Tajac Capital Inc.
TSX VENTURE : TJC.P

March 27, 2008 12:10 ET

Tajac Capital to Acquire Balkan Resources

SURREY, BRITISH COLUMBIA--(Marketwire - March 27, 2008) - Tajac Capital Corp.'s (TSX VENTURE:TJC.P) ("Tajac") President, Mr. Terry Rogers, is pleased to announce the signing of a Term Sheet dated March 1, 2008 (the "Agreement") to acquire all of the outstanding common shares of Balkan Resources Inc. ("Balkan"), a junior Canadian mining and exploration company, in exchange for common shares of Tajac (the "Balkan Acquisition"). Balkan has interests in a number of exploration properties (the "Exploration Properties"), located in Albania, considered prospective for the discovery of nickel, copper and other base metals. The Exploration Properties are divided into a number of copper and nickel projects including the Perlati (copper) Tuc (copper), Librazhd (nickel) and Kokogllave (nickel) projects which contain known areas of nickel, copper and other base metal mineralization.

Balkan has been active since 2007 and its operational office is located in Tirana, Albania.

Transactions

The Balkan Acquisition is an arm's-length transaction. The directors and officers of Tajac currently have no interest in Balkan and none of the principals of Balkan have any interest in Tajac. The Balkan Acquisition is intended to constitute Tajac's Qualifying Transaction (as defined in TSX Venture Exchange (the "Exchange") Policy 2.4 Capital Pool Companies). Upon completion of the Balkan Acquisition, the Resulting Issuer (as defined in Exchange Policy 2.4) will be considered a Tier 2 mining issuer (as defined in Exchange Policy 2.1).

Subject to Exchange and shareholder approval and upon completion of the transactions contemplated, Tajac will change its name to Balkan Resources Corporation.

As part of the Balkan Acquisition, Tajac will consolidate its existing common shares on the basis of 3 new common shares for every 5 existing common shares. The issued and outstanding warrants and stock options will be consolidated on the same basis.

Prior to the completion of the Balkan Acquisition, Balkan will conduct an interim financing by way of a private placement of up to 19,047,619 units (the "Units") at a price of $0.42 per Unit for gross proceeds of up to $8 million. (the "Interim Financing"). Each Unit will consist of one common share and one-half of a common share purchase warrant (each whole warrant, a "Warrant"). Each Warrant will entitle the holder thereof to acquire one additional common share of Balkan at an exercise price of $0.50 per share for a period of 12 months from the date of issuance. The Warrants will be callable by Balkan upon five (5) days prior notice to the holder thereof, in the event that the volume weighted average trading price of the common shares on the Exchange is at or above $1.00 for a period of twenty five (25) consecutive trading days. A total of $3 million of the Interim Financing will be undertaken as a brokered private placement by Silverbridge Capital Inc. ("Silverbridge") acting as agent. A total of 714,286 Broker Warrants will be issued to Silverbridge with each Broker Warrant entitling the holder thereof to acquire one Broker Unit for a price of $0.42. Each Broker Unit will have the same terms as the Units being issued in connection with the Interim Financing. Proceeds from the Interim Financing will be used to fund exploration of the Exploration Properties and general corporate purposes and expenses.

The consideration for the Balkan Acquisition, inclusive of the shares to be issued pursuant to the terms of the Interim Financing, will be $25.5 million payable by way of the issuance to the security holders of Balkan of an aggregate 50,973,173 new consolidated common shares in the capital of Tajac ("Purchase Shares") at a deemed price of $0.50 per Purchase Share. It is anticipated that the Purchase Shares held by the security holders of Balkan will be subject to a Tier 2 Value Security Escrow Agreement pursuant to Exchange Policy 5.4.

The principal shareholders of Balkan are Richard Groome (18.88%), Harry Bloomfield (13.85%), Ardian Avdalli (13.02%) and Jim Belushi (10.51%). These shareholdings are in Balkan prior to the Interim Financing and Balkan Acquisition. After giving effect to the Interim Financing and the Balkan Acquisition, these individuals will collectively hold approximately 32.81% of the Resulting Issuer.

Concurrently with, and as a condition of, the Balkan Acquisition, Tajac will complete a concurrent private placement of $3 million (the "Concurrent Financing"). Proceeds from the Concurrent Financing will be used to fund further exploration of the Exploration Properties, the costs of the Concurrent Financing and for general working capital purposes.

The Concurrent Financing will consist of a private placement of units of Tajac (the "Tajac Units") at a price per Tajac Unit of $0.50 for gross proceeds of $3,000,000 (6,000,000 Units). Each Tajac Unit will consist of one common share and one-half of a common share purchase warrant (each whole warrant a "Tajac Warrant"). Each Tajac Warrant will entitle the holder to purchase one additional common share at a price of $0.75 per share for a period of 24 months following the closing of the Concurrent Financing. The Tajac Warrants are callable by the Resulting Issuer upon five days prior notice to the holder in the event that the volume weighted average closing trading price of the common shares on the Exchange is at or above $1.50 for 25 consecutive trading days.

Silverbridge will act as Lead Agent for Tajac. A total commission of 10% cash will be payable on the gross proceeds of the Concurrent Financing. Silverbridge will also receive broker warrants entitling them to purchase that number of Units as is equal to 10% of the number of Units sold pursuant to the Concurrent Financing, exercisable for a period of one year from the closing of the Concurrent Financing. Silverbridge reserves the right to convert its cash commission to common shares in the Resulting Issuer at a deemed price of $0.50 per share.

Silverbridge is registered as a limited market dealer in Ontario. It is a private company wholly-owned by the Hughnie Laing Trust whose sole beneficiary is Hughnie Laing. Hughnie Laing is the wife of Glenn Laing, a proposed director of the Resulting Issuer. Silverbridge is at arm's length to both Balkan and Tajac.

Haywood Securities Inc, subject to completion of satisfactory due diligence, has agreed to act as Tajac's Sponsor for the transactions and to prepare a sponsor report in compliance with Exchange Policy 2.2. An agreement to sponsor should not be construed as any assurance with respect to the merits of the transaction or the likelihood of completion.

Tajac reserves a price of $0.50 per share for the Purchase Shares to be issued pursuant to the Balkan Acquisition and the Concurrent Financing and for stock options to acquire up to approximately 5,000,000 common shares of the Resulting Issuer (the "New Stock Options") to be granted to directors, officers, employees and consultants of resulting issuer upon completion of the Balkan Acquisition is completed. The grant of the New Stock Options is subject to regulatory approval including shareholder approval, if required.

Completion of the Balkan Acquisition is subject to a number of conditions, including but not limited to:

(i) completion and execution of a formal share exchange agreement between Tajac and the principals of Balkan;

(ii) approval of the Balkan Acquisition by the Exchange, and all other necessary regulatory approvals;

(iii) completion of the Interim Financing;

(iv) completion of the Concurrent Financing;

(v) resignation of the existing officers and directors of Tajac in favour of nominees of Balkan;

(vi) completion of a national Instrument 43-101 Technical Report on the Balkan Exploration Properties; and

(vii) Personal Information Forms (PIF's) of the officer and director nominees of Balkan being accepted by the applicable regulatory authorities

Tajac currently has 2,833,333 common shares outstanding. Assuming completion of the Balkan Acquisition and Concurrent Financing, it is expected that the Resulting Issuer will have approximately 58,973,174 common shares issued and outstanding, of which the former principals of Balkan will own 17,283,415 million common shares, or approximately 29.31 %.

The common shares of Tajac will remain halted at least until the Exchange has completed its review of all documentation requested from Tajac and Balkan.

About Balkan Resources Inc.

Balkan was incorporated on June 8, 2006, pursuant to the Canada Business Corporations Act. It has no long term liabilities. Balkan has not conducted any business other than to acquire exploration interests and conduct exploration activities in Albania. Balkan's property interests are focused in two areas - copper and nickel.

COPPER

Perlati Project

- Located near Burrel, 80 km north of capital city of Tirana, within the boundaries of Tirex Resources Ltd Mirdita volcanic massive suphides project area

- Under license to Balkan for 2 years; available for a 20-year term

- Drilling program currently underway

Tuc Project

- Located south of Puke region, 150 km north of capital city of Tirana, within the boundaries of Tirex Resources Ltd Mirdita volcanic massive suphides project area

- 4 sq km exploration area optioned for 2 years.

NICKEL

Bitincke - Kokogllave Project

- Located in southeast Albania, near Korce

- Drilling program is planned.

Librazhd Project

- 220 sq. km prospecting area that includes 10 former producing mines

- Drilling programs to be implemented.

- Region is mostly unexplored

Current Activities

- Producing detailed environmental report on Perlati area and Bitincke-Kokogllave

- Collecting, collating and interpreting geological data and existing geological reports to prepare for drilling programs at Bitincke - Kokogllave and Librazhd Projects

- Conducting drilling program at Perlati

- Compilation of an Independent 43-101 Technical Report on the Exploration Properties

The Exploration Properties will be subject to an Independent National Instrument 43-101 Technical Report to be completed by Tajac as part of the Balkan Acquisition.

Balkan maintains an operations office in Albania, and a head office in Toronto, Ontario.

Mr. Glenn Laing, B.Sc. (Mining Geology), MSc. (Mining Engineering) meets the qualified person requirements (as defined by National Instrument 43-101) with more than 30 years of experience in the mining and exploration industry and has read and approved the technical disclosure in this News Release.

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.

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

Contact Information

  • Tajac Capital Corp.
    Terry Rogers
    President and CEO
    (604) 531-8113
    or
    Balkan Resources Inc.
    Rick Groome
    Chairman
    (514) 907-4989
    or
    Silverbridge Capital Inc
    Glenn Laing
    President
    (416) 368-8496