Urban Select Capital Corporation
TSX VENTURE : CH

Urban Select Capital Corporation

November 08, 2011 03:21 ET

Urban Select Announces Letter of Intent With ARNEVUT Resources

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Nov. 8, 2011) - Urban Select Capital Corporation (the "Company") (TSX VENTURE:CH) is pleased to announce that it has entered into a letter of intent ("LOI") with ARNEVUT Resources Inc. ("ARNEVUT"), a Colorado incorporated private company dedicated to the identification and active exploration of mineral properties. Pursuant to the terms of the LOI, the Company and ARNEVUT have agreed to establish a new company focused on precious metals exploration and development in the Western United States, especially in Nevada. The new company is expected to be called ARNEVUT Exploration Corp. ("ARNEVUT Exploration").

Pursuant to the LOI, the Company has agreed to: (i) incorporate ARNEVUT Exploration as a wholly-owned subsidiary of the Company; (ii) transfer cash to ARNEVUT Exploration in consideration for common shares of ARNEVUT Exploration and distribute these common shares to the Company's shareholders pursuant to a plan of arrangement under the Business Corporations Act (British Columbia) (the "Plan of Arrangement"); and (iii) assist ARNEVUT Exploration with completion of an anticipated $1,500,000 non-brokered private placement financing (the "Financing") to be completed following the entering into of the Definitive Agreement (as defined herein). The Company will seek approval of the Plan of Arrangement at an annual and special general meeting of its shareholders to be held on December 19, 2011 (the "Meeting"). Further information regarding the LOI and the Plan of Arrangement will be set forth in the notice of meeting and information circular to be prepared in connection with the Meeting. Should the Plan of Arrangement receive approval at the Meeting, it is anticipated that the Plan of Arrangement will become effective shortly thereafter. Upon completion of the Plan of Arrangement, ARNEVUT Exploration will become a reporting issuer in British Columbia and Alberta. Completion of the Plan of Arrangement is subject to the approval of the Supreme Court of British Columbia and the TSX Venture Exchange.

Subject to completion of the Plan of Arrangement, ARNEVUT and ARNEVUT Exploration anticipate entering into a definitive agreement (the "Definitive Agreement") whereby ARNEVUT Exploration will acquire, in consideration for the issuance of 18,997,767 common shares of ARNEVUT Exploration, 100% of ARNEVUT's option interests in the Island Mountain Gold Property, Nevada, USA (the "Acquisition") and East Canyon Property, Nevada and Utah, USA (collectively the "Properties"). Should ARNEVUT and ARNEVUT Exploration enter into the Definitive Agreement, the Acquisition will be subject to a number of conditions, including: completion of the Financing; delivery by ARNEVUT of a National Instrument 43-101 compliant technical report in respect of one of the Properties; and satisfactory due diligence. Should the Plan of Arrangement be implemented, the Definitive Agreement will be entered into and the Acquisition will be completed, it is expected that shareholders of the Company will:

  • retain their current interest in the Company;
  • obtain an approximate 3.4% interest in ARNEVUT Exploration; and
  • through their interest in the Company, receive the benefit of the Company's approximate 3.8% interest in ARNEVUT Exploration.

Should the Plan of Arrangement be completed, it is anticipated that the Definitive Agreement will be entered into on or before January 31, 2012 with the Acquisition to be completed shortly thereafter. The Company and ARNEVUT are at arm's length.

ABOUT ARNEVUT RESOURCES

ARNEVUT Resources is a private, pre-IPO stage company transitioning to a full junior gold mining company. ARNEVUT holds an option on the Island Mountain gold-silver property, Nevada, USA. ARNEVUT also holds an exclusive contract on the East Canyon Claims, a gold-silver-copper-lead-zinc property on the border between Nevada and Utah, USA.

Island Mountain

The Island Mountain property is located near the northeast end of the Jerritt Canyon Trend (>9 million oz Au produced), 70 miles north of Elko, Nevada, with similarities to other known deposits in that Trend. The property has had gold intercepts in drill holes (up to 11 m at 0.119 opt); intercepts are variable, scattered laterally and vertically in clusters, and mineralization limits have not yet been defined.

The Island Mountain Property currently consists of approximately 1,480 acres of Federal land, managed by the Forest Service, as 78 unpatented claims and 320 acres of leased private land (16 patented claims). ARNEVUT's option agreement with Victoria Gold Corp. requires expenditures of $2,500,000 to earn a 51% ownership in the Property by November 2013. ARNEVUT's expenditures to date are approximately $740,000. ARNEVUT can achieve a total ownership of 75% through further expenditure of $2,500,000 and completion of a full feasibility analysis.

ARNEVUT has completed a NI 43-101 Technical Report on Island Mountain, dated 2008, but is in the process of updating this report to include more recent resource estimation modeling by a QP and cover changes to the land package and technical activities since 2008. The resource modeling has shown that the Island Mountain Property has a historical Inferred resource of 515,000 ounces of gold at a 0.20 g/tonne cutoff grade (P.J. Hollenbeck, pers. Communication, 2011), which is a most likely cutoff for a heap leach operating scenario. NI 43-101 compliant resources are 38,000 ounces Measured and Indicated resources and 43,000 ounces Inferred resources. The known gold deposits occur in clusters, partially due to the clustered nature of past drilling activity, along multiple apparent northeast-southwest and west-northwest-east-southeast trends. All known resources are in the oxide zone, and any sulfide resource potential remains untested. All clusters are unconstrained laterally and vertically based on past drilling.

East Canyon

This property consists of 10 unpatented claims (approx. 180 acres) on Federal lands and one 634 acre Utah State Section encompassing a highly prospective Long Canyon-type gold target that is mostly within Utah but straddles the Nevada-Utah state line, roughly 40 miles north of Wendover, Utah. The property also has silver, copper, lead, and zinc mineralization.

East Canyon is located in the northern Pilot Range and is within the Long Canyon Trend in northeastern Nevada and northwestern Utah. The Long Canyon Trend was recently identified as a result of gold discoveries in the northern Pequop Range of Nevada, the T.U.G. and KB deposits about 10 miles north of East Canyon, and the Viper deposit about 15 miles north of East Canyon, the latter three deposits are all near the Utah-Nevada border.

ABOUT URBAN SELECT

Urban Select Capital Corporation is global investment management, financial advisory and private equity 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.

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 approval of the Company's shareholders, the Supreme Court of British Columbia and the TSX Venture Exchange. The Acquisition is subject to completion of the Plan of Arrangement, execution of a Definitive Agreement 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