Puget Ventures Inc.
TSX VENTURE : PVS

Puget Ventures Inc.

July 20, 2011 13:30 ET

Puget Ventures Inc. Provides Updates to Information Circular

VANCOUVER, BRITISH COLUMBIA--(Marketwire - July 20, 2011) - PUGET VENTURES INC. ("Puget") (TSX VENTURE:PVS) (the "Company") provides the following updates to its information circular dated June 29, 2011 (the "Information Circular") with respect to its annual and special meeting of its shareholders (the "Meeting"), to be held at 10:00 AM (Vancouver time) on July 21, 2011.

The following updates to the Information Circular are made in light of the Company's previously announced financing (the "Offering"), through its agent Mackie Research Capital Corporation, of 15,239,000 Subscription Receipts at $1.05 per Subscription Receipt, for total gross proceeds of $16,000,950 (as opposed to $20,000,400, as previously stated in the Information Circular). The Offering was previously announced on December 6, 2010.

Each subscription receipt will entitle the holder thereof to receive, without further consideration or action, one Unit of the Company. Each Unit will be comprised of one common share and one-half of a share purchase warrant, with each whole warrant exercisable at $1.50 per share for a period of 36 months from closing. The Subscription Receipts will be converted to Units upon satisfaction of certain conditions, including but not limited to the completion of the Company's acquisition (the "Pafra Acquisition") of Pafra Enterprises Company Limited ("Pafra"), previously announced on September 20, 2010 and more fully described in the Information Circular.

The Information Circular will be updated as described below. An addendum to the Information Circular (the "Addendum") will be provided to the shareholders of the Company in advance of the Meeting (all undefined capitalized terms have the meaning ascribed to them in the Information Circular).

The Offering

All references to the Offering in the Information Circular will be updated to reflect the financing terms stated above, namely that the Offering will be for total gross proceeds of $16,000,950 (as opposed to $20,000,400, as previously stated in the Information Circular).

Funds Available and Use of Proceeds

The "Funds Available" and "Use of Proceeds" tables in the Information Circular will be updated with the following tables:

Funds Available
Source of Funds Available Funds on Completion of the Pafra Acquisition and the Offering
Existing Working Capital(1) $377,000
Estimated net proceeds of the Offering $14,574,614
Less: Remainder of amounts due to the Sponsor with respect to the Pafra Acquisition plus applicable taxes ($100,000)
Less: Cash fee payable pursuant to the Finder's Fee Agreement ($500,000)
Less: Remaining expenses and costs relating to the Pafra Acquisition (including legal fees and other expenses, but excluding amounts due to the Sponsor)(2) ($41,000)
Estimated funds available $14,310,614
Notes:
(1) Estimated as at June 30, 2011. Does not include the estimated working capital deficiency of Pafra. Pursuant to the Pafra Purchase Agreement, IMHL has agreed to pay, on or before that day which is 180 days from the Acquisition Closing Date, all consolidated debts and liabilities of Pafra incurred prior to and including the Acquisition Closing Date, excepting those debts and liabilities of Pafra arising under certain service agreements for drilling and geological and exploration support relating to the commencement of the exploration program for the Karakul Property recommended under the Karakul Report. Upon completion of the Pafra Acquisition, the Resulting Issuer will reimburse IMHL for such expenses.
(2) Estimated aggregate expenses for legal fees, audit and accounting fees, filing fees and printing costs. The Company has also agreed to pay all reasonable expenses of the Sponsor in connection with the Pafra Acquisition.
Use of Proceeds
Principal PurposeEstimated Amount ($)
Completion of recommended exploration program for the Karakul Property(1)10,848,000
Complete phase 1 of the recommended exploration program for the Werner Lake Mineral Belt properties(2)470,000
General and administrative expenses for the next 12 months850,000
Unallocated working capital2,142,614
Notes:
(1) See "The Karakul Property" in Appendix B Information Concerning Pafra and the Karakul Property for further discussion. A portion of these costs will be incurred by IMHL, Pafra or its subsidiaries prior to the completion of the Pafra Acquisition, and, to the extent that they are incurred by IMHL, will be reimbursed by the Resulting Issuer on completion of the Pafra Acquisition.
(2) An exploration program has been recommended in a NI 43-101 compliant technical report dated March 22, 2011 and revised June 23, 2011 entitled "Werner Lake Mineral Belt Properties, Kenora Mining Division, Ontario - Report for Puget Ventures Inc." prepared by Gerald Harper, Ph.D., P.Geo (O) with respect to Puget's Werner Lake mineral properties in Ontario.

The Company's anticipated general and administrative expenses in the 12 month period subsequent to the completion of the Pafra Acquisition and the Offering are also updated with the following table:

Salaries and consulting fees for senior staff$637,632
Marketing and Investor Relation Fees$60,000
Corporate and administrative expenses$110,368
Professional Fees$42,000
TOTAL$850,000

Share Capital

As fewer Subscription Receipts will be issued under the Offering than was previously anticipated in the Information Circular, the following tables in the Information Circular will be updated as follows:

Pro Forma Consolidated Capitalization
Designation of SecurityAmount authorized or to be authorizedAmount outstanding after giving effect to the Share Consolidation, the Pafra Acquisition and the Offering(1)
Common SharesUnlimited86,458,227
Share purchase warrants-14,806,046
Incentive stock options-997,963
Special Warrants-80,000,000
Compensation options-1,219,120
Notes:
(1) Assumes that the Subscription Receipts issued under the Offering are converted to Units. See "the Offering" for further description.
(2) Pursuant to the Agency Agreement, the Agent will receive compensation option receipts, each compensation option receipt entitling the holder thereof to receive one compensation option upon satisfaction of certain release conditions, including the completion of the Pafra Acquisition, without payment of additional consideration or further action. Each compensation option will entitle the holder thereof to purchase one Unit at a price of $1.05 per Unit for a period of 36 months from the Acquisition Closing Date.
Fully Diluted Share Capital
Common Shares Outstanding (fully diluted)
NumberPercentage (%)
Holders of Post-Consolidation Common Shares29,769,22716.17%
Common Shares issuable upon exercise of outstanding share purchase warrants (after completion of the Share Consolidation)6,686,5463.63%
Common Shares issuable upon exercise of outstanding incentive stock options (after completion of the Share Consolidation)997,9630.54%
Common Shares issued to IMHL or its nominees under the Pafra Acquisition40,000,00021.73%
Common Shares issuable upon exercise of the Special Warrants issued to IMHL or its nominees under the Pafra Acquisition80,000,00043.46%
Common Shares, as part of the Units issuable upon conversion of the Subscription Receipts15,239,0008.28%
Common Shares issuable upon exercise of the Warrants forming part of the Units issuable upon conversion of the Subscription Receipts7,619,5004.14%
Common Shares forming a portion of the Units issuable upon exercise of the Compensation Options issued upon conversion of the Compensation Option Receipts1,219,1200.66%
Common Shares issuable upon exercise of the Warrants issuable upon exercise of the Compensation Options issued upon conversion of the Compensation Option Receipts609,5600.33%
Common Shares issuable as part of the finder's fee payable to Performance Capital Advisors under the Finders Fee Agreement1,450,0000.79%
Common Shares issuable as part of the finder's fee upon exercise of the Finders Fee Warrants500,0000.27%
TOTAL184,090,916100.00%

Principal Shareholders & Shareholdings of Directors and Officers

As the number of Subscription Receipts issuable under the Offering has decreased relative to the number previously disclosed in the Information Circular, the percentage shareholdings of Imperial Mining Holdings Limited ("IMHL"), the vendor in the proposed Pafra Acquisition, and the proposed directors and officers of the Company following completion of the Pafra Acquisition, will be as follows:

Name and municipality and country of residencePercentage and Number of Common Shares Upon Completion of the Share Consolidation, the Pafra Acquisition and the Offering(1) (2) (3)
IMHL
Isle of Man
40,000,000
(44.31%)
Raymond Castelli
Vancouver, British Columbia
456,726
(0.53%)
Erin Chutter
Vancouver, British Columbia
1,245,303
(1.44%)
Christopher Couzelis
Richmond, British Columbia
186,556
(0.22%)
Igor Kovarsky
Port Moody, British Columbia
0
Tim Mann
Oakville, Ontario
0
Peter Reynolds
Encounter Bay, Australia
0
Wilson Russell
Vancouver, British Columbia
481,000
(0.56%)
Bagrat Safarian
Encino, California
0
Marc Thomas
Moscow, Russia
0
Dmitry Vasiliev
London, United Kingdom
0
Notes:
(1) Does not include Common Shares issuable upon exercise of outstanding share purchase warrants, incentive stock options, the Special Warrants, the Finders Fee Shares issuable upon exercise of the Special Warrants, or any securities issuable to the Agent with respect to the Offering.
(2) The number of Common Shares beneficially owned by the individuals (excluding IMHL) listed, directly or indirectly, is based on information furnished by Computershare Investor Services Inc., the registrar and transfer agent of the Issuer, insider reports filed on SEDI and by the individuals themselves.
(3) Assumes the Offering is fully subscribed and that none of the directors or officers purchases securities under the Offering. Does not include Common Shares issuable upon the exercise of incentive stock options or share purchase warrants held by that individual.

Pro Forma Financial Information

The revised pro forma balance sheet of the Company, assuming completion of the Share consolidation, the Pafra Acquisition and the Offering, currently attached as Appendix G of the Information Circular, will be updated and sent to the shareholders of the Company as part of the Addendum.

The following table sets out selected revised pro forma financial information of the Company, assuming completion of the Pafra Acquisition and the Offering:

Pro Forma(1)
(Unaudited)($)
Total current assets16,180,360
Total assets25,496,307
Total current liabilities1,074,726
Total liabilities1,074,726
Shareholders' equity24,421,581
Notes:
(1) The table above should be read in conjunction with the notes to the revised pro forma balance sheet for assumptions and adjustments.

About Puget Ventures Inc. (www.pugetventures.com)

Puget Ventures Inc. is a Vancouver, Canada-based mineral-resource exploration company focused on the acquisition, exploration and development of strategic base metals properties, with a focus on cobalt. Puget Ventures' package of properties encompasses historic deposits and past Cobalt and Nickel-Copper-PGE producers, including the Werner Lake Mineral Belt located in North-western Ontario, Canada. On December 6, 2010, Puget announced a definitive agreement to acquire the Karakul and other mineral projects in Russia and Mongolia subject to Exchange and shareholder approval.

Cautionary Statement on Forward-Looking Information: The statements made in this News Release may contain certain forward-looking statements. Actual events or results may differ from the Company's expectations. Certain risk factors may also affect the actual results achieved by the Company.

This news release shall not constitute an offer to sell or the solicitation of any offer to buy, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. The shares offered will not be and have not been registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the U.S. Securities Act and applicable state securities laws.

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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