Tectonic Minerals Corporation

July 26, 2011 20:30 ET

Tectonic Receives Conditional Approval for Qualifying Transaction

VANCOUVER, BRITISH COLUMBIA--(Marketwire - July 26, 2011) - Tectonic Minerals Corporation (the "Company") (TSX VENTURE:TEK.P) is pleased to announce that it has received TSX Venture Exchange (the "Exchange") conditional approval for its qualifying transaction (the "Qualifying Transaction"), the details of which were previously announced on February 3, 2011.

The Qualifying Transaction will be effected through the Company's acquisition of all of the issued and outstanding shares of Comstock Metals Ltd. ("Comstock") through a "three-cornered" amalgamation (the "Amalgamation"), whereby a wholly owned subsidiary of the Company will amalgamate with Comstock. Pursuant to the Amalgamation, the Company is expecting to issue an aggregate of 39,213,682 common shares to Comstock shareholders (including 8,750,000 shares issued by Comstock in the Sidecar Financing, described below) and the resulting amalgamated company will be the Company's wholly owned operating subsidiary possessing all the business and assets of Comstock. Comstock's principal property is referred to as the Corona Project. For a summary of the Corona Project, please see the Company's press release dated February 3, 2011, as well as the Technical Report identified below.

As part of the Qualifying Transaction, Comstock will complete a concurrent brokered private placement (the "Sidecar Financing") of 8,750,000 units at a price of $0.20 per unit for aggregate gross proceeds of $1,750,000. Each unit will be comprised of one common share and one-half of a warrant, a whole warrant being exercisable into a common share at a price of $0.35 for 24 months from closing. Canaccord Genuity Corp. will act as agent for the Sidecar Financing, and will receive a corporate finance fee of $30,000, commission in the amount of 10% of the gross proceeds and agent's warrants in the amount of 5% of the units sold, each agent's warrant being exercisable into a common share at a price of $0.35 for 24 months from closing. Under the Amalgamation, the warrants and agent's warrants will be exchanged for securities entitling the holder to purchase a common share of the Company on equivalent terms. In the event the Sidecar Financing is oversubscribed, additional units and agent's warrants will be issued and form part of the Amalgamation's share and warrant exchange.

Upon completion of the Qualifying Transaction, the Company will be classified as a mineral exploration company and is expected to have 43,773,819 common shares issued and outstanding, assuming no oversubscription of the Sidecar Financing, of which 4,906,00 common shares will be held and released pursuant to a Value Security Escrow Agreement and an additional 2,500,000 common shares will be held and released pursuant to the Company's original CPC Escrow Agreement.

For further information, see the Company's Filing Statement dated July 25, 2011, which is available on SEDAR. The Company has also filed a Technical Report on the Corona Project, entitled "Technical Report on the Corona Gold-Silver Property, Sierra Madre Occidental, State of Chihuahua, Mexico", which is also available on SEDAR. The Company expects to close the Qualifying Transaction based on the Exchange's conditional approval on or about August 5, 2011.

Statements included in this news release, including statements concerning the Company's plans, intentions and expectations, and which otherwise are not historical in nature, are intended to be, and are hereby identified as, "forward-looking statements" for purposes of safe harbour. Forward-looking statements may be identified by words including "plans", "intends", "will", "expects", "estimates", "anticipates", "believes", and similar expressions. The Company cautions readers that forward-looking statements, including without limitation those relating to the structure and closing of the Qualifying Transaction and the Company's future operations and business prospects, are based on assumptions, none of which can be assured, and are subject to certain risks and uncertainties that could cause actual results to differ materially from those indicated in the forward-looking statements. Readers should not place undue reliance on forward-looking statements.

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.

Contact Information

  • Tectonic Minerals Corporation
    Michael Iverson
    (604) 856-9887

    Comstock Metals Ltd.
    Rasool Mohammad
    (604) 868-7737