Valencia Ventures Inc.
TSX VENTURE : VVI.H

Valencia Ventures Inc.

April 02, 2015 12:59 ET

Valencia Enters Into Agreement to Acquire Alternative Fuel Company Specializing in Compressed Natural Gas

TORONTO, ONTARIO--(Marketwired - April 2, 2015) - Valencia Ventures Inc. (TSX VENTURE:VVI.H) ("Valencia" or the "Company") is pleased to announce that it has entered into an amalgamation agreement dated March 13, 2015 ("Agreement") with Chelsea Natural Gas Ltd., a British Columbia company, ("Chelsea CNG") and a subsidiary of Valencia, whereby Valencia will acquire all of the issued and outstanding shares of Chelsea CNG (the "Transaction"). It is expected that the Transaction will be effected by way of a three-cornered amalgamation pursuant to which a wholly-owned subsidiary of Valencia will amalgamate with Chelsea CNG, and the holders of Class "A" voting shares of Chelsea CNG will receive 1.6 common share of Valencia for each one share of Chelsea CNG so held. There are currently 16,473,422 common shares of Valencia issued and outstanding and 22,000,000 Class "A" voting shares of Chelsea CNG. Following completion of the Transaction, the newly amalgamated company, which will hold all of Chelsea CNG assets, will be a wholly-owned subsidiary of Valencia. The completion of the Transaction remains subject to a number of conditions, as set forth below.

Chelsea CNG operates a Canadian compressed natural gas (CNG) distribution system for motor vehicles in Canada. Chelsea CNG engages in two major activities: (1) Chelsea CNG develops and operates compressed natural gas fueling stations throughout Canada; and (2) Chelsea CNG modifies land driven motor vehicles such as cars and trucks to enable them to use compressed natural gas as their fuel. Currently, Chelsea CNG primarily serves businesses that operate vehicle fleets. Chelsea CNG converts vehicle fleets to enable those vehicles to use compressed natural gas as fuel. Chelsea CNG then develops and operates compressed natural gas fuelling stations to serve those fleets. Chelsea CNG's customers save expense by lowering the operating and capital costs of maintaining their vehicle fleets, particularly for those businesses that rely on vehicle fleets to serve their customers. Chelsea CNG also operates shared fueling stations available to smaller fleet owners whose vehicles use compressed natural gas for fuel. Chelsea CNG generates revenue on sales of fuel from the stations that it operates. It also generates revenue from the fees earned from converting vehicles from traditional fuel to compressed natural gas and selling dedicated natural gas heavy duty vehicles.

In connection with the transaction, Valencia has provided Chelsea CNG with a $250,000 loan (the "Loan") for working capital purposes until the Transaction is completed. In the event the Transaction is not completed by June 30, 2015, the Loan is secured against the Class "A" voting shares of Chelsea CNG owned by the founding shareholders of VVI, comprising over 90% of the Class "A" voting shares of Chelsea CNG.

"In Canada, there are many commercial and municipal fleets which are small in number. This fact makes it difficult for individual fleet operators to justify the expense of building their own compressed natural gas refueling facilities and converting their existing vehicle inventory," said Steve Carmichael, President and CEO of Chelsea Natural Gas Ltd. "Chelsea CNG's fuelling solutions, and vehicle conversion products, allow us to offer a cost-effective way for fleet operators to take advantage of the economic and environmental benefits that come with using compressed natural gas as a transportation fuel."

In connection with the proposed Acquisition, the Company intends to complete a private placement financing for proceeds of not less than $3,000,000 (the "Financing"). The final terms of the Financing are currently being negotiated and an additional announcement will be made by the Company upon the terms of the Financing being finalized. It is anticipated that the proceeds of the Financing will be used for meeting the initial listing requirements of the Exchange, funding Chelsea CNG's business operations, including commitments to build fueling station, expand the scale and number of its conversion facilities, and for general working capital. A finder's fee may be payable in connection with the Financing.

The Transaction will constitute a Reverse Takeover and a Change of Business for the Company under the policies of the TSX Venture Exchange (the "Exchange"). Additional information as required by the policies of the Exchange will follow in subsequent press releases. Closing of the Transaction is subject to a number of conditions including the completion of the Financing, receipt of all required shareholder, regulatory and third party consents and approvals including Exchange approval, and satisfaction of other customary closing conditions. The Transaction cannot close until the required approvals are obtained. There can be no assurance that the Transaction will be completed as proposed or at all. If required pursuant to Exchange Policy 2.2, the Company will retain a sponsor in connection with the Transaction. 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.

Investors are cautioned that, except as disclosed in the disclosure document to be prepared in connection with the Transaction, any information released or received with respect to the Acquisition may not be accurate or complete and should not be relied upon. Trading in the securities of the Company should be considered highly speculative. Trading in the common shares of the Company will remain halted pending further filings with the Exchange.

Upon completion of the Transaction, it is anticipated that management of Valencia will include Mr. Steve Carmichael as President and Chief Executive Officer and the board of directors of Valencia will include the persons identified below:

Dave Antony. Mr. Antony is a Chartered Accountant and has over 20 years' experience in assisting companies in structuring transactions, accessing capital, and corporate governance. He is currently is also Chief Executive and a director of Blackhawk Resource Corp., and DraftTeam Daily Fantasy Corp., and he is a director of Southern Pacific Resource Corp., Africa Hydrocarbons Inc., and Iron Tank Resources Corp., In addition Mr. Antony sits on both the Local Advisory and National Advisory Committees for the TSXV. Mr. Antony is currently the Chairman of Valencia.

Steve Carmichael. Mr. Carmichael is a founding shareholder and the current President and CEO of Chelsea CNG. He has over 30 years' experience with early stage and start up industrial design and internet companies. Prior to Chelsea CNG, he created and was the driving force behind one of the largest online business directories in the world, publicly listed on the OTCBB. Mr. Carmichael worked in San Jose, California for a leading robotics company as a project leader. From 1986 to 2000 Mr. Carmichael worked at several World Expositions as sales and project management. Mr. Carmichael has been involved in all aspects of a business from capital raising, sales & marketing to research & development.

Dianne Szigety. Ms. Szigety brings over 25 years of management experience for public and private companies, specializing in corporate paralegal services to help optimize regulatory compliance and corporate governance for her clients. Her hands-on experience liaising with a diverse group of clients, auditors, lawyers, transfer agents, stock exchanges and regulatory bodies allows her to provide detailed insight based on experience. She has been an Officer of a number of TSX Venture Exchange, Canadian Securities Exchange and OTCQB/QX-listed companies and was a Director and Officer of a junior mining exploration company from 1996 to 2013. Ms. Szigety is a Fellow of The Institute of Chartered Secretaries and Administrators. Previously, she worked as a Legal Assistant with several prominent Vancouver, B.C. law firms.

John L. Turner, P.Eng. MBA. Mr. Turner, currently Chelsea CNG's COO and Director, has over 30 years of experience and leadership in the energy business most recently with FortisBC. He is a transformational and results-oriented professional with a record of success as a business development and operations leader - from the production phase to end-use market growth and development. He has been instrumental in transforming the energy business in British Columbia to a more sustainable future, developing and marketing new renewable energy products and services including CNG and LNG. Mr. Turner is an active speaker on the topic of energy and sustainable energy market development; presenting at international, national and provincial level events. He has an MBA in Entrepreneurship from the University of Victoria, and a degree in Mechanical Engineering from the University of Waterloo.

Thomas (Tom) West. Mr. West has over 30 years' experience in military, computing, banking, and the energy sectors. Tom's career started as a Communications and Computer Systems Officer in the US Air Force and since 1990 Tom has worked in the oil and gas sector in software and control systems, project management, management consulting and oil and gas production over the last two years as CEO of two startup companies, Imola Oil and Gas Corporation and AquapheX Canada Ltd. Mr. West is an MBA graduate of Florida Institute of Technology and resides in Chestermere, Alberta.

About Valencia

Valencia is a Canadian resource company with common shares that trade on the NEX Board of the TSX Venture Exchange under the symbol VVI.

About Chelsea CNG

Chelsea Natural Gas Limited is a Vancouver based corporation that will build and operate compressed natural gas (CNG) filling stations and conversion shops in business communities throughout Canada. Our goal is to help reduce the cost of fuel in fleet vehicles and to assist local communities and businesses in reducing their carbon footprint, while providing a cleaner and healthier environment for tomorrow. For more information about Chelsea CNG, please visit www.Chelseacng.com.

Forward - Looking Information

This press release contains "forward-looking information" within the meaning of applicable Canadian securities legislation. Forward-looking information includes, but is not limited to, statements with respect to the timing and implementation of the Transaction, the development and prospects of Chelsea CNG's business, the proposed Financing and the use of proceeds of the Financing. Generally, forward looking information can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information, including but not limited to: general business, economic, competitive, geopolitical and social uncertainties; the actual results of exploration activities; regulatory risks; risks inherent in foreign operations; and other risks of the oil and gas industry. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking information. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws.

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

  • Valencia Ventures Inc.
    Christine Gallo
    65 Queen Street West, Suite 815
    Toronto, Ontario
    M5H 2M5
    cgallo@fmresources.ca

    Chelsea Natural Gas Ltd.
    Steve Carmichael
    President and CEO
    604.942.2300
    steve@Chelseacng.com

    Chelsea Natural Gas Ltd.
    118 - 1525 Broadway Street
    Port Coquitlam, BC
    V3C 6P6
    www.Chelseacng.com