Prelim Capital Inc.

May 01, 2009 16:50 ET

Prelim Capital Announces Proposed Qualifying Transaction With Green Bull Energy Inc. and Annual Meeting

TORONTO, ONTARIO--(Marketwire - May 1, 2009) - Prelim Capital Inc. ("Prelim" or the "Company") (TSX VENTURE:PLM.P), a capital pool company, is pleased to announce it has entered into an arm's length letter of intent (the "LOI") dated May 1, 2009, with Green Bull Energy Inc. ("GBE"), pursuant to which Prelim will, subject to a number of conditions, acquire all of the issued and outstanding securities of GBE. The transaction will constitute the Company's qualifying transaction (the "Qualifying Transaction") under the policies of the TSX Venture Exchange (the "Exchange").

Under the LOI, shares of GBE will be exchanged for shares of Prelim on the basis of 0.7805 Prelim shares for each GBE share, after giving effect to the stock split referred to below, such that following the exchange, current holders of Prelim shares with hold approximately 54.5% (4,800,000 shares) of the post-split Prelim shares and current holders of GBE shares will hold approximately 45.5% (4,000,000 shares) of the post-split Prelim shares (the "Proposed Acquisition") before giving effect to the private placement described below.


Concurrent with the Proposed Acquisition, Prelim will undertake a non-brokered private placement for gross proceeds of up to $600,000 to fund exploration programs on GBE's mineral properties. The Proposed Acquisition is conditional upon Prelim raising, within thirty (30) days, a minimum of $300,000 and a maximum of $600,000 through the sale of a minimum of 3,000,000 post-split Prelim shares and a maximum of 6,000,000 post-split Prelim shares at $0.10 per share (the "QT Financing"). The QT Financing may include warrants and may provide for finders fees to be paid.


Prelim has called an annual and special meeting (the "ASM") of its shareholders for June 19, 2009, for the purpose, among other things, of obtaining shareholder approval to the split of the current issued and outstanding capital of Prelim on the basis of two (2) new shares for each one (1) currently issued and outstanding share of Prelim (the "Stock Split"). Prelim will also seek shareholder approval for a change of name of the corporation to Green Bull Energy Corp., or such other name as deemed appropriate (the "Change of Name"). Prelim will proceed with the ASM whether or not the financing condition referred to above is satisfied and whether or not the Qualifying Transaction proceeds. The Qualifying Transaction will be conditional upon shareholder approval being obtained to the Stock Split and the Change of Name, and the Qualifying Transaction will not close until after such shareholder approval has been obtained. If the Qualifying Transaction is consummated, the Stock Split and the Change of Name to Green Bull will be effected immediately prior to the closing of the Qualifying Transaction. If the conditions to the closing of the Qualifying Transaction have not been satisfied and the Qualifying Transaction is abandoned, the Stock Split will be effected by Prelim but the Change of Name may be deferred until another qualifying transaction is identified and closed. The Qualifying Transaction itself is not conditional upon the approval of shareholders of Prelim.


The closing of the Qualifying Transaction with GBE is subject to a number of conditions, including, but not limited to the following:

- receipt of gross proceeds of not less than $300,000 pursuant to the QT Financing within thirty (30) days;

- completion or waiver of sponsorship;

- receipt of all required regulatory approvals, including the approval of the Exchange, of the Qualifying Transaction;

- completion of all due diligence reviews;

- receipt of all director and shareholder approvals as may be required under applicable laws or regulatory policies; and

- execution of a formal Transaction Agreement.

Sponsorship of a qualifying transaction of a capital pool company is required by the Exchange unless exempt in accordance with Exchange policies. Prelim intends to apply for an exemption from sponsorship requirements, however, there is no assurance that Prelim will obtain this exemption.

A filing statement in respect of the proposed Qualifying Transaction will be prepared and filed in accordance with Policy 2.4 of the Exchange on SEDAR at no less than seven business days prior to the closing of the proposed Qualifying Transaction. A press release will be issued once the filing statement has been filed as required pursuant to Exchange policies.

Trading in the common shares of Prelim will remain halted pending the release of further disclosure regarding this Qualifying Transaction and the satisfaction of the initial filing requirements of the Exchange and a preliminary review by the Exchange.


GBE had previously entered into two option agreements (the "Option Agreements") with RJK Explorations Ltd. to earn a 60% interest in the On Strike North and the On Strike South claim groups.

On Strike North Claim Group

The On Strike North claim group consists of 2,226 hectares located in the Sherbrooke North, Lavant and Palmerston townships in the east Bancroft area, approximately 77 kilometres southwest of Ottawa, Ontario. The claims were acquired due to the increased uranium exploration activity in the area and the area's historic uranium production totalling 14,862,653 lbs of U3O8 between 1956 and 1982.

Terms of Option Agreement

GBE made an initial $25,000 cash payment, will incur up to $905,000 in expenditures, and issue up to 400,000 shares of GBE over a 42-month period.

1. 100,000 shares and expenditures totalling $75,000 on the property from June 16, 2007 to August 31, 2008 (which has been completed)

2. 150,000 shares and expenditures totalling $230,000 on the property from June 16, 2008 to August 31, 2009 (to be assumed by Prelim)

3. 150,000 shares and expenditures totalling $600,000 on the property from June 16, 2009 to August 31, 2010 (to be assumed by Prelim)

RJK Explorations Ltd. will retain a 1% net smelter royalty return subject to a buy-back by GBE of up to 0.5% with payments of $600,000.

On Strike South Claim Group

The On Strike South claim group consists of 1,600 hectares and is located 18 kilometres southwest of the On Strike North claims.

Terms of Option Agreement

GBE made an initial $15,000 cash payment, will incur up to $400,000 in expenditures, and issue up to 225,000 shares of GBE over a three-year period.

1. Year One - 75,000 shares and expenditures totalling $30,000 on the property from October 11, 2007 to October 11, 2008 (which have been completed)

2. Year Two - 75,000 shares and expenditures totalling $100,000 on the property from October 11, 2008 to October 11, 2009 (to be assumed by Prelim)

3. Year Three - 75,000 shares and expenditures totalling $270,000 on the property from October 11, 2009 to October 11, 2010 (to be assumed by Prelim)

RJK Explorations Ltd. will retain a 1% net smelter royalty return subject to a buy-back by GBE of up to 0.5% with payments of $600,000.

Work Program Completed by GBE To Date:

GBE retained MPX Geophysics Ltd. of Richmond Hill, Ontario, to conduct a helicopter-borne radiometric survey on the On Strike North and On Strike South claim blocks. The survey has identified in excess of 6 high priority target anomalies on the North claim blocks and GBE is currently evaluating recent geophysical survey data on the South claim blocks.

GBE has completed $130,000 in expenditures on the claim blocks. GBE is current and ahead of schedule on its first year commitments.

Interpretations and Conclusions

The On Strike North and On Strike South claim blocks lie within a region known to host uranium mineralization. Historic work has revealed many uranium showings and radiometric anomalies in the area of the claims. GBE intends to conduct a further exploration program to meet the Year 2 terms of the Option Agreements.

Board of Directors and Management of the Resulting Issuer

Concurrently with the completion of the Proposed Acquisition, it is currently contemplated that at least two of the current five directors and officers of Prelim will resign and the board will be comprised of three (3) nominees from Prelim and three (3) nominees from GBE.

James Borland will remain a Director and be appointed Chairman. William R. Johnstone will remain as Corporate Secretary and will be joined by the following current directors and officers of GBE.

Jerry L. Bulman - President and Director

Mr. Bulman is currently a director and President of GBE. He is the CEO and founder of Parkvalley Consulting Ltd., a private company based in Calgary, AB that provides consulting services to the resource sector. With over 30 years of senior management experience, Mr. Bulman has been involved with the exploration and development of a diverse range of projects. These include oil & gas, coal bed methane and oil sands developments, as well as several projects in the mining sector. In addition to his duties as CEO of Parkvalley Consulting Ltd., Mr. Bulman is a Director of Bold Ventures Inc., Molystar Resources Inc., Major Gold Ltd., and Kernow Resources & Developments Ltd. Mr. Bulman currently provides Senior Consulting services to two major international energy companies in support of their Arctic and North American frontier exploration operations.

Kenneth C. Phillippe - CFO

Mr. Phillippe is currently a director of GBE and is responsible for the accounting of GBE. Mr. Phillippe has been a self-employed Chartered Accountant since 1981. He was a Director of MDX Medical Inc. (2004-2005), an Exchange listed company. He is the Chief Financial Officer of Exchequer Resource Corp. and Bold Ventures Inc., Exchange listed companies, and Amazon Goldsands Ltd. and Constitutional Mining Corp., whose shares trade on the Over-the-Counter Board in the U.S. He was the Chief Financial Officer of Columbia Goldfields Ltd. from January to October, 2006. He has a Bachelor of Commerce Degree from the University of British Columbia.

Gary F. Zak - Director

Mr. Zak is currently a director of GBE. He has been active for the past 28 years providing Business Development management to public resource companies. He has extensive experience in funding early stage companies, organizing management, corporate and investor relations groups and has successfully completed several mergers and acquisitions. Mr. Zak is currently President and CEO of Bold Ventures Inc. and has occupied senior management and/or Directorship positions in various companies, including: Bold Ventures Inc., Passport Metals Inc., Forum Uranium Corp., Alto Ventures Ltd., Beaufield Resources Inc. and TAC Capital Corp.

William E. Schmidt - Director

Mr. Schmidt is currently a director of GBE. Mr. Schmidt has been a Barrister and Solicitor with the firm of Hemsworth, Schmidt since 1971 (his principal business). He is a director of Academy Ventures Inc., Bold Ventures Ltd., Devonshire Resources Ltd., Exchequer Resource Corporation, Lignol Energy Corporation (formerly Santa Cruz Ventures Inc.), and San Marco Resources Inc. He is the Secretary of Equus Energy Corp. and CFO of Carat Exploration Inc. He is a former director of Artina Resources Ltd., Clifton Star Resources Inc., San Telmo Energy Ltd., Storm Cat Energy Ltd., Unbridled Energy Corp. and Vault Systems Inc. He has been a former director and officer of several other public companies since 1971. He has a Bachelor of Arts Degree (1966) and Bachelor of Law Degree (1969) from the University of British Columbia.

Significant GBE Shareholders

GBE is a closely held private B. C. corporation consisting of 28 shareholders. The following individuals own 10% or more of the company:

- Jerry Bulman, President - 1,208,000 for 24% ownership

- Gary F. Zak, Chairman and Director - 831,000 for 16% ownership

Material Financial Summary of GBE

To date GBE has been capitalized with private funding of approximately $317,000. The company has completed exploration expenditures of approximately $135,000 on the claim groups and has advanced a one-time cash payment of $40,000 according to the Option Agreements. GBE has expended $83,000 on consulting, general and administrative expenses. GBE has approximately $10,000 of working capital at this time.

A press release with further particulars relating to the Qualifying Transaction will follow in accordance with the policies of the Exchange.

Derrick Strickland, P.Geo., is the Qualified Person who has reviewed the technical information in this news release.

About Green Bull Energy Inc.

GBE was incorporated in April 2007 in the Province of British Columbia under the name of Atomic Uranium Inc. and changed its name to Green Bull Energy Inc. on July 22, 2008. As of this date GBE has 5,124,800 shares issued and outstanding.

Completion of the transaction is subject to a number of conditions, including but not limited to, Exchange acceptance. 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 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.

Forward Looking Statement

Some of the statements contained herein may be forward-looking statements which involve known and unknown risks and uncertainties. Without limitation, statements regarding potential mineralization and resources, exploration results, and future plans and objectives of the Company are forward looking statements that involve various risks. The following are important factors that could cause the Company's actual results to differ materially from those expressed or implied by such forward looking statements: changes in the world wide price of mineral commodities, general market conditions, risks inherent in mineral exploration, risks associated with development, construction and mining operations, the uncertainty of future profitability and the uncertainty of access to additional capital. There can be no assurance that forward-looking statements will prove to be accurate as actual results and future events may differ materially from those anticipated in such statements. Prelim undertakes no obligation to update such forward-looking statements if circumstances or management's estimates or opinions should change, except as required by law. The reader is cautioned not to place undue reliance on such forward-looking statements.

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.

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