Sagittarius Capital Corporation
TSX VENTURE : SCX.H

November 08, 2011 13:48 ET

Sagittarius Capital Announces Results of AGM Voting, Resignation of Board Member and Amended and Restated LOI

TORONTO, ONTARIO--(Marketwire - Nov. 8, 2011) - Sagittarius Capital Corporation (TSX VENTURE:SCX.H) ("Sagittarius" or the "Company"), a capital pool company, announces the outcome of voting at its October 13, 2011, Annual General Meeting ("AGM"); the resignation of long-time board member, Thomas Vukovich; and an amended and restated LOI with Alpaca Resources Inc. ("Alpaca"), a non-reporting issuer incorporated under the laws of the Province of Ontario on March 10, 2010.

Highlights from the AGM:

With more than 95% of the eligible votes cast at the meeting voting with management, Sagittarius:

  • Re-appointed Collins Barrow Toronto LLP as auditors of the Company;

  • Elected Robin Sundstrom, Gary Hokkanen, Maurice Colson, Thomas Vukovich, Brian Illion, and Jim Macpherson as directors of the Company;

  • Ratified and approved the Company's 10% rolling stock option plan;

  • Ratified and approved the 1.4:1 share consolidation outlined in the Management Information Circular in preparation for the closing of its Qualifying Transaction with Alpaca Resources Inc.;

  • Passed the special resolution to change the Company's name to Cave Creek Minerals Inc.

Note, the name change and share consolidation will not come into effect until the Company has closed its Qualifying Transaction with Alpaca.

Subsequent to the AGM:

Mr. Thomas Vukovich submitted his resignation from the Sagittarius Board of Directors effective October 14, 2011. The Board thanks Mr. Vukovich for his service and wishes him well in his future endeavours.

Amended and Restated LOI:

On September 1, 2010, the Company and Alpaca entered into an arm's-length binding letter agreement (as amended and restated on July 27, 2011) in connection with negotiating a transaction to effect a business combination of the Company and Alpaca. On October 25, 2011, the LOI was further amended to include Cave Creek Precious Metals Inc. ("CCPM"), a non-reporting issuer incorporated under the laws of the Province of Ontario on October 25, 2011, as a party. The highlights of the Amended and Restated LOI are as follows:

  • Sagittarius agrees to incorporate a wholly owned subsidiary ("SubCo") to amalgamate with Alpaca upon the Closing of the Qualifying Transaction. For every two (2) Alpaca shares, the Alpaca shareholder shall receive one (1) post-consolidation Sagittarius share, valued at $0.35; all outstanding Alpaca warrants, options and broker warrants shall receive Sagittarius warrants, options, and broker warrants at the same ratio as described above.

  • Sagittarius agrees to incorporate a wholly owned subsidiary ("Gold SubCo") to amalgamate with CCPM upon the Closing of the Qualifying Transaction. For every one (1) CCPM share, the CCPM share holder shall receive one (1) post-consolidation Sagittarius Share, valued at $0.35; all outstanding CCPM warrants, options and broker warrants shall receive Sagittarius warrants, options, and broker warrants at the same ratio as described earlier in this paragraph.

  • In order to create a separate gold focused division of the resulting issuer, CCPM will buy Cave Creek Gold Corp., a wholly owned subsidiary of Alpaca which holds the option to acquire the Iron Butte gold property, on terms to be agreed with the purchase price to be based on an independent third-party valuation.

  • CCPM shall complete a financing (the "QT Financing") concurrently with the completion of the Qualifying Transaction in order to meet the minimum listing requirements of the Exchange for gross proceeds of a minimum of $3.3 million to a maximum of $6 million (see terms more fully described below under the heading "The QT Financing").

  • Upon the completion of this series of transactions, which will constitute the Sagittarius Qualifying Transaction, both Alpaca and CCPM will be wholly owned subsidiaries of the Company.

The QT Financing:

CCPM shall complete the QT financing concurrently with the completion of the Qualifying Transaction for gross proceeds of a minimum of $3.3 million to a maximum of $6 million. The QT financing is expected to be priced at $0.35 per unit, with each unit comprised of one (1) CCPM share and one half of one CCPM warrant, with each whole CCPM warrant exercisable into one (1) CCPM share at an exercise price of $0.50 for a period of twenty-four (24) months from the date of issuance, subject to acceleration in certain circumstances.

Pursuant to a restated engagement letter with Canaccord Genuity Corp. ("Canaccord") and Foundation Markets Inc. ("FMI") dated November 7, 2011, Canaccord and FMI will act as co-agents on the QT Financing and receive a cash commission equal to 8% of the funds raised and broker warrants equal to 8% of the units sold in the QT financing. Each broker warrant is comprised of one (1) CCPM share and one half of one CCPM warrant, with each whole CCPM warrant exercisable into one (1) CCPM share at an exercise price of $0.50. Each broker warrant is exercisable at $0.35 for a period of twenty-four (24) months from the date of issuance. In consideration for Canaccord providing fiscal advisory services including a sponsorship report to the TSX Venture Exchange, it shall also receive a cash fee of $40,000 and 100,000 units under the QT Financing.

Pursuant to the financial advisory agreement between Alpaca and Foundation Opportunities Inc. ("FOI"), a sister company to FMI, Alpaca shall pay to FOI a consulting fee equal to 1% plus applicable taxes of the funds raised under the QT financing except on any funds sourced directly by FMI. Alpaca shall also pay to FOI a success fee of $85,000 upon the completion of the Qualifying Transaction.

Principal Shareholders and Select Financial Information of Alpaca

The principal stakeholders of Alpaca is Foundation Financial Holdings Corp. ("FFHC"), which owns and operates a Toronto-based Merchant Bank and Exempt Market Dealer, that owns beneficially, directly or indirectly, or exercises control or direction over approximately 10.33% of the Alpaca Shares. FFHC is controlled by Jeremy Goldman (of North York, Ontario), Yannis Banks (of Toronto, Ontario) and The Goomie Trust, a trust formed under the laws of the Province of Ontario, whom together hold a 95% interest in FFHC.

As of June 30, 2011, Alpaca had total assets of $2,961,462, total liabilities of $1,943,120, and a working capital deficiency of $456,820.

Principal Shareholders and Select Financial Information of CCPM

The principal stakeholder of CCPM is its sole director and Officer Chris Hazelton (of Barrie, Ontario), that owns one CCPM share, being all of the issued and outstanding shares of CCPM.

CCPM is a newly incorporated company and as such, there is no material financial information available at this time.

The Amended and Restated LOI and a draft filing statement have been submitted to the TSX-V for their review and consideration. Management looks forward to the completion of this transaction.

Post-Closing Pro Forma Capital Structure:

Upon the closing of the Qualifying Transaction and assuming the completion of the maximum QT Financing, the pro forma capital Structure of the resulting issuer shall be as follows:

  • 56,716,372 post-consolidation Company shares (2,992,857 post-consolidation Company shares to exchange for 4,190,000 pre-consolidation Company shares; 36,480,658 post-consolidation Company shares to exchange for 72,961.316 Alpaca shares; 17,142,857 post-consolidation Company shares to exchange for 17,142,857 CCPM shares issued under the maximum QT Financing; 100,000 post-consolidation Company shares to exchange for 100,000 CCPM shares issued to Canaccord pursuant to the Canaccord engagement letter);

  • 19,338,654 post-consolidation Company warrants (10,717,226 post-consolidation Company warrants to exchange for 21,434,451 Alpaca warrants; 8,571,429 post-consolidation Company warrants to exchange for 8,571,429 CCPM warrants issued under the maximum QT Financing; 50,000 post-consolidation Company warrants to exchange for 50,000 CCPM warrants issued to Canaccord pursuant to the Canaccord engagement letter);

  • 2,991,121 post-consolidation Company broker warrants (1,619,693 post-consolidation Company broker warrants to exchange for 3,239,385 Alpaca broker warrants; 1,371,429 post-consolidation Company broker warrants to exchange for 1,371,429 CCPM broker warrants issued under the maximum QT Financing); and

  • 2,622,500 post-consolidation Company options (335,000 post-consolidation Company options to exchange for 469,000 pre-consolidation Company options; 2,287,500 post-consolidation Company options to exchange for 4,575,000 Alpaca options).

About Alpaca Resources Inc.

Alpaca is a Canadian junior exploration company with advanced exploration stage gold and copper properties in the Western United States. Alpaca's gold portfolio consists of the Iron Butte project in Lander County, Nevada, approximately 8 miles south of the Cove-McCoy mine, which produced 3.4 million ounces of gold and over 110 million ounces of silver. Extensive historical drilling has been done on the Iron Butte property. Alpaca's objective is to define an NI 43-101 compliant resource. Alpaca's copper portfolio consists of the Hill Copper project located in Cochise County, Arizona.

About Sagittarius Capital Corporation

The Company is a NEX-listed company and was formerly classified as a Capital Pool Corporation as defined in the TSX Venture Exchange Policy 2.4. The Company's principal business is the identification and evaluation of assets or businesses with a view to completing a Qualifying Transaction within the meaning of Exchange policies.

In accordance with the Exchange policies, the Common Shares are currently halted from trading, and it is intended that they will remain halted until completion of the Qualifying Transaction.

"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.

This news release does not constitute an offer to sell or a solicitation of an offer to sell any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

Forward-Looking Statements

This press release contains "forward-looking information", as such term is defined in applicable Canadian securities legislation. There can be no assurance that such information will prove to be accurate or that management's expectations or estimates of future developments, circumstances or results will materialize. Accordingly, readers should not place undue reliance on forward-looking information. The forward-looking information in this press release is made as of the date of this press release, and Sagittarius disclaims any intention or obligation to update or revise such information, except as required by applicable law.

The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release. Neither TSX Venture Exchange Inc. nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange Inc.) accepts responsibility for the adequacy or accuracy of this release.

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