Nebo Capital Corp.

TSX VENTURE : NBO.P


December 03, 2013 13:00 ET

Nebo Capital Corp. Announces Letter of Intent with Lara Exploration Ltd. and Kiwanda Mines (NA) LLC

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Dec. 3, 2013) -

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF U.S. SECURITIES LAWS.

Nebo Capital Corp. (the "Corporation") (TSX VENTURE:NBO.P) is pleased to announce that it has entered into a letter of intent dated November 29, 2013 (the "Letter of Intent") with Lara Exploration Ltd. ("Lara") and privately held Kiwanda Mines (NA) LLC ("Kiwanda"), wherein the Corporation will acquire the interests held by Lara and Kiwanda in certain mineral exploration properties and assets (the "Properties") located in Colombia (the "Acquisition"). Concurrent with the Acquisition, the Corporation intends to consolidate its common shares on a 3-1 basis, change its name and complete the Private Placement, as described below.

The Corporation is a capital pool company and intends for the Acquisition to constitute the "Qualifying Transaction" of the Corporation as such term is defined in the policies of the TSX Venture Exchange (the "Exchange"). The Acquisition is an arm's length transaction. Upon completion of the Acquisition, it is expected that the Corporation will be a Tier 2 Mining Issuer.

Lara is a publicly traded mineral exploration company existing under the laws of British Columbia whose shares trade on the TSX Venture Exchange under the symbol "LRA". Kiwanda is a private limited liability company existing under the laws of the State of Oregon, USA.

Highlights of the Acquisition

Under the terms of the Letter of Intent, the Corporation, Lara and Kiwanda will negotiate and enter into a definitive agreement incorporating the principal terms of the Acquisition as described in this press release, and in addition, such other terms and provisions of a more detailed nature as the parties may agree upon. However, there is no assurance that a definitive agreement will be successfully negotiated or entered into.

The Corporation intends to acquire the interests of Lara and Kiwanda in the Properties (as described below) indirectly by the acquisition of 100% of the issued and outstanding shares in a newly incorporated company ( "BC Newco") in consideration for a total of 10,000,000 post consolidated common shares ("Post Consolidated Common Shares") in the capital of the Corporation. The Post Consolidated Common Shares will be issued at a deemed price of CAD $0.50 per share representing a deemed acquisition value of $5,000,000.

Upon completion of the Acquisition, the Corporation will be engaged in the business of exploring for, with the ultimate goal of developing and producing coal from the Properties. In addition, the Corporation may explore and develop such other properties and interests as may be subsequently acquired by the Corporation.

The Corporation currently has 2,320,000 Common Shares issued and outstanding and options to acquire 250,000 Common Shares outstanding. The Corporation intends to request approval from the shareholders for the consolidation of the common shares on a 1 new for every 3 old common shares issued and outstanding.

Given effect to the proposed 1 new for 3 old consolidation, upon closing of the Acquisition and the completing the maximum amount of the Private Placement (as described below), it is expected that the Corporation will have approximately 20,783,333 Post Consolidated Common Shares issued and outstanding and options plus warrants to acquire 10,083,333 Post Consolidated Common Shares outstanding.

The Properties

It is anticipated that Lara and Kiwanda will transfer the following assets/rights into BC Newco that will then be acquired by the Corporation. BC Newco is anticipated to hold:

  1. a 19.91% equity interest in Carbhid SAS ("Carbhid"), a Bogota, Colombia-based coal producer which holds an operating contract on the Escalones concession in the Boyaca district, where it is developing underground coal mining operations targeting thermal- and metallurgical-grade coal. During 2012, Carbhid completed the El Diamante inclined shaft and related reserve development, which began small-scale production for sale to a local thermoelectric power plant in mid-2013. BC Newco will also have the option to acquire a 51% interest in the Escalones coal mining lease.
  2. the option to acquire a 75% interest in the Pelaya exploration prospect, in the Cesar district of northern Colombia. The approximately 1,600-hectare Pelaya prospect lies at the southern end of one of the principal coal-producing basins of Colombia, covering an area not previously drill tested. The option calls for cash payments of $3.8-million (U.S.) payable over five years. (see Lara press release dated November 18, 2013.) and
  3. a 100% interest in Andean Coal Alliance (BVI) Ltd (the "Coal Alliance").

Andre Gauthier, Lara's president, a member of the Quebec Order of Engineers, is a qualified person as defined by National Instrument 43-101 - Standards of Disclosure for Mineral Projects, and has verified and approved the disclosure of the technical information in this news release.

Private Placement

The Acquisition is subject to the raising of gross proceeds of a minimum of $4,000,000 and a maximum of $6,000,000 through the issuance of subscription receipts of the Corporation (the "Subscription Receipts") at a price of $0.50 per Subscription Receipt. Each Subscription Receipt shall entitle the holder to acquire a Unit (as described below) of the Corporation for no additional consideration. Each Unit shall consist of one Post-Consolidated Common Share and one common share purchase warrant in the Corporation ("Warrants'). Each Warrant shall entitle the holder to acquire a Post Consolidated Common Share at an exercise price of $0.75 per Post Consolidated Common Share on the date that is 5 years from the date of issuance.

The gross proceeds from the Private Placement shall be placed with a subscription receipt agent and held until the completion of the Acquisition at which time the Subscription Receipts will be automatically converted into Post Consolidated Common Shares and Warrants and the gross proceeds shall be released to the Corporation. If the Acquisition is not completed within 150 days from the date of completion of the Private Placement, the subscription receipt agent shall return the gross proceeds, plus accrued interest, to the holders of the Subscription Receipts and the Subscription Receipts shall be cancelled and rendered null and void.

It is also anticipated that, in connection with the Acquisition, the proceeds from the Private Placement (as defined below) will be used: (a) to fund the business of the Corporation, including, exploration, development, repayment of a US$400,000 loan to Lara and the general and administrative expenses; (b) for Acquisition expenses; and (c) for general working capital purposes. The securities issued pursuant to the Private Placement (as defined below) may be subject to restricted resale periods in Canada pursuant to applicable securities law and Exchange policy and escrow pursuant to Exchange policy.

The Corporation may pay a cash finder's fee of up to 7% of the proceeds of the Private Placement, if and only if the gross proceeds are released to the Corporation.

Sponsorship of the Acquisition

Sponsorship of a qualifying transaction of a capital pool company is required by the Exchange unless exempt in accordance with the policies of the Exchange.

Additional Information

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

If and when a definitive agreement between the Corporation and Lara and Kiwanda is executed, the Corporation will issue a subsequent press release in accordance with the policies of the Exchange containing the details of the definitive agreement and additional terms of the Acquisition, including information relating to sponsorship, summary financial information in respect of BC Newco, and to the extent not contained in this press release, additional information with respect to the Private Placement, and the proposed directors, officers, and insiders of the Corporation upon completion of the Acquisition.

Completion of the Acquisition is subject to a number of conditions including but not limited to, the closing of Private Placement, Exchange acceptance and if required by Exchange policies, majority of the minority shareholder approval. Where applicable, the Acquisition cannot close until the required shareholder approval is obtained. 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.

A further press release will be prepared and disseminated regarding the Acquisition and related transactions, in due course, in compliance with the policies of the Exchange as information becomes available.

The 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.

Cautionary statements

This news release contains "forward-looking information" within the meaning of applicable securities laws relating to the proposal to complete the Acquisition and associated transactions, including statements regarding the terms and conditions of the Acquisition, the Private Placement, and the use of proceeds of the Private Placement. Readers are cautioned to not place undue reliance on forward-looking information. Actual results and developments may differ materially from those contemplated by these statements depending on, among other things, the risks that the parties will not proceed with the Acquisition, the Private Placement and associated transactions, that the ultimate terms of the Acquisition, the Private Placement and associated transactions will differ from those that currently are contemplated, and that the Acquisition, the Private Placement and associated transactions will not be successfully completed for any reason (including the failure to obtain the required approvals or clearances from regulatory authorities). The statements in this press release are made as of the date of this release. The Corporation undertakes no obligation to comment on analyses, expectations or statements made by third-parties in respect of the Corporation, Lara, Kiwanda, their securities, or their respective financial or operating results or (as applicable).

Neither 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

  • Nebo Capital Corp.
    K. Peter Miller
    Director
    (604) 689-1428