Rattlesnake Ventures Inc.
TSX VENTURE : RVI.H

January 05, 2011 14:36 ET

Rattlesnake Agrees to A Business Combination With Minsud Resources Inc. as Its Qualifying Transaction and Related Brokered Private Placement

CAMPBELLVILLE, ONTARIO--(Marketwire - Jan. 5, 2011) -

NOT FOR DISTRIBUTION IN THE UNITED STATES OR THROUGH UNITED STATES WIRE SERVICES.

All amounts in CANADIAN DOLLARS

Rattlesnake Ventures Inc. ("Rattlesnake") (TSX VENTURE:RVI.H) a capital pool company listed on the NEX Exchange (the "Exchange") is pleased to announce that it has entered into a letter of intent dated December 24, 2010 with Minsud Resources Inc. ("Minsud"), that sets out the basic terms and conditions pursuant to which it is intended that Rattlesnake and Minsud will complete a business combination (the "Proposed Transaction").

The Proposed Transaction is intended to be the Qualifying Transaction of Rattlesnake pursuant to Policy 2.4 of the Exchange. It is expected that the combined entity, after completion of the Proposed Transaction (the "Resulting Issuer"), will qualify as a Tier 2 Mining Issuer pursuant to the requirements of the Exchange. The Proposed Transaction will be an arm's length transaction as the directors and officers of Rattlesnake presently have no interest in Minsud. It is intended that the Proposed Transaction shall take place by way of an amalgamation, arrangement, share exchange or other similar form of transaction.

ABOUT MINSUD

Minsud is a private company headquartered in Toronto, Ontario and was incorporated on August 12, 2010 under the Business Corporations Act (Ontario). Minsud intends to acquire prior to closing of the Proposed Transaction not less than 95% of Minera Sud Argentina S.A. ("MSA"), a private Argentinean company. In addition, Minsud intends to own an option to purchase the remaining 5% of MSA.

MSA is presently owned by six shareholders and is controlled by Compania de Tierras Sud Argentina S.A. ("CTSA"). CTSA is a private subsidiary (incorporated in Argentina) wholly owned by the Benetton family through private Italian holding companies.

MSA controls highly prospective properties in the favourable Argentinean mining provinces of San Juan and Santa Cruz.

In San Juan, MSA consolidated the District Mining of Chita Valley by signing three adjacent Option Agreements for properties in the heart of a low sulphidation and porphyry system which cover 12,900ha plus 4,500ha claimed but not yet granted. 

Among a total of 100,000ha covered by claims and mining concessions at Patagonia, MSA has two strategically located exploration projects in Santa Cruz. The La Rosita project is 10km away from Coeur D'Alene Mines Corporation's Mina Martha property and the San Antonio project is located on regional trend and approximately 40km northwest of the Cerro Vanguardia mine.

The Proposed Transaction

Prior to the completion of the Proposed Transaction, Rattlesnake will effect the consolidation of its common shares such that each two (2) pre-consolidation common shares will become one (1) post-consolidation common share (each an "Rattlesnake Share") such that there will be issued and outstanding 2,810,500 Post-Consolidation common shares of Rattlesnake. Prior to the completion of the Proposed Transaction, all outstanding stock options of Rattlesnake shall be exercised or cancelled and Rattlesnake shall, on a best efforts basis, encourage the exercise of all outstanding warrants. It is presently assumed that all outstanding options and warrants will be exercised in advance of the Proposed Qualifying Transaction.

Prior to the completion of the Proposed Transaction Minsud will have entered into a definitive agreement with the shareholders of MSA, as a result of which, the shareholders of MSA will have exchanged, prior to the closing date, a sufficient amount of their shares of MSA, which as of the date hereof amount to a total of 10,852,000 shares, for shares of Minsud so that, after the completion of such exchange, Minsud shall become the owner of at least 95% of the total number of issued and outstanding shares of MSA (the "MSA Swap"), and will receive from the remaining shareholder(s) an irrevocable option to buy the remaining 5% of the total number of issued and outstanding shares of MSA at the same price and an irrevocable covenant to not divest or encumber such shares. The MSA Swap will represent a reverse takeover of Minsud by MSA.

Share Exchange

Rattlesnake will issue 18,000,000 Rattlesnake Shares to Minsud in exchange for 100% of its issued and outstanding shares. Following the share exchange and the Brokered Private Placement, described further below, it is estimated that approximately 20% of the Resulting Issuer will be owned by CTSA at closing or 13.22% on a fully diluted basis. This transaction will represent a reverse takeover of Rattlesnake by Minsud.

Sponsorship

Rattlesnake intends to make an application to the Exchange for an exemption from the sponsorship requirements in connection with the Proposed Transaction. There is no assurance that such exemption will be granted. Trading in Rattlesnake common shares are presently suspended. It is uncertain whether the shares of Rattlesnake will resume trading until the Proposed Transaction is completed and approved by the Exchange.

Stock Options

It is intended that the Resulting Issuer will grant incentive stock options ("Stock Options") on closing of the Proposed Transaction, subject to the approval of the Exchange, to employees, consultants, directors, officers of the Resulting Issuer and its subsidiaries, if any. The number of Stock Options will equal 10% of the issued and outstanding shares of the Resulting Issuer. The Stock Options will be issued at a price which is the greater of the Brokered Private Placement or the price per share of the Proposed Transaction.

Name Change

It is intended that the Resulting Issuer will be named "Minsud Resources Inc." or such other name as the parties may reasonably agree upon, and the Resulting Issuer will be governed by the Business Corporations Act (Ontario).

PROPOSED BROKERED PRIVATE PLACEMENT

Brokered Private Placement

The Proposed Transaction will be completed contemporaneously with a brokered equity offering (the "Brokered Offering"). Portfolio Strategies Securities Inc. ("PSSI") has executed a preliminary agreement, which is subject to satisfactory due diligence and the completion of a formal agency agreement, and has agreed to act as agent for and on behalf of the Resulting Issuer pursuant to the Brokered Offering to raise, on a commercially reasonable efforts basis, gross proceeds of $5,000,000 from the sale of units (the "Private Placement Units") at a price of not less than $0.40 per Private Placement Unit. 

Each Private Placement Unit will consist of one common share and one non-transferable common share purchase warrant (a "Warrant"), with each Warrant entitling the holder thereof to purchase one additional common share at $0.60 per common share for a period of 24 months from the date that the Proposed Transaction closes. 

PSSI will receive a cash commission equal to 8% of the gross proceeds received by from the sale of the Private Placement Units as well as agent's options to acquire that number of common shares equal to 8% of the number of Private Placement Units sold under the Brokered Offering. These agent's options will have a price equal to the price of the Private Placement Units. PSSI will also receive reimbursement for its reasonable out-of-pocket fees and expenses in connection with the Brokered Offering and a $25,000 work/success fee, such fee to be payable on closing.

The proceeds from the Brokered Offering will be used by the Resulting Issuer for exploration of the MSA properties and general working capital requirements. Additional amounts have been allocated for costs required to complete the Proposed Transaction and for unallocated working capital. There may be circumstances where, for sound business reasons, a reallocation of funds may be necessary in order for the Resulting Issuer to achieve its business objectives.

Capitalization of the Resulting Issuer

Following the completion of the Proposed Transaction and assuming completion of the maximum number of Private Placement Units sold under the Brokered Offering, approximately 33.3 million Rattlesnake Shares are anticipated to be issued and outstanding. Following the completion of the Proposed Transaction and assuming completion of the maximum number of Private Placement Units sold under the Brokered Offering, approximately 16.8 million Rattlesnake options and warrants are anticipated to be outstanding.

DIRECTORS AND SENIOR MANAGEMENT OF THE RESULTING ISSUER

Subject to and following the closing of the Proposed Transaction, the directors and senior officers of the Resulting Issuer are expected to be the following individuals:

David G. Wahl, P. Eng, P.Geo, ICD.D – Managing Director and Director Nominee

Mr. Wahl is the Managing Director of Southampton Associates-Consulting Engineers & Geoscientists with 45 years experience. Mr. Wahl is a Director of several Canadian public and private mining companies and is a member of the Institute of Corporate Directors.

Carlos Massa – CEO, COO and Director Nominee

Mr. Massa is an accountant with 30 years of experience in banking and private equity funds and was one of the founders of Latin American Minerals Inc. Over the past five years, Mr. Massa, as CEO and Director, successfully guided the steady growth of MSA and, in doing so, contributed to the company's capitalization through asset generation.

Roberto Milanese - Vice President Exploration

Mr. Milanese is an exploration geologist with 20 years experience. Mr. Milanese served as exploration geologist for Minas Argentinas S.A. and El Desquite S.A., and was responsible for the recognition of a discovery at the Esquel Gold Deposit.

Alberto F. Orcoyen - Chairman and Director Nominee

Mr. Orcoyen has a degree in Industrial Engineering from the University of Buenos Aires and a MBA from the Harvard Business School. Throughout his eminent career he has held senior management positions with various industrial companies and financial institutions including the Bank of Boston, Chase Manhattan Bank and the Techint Group.

In 1992, Mr. Orcoyen joined the Miguens Bemberg Group, which among other businesses was a joint venture partner with Brancote Holdings plc of London and was the 50% owner of Minera El Desquite S.A., a private junior company, that discovered the high grade Esquel gold deposit in 1997, which was later acquired by Meridian Gold in 2002 for USD$311 million in total value-the acquisition was estimated at USD$100 per in-situ reserves plus resources at that time.

Diego Eduardo Perazzo – Director Nominee

Mr. Perazzo is an accountant with extensive experience in all aspects of Corporate Finance. He was Chief Financial Officer at one of the largest family controlled companies in Argentina, the Fortabatt Group. During the past 15 years he has worked at Compañia de Tierras Sud Argentina S.A., a subsidiary of the Benetton Group in Argentina, a diversified holding company involved in ranching. He is a founder and President of MSA.

Charles Beaudry P.Geo: - Director Nominee

Mr. Beaudry is a seasoned mining executive with over 30 years experience in project generation, business development, exploration geochemistry and hands on project management including acting as Country Manager in Brazil for Noranda Inc. from 1996 to 2001. Over his distinguished career he has participated in the discovery of a number of significant deposits for Agip Canada Inc., Aur Resources Inc. and Noranda/Falconbridge. Until recently he was General Manager for New Opportunities for IAMGOLD where he headed the world-wide search for new acquisition opportunities and established a new exploration office in Colombia.

Scott F. White, Director Nominee

Mr. White is presently Chief Executive Officer and a director of Rattlesnake. He has served as co-founder and Chief Executive Officer of Parlay Entertainment Inc. (TSX VENTURE:PEI) since 1998. Prior to that time, Mr. White was the founding partner of Bush Frankel White, Barristers & Solicitors where he practiced in the areas of corporate/commercial, administrative and business law serving a multinational, primarily corporate client base. In addition to practicing law, Mr. White has been involved in a number of private and public enterprises where he has served as a founder, director, officer and investor. 

Prior to the completion of the Proposed Transaction, it is intended that Rattlesnake's current Chief Financial Officer will resign and that a new Chief Financial Officer will be appointed.

The completion of the Proposed Transaction and the Brokered Offering are subject to the approval of the Exchange and all other necessary approvals. The completion of the Proposed Transaction is also subject to certain other additional conditions precedent, including, but not limited to: (i) the completion of the MSA Swap transaction (ii) the entering into of a definitive agreement by Rattlesnake and Minsud on or before February 28, 2011 (the "Definitive Agreement"); (iii) completion of satisfactory due diligence by each of Rattlesnake and Minsud; (iv) the approval of the Proposed Transaction by each of Rattlesnake's and Minsud's respective board of directors; (v) the approval of the shareholders of Minsud; (vi) completion of the Brokered Offering; (vii) approval from the Exchange to list the Resulting Issuer's shares; (viii) the absence of any material change or change in a material fact which might reasonably be expected to have a material adverse effect on the financial and operational conditions or the assets of each of the parties to the Definitive Agreement; and (ix) certain other conditions typical in a transaction of this nature.

All information contained in this news release with respect to Rattlesnake and Minsud was supplied by the parties respectively, for inclusion herein, and Rattlesnake and its directors and officers have relied on Minsud for any information concerning them.

READER ADVISORY

Investors are cautioned that, except as disclosed in the information circular or filing statement to be prepared in connection with the Proposed Transaction, any information released or received with respect to the Proposed 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.

Statements in this press release may contain forward-looking information including, operating costs, administrative costs, acquisitions and dispositions, capital spending, access to credit facilities, income taxes, regulatory changes, and other components of cash flow and earnings. Any statements that are contained in this press release that are not statements of historical fact may be deemed to be forward looking statements. Forward-looking statements are often identified by terms such as "may", "should", "anticipate", "expects" and similar expressions. The reader is cautioned that assumptions used in the preparation of any forward-looking information may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted, as a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of Rattlesnake. The reader is cautioned not to place undue reliance on any forward-looking information. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this press release are expressly qualified by this cautionary statement.

The forward-looking statements contained in this press release are made as of the date of this press release, and Rattlesnake does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by securities law.

THIS PRESS RELEASE, REQUIRED BY APPLICABLE CANADIAN LAWS, IS NOT FOR DISTRIBUTION TO U.S. NEWS SERVICES OR FOR DISSEMINATION IN THE UNITED STATES, AND DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO SELL ANY OF THE SECURITIES DESCRIBED HEREIN IN THE UNITED STATES. THESE SECURITIES HAVE NOT BEEN, AND WILL NOT BE, REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO U.S. PERSONS UNLESS REGISTERED OR EXEMPT THEREFROM.

Completion of the Proposed 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 Proposed Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Proposed Transaction will be completed as proposed or at all.

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. 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 PRESS RELEASE.

Contact Information

  • Rattlesnake Ventures Inc.
    Scott White
    President and Chief Executive Officer
    (416) 704-6611
    (905) 337-2395 (FAX)
    or
    Rattlesnake Ventures Inc.
    David Callander
    Chief Financial Officer
    (416) 459-1649
    (905) 337-2395 (FAX)
    or
    Minsud Resources Inc.
    David Wahl
    Managing Director
    (905) 473-9643
    (416) 862-7661 (FAX)