Sama Resources Inc.
TSX VENTURE : SME

Sama Resources Inc.
Section Rouge Media Inc.
TSX VENTURE : SRO

Section Rouge Media Inc.

July 06, 2016 07:00 ET

Sama Resources and Section Rouge Media Inc. Enter Into Reverse Take-Over Transaction to Form New Graphite Exploration and Development Company

MONTREAL, QUEBEC--(Marketwired - July 6, 2016) - Sama Resources Inc./Ressources Sama Inc. (TSX VENTURE:SME) ( "Sama") and Section Rouge Media Inc. (TSX VENTURE:SRO) ("Section") are pleased to announce that they have entered into an arm's length letter of intent dated June 23, 2016 (the "LOI") to acquire 100% of the shares of Sama Resources Guinea SARL ("SRG"), a wholly-owned subsidiary of Sama resulting in a reverse take-over of Section as described below (the "Reverse Take-over" or the "Transaction"). SRG's principal asset is exploration permit N°2013/4543/MMG/DNM, known as the Lola Graphite Project, located near the town of Lola in eastern Republic of Guinea (the "Property"). Upon closing, Mr. Audet will be appointed CEO of the new Section (the "Resulting Issuer").

"Sama is very pleased to team up with Section in advancing the Lola Graphite Project," stated Dr. Marc-Antoine Audet, P.Geo, President and Chief Executive Officer, Sama Resources. "This transaction leverages the rapidly-growing graphite market. Graphite is an essential commodity in the renewal energy sector," added Dr. Audet.

In connection with the Reverse Take-over, Section will acquire 100% of the shares of SRG in consideration of 20,000,000 common shares (the "Payment Shares") of Section. The deemed value per Share is CDN$0.10, for a total purchase price of CDN$2,000,000. The Payment Shares may be subject to escrow restrictions under the policies of the TSX Venture Exchange (the "TSXV"). It is anticipated that the Resulting Issuer will change its name to Sama Graphite Inc. upon completion of the Reverse Take-over or as rapidly as possible thereafter.

Capital Structure of Section

Section has an authorized share capital consisting of an unlimited number of common shares, of which 6,946,452 Shares are issued and outstanding. There are 620,000 options at an average exercise price of $0.05 currently outstanding. The Shares and those options are the only issued and outstanding securities of Section.

Concurrent Financing

In connection with the Reverse Take-over, Section intends to conduct a concurrent private placement offering of common shares of Section at a price of $0.10 for aggregate gross proceeds of not less than $500,000 up to a maximum of $1,000,000 (the "Concurrent Financing"). The Company may pay finders' fees in cash and issue finder's warrants in connection with the Concurrent Financing. Net proceeds from the Concurrent Financing will be used for the advancement of the Property and for general working capital purposes related thereto.

Resulting Issuer Capital Structure

Assuming that no currently-outstanding convertible securities of Section are exercised prior to the closing of the Reverse Take-over, the issued capital of the Resulting Issuer will consist of approximately 32,946,452 common shares, of which approximately 60.7% will be held by Sama and approximately 21.1% by existing shareholders of Section, assuming completion of the minimum amount of the Concurrent Financing.

Closing Conditions:

Under the LOI, the completion of the Reverse Take-over is conditional upon a number of conditions precedent, which include without limitation the following:

  • Completion of customary due diligence reviews by both SRG and Section;
  • Receipt of all necessary consents and approvals (including the approval of the Guinean Minister of Mines and Geology, Section's shareholders and the TSXV);
  • The completion of the Concurrent Financing;
  • Section obtaining from Sama a title opinion on the Property;
  • Section having a minimum of CDN$600,000 in net tangible assets, including CDN$300,000 in cash; and
  • The signature of definitive agreements no later than July 29, 2016.

Completion of the Reverse Take-over is expected to occur no later than the end of October 2016

Lola Graphite Property

The Property is located near the town of Lola in eastern Guinea, 1,000 km from Conakry, the capital of the Republic of Guinea. The Property is within 50 km from the border with Guinea and located 3.5km west of the town of Lola.

The Property was originally discovered by the BUMIFOM (Bureau Minier de la France Outremer) during the construction of the Conakry-Lola road in 1951. Following Guinean independence in 1959, the Property was abandoned and subsequently forgotten until Sama "re-discovered" it in 2012.

The graphite-rich paragneiss is present at surface over 8.7 kilometers with an average width of 300m and up to 1,000m wide. The first 20m or so of the deposit is well weathered (lateralized) freeing graphite flakes from the silicate gangue and allowing for an easy grinding with an optimal recovery of large and jumbo flakes. Graphite mineralisation continues at depth within the non-weathered paragneiss.

A NI 43-101 technical report supporting the foregoing technical disclosure is expected to be filed and available on SEDAR within 45 days.

Sama Resources Guinea

For the audited fifteen-month period ended December 31, 2015, SRG (which is incorporated under Guinean law) had assets of CDN$381,082, liabilities of $1,327,158, shareholder equity of CDN$946,076, no revenues and a net loss of CDN$667,503 (all amounts were prepared in accordance with International Financial Reporting Standards and are approximate and were converted from Guinean francs as at and for the fifteen-month period ended December 31, 2015). SRG's liabilities include an amount of CDN$1,291,751 owing to Sama; the parties intend for Section to acquire that receivable from Sama upon the closing of the Transaction.

For the unaudited, three-month period ended March 31, 2016, SRG had assets of CDN$413,994, liabilities of $1,364,569, shareholder equity of CDN$950,575, no revenues and a net loss of CDN$4,499 (all amounts were prepared in accordance with International Financial Reporting Standards and are approximate and were converted from Guinean francs as at and for the three-month period ended March 31, 2016). SRG's liabilities include an amount of CDN$1,322,060 owing to Sama; the parties intend for Section to acquire that receivable from Sama upon the closing of the Transaction.

Proposed Officers and Directors of the Resulting Issuer

Marc-Antoine Audet, BSc, MSc and PhD (Geology), P.Geo., Chief Executive Officer and Director

Dr. Audet has over 27 years of geological experience in international nickel laterite exploration and development with major mining companies such as Xstrata Nickel and Falconbridge. His project experience includes the Falcondo laterite nickel operation, the newly discovered Serra do Tapas and Vale dos Sonhos deposits in Brazil and New Caledonia's Koniambo nickel cobalt laterite project.

Benoit La Salle, FCPA, MBA, Chairman and Director

Mr. La Salle is a Fellow Chartered Professional Accountant, a member of the Chartered Professional Accountants of Canada and holds a Commerce Degree and a Masters of Business Administration. In 1980, Mr. La Salle founded Grou, La Salle & Associates, Chartered Accountants. In 1995, Mr. La Salle founded SEMAFO Inc. and held the position of President and Chief Executive Officer of the organization until August 2012.

Marc Filion, Ph.D, MBA, Eng., Asc, Director

Marc Filion is a certified board director and company executive. He currently sits on a number of boards as chairman of the board or as an active audit and compensation, nominating and corporate governance committee member. A geological engineer by training, Dr. Filion exercised his technical skills in Canada and abroad while at the employ of SOQUEM, SNC-Lavalin and CHIM International for over 40 years.

The Resulting Issuer's remaining directors and officers will be determined by the closing date of the Transaction.

Finder's Fee and Other

The Resulting Issuer will pay an aggregate finder's fee of $100,000 payable by the issuance of 500,000 common shares of Section to each of Hamsa Capital Inc. and 9216-3815 Quebec Inc. Hamsa Capital Inc. and 9216-3815 Quebec Inc. are arm's length parties with Section and Sama.

There will be no loan or deposit payable by Section in connection with the Transaction. Section's common shares will remain halted until the completion of the Transaction.

The parties intend to request a waiver of the sponsorship requirement set forth under TSXV Policy 2.2. There can be no guarantee that such a waiver will be granted.

Completion of the Reverse Take-over is subject to a number of conditions, including TSXV acceptance and disinterested approval from Section's shareholders. The Reverse Take-over cannot close until the required shareholder approval is obtained. There can be no assurance that the Reverse Take-over 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 Reverse Take-over, any information released or received with respect to the Reverse Take-over may not be accurate or complete and should not be relied upon. Trading in the securities of Section should be considered highly speculative.

The TSXV has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.

About Sama Resources Inc./Resources Sama Inc.

Sama is a Canadian-based mineral exploration and development company with projects in West Africa. For more information about Sama, please visit Sama's website at www.samaresources.com.

About Section Rouge Media Inc.

Section Rouge is specialized in producing publications related to agricultural machineries

Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.

Forward-Looking Statements

This news release discusses items that may constitute forward-looking statements within the meaning of securities laws and that involve risks and uncertainties. Such statements include those with respect to the completion of the Transaction, the composition of Section's board following the Transaction, the business plans and operations of Section following the Transaction and the Concurrent Financing. Although Sama and Section believe in light of the experience of its officers and directors, current conditions and expected future developments and other factors that have been considered appropriate that the expectations reflected in such forward-looking statements are based on reasonable assumptions, they can give no assurances that those expectations will be achieved and actual results may differ materially from those contemplated in the forward-looking statements and information. Such assumptions, which may prove incorrect, include the following:
(i) the Transaction will obtain all required regulatory approvals and any applicable shareholder approvals in a timely fashion, (ii) Sama and Section will agree on final documentation to complete the Transaction, (iii) Section's management will not identify and pursue other business objectives following the Transaction, (iv) Section will succeed in obtaining any necessary financing to fund its ongoing operations and work plans, including the Concurrent Financing, (v) no material obstacles, technical or otherwise, will hinder the operations of Section following the Transaction and (vi) the price of graphite will remain sufficiently high and the costs of advancing the Property sufficiently low so as to permit Section to implement its business plans in a profitable manner. Factors that could cause actual results to differ materially from expectations include (i) the failure of Section to make effective use of their available funds following the Transaction, (ii) the failure of the drilling projects of Section for technical, logistical, labour-relations or other reasons, (iii) the inability of Sama or Section to obtain the necessary approvals for the Transaction, (iv) a decrease in the price of graphite below what is necessary to sustain the operations of Section, (v) an increase in the operating costs of Section above what is necessary to sustain its operations, (vi) accidents, labour disputes or the materialization of similar risks, (vii) a deterioration in capital market conditions that prevents Section from raising the funds that it requires Section on a timely basis (including by preventing it from completing the Concurrent Financing), (viii) an inability or unwillingness of Sama or Section to complete the Transaction for whatever reason, (ix) an inability or unwillingness of the individuals named above to serve as directors or officers of Section following the Transaction and (x) generally, an inability of Sama or Section to develop and implement a successful business plan for any reason. These factors and others are more fully discussed in Sama and Section's filings with Canadian securities regulatory authorities available at www.sedar.com. Actual results may vary from the forward-looking information and neither Sama nor Section assume any obligation to update any forward-looking statement except as required by applicable law.

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