NXA Inc.
NEX BOARD : NXI.H

June 12, 2007 17:58 ET

NXA Inc. Announces Closing of Change of Business Transaction

TORONTO, ONTARIO--(Marketwire - June 12, 2007) - NXA INC. ("NXA" or the "Company")(NEX:NXI.H) is pleased to announce today the closing of its previously announced change of business transaction (the "Change of Business Transaction") following receipt of shareholder and TSX Venture Exchange (the "Exchange") approvals, pursuant to which NXA will continue its business operations as a mining company. The Company has entered into two agreements with 1698727 Ontario Inc. (the "Vendor") to acquire, pursuant to an assignment and assumption agreement (the "Assignment Agreement") and a mining claims acquisition agreement (the "Acquisition Agreement", and together with the Assignment Agreement, the "Agreements")), each dated November 23, 2006, the Vendor's rights in seven contiguous mining claims in British Columbia (the "Acquisition") known as the Topley Richfield property (the "Property"). Please see the Company's press release dated November 27, 2006 as well as the management information circular of the Company dated April 10, 2007, each of which is available on www.SEDAR.com, for more information with respect to the Property, the Agreements and the Acquisition. The Company has also filed a technical report on SEDAR which contains detailed information in respect of the Property. The Company expects to begin trading on Tier 2 of the Exchange on June 14, 2007 under the symbol "NXI".

THE AGREEMENTS

The terms of the Assignment Agreement provide, among other things, that NXA will be assigned all of the rights and obligations of the Vendor, a private Ontario corporation all of the shares of which are held by a single individual who is at arm's length from the Company, under an option agreement (the "Underlying Agreement") between the Vendor and the registered claimholders (the "Claimholders") of three of the mining claims comprising the Property. As assignee of the Vendor's interest, NXA may earn a 100% interest in these three claims partially comprising the Property. In order to earn such interest, NXA will assume the obligations of the Vendor in the Underlying Agreement, which obligations include the payment of a total of $120,000 and the issuance of 400,000 common shares of NXA over a four year period. The Underlying Agreement also provides for a 2% net smelter return royalty in favour of the Claimholders. In addition, NXA must incur a total of $700,000 in exploration expenditures over a four year period. As consideration for the assignment, NXA will issue the equivalent of $100,000 of its common shares at a deemed price of $0.08 to the Vendor.

The terms of the Acquisition Agreement provide that NXA will acquire the remaining four mining claims comprising the Property by issuing to the Vendor the equivalent of $100,000 at a deemed price of $0.08 in common shares, half of which will be issued immediately upon receipt of shareholder and regulatory approvals and half will be issued on the first anniversary of receipt of such approvals. The number of common shares to be issued pursuant to the second instalment will be reduced by $36,000 previously loaned to the Vendor. This agreement also provides for a 2% net smelter return royalty in favour of the Vendor.

Consequently, upon graduation to Tier 2, there will be 21,337,055 common shares of NXA outstanding as the Company will issue a total of 1,875,000 common shares to the Vendor, being 1,250,000 common shares pursuant to the Assignment Agreement and 625,000 shares as the first instalment under the Acquisition Agreement. A further 175,000 common shares will be issued to the Vendor on the one-year annivarsary of such graduation (being the second and final instalment under the Acquisition Agreement).

FINANCING

In order to finance the costs of its Change of Business Transaction and to meet minimum listing requirements of Tier 2 of the TSXVE, NXA completed the first closing of a non-brokered private placement (the "Offering") on December 29, 2006 of 6,263,334 flow through units (the "Flow Through Units"), each Flow Through Unit comprised of one common share which qualifies as a "flow-through share" for purposes of the Income Tax Act (Canada) (the "Flow-Through Shares") and one common share purchase warrant (the "Warrant"), at a price of $0.06 per Flow-Through Unit, and 278,333 units (the "Units") of the Corporation, each Unit consisting of one common share and one Warrant, at a price of $0.06 per Unit, for gross proceeds of $392,500. Each Warrant is exercisable to acquire one common share at a price of $0.10 per common share for a period of one year following the issuance of the Warrants. On March 9, 2007, the Corporation completed the second closing of the Offering of 2,106,667 Units for gross proceeds of $126,400. On April 16, 2007, the Corporation completed the third and final closing of the Offering of 840,000 Units for gross proceeds of $50,400. Aggregate gross proceeds of the three closings of the Offering were $569,300.

ABOUT NXA

NXA is a mineral exploration company with properties in British Columbia, Canada.

FORWARD-LOOKING STATEMENTS

Some statements herein are forward-looking statements. These statements address future events and conditions and, as such, involve inherent risks and uncertainties. Actual results could be significantly different from those anticipated in the forward-looking statements, and therefore readers should not place undue reliance on the forward-looking statements.

Shares Outstanding: 19,462,055

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of the information contained herein.

Contact Information

  • NXA INC.
    Chuck Lilly
    Chief Financial Officer
    (705) 522-2400, ext. 207