, Alberta, who holds, directly and indirectly, 3,000,000 shares, Scott Jobin Bevans, of Toronto, Ontario, who holds, directly and indirectly 945,000 shares, and Shanda Theaker, of Toronto, Ontario, who holds, directly and indirectly, 1,233,333 shares. These four persons currently own approximately 56% of the issued shares of 075.

As a uranium mining exploration company, 075 has no revenue, nor income, and is dependent on raising funds in order to maintain its operations. Since incorporation, 075 has advised that it has raised approximately CDN$1,1000,000 in cash, and has approximately $345,000 in working capital. Over the past year, 075 has advanced to the joint venture account (described below) CDN$506,000 (US$436,000) in exploration funding commitments to advance the Kaibab Joint Venture. 075 is currently in the process of having its financial statements prepared for its fiscal year end March 31, 2007 and accordingly, all financial disclosure provided by 075 is on an unaudited basis.

075 and its joint venture partner, DIR Exploration, Inc. ("DIR"), an Arizona private corporation, have been active in uranium breccia pipe exploration in the Arizona Strip situated in the northwestern portion of Arizona, where 075 and DIR are currently carrying out the Phase I program of the Kaibab Joint Venture. By incurring US $2,000,000 in exploration expenditures on the Kaibab Joint Venture project over 3 years, 075 will earn a 50% interest in nineteen DIR breccia pipe prospects covered by 47 lode mining claims, as well as in all other breccia pipe prospects acquired by the joint venture in the intervening time. 075 may incur these expenditures on the existing claims owned by the Kaibab Joint Venture or on any additional lode mining claims which the joint venture acquires over the initial three years of its operations. At the time that 075 completes the first US$500,000 in exploration expenditures, DIR will begin to transfer its interest in the Joint Venture to 075 on a pro rata basis. Upon vesting of its 50% ownership interest in the Kaibab Joint Venture, 075 may elect, at its sole discretion, to increase its interest to 90% by agreeing to carry DIR's pro rata exploration and development costs in the joint venture to commercial production.

DIR created and managed a previous uranium exploration program in the Kaibab Joint Venture exploration area that ended in 1993 when the price of uranium declined. These historic exploration programs included surface geochemical and geophysical surveys, followed by both shallow and deep drilling programs. DIR is controlled by Larry D. Turner (M.Sc., Geology/M. Sc., Mineral Economics) of Palisade, Colorado, and by I. L. Turner (retired M. Sc., P. Geo.) of Golden, Colorado.

Concurrent Financing

In conjunction with the Proposed Acquisition, it is anticipated that certain financings for gross proceeds of up to $3,000,000 will be completed in Naples and 075 concurrently with the closing of the Qualifying Transaction. Firstly, Integral Wealth Securities Limited ("Integral") has agreed, in principle, to act as agent for Naples, on a commercially reasonable efforts basis, in respect of a minimum $1 million and maximum $1.5 million offering of units ("Units"), at a price of $0.50 per Unit (the "Naples Financing"). Each Unit shall be comprised of one common share of Naples, and one-half of one purchase warrant, exercisable at a price of $0.65 for a period of 15 months from closing. The expiry of the warrants may be reduced upon notice to holders and at the election of Naples if, after the expiry of a potential four month hold period, the price of the common shares trade on the TSX-Venture Exchange at a price equal or greater than $0.80 for 20 consecutive trading days. The Naples Financing will be offered by way of a Short Form Offering Document ("SFOD") or such other form of financing pursuant to applicable prospectus exemptions to subscribers resident in Alberta and British Columbia, and it may include selling groups. A commission of 8 1/2 % of the gross proceeds raised for the Naples Financing will be paid to Integral, as well as the issuance of a number of warrants equal to 10% of the total Units subscribed for, issuable upon the same terms as the Naples Financing. In addition to this, Integral will receive a corporate finance fee of $20,000, payable in a number of common shares at a deemed price equal to the price of the Units.

Simultaneously, it is anticipated that 075 will complete an offering of up to $1,500,000 ("075 Offering") upon the same terms and conditions as the Naples Financing, to accredited investors resident in Ontario through a limited market dealer. The limited market dealer is unknown as at the date hereof, however, in the event that a commission or finders fee is payable pursuant to the 075 Offering, the terms of payment would be not more than those payable pursuant to the Naples Financing.

It is anticipated that none of the securities issued pursuant to the Naples Financing and the 075 Offering will be subject to trading restrictions, other than Naples shares sold under the SFOD to designated hold purchasers. The funds raised under these offerings, assuming closing, will be used to carry out exploration and development work on the properties which are the subject of the Kaibab Joint Venture, to enable the Kaibab Joint Venture to acquire further claims in the area and for general corporate and working capital purposes.

Transfer of Existing Naples Escrow Shares

Under a separate agreement, in principle, the seven current holders of Naples escrow shares (the "Escrow Shareholders") will, subject to Exchange approval, sell, pro-rata, an aggregate of 1,500,000 Naples common shares held in escrow (the "Escrow Shares") to a number of unrelated purchasers identified by 075, at a price of $0.15 per share, payable on closing of the Qualifying Transaction. This transaction will be subject to the Escrow Shareholders obtaining an exemption order from the applicable securities regulatory authorities or the number of shareholders transferring escrow shares being reduced to five persons in order to rely upon exemptions from applicable securities legislation.

Related Matters

The Proposed Acquisition has been negotiated at arm's length and is not a "non arm's length qualifying transaction" as such term is defined by the Exchange's policies. As such, and pursuant to the policies of the Exchange, it is not anticipated that a meeting of the shareholders of Naples will be required. Integral will receive 150,000 Naples common shares, as a finder's fee, for identifying the Proposed Acquisition, subject to successful completion of the Proposed Acquisition and completion of the Qualifying Transaction.

As of the date of this press release, Naples has 3,500,000 common shares issued and outstanding, 4,000,000 on a fully-diluted basis. 075 has 14,507,167 shares issued and outstanding, and it is contemplated that an additional 200,000 common shares will be issued to DIR pursuant to the Kaibab Joint Venture.

Assuming the Naples Financing and 075 Offering are completed in the aggregate amount of $3 million, approximately 6,000,000 new shares of Naples and 075 will be issued, in addition to the common shares of Naples proposed to be issued to the current shareholders of 075, in consideration of the acquisition by Naples of the 075 Shares. There will be no consolidation of the share capital of Naples.

Insiders and Board of Directors of Resulting Issuer:

Upon closing of the Qualifying Transaction, Jennifer L. Boyle, B.A., LL.B, Pamela D. Strand, P. Geol., Marni Wieshofer, C.A., M.B.A., and Judy Baker, B.Sc. Geol. Eng., M.B.A. will be the directors of Naples and insiders of Naples, along with other persons who will fill the roles of vice president, exploration (Scott Jobin-Bevans Ph.D., P. Geol.), corporate secretary (Shanda Theaker, B.A.), vice president business development, (Carrie Howes, B.A.) and chief financial officer (Annie Karahissarian, B.Comm).

Jennifer Boyle and Pamela Strand are the founders of 075, and will be primarily responsible for the operations, management and direction of Naples, going forward. Ms. Boyle was a Director and Executive Vice President of Canadian Royalties Inc. (TSX:CZZ) from 1998 to 2006 and a co-founder and Executive Vice President of Golden Valley Mines Ltd. (TSX-V:GZZ) since 2002. She will act as Director, President and CEO of Naples upon completion of the Qualifying Transaction. Pamela Strand is President of Shear Minerals Ltd. (TSX-V:SRM) and will become chairperson of the board of directors of Naples. Also joining the board will be Marni Wieshofer. Ms. Wieshofer is currently the Executive Vice President, Corporate Development, of Lions Gate Entertainment Corp. ("Lionsgate"), based in Santa Monica, California. Ms. Wieshofer is the former CFO of Lions Gate, is an integral member of the company's senior executive management team and is instrumental in the design and facilitation of its domestic and international financial and strategic initiatives. Prior to joining Lionsgate, Ms. Weishofer was Vice President, Finance, with Alliance Atlantis Communications in Toronto, Ontario. Ms. Baker is currently the Vice President, Investor Relations and Business Development for Nevsun Resources Ltd. based in Vancouver, B.C. Ms. Baker holds an Honours B.Sc. Geological Engineering in Mineral Resources Exploration and a M.B.A., and has fourteen years of experience in the mining and mineral exploration sector including equity analysis, fund management and exploration activity. Prior to joining Nevsun, Ms. Baker was the North American Business Manager for Quantec Geoscience.

Scott Jobin-Bevans has been acting as 075's Vice-President, Exploration since June, 2006, and is currently the managing director of Caracle Creek International Consulting - a private geological consulting firm having an office in Sudbury, Ontario, Toronto, Ontario, and Johannesburg, SA. Dr. Jobin-Bevans has held various roles as vice-president exploration in the mining industry, and currently sits as the Second Vice-President and Director of the PDAC. Annie Karahissarian holds a B.Comm from Ecole des Hautes Etudes Commericales de Montreal (affiliated to University of Montreal), and has been Controller of Canadian Royalties Inc. (TSX:CZZ) and since 2004. Shanda Theaker currently holds office as Corporate Secretary of Richview Resources Inc. (TSX:RVR) in Toronto, ON, and prior thereto, Ms. Theaker worked as Investor Relations manager for North American Palladium Ltd. (TSX:PDL; AMEX;PAL) of Toronto, ON, in corporate compliance for Simberi Mining Corporation (TSX-V:SAU), and in the legal department of both Canadian Royalties Inc. (TSX:CZZ) and Golden Valley Mines Ltd. (TSX-V:GZZ) in Montreal. Ms. Theaker also works part time at researching various companies and projects for the purpose of brokering joint venture transactions in the mineral industry. Carrie Howes, B.A. (Hons), formerly of Toronto, Ontario, worked as an Institutional Broker for Union Securities International Ltd. (London), and has recently been developing a niche working in small and micro-cap equity sales, inclusive of IPO's, with a concentration on the North American markets. Subsequently, Ms. Howes became the UK Director of Investor Relations for MCC Global, a company specializing in raising capital for small cap companies, and is currently the Investor Relations Director of Proactive Investors and manages monthly Forums.

Sponsorship

In the event that sponsorship is required, Integral has agreed, in principle, to act as sponsor in connection with the Proposed Acquisition, subject to completion of required due diligence and the execution of a formal sponsorship agreement. If signed, an agreement to sponsor should not be construed as any assurance with respect to the merits of the Proposed Acquisition or the likelihood of completion of the Proposed Acquisition or the Qualifying Transaction.

Description of Significant Conditions to Closing and Requirements of the Exchange

Completion of the Proposed Acquisition is subject to a number of conditions, including but not limited to, Exchange acceptance and completion of the Financing. Completion of the Proposed Acquisition is also conditional upon: (1) satisfactory completion by Naples and 075 of their due diligence reviews; (2) the execution of a definitive agreement to give effect to the Proposed Acquisition, such agreement to contain customary representations, warranties, covenants, indemnifications and closing conditions for a transaction of this nature; (3) closing of the Naples Financing, with the combined funds raised by 075, under the 075 Offering, and by Naples being at least $1,400,000, in the aggregate; (4) closing of the purchase and sale of the Escrow Shares; and (5) receipt of all required shareholder approvals and the receipt of all required regulatory and TSX Venture Exchange approvals and compliance with all applicable regulatory requirements and conditions.

There can be no assurance that the Proposed Acquisition will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the filing statement to be prepared in connection with the Proposed Acquisition, any information released or received with respect to the Proposed Acquisition may not be accurate or complete and should not be relied upon. Trading in the securities of a Capital Pool Company, such as Naples, should be considered highly speculative.

The securities of Naples and 075 have not been, and after the closing of the Proposed Acquisition, will not be, registered under the United States Securities Act of 1933, as amended, or the securities laws of any state, and may not be offered or sold in the United States or to any "US Person" (as defined in Regulation S under the Securities Act of 1933) absent registration or an exemption from registration.

THIS PRESS RELEASE, REQUIRED BY APPLICABLE CANADIAN LAWS, IS NOT FOR DISTRIBUTION TO U.S. NEWS SERVICES OR FOR DISSEMINATION IN THE UNITED STATES, AND DOES NOT CONSTITUTE AN OFFER OF THE SECURITIES DESCRIBED HEREIN. THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO U.S. PERSONS UNLESS REGISTERED OR EXEMPT THEREFROM.

The TSX Venture Exchange has in no way passed upon the merits of the Proposed Acquisition and has neither approved nor disapproved the contents of this press release. The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Naples Capital Corp.
    Michael G. Thomson
    President
    (239) 390-3334
    or
    Naples Capital Corp.
    Bill DeJong
    Director
    (403) 268-6827