Urban Select Capital Corporation
TSX VENTURE : CH

Urban Select Capital Corporation

February 27, 2012 08:30 ET

Urban Select Announces Letter of Intent With Constantine Metal Resources and Carlin Gold

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Feb. 27, 2012) - Urban Select Capital Corporation (the "Company") (TSX VENTURE:CH) is pleased to announce that it has entered into a letter of intent ("LOI") with Constantine Metal Resources Ltd. ("Constantine"), a company listed on the TSX Venture Exchange (the "Exchange"), and Carlin Gold Corporation ("Carlin"), a company also listed on the Exchange (collectively, Constantine and Carlin will be referred to as the "Vendors"). The Vendors currently have a 100% interest in Yukon Properties (the "Properties").

Pursuant to the LOI, the Company has agreed to: (i) transfer cash to its wholly-owned subsidiary ("SpinCo"), in consideration for common shares of SpinCo and distribute these common shares to the Company's shareholders pursuant to the Company's previously-announced plan of arrangement under the Business Corporations Act (British Columbia) (the "Plan of Arrangement"); (ii) enter into a definitive agreement (the "Definitive Agreement") with the Vendors whereby SpinCo will acquire, in consideration for the issuance of 28,333,333 common shares of SpinCo and payment of $1,000,000 to the Vendors, 100% interest in the Properties (the "Acquisition") and (iii) assist SpinCo with completion of an anticipated $4,000,000 non-brokered private placement financing (the "Financing") to be completed following the entering into of the Definitive Agreement (as defined herein). In addition, upon production by the SpinCo of a National Instrument 43-101 ("NI 43-101") compliant mineral resource estimate in respect of the Properties, SpinCo will issue to the Vendors 1,000,000 common shares for each 1,000,000 ounces of gold in the measured and indicated mineral resource categories, to a maximum of 4,000,000 common shares. The Acquisition is anticipated to be subject to a number of conditions, including but not limited to: completion of the Financing; delivery by the SpinCo of a NI 43-101 compliant technical report in respect of the Properties; with respect to the Vendors, approval of the Exchange; and satisfactory due diligence.

Upon completion of the Acquisition and Financing, it is anticipated that ownership of SpinCo will be approximately as follows: the Company's current shareholders 2.5%; Constantine 28.5%; Carlin 28.5%; the Company 3.5%; and the remaining 37% to investors in seed financings and the Financing. The Company received approval of the Plan of Arrangement at its annual and special general meeting of its shareholders held on December 19, 2011 (the "Meeting"). Final court approval of the Plan of Arrangement was received on December 21, 2011. The Company has also received conditional approval of the Exchange in respect of the Plan of Arrangement. Further information regarding the Plan of Arrangement is set forth in the notice of meeting and information circular prepared in connection with the Meeting, a copy of which is available at www.sedar.com. It is anticipated that the Plan of Arrangement will be made effective on or before February 29, 2012. Upon completion of the Plan of Arrangement, SpinCo will become a reporting issuer in British Columbia and Alberta. In addition, concurrently with completion of the Plan of Arrangement, SpinCo is expected to complete a $100,000 seed financing. Completion of the Plan of Arrangement is subject to the final approval of the Exchange.

Should the Definitive Agreement be entered into and the Acquisition be completed, it is expected that shareholders of the Company will:

  • retain their current interest in the Company;
  • obtain an approximate 2.5% interest in SpinCo, an exploration and development company with properties in the Yukon; and
  • through their interest in the Company, receive the benefit of the Company's approximate 3.5% interest in SpinCo.

Should the Plan of Arrangement be completed, it is anticipated that the Definitive Agreement will be entered into on or before April 15, 2012. Should the Plan of Arrangement be completed, but the Acquisition not be completed, shareholders of the Company will retain their interest in the Company and will also hold an interest in SpinCo, an unlisted reporting issuer in British Columbia and Alberta with no assets other than cash. The Company, Constantine and Carlin are at arm's length.

In other news, the Company wishes to confirm that it has terminated its previously announced letter of intent with ARNEVUT Resources Inc. The LOI with the Vendors is intended to replace the letter of intent with ARNEVUT.

ABOUT URBAN SELECT

Urban Select Capital Corporation is global investment management and financial advisory firm focused on investing growth capital into private and public companies in a broad range of sectors including renewable energy, natural resources, chemicals, agriculture and consumer retail services. Urban Select's management team is composed of investment professionals combining an Asian background with Western education and extensive experience in investment banking, venture capital and fund management in Canada, China and the U.S.

Caution Regarding Forward-Looking Statements - This news release contains certain forward-looking statements, including statements regarding the business and anticipated financial performance of the Company, including with respect to completion of the Plan of Arrangement, the entering into of a Definitive Agreement, completion of the Financing, completion of the Acquisition and the anticipated results thereof. These statements are subject to a number of risks and uncertainties. Actual results may differ materially from results contemplated by the forward-looking statements. There is no guarantee that any of the Plan of Arrangement, the entering into of the Definitive Agreement, the Acquisition or the Financing will be completed as proposed or at all. The Plan of Arrangement remains subject to final approval of the TSX Venture Exchange. The Acquisition is subject to completion of the Plan of Arrangement, execution of a Definitive Agreement, Exchange approval and completion of the Financing, among other things. When relying on forward-looking statements to make decisions, investors and others should carefully consider the foregoing factors and other uncertainties and should not place undue reliance on such forward-looking statements. The Company does not undertake to update any forward looking statements, oral or written, made by itself or on its behalf except as required by law.

Neither the 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

  • Urban Select Capital Corporation
    David Yoo
    Chief Financial Officer and Managing Director
    (604) 689-0618 or (866) 689-0618
    (604) 689-0628 (FAX)
    www.urbanselect.com