Newstrike Capital Inc.
NEX BOARD : NES.H

Newstrike Capital Inc.

May 04, 2007 18:02 ET

Newstrike to Acquire Stans Energy Corp.

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - May 4, 2007) -

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Newstrike Capital Inc. (NEX:NES.H) (the "Company" or "Newstrike") is pleased to announce that it has entered into a Letter Agreement dated May 2, 2007 with Stans Energy Corp. ("Stans Energy" or "Stans") under which Newstrike has agreed to acquire all of the issued securities of Stans.

Stans Energy is a junior mining exploration and development company engaged in the acquisition, exploration and development of mineral resource properties in the Kyrgyz Republic. Through its wholly owned subsidiary, Stans Energy Corp. KG, it holds three properties in the Kyrgyz Republic.

The acquisition of Stans (the "Acquisition") will constitute a reverse take-over of the Company under the policies of the TSX Venture Exchange (the "Exchange"). The Company is currently listed on the NEX board of the Exchange and, on the closing of the Acquisition, the Company will apply to graduate from the NEX board to Tier 1 or Tier 2 of the Exchange.

Proposed transactions

Under the terms of the Letter Agreement, Newstrike has agreed, subject to receipt of the approval of the Exchange and the shareholders of the Company and all other required approvals, to acquire all of the issued shares and convertible securities of Stans Energy in exchange for shares of the Company and to change its name. The parties have agreed to work together to determine the appropriate structure for the Acquisition, whether by purchase and sale, plan of arrangement, amalgamation or otherwise.

The Acquisition will be carried out on an arm's length basis. None of the insiders of Newstrike are insiders of Stans Energy or own, directly or indirectly, any of the issued securities of Stans Energy.

Under the terms of the Acquisition, Newstrike will acquire all of the issued and outstanding common shares of Stans Energy on the basis of three common shares of Newstrike for each issued common share of Stans Energy. In addition, Newstrike will acquire any outstanding convertible securities of Stans in exchange for a comparable security of Newstrike.

Stans Energy will have about 25.5 million shares issued and outstanding prior to the closing of the Acquisition that are currently owned by over 90 registered shareholders, none of whom own more than 10% of the issued shares. Accordingly, Newstrike will issue approximately 76.5 million shares to acquire all of the issued and outstanding shares of Stans Energy.

Concurrently with the closing of the Acquisition, Newstrike has agreed to change its name to "Stans Energy Corp.".

Newstrike has also entered into an Engagement Letter with Haywood Securities Inc. under which Newstrike engaged Haywood as its agent in connection with a private placement of 12 million common shares of Newstrike at a price of $1.25 per share to raise, on a commercially reasonable efforts basis, gross proceeds of $15 million. A commission of 5% of the gross proceeds will be payable in cash on closing which will occur concurrently with the closing of the Acquisition.

On closing, Newstrike will have approximately 135 million issued common shares, plus options and warrants to purchase additional common shares.

Business of Stans Energy

Stans Energy is a junior mining exploration and development company incorporated in Ontario that is engaged in the acquisition, exploration and development of mineral resource properties in the Kyrgyz Republic.

Since incorporation, Stans Energy has acquired through its wholly owned subsidiary, Stans Energy KG, a 100% interest in the mining claims comprising three properties in the Kyrgyz Republic: (i) Shaltin located near Bishkek in northern Kyrgyzstan, (ii) Kapkatash located in southern Kyrgyzstan, and (iii) Kyzyluraan located near the Toktogul Reservoir in Central Kyrgyzstan.

Stans Energy also holds an option in trust (Alamuduun) and is negotiating several other licences. In addition, Stans Energy recently submitted a tender bid to the Government of Kyrgyzstan for its 72.28% ownership of Kara-Balta Ore Mining Combine JSC.

Stans Energy has raised $9.75 million through the sale of securities and has expended approximately $1.6 million on property acquisitions and exploration. It currently has approximately $7 million in cash on hand with no debt. The proceeds from the proposed $15 million financing will enable Stans Energy to continue its aggressive acquisition and exploration and development strategy in Russia and the former Soviet Union.

Directors and senior officers of the resulting issuer

On completion of the Acquisition, the directors and senior officers of the resulting issuer are anticipated to be:

Robert J. Mackay, President, Chief Executive Officer and Director

Mr. Mackay is the President, Chief Executive Officer and a director of Stans Energy. Mr. Mackay graduated from the Haileybury School of Mines in 1975. In 1980, he obtained a mining engineering degree from The South Dakota School of Mines Technology. Mr. Mackay spent 20 years in the investment business and, during this time, was Vice President of two national brokerage firms. In 2000, Mr. Mackay founded a private consulting business through which he consulted as Project Engineer on projects in Canada, the US, China and Africa. Throughout his career, Mr. Mackay has gained extensive experience in mining, mine planning, surveying, grade control, industrial engineering, open pit and underground production.

Marat Fazlullin, Chairman and Director

Mr. Fazlullin is the Chairman and a director of Stans Energy. Dr. Fazlullin is a leading expert on acid In Situ Leach (ISL) uranium mining technologies. He is a Professor, holds a Doctor of Science (engineering) and is a Member of the Mineral Resources International Academy and Honorable Geologist of the Russian Federation. Dr Fazlulin has authored over 300 publications on uranium and gold-ore deposits and has co-authored papers on the development of the uranium deposits in Uzbekistan, Kazakhstan and Russia. Dr. Fazlullin has acted as both the Head of and Chief Engineer of prospecting teams and expeditions for poly-metallic, mercury deposits, oil and gas fields located in Kyrgyzstan, Tajikistan and Algeria. Dr. Fazlullin worked for many years in the State Scientific & Research Institute of Chemical Technologies of Rosatom former USSR Medium Machinery Production Ministry. Until 1992, he was the Deputy Director of the Institute, Head of Department and Director of Division responsible for prospecting and exploitation of uranium and gold deposits. He is currently the Senior Advisory to the Director of the Institute and Director General of "GEOTEP", the leading private uranium engineering company in CIS.

Rodney Irwin, Director

Mr. Irwin is a director of Stans Energy. Mr. Irwin is the retired Canadian Ambassador to Russia. Mr. Irwin joined the department of External Affairs in Ottawa in 1972. Between 1972 and 1990, he served abroad in New Delhi, Moscow and Port of Spain; in 1988 Mr. Irwin was appointed High Commissioner to Trinidad & Tobago. In 1992, Mr. Irwin was named Ambassador to Yugoslavia, due to the war with Croatia, Mr. Irwin served as Ambassador to Albania, Bulgaria, Slovenia and Croatia. From 1993 to 1996, Mr. Irwin served as Ambassador to Hungary while retaining his Balkan country accreditations. From 1999 to 2003, Mr. Irwin served as Ambassador to the Russian Federation with concurrent accreditation to the Republics of Armenia and Uzbekistan. Mr. Irwin retired to Ottawa in 2003 after 32 yeas in the foreign service.

Doug Underhill, Director

Mr. Underhill is a director of Stans Energy. Mr. Underhill is a uranium consultant and holds graduate degrees in geology from McGill and McMaster Universities, as well as a MBA in strategic planning and finance. From 1993 to 2000, Mr Underhill was the Uranium Resource & Production Specialist for the International Atomic Energy Agency (IAEA) in Vienna. He was responsible for the worldwide IAEA uranium supply program, as well as representing the IAEA in the Joint IAEA-NEA/OECD Uranium Group. To evaluate the uranium supply from the CIS countries he worked with uranium specialists, including those from Kazakhstan, Russia, Ukraine and Uzbekistan, in organizing international meetings and preparing reports on the uranium resources and production technologies of the region. Mr. Underhill has also acted as a Senior Consultant with NAC International (USA) responsible for consulting on uranium supply strategy and maintaining a worldwide uranium production projects database. He has 40 years minerals experience with both industry and governmental organizations, with nearly 30 years dedicated to uranium.

Boris Aryev, Chief Operating Officer and Director

Mr. Aryev is the Chief Operating Officer and a director of Stans Energy. Mr. Aryev is the founding director and member of the National Board of the Canada-Eurasia Russia Business Association as well as founder and chairman of its Mining and Northern Development Committees. He graduated in 1972 from USSR State Institute of Civil Aviation in Riga, Latvia. From 1972 to 1982 Mr. Aryev worked in Riga branch of Central Research Institute of Communication Science of the Ministry of Communications of the USSR. From 1983 to 1986, Mr. Aryev was a software development consultant with NCR Canada Limited and OPTIMOD Inc. Between 1986 and 1996, he worked as a Project Leader and consultant with Verifact Inc. Since 1990, Mr. Aryev has been President of Marhope Systems Inc., a company which provides management/consulting services to public and private sectors. Mr. Aryev is the co-founder of Canada-Russia Intergovernmental Economic Commission Minerals Working Group.

Gerald Ruth, Chief Financial Officer and Director

Mr. Ruth is the Chief Financial Officer and a director of Stans Energy. Mr. Ruth is a Chartered Accountant who graduated from Wilfrid Laurier University with a Bachelor of Business Administration (Hons.) in 1981. He was employed for several years in the public accounting field with Coopers and Lybrand followed by KPMG Peat Marwick. From 1988 to 2003, Mr. Ruth held various positions of increasing responsibility with the Toronto Stock Exchange where he served as Head of Listings from 1997 to 2003 with responsibility for operations, policy and management within the Listings Group. Mr. Ruth is currently also a director of Western Goldfields, Inc., a mining company listed on the Toronto Stock Exchange, and a director and officer of Greenwich Global Capital Inc. and Yonge Street Capital Corp., both capital pool companies listed on the TSX Venture Exchange. Mr. Ruth is also President and CEO of York Street Capital Corp., a limited market dealer involved in corporate finance and capital markets advisory services.

Gordon R. Baker, Q.C., Secretary

Gordon R. Baker, Q.C. is a lawyer practicing in the areas of tax and business law in Toronto, Ontario. He has acted for a number of public and private Canadian and multi-national clients, as general counsel or special counsel for specific projects. He is a director and member of the audit committee of Jemtec Inc. which trades on the TSX Venture Exchange.

Conditions precedent to closing Acquisition

The parties' obligations to complete the Acquisition and related transactions are subject to the satisfaction of the usual conditions precedent including:

(a) all necessary approvals to enable the Acquisition to be carried out have been obtained from the Exchange, the shareholders of Newstrike and Stans, and all other regulatory authorities and third parties having jurisdiction;

(b) all necessary approvals to enable the name change to be effected on the closing of the Acquisition have been obtained; and

(c) the parties being satisfied with the results of their due diligence reviews.

General

Completion of this transaction is subject to a number of conditions, including but not limited to Exchange acceptance and any required disinterested Shareholder approval. 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 information circular 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 Newstrike should be considered highly speculative. Trading in the Company's common shares on the Exchange will be halted pending completion of certain filings by the Company. The TSX Venture Exchange has in no way passed upon the merits of the proposed transaction and has neither approved or disapproved the contents of this press release.

ON BEHALF OF NEWSTRIKE CAPITAL INC.

Bill McCartney, President

Forward-Looking Statements

Any statements made in this press release which are not statements of historical facts may constitute "forward-looking statements", including those concerning the Company's goals, assumptions or expectations. Forward-looking statements are subject to risks, uncertainties and other factors which could cause actual results to differ including, but not limited to receipt of necessary regulatory and shareholder approvals required to complete the Acquisition and financing.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Newstrike Capital Inc.
    Bill McCartney
    (604) 687-0888
    or
    Stans Energy Corp.
    Robert Mackay
    (416) 452-0890
    Website: www.stansenergy.com