Pannonia Ventures Corp.
TSX VENTURE : PAN.P

June 29, 2011 13:46 ET

Pannonia Ventures Corp. Announces Qualifying Transaction

VANCOUVER, BRITISH COLUMBIA--(Marketwire - June 29, 2011) - Pannonia Ventures Corp. ("Pannonia") (TSX VENTURE:PAN.P) is pleased to announce that it has entered into a definitive option agreement dated June 24, 2011 (the "Agreement") with Aurumbank Incorporated, Watering Hole Productions Inc. and Nevada Pacific Mining Inc. (collectively, the "Optionors"), whereby the Optionors will grant Pannonia an option (the "Option") to acquire up to 100% of the Optionors' 100% interest in certain properties located in the Gold Basin Mining District (collectively, the "Properties"), located in Mohave County, Arizona (the "Transaction"), covering approximately 7,700 acres. The Transaction is intended to be Pannonia's "qualifying transaction" as that term is defined in TSX Venture Exchange (the "Exchange") Policy 2.4 concerning capital pool companies. To date, Pannonia has been a capital pool company with the business of indentifying a "qualifying transaction".

The Transaction will be carried out by parties dealing at arm's length to one another and therefore will not be a Non-Arm's Length Qualifying Transaction, as such term is defined in Exchange Policy 2.4. Pannonia does not expect that approval of its shareholders will be required for the Transaction.

Upon completion of the Transaction, Pannonia expects that it will be classified as a mining issuer under the policies of the Exchange and will be engaged in the exploration and development of prospective gold properties, including the Properties.

Drew Bonnell, President of Pannonia, commented, "As anyone who has organized a CPC knows, a lot of collective effort goes into achieving the "qualifying transaction" milestone. Due to the unique history, geographical setting, and body of work amassed by the Optionors, this Gold Basin acquisition represents an exciting opportunity for Pannonia, and I look forward to announcing progress reports and updates in the near future."

Terms of the Transaction

Under the terms of the Agreement, Pannonia has agreed to acquire from the Optionors up to 100% of the Optionors' right, title and interest in and to the Properties, as further described below.

Pannonia can exercise the first portion of the Option and earn a 45% interest in the Properties (which will include a 100% interest in the portion of the Properties owned by Nevada Pacific Mining Inc. and such other portions of the Properties where Pannonia focuses its exploration during the first Option period) by:

  1. allotting and issuing the Optionors an aggregate of:

    1. 600,000 common shares of Pannonia (each, a "Share") on the date of receipt of final acceptance from the Exchange for the Transaction (the "Effective Date"), and

    2. 600,000 Shares on or before the second anniversary of the Effective Date; and

  2. incurring exploration expenditures on any one or more of the Properties of $1,500,000 on or before the second anniversary of the Effective Date, with a minimum obligation to incur at least $275,000 in exploration expenditures by the first anniversary of the Effective Date.

At its sole election, Pannonia can exercise the second portion of the Option and earn an additional 35% interest in the Properties (which will include such portions of the Properties where Pannonia focuses its exploration during the second Option period) by:

  1. allotting and issuing the Optionors an additional aggregate of:

    1. 1,050,000 Shares on or before the third anniversary of the Effective Date, and

    2. 1,050,000 Shares on or before the fourth anniversary of the Effective Date; and

  2. incurring exploration expenditures on any one or more of the Properties of $2,500,000 (for an aggregate total of $4,000,000) on or before the fourth anniversary of the Effective Date.

At its sole election, Pannonia can exercise the third portion of the Option and earn an additional 20% interest in the Properties, for a total 100% interest, by:

  1. allotting and issuing the Optionors an additional aggregate of:

    1. 1,350,000 Shares on or before the fifth anniversary of the Effective Date, and

    2. 1,350,000 Shares on or before the sixth anniversary of the Effective Date; and

  2. incurring exploration expenditures on any one or more of the Properties of $4,000,000 (for an aggregate total of $8,000,000) on or before the sixth anniversary of the Effective Date.

In the event that Pannonia elects to terminate and abandon the first Option portion prior to exercise, the Option will terminate and Pannonia will be entitled to receive a net smelter returns royalty with respect to the Properties in an amount equal to 0.15% for every $100,000 in exploration expenditures incurred on the Properties by Pannonia prior to termination of the Option.

In the event that Pannonia elects to proceed with the second Option portion or the third Option portion, but subsequently elects to terminate and abandon such Option portion, the Optionors will have the right, for 120 days, to re-purchase any interest in the Properties that Pannonia has earned up to such point at a price equal to current market price. Current market price will be determined by an independent accredited mining evaluator to be mutually agreed upon by Pannonia and the Optionors.

Conditions of Closing

Completion of the Transaction will be subject to certain conditions, including:

  1. Pannonia obtaining a report that is compliant with the terms and provisions of National Instrument 43-101 Standards of Disclosure for Mineral Projects; and

  2. Pannonia and the Optionors' obtaining the consent of any parties from whom consent to the consummation of the Transaction is required, including the Exchange and other applicable regulatory authorities, and the shareholders of Pannonia, if required.

Deposit

Pannonia has provided the Optionors with a non-refundable deposit of $25,000.

Private Placement

Pannonia intends to complete a concurrent private placement financing of common shares in connection with the Transaction for gross proceeds of up to $750,000. The terms of the financing have not been determined as of the date of the press release but will be disclosed in a subsequent press release once determined.

Sponsorship

Pannonia will be relying on an exemption from the sponsorship requirements set out in Exchange Policy 2.2.

The Properties

The Gold Basin Mining District has a well-documented history of gold mining exploration and production activity dating back to the late 1800's. The approximately 7,700 acre properties, consisting of mineral rights and unpatented mining claims, lie on a north westerly bias to the east of the White Hills in northwestern Arizona, approximately 120 kilometres (75 miles) southeast of Las Vegas, Nevada. During the last three decades, considerable exploration activity has been conducted, with results supporting the ongoing exploration of the Properties. For primarily market related reasons, the exploration programs were subsequently interrupted or discontinued. There is no significant financial information respecting the Properties at this time.

Directors, Officers and Insiders

Upon completion of the Transaction, the current directors and officers of Pannonia are expected to remain in their current positions. In addition, Pannonia intends to appoint Mr. Bill Cowie to its board of directors. These persons are expected to be the only insiders of the Company upon completion of the Transaction.

Mr. Cowie has extensive experience in the mining sector, which includes positions as the Inspector of Mines for the Northern Territory Government, Australia, as a mining engineer for various companies and as Operations Manager for L&M Mining, New Zealand. Mr. Cowie holds a Bachelor of Science, Honours, degree in Mineral Technology from the University of Otago in New Zealand. His professional affiliations include the Australasian Institute of Mining and Metallurgy.

About the Optionors

Each of the Optionors are incorporated under the laws of the State of Nevada. The Optionors have no controlling shareholders, other than Watering Hole Productions Inc. ("Watering Hole"), which is a wholly-owned subsidiary of Aurumbank Incorporated ("Aurumbank"). Mr. Alan Brown of Auckland, New Zealand, and Mr. Michael Smith of Las Vegas, Nevada, are the directors of Watering Hole. Mr. Brown is the sole director of Aurumbank and Nevada Pacific Mining Inc.

Completion of the Transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable pursuant to Exchange Requirements, majority of the minority shareholder approval. Where applicable, 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 management information circular or filing statement 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 a capital pool company should be considered highly speculative.

The TSX Venture Exchange Inc. has in no way passed on the merits of the proposed Transaction and has neither approved nor disapproved the contents of this press release.

ON BEHALF OF THE BOARD PANNONIA VENTURES CORP.

Drew M. Bonnell, President and CEO

Disclaimer for Forward-Looking Information

Certain statements in this release are forward-looking statements, which reflect the expectations of management regarding Pannonia's proposed qualifying transaction. Forward-looking statements consist of statements that are not purely historical, including any statements regarding beliefs, plans, expectations or intentions regarding the future. Such statements are subject to risks and uncertainties that may cause actual results, performance or developments to differ materially from those contained in the statements. No assurance can be given that any of the events anticipated by the forward-looking statements will occur or, if they do occur, what benefits Pannonia will obtain from them.

Neither the 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

  • Pannonia Ventures Corp.
    Drew M. Bonnell
    President
    (604) 601 8250