Navan Capital Corp.

October 20, 2005 18:52 ET

Navan Capital Corp. Announces Proposed Acquisition of Western Uranium Corporation

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Oct. 20, 2005) - Navan Capital Corp. (the "Company" or "Navan") (TSX VENTURE:NCN) is pleased to announce that the Company has entered into a Letter of Intent, dated October 6, 2005, as amended by an amending letter dated October 20, 2005, to acquire (the "Acquisition") all of the issued and outstanding shares of Western Uranium Corporation ("WUC"), a British Columbia corporation, from WUC's shareholders (the "Shareholders"). WUC has an interest in properties in Nevada and New Mexico which properties were previously explored by Chevron Resources and Conoco. Based on historical data prepared by Chevron and Conoco, which data pre-dates the implementation of, and was not prepared or presented in accordance with the requirements of NI 43-101, WUC estimates that these properties contain an aggregate of 13.5 million pounds of U3O8 inferred mineral resources comprised of 2.5 million pounds at 0.22% U3O8 on the property previously explored by Conoco and 11.0 million pounds at 0.15% U3O8 on the property previously explored by Chevron. WUC has not done the work necessary to verify the classification of the resource and is not treating the data as a NI 43-101 defined resource verified by a Qualified Person. Accordingly, the historical estimate should not be relied upon. However, WUC believes that the data supplied by Chevron and Conoco is relevant and has no reason to believe that the data is not reliable. WUC has engaged a Qualified Person to prepare a technical report in respect of the Nevada and New Mexico properties and proposes to file the reports when they are available.

The Acquisition will result in a change in control of Navan and constitutes a reverse takeover under the policies of the TSX Venture Exchange (the "Exchange").

Navan is an investment company which invests primarily in debt and securities of public and private companies. Navan was a capital pool company. It completed its qualifying transaction in June, 2004 by the acquisition of Kenmare Capital Corporation ("Kenmare"), a company with an investment portfolio. Navan and Kenmare amalgamated in September, 2004. The Company believes that, given the current economic climate and interest rate environment, the Acquisition presents a better opportunity than the Company's current business.

Transaction Terms

The Company will purchase from the Shareholders, all of WUC's issued and outstanding common shares (the "WUC Shares"). As consideration for the WUC Shares, Navan will issue common shares (the "Transaction Shares") in the share capital of Navan on a 1:1 basis, subject to a maximum of 30,493,001 Transaction Shares. Those Transaction Shares held by principals of Navan subsequent to the completion of the Acquisition will be subject to the escrow restrictions pursuant to Exchange Policy 5.4 and an escrow agreement to be entered into by Navan, the principal Shareholders, and Navan's transfer agent in the form prescribed by the Exchange. The escrowed shares will be released in accordance with the policies of the Exchange. All of the Transaction Shares, including the Transaction Shares not subject to escrow, will be subject to other resale restrictions as may be prescribed by applicable securities laws.

The WUC Shares to be acquired by Navan includes 350,000 common shares of WUC to be issued on the exercise of outstanding options prior to the completion of the Acquisition. Also prior to the completion of the Acquisition WUC proposes to complete a brokered private placement of up to 7,500,000 common shares at a price per common share to be determined. In conjunction with the private placement WUC will also issue broker warrants which, together with any outstanding share purchase warrants will, on closing, be exchanged for share purchase warrants of Navan having the same terms and conditions.

Immediately prior to the closing of the Acquisition, principals of WUC will acquire 1 million issued common shares of Navan, including 900,000 common shares to be transferred within escrow. All of the issued preferred shares of Navan will be redeemed in consideration of payment of an amount equal to Cdn $2 million and accrued and unpaid dividends and the issuance of up to 350,000 shares of Navan.

Western Uranium Corporation

WUC is a private British Columbia corporation which, through Western Energy Development Corp., its wholly owned US subsidiary, currently holds the right to two uranium projects in the United States, one near McDermitt, Nevada, and one near Grants, New Mexico. The McDermitt project is comprised of approximately 2,500 claims (approximately 55,000 acres). Twenty-seven of these claims, together with approximately $5 million of data generated by Chevron Resources during their work on the project in the late 1970's, were acquired under an option agreement. The remaining claims were staked by WUC. The Grants project is located in the Grants Mineral Belt. WUC's interest in the Grants project is held through a lease and federal mining claims. Both are considered by WUC to have favourable exploration potential.

WUC has raised US $2.45 million to date. WUC's current working capital of approximately US$600,000, together with the net proceeds of the above described private placement and the proceeds from the exercise of outstanding options, will principally be allocated for the development of its properties and potential property acquisitions. WUC is arm's length to the Company. Upon the completion of the brokered private placement and the Acquisition, none of the Shareholders will beneficially own, directly or indirectly, or exercise control or direction over shares carrying 10% or more of the voting rights attached to all shares of the Company.

WUC Management

Upon completion of the Acquisition, most of the current directors of Navan will resign and the Board will be comprised of five individuals, including Pamela Klessig, currently the President and Chief Executive Officer of WUC, John Proust and Debra Struhsacker. Ms. Klessig has more than 25 years of global resource exploration, evaluation, development and production experience and has been previously employed by British Petroleum, Kennecott, Homestake and others. Ms. Struhsacker also has an extensive background working on permitting and governmental issues relating to mining, natural resource development and environmental issues and is concurrently employed with Kinross Gold as Vice-President - U.S. Governmental and Regulatory Affairs. Mr. Proust has advised public and private companies with respect to debt and equity financings, mergers and acquisitions and corporate restructuring since 1986. He has served on boards and in senior operating positions for numerous public companies including, currently, as president, CEO and a director of Southern Arc Minerals Inc. and as president and a director of Signature Resources Ltd. and TelcoPlus Enterprises Inc. Mr. Proust holds the designation of Chartered Director, awarded by Michael G. De Groote School of Business, McMaster University.

Other Matters

The information with respect to WUC disclosed above has been provided by WUC. Completion of the Acquisition is subject a number of conditions including, but not limited to, the execution of definitive agreements, the receipt of Exchange approval and the approval of the Navan Board of Directors and disinterested shareholders. The Acquisition cannot close until required Shareholder approval is obtained and there can be no assurance that the Acquisition will be completed as proposed, or at all. WUC and the Company propose to request that the Exchange waive the requirement that a Sponsor be engaged in respect of the Acquisition.

Investors are cautioned that, except as disclosed in the Management Information Circular to be prepared in connection with the Acquisition, any information received or released with respect to the Acquisition may not be accurate or complete and should not be relied upon. Trading in the securities of Navan 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 or disapproved of the contents of this press release.

Contact Information

  • Navan Capital Corp.
    A. Murray Sinclair
    (604) 689-1428
    Navan Capital Corp.
    Brian E. Bayley
    (604) 689-1428
    (604) 681-4692 (FAX)
    Western Uranium Corporation
    John Proust
    (604) 669-6446