THEMAC Resources Group Limited
TSX VENTURE : MAC.H

March 02, 2011 14:44 ET

THEMAC Receives Conditional Approval From the TSX Venture Exchange for Acquisition of Copper Flat

VANCOUVER, BRITISH COLUMBIA--(Marketwire - March 2, 2011) - THEMAC Resources Group Limited ("THEMAC" or "the Company") (TSX VENTURE:MAC.H) is pleased to announce that, further to its news releases of December 23, 2010 and November 24, 2010, it has received conditional approval from the TSX Venture Exchange (the "Exchange") to complete the acquisition of the Copper Flat Property from ECR Resources plc (formerly named Electrum Resources plc and Mercator Gold plc)("ECR") and ECR's wholly-owned New Mexico subsidiary, Copper Flat Corporation ("CFC"). In addition, the Company has also:

  • Appointed an additional independent director and new Chief Financial Officer.
  • Made arrangements to borrow an additional $5.25 million from Tulla Resources Pty Ltd ("Tulla"), a company controlled by Kevin Maloney.
  • Made a $150,000 deferral payment, through CFC, in respect of the option to acquire the Copper Flat Property.
  • Filed its Filing Statement and an updated Technical Report in respect of the Copper Flat acquisition.

Conditional Approval from the TSX Venture Exchange

The Exchange has conditionally approved the completion of the acquisition (the "Acquisition") of the exclusive option to acquire a 100% interest in the Copper Flat Property and related assets from CFC. The Acquisition is described in the Company's Filing Statement dated February 25, 2011, which is available under the Company's profile on SEDAR at www.sedar.com. In connection with its approval of the Acquisition, the TSX Venture Exchange approved:

  • the issue of 10,500,000 shares and 10,500,000 warrants to ECR as partial consideration for the Acquisition, each warrant exercisable to acquire one share at a price of $0.28 per share for a period of five years from Closing of the Acquisition;
  • the issue of 5,582,556 shares and 5,582,556 warrants to subscribers of the May 2010 private placement of subscription receipts, each warrant exercisable to acquire one share at a price of $0.28 per share at any time before May 3, 2013; and
  • the issue to Tulla of 40,000,000 units, each unit consisting of one common share and one warrant, at a price of $0.255 per unit, with each warrant being exercisable to acquire one share at a price of $0.34 per share for a period of five years from Closing.

The Exchange has also approved the reactivation of the Company to Tier 2, subject to the Company (i) filing final documentation, (ii) completing the financing with Tulla for $10.2 million, (iii) implementing a $5.25 million bridge loan, and (iv) appointing a second independent director, and the completion of a distribution trade to ensure the Company meets the 10% public float requirement.

Appointment of Independent Director and Chief Financial Officer

The Company is pleased to announce the appointment of Mr. Joel Schneyer to the Board of Directors. Mr. Schneyer's international career spans 30 years as an investment banker, financial engineer, geologist and expert witness to private and listed resource companies, private equity groups, as well as law firms and governments. Mr. Schneyer is based in Denver, Colorado and is the Managing Director of the investment banking firm Headwaters MB. Prior to joining Headwaters MB, Mr. Schneyer founded Mercantile Resource Finance, an advisory firm to the natural resource sector. Prior to that, he was Manager of Derivative Finance in the metals group of Barclays Bank, and a Senior Analyst in the New Business and Strategic Planning Group, at Billiton Royal Dutch Shell. Before commencing on his banking career, Mr. Schneyer worked as an oil and gas exploration geologist with Celeron Oil & Gas. Joel has served on the board of directors of a number of mining companies over the years and currently serves on the boards of the TSX and TSX-V listed companies, including Globex Mining Enterprises, Inc. and Claim Post Resources, Inc. He also serves on the board of SynCoal Solution, Inc., a private Colorado based company advancing a pre-combustion coal upgrading and flue gas conditioning technology. He has earned an undergraduate degree from Colgate University, a Masters in Geology from the University of Texas at Austin, and a Masters in Mineral Economics from the Colorado School of Mines. He holds the ICD.D certification from the Institute of Corporate Directors and the FINRA Series 79 investment banking license.

The Company is also pleased to announce the appointment of Mr. Steve Vanry as Chief Financial Officer of the Company. Mr. Vanry's career includes over 17 years with public and private natural resource companies at both the management and board levels, concentrated in strategic planning, fund raising, mergers and acquisitions, regulatory compliance and financial reporting. In 2003, he founded Fury Explorations Ltd., a precious metal focused company, which was subsequently acquired by Golden Predator Mines Inc. Mr. Vanry currently serves as a director and officer of several public companies in the mining sector and provides consulting services in corporate finance, business development and merchant banking. He holds the right to use the Chartered Finance Analyst (CFA) and Canadian Investment Manager (CIM) designations and is a member of the CFA Institute and the Vancouver Society of Financial Analysts.

$5.25 million Loan from Tulla

In addition to the purchase of 40,000,000 units, Tulla has agreed to provide the Company with a $5.25 million. The loan will bear interest at 10% per annum and mature 15 months after being made. The loan may be repaid by the Company at any time without penalty, and will be required to be repaid if the Issuer completes an equity financing for greater than $20 million. The loan will be advanced upon closing of the Acquisition, and will be used to execute the Company's business plan described in the Filing Statement.

Copper Flat Property Option Payments

As previously announced, THEMAC entered into a transaction agreement dated June 28, 2010, as amended November 23, 2010 to acquire an exclusive option over a 100% interest in the Copper Flat Property from CFC. CFC has to date paid to the underlying optionors a total of US$2,850,000 pursuant to the underlying option agreement. A portion of these payments were funded by an advance from THEMAC to CFC. CFC has also deferred the final payment of US$7.0 million from February 14, 2011 to May 14, 2011 by making a deferral payment of US$150,000 (also advanced by THEMAC) on February 11, 2011.

Filing Statement and Technical Report

The Company has filed a Filing Statement with the Exchange in connection with the Acquisition of the Copper Flat Property and related transactions, and has made the Filing Statement available on SEDAR at www.sedar.com. Details regarding the Company and the acquisition of the Copper Flat Property are available in the Filing Statement. In addition, the Company has filed on SEDAR an updated technical report on the Copper Flat Property, prepared by SRK Consulting (U.S.), Inc. and endorsed by Qualified Persons Peter Clarke, P.Eng., B.Sc., MBA, Jeffrey Volk, CPG, FAusIMM, MSc, Bret Swanson, BE Mining, MAusIMM of SRK Consulting (U.S.), Inc. and Mark Pfau, BA, MSc., R.P.G. of Tellurian Exploration, Inc. – all of whom are independent of the Company) entitled "Updated NI 43-101 Preliminary Assessment, THEMAC Resources Group Limited, Copper Flat Project, Sierra County, New Mexico" dated June 30th, 2010 and updated on February 25, 2011.

The updated technical report clarifies the recommended work program and budget for the Copper Flat Property. The updated report provides that the proposed Pre-Feasibility Study program be conducted in two phases, the second phase being contingent on the first phase. The authors of the updated report estimated an aggregate cost of the two-phase program to be approximately US$3.0 million, excluding ongoing project environmental permitting programs, divided into two phases. The following is extracted from the report:

Item Cost (US$)
Pre-Feasibility Phase 1 Program  
Resource Drilling Program Requirements (as described in Section 19.1.1) $995,000
Aerial Topography Survey and Site Surveying $25,000
Sub-Total Pre-Feasibility Phase 1 $1,020,000
Pre-Feasibility Phase 2 Program  
Geotechnical Pit Slope Program and Study (with drilling costs in Hydrogeology) $130,000
Geotechnical Tailings Pre-Feasibility Program and Study $120,000
Hydrogeology Pre-Feasibility Program and Study (including drilling costs) $1,100,000
Metallurgical Pre-Feasibility Program and Testwork $170,000
Infrastructure Pre-Feasibility Assessment Program $160,000
Remaining Pre-Feasibility Study (PFS) NI 43-101 Compliant $300,000
Sub-Total Pre-Feasibility Phase 2 $1,980,000
Total Pre-Feasibility Phases 1 and 2 $3,000,000

There were no material changes to the scientific or technical or economic information contained in the report.

Distribution Trade

Marley Holdings Pty. Ltd. ("Marley"), a company controlled by Mr. Kevin Maloney, a director of the Company who also controls Tulla, has entered into an agreement to sell a total of 3.4 million shares of the Company on a private basis to an offshore purchaser. Such sale of shares is anticipated to be completed shortly prior to or concurrently with the closing of the Concurrent Financing and will reduce Marley's holdings of shares of the Company, to ensure the Company has an adequate public float to meet Tier 2 listing requirements, at the request of the Exchange. Following the disposition of 3.4 million shares and prior to closing of the Acquisition and the Concurrent Financing, Mr. Maloney will own, directly and indirectly through Marley, a total of 10,806,879 common shares, representing approximately 60% of the outstanding shares of the Company.

About the Copper Flat Project

The Copper Flat project is a porphyry copper-molybdenum-gold-silver deposit located in the Las Animas mining district of South Central New Mexico. The project is approximately 150 miles south of Albuquerque, New Mexico and approximately 20 miles southwest from Truth or Consequences, New Mexico (straight-line distances). Access from Truth or Consequences is by 24 miles of paved highway and 3 miles of all weather gravel road.

In 1982, Quintana Minerals brought the project into production as an open pit mine with a mill and concentrator rated at 15,000 short tons per day. The mine was in production for three and a half months, but operations were halted when copper prices declined. The property was placed on care and maintenance until 1986 at which point all the buildings and equipment were removed and sold. However building foundations and other infrastructure remain.

Neither the TSX Venture Exchange (the "TSXV") nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) has reviewed, nor do they accept responsibility for the adequacy or accuracy of, this release.

Contact Information

  • THEMAC Resources Group Limited
    Barrett Sleeman, P.Eng.
    Chief Executive Officer
    (604) 806-6110
    (604) 806-6112 (FAX)