West Mountain Capital Corp.
TSX VENTURE : WMT

November 20, 2013 12:27 ET

West Mountain Announces Proposed Transaction with Jereh International Investment (Group) Company Limited

CALGARY, ALBERTA--(Marketwired - Nov. 20, 2013) - West Mountain Capital Corp. (the "Company" or "West Mountain") (TSX VENTURE:WMT) announces that it has executed a binding heads of agreement ("Heads of Agreement") with Jereh Energy Services Corporation ("Jereh") of Yantai, China that sets out the terms and conditions of a private placement, the establishment of joint venture in China and other related transactions (collectively, the "Transaction").

The Heads of Agreement provides for: (a) the subscription by Jereh for new common shares of West Mountain (the "Common Shares") with an aggregate value of US$7,000,000 at a share price equal to 130% of the average trading price of West Mountain's common shares on the TSX Venture Exchange ("TSXV") for the 30 days preceding the date of the Heads of Agreement (the "Private Placement"); (b) the establishment of a joint venture ("the JV") for the purpose of remediating hazardous waste from the Chinese oil and gas industry by the Company's wholly owned foreign enterprise located in Shanghai, China ("PS2SH") and Jereh; (c) the grant by the Company to the JV an exclusive sub-license for the thermal phase separation technology for hazardous waste remediation in the Chinese oil and gas industry; and (d) the grant by the Company to Jereh of the exclusive right to manufacture the thermal phase separation units to be purchased by the JV in China. The proceeds of the Private Placement with Jereh will be used to repay outstanding bank indebtedness, to repay monies owned to debentureholders, to further underwrite the build-out of West Mountain's business plan in China and for general operating purposes. The price of $0.28 per common share is reserved as the issue price for the Private Placement.

Upon completion of the Transaction, Jereh will own approximately 39% of the outstanding common shares of West Mountain and 70% of the JV in mainland China. As a condition of the Transaction, Jereh will be provided with the right to nominate two directors to the board of directors of the Company, with such persons to be acceptable to the TSXV. This right will terminate on the earlier of (i) sale by Jereh of 50% of its common shares of West Mountain; or Jereh's percentage ownership of outstanding common shares of West Mountain falls below 10% (ownership maintained between 10%-30% grant Jereh the right to have at least one designee serve as a director) other than as a result of currently outstanding exercisable/convertible securities of West Mountain or on the exercise of options granted under West Mountain's stock option plan from time to time.

Joint Venture

West Mountain and Jereh have agreed in the Heads of Agreement to form a joint venture in China in accordance with the following principal terms and conditions: (a) the JV will be a joint venture company incorporated under the laws of the People's Republic of China; (b) the JV will have registered capital of US$1.0 million, of which US$700,000 in cash will be contributed by Jereh and US$300,000 in cash will be contributed by PS2SH, with the resulting participating interests of Jereh and PS2SH in the JV being 70% and 30% respectively; (c) the profits of the JV will be shared by Jereh and PS2SH on the basis of their respective participating interests in the JV; (d) the purpose of the JV will be to provide services exclusively for the remediation of hazardous waste to the Chinese oil and gas industry; (d) Jereh will be solely responsible for the JV's working capital requirements according to JV's operation, such financing behaviour including amount and interest rate shall be decided by JV's management team. PS2SH will have the right to appoint only one key member of the JV's management team; (e) Jereh will be solely responsible for the manufacture of equipment required by the JV for its projects, including thermal units; and (f) West Mountain will provide the JV, when requested by JV, with professional and technical services.

In addition to conditions customary for transactions of this nature, the completion of the Transaction is conditional upon the following: (a) the completion by West Mountain, Jereh and their respective advisors of "due diligence" investigations satisfactory to the parties in their respective sole discretion; (b) the entering into of definitive binding agreements providing for the various transactions that comprise the Transaction; and (c) the Company receiving all necessary consents and approvals, including approval by the TSXV of the Private Placement. The definitive agreements providing for the Transaction are expected to be finalized and executed by the parties on or before January 15, 2014.

About Jereh

Jereh Energy Services Corporation is wholly owned by Yantai Jereh Group, a public company listed on the Shenzhen Stock Exchange (002353:CH) with a market cap of over $7.0 billion. The company is focused on providing oilfield engineering, technology services and environmental services to the Chinese oil and gas industry. Jereh has subsidiaries in Houston, Calgary, UAE, Kazakkhstan and Indonesia.

About West Mountain

West Mountain is an established Canadian environmental solutions company specializing in the thermal treatment of a variety of hazardous and non-hazardous waste streams. It employs a unique indirectly heated, closed loop technology that allows it to extract even the most hazardous contaminants from soil, industrial sludge, pharmaceutical waste and consumer waste streams converting much of it into reusable oil and synthetic natural gas that it uses to sustain the process. This methodology offers significant opportunity for greenhouse gas reduction over traditional hazardous waste destruction technologies. The Company's management team maintains expertise in hazardous waste management, Brownfield remediation and pharmaceutical waste management with experience spanning North America and 15 countries internationally.

Update

The Company will not proceed with the proposed transactions with Reignwood International Investment (Group) Company Limited announced on July 10, 2013.

Forward-Looking Statements

This news release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "objective", "ongoing", "may", "will", "project", "should", "believe", "plans", "intends" and similar expressions are intended to identify forward-looking information or statements. In particular, this news release contains forward-looking information regarding the Transaction and the use of the proceeds received from the Private Placement. The forward-looking statements and information are based on certain key expectations and assumptions made by West Mountain, including expectations and assumptions concerning the completion of the transactions described in this news release. Although West Mountain believes that the expectations and assumptions on which such forward-looking statements and information are based are reasonable, undue reliance should not be placed on the forward-looking statements and information because West Mountain can give no assurance that they will prove to be correct. There is no assurance that the Transaction or any of the other transactions described in this news release will be completed on the terms set out in this news release or at all.

Since forward-looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. Factors which could materially affect such forward-looking information include the failure to enter into definitive agreements that provide for the Transaction described in this news release and other factors that are described in the risk factors in the Company's most recent annual management's discussion and analysis that is available on SEDAR at www.sedar.com. The forward-looking statements included in this news release are expressly qualified by this cautionary statement. The forward-looking statements and information contained in this news release are made as of the date hereof and West Mountain undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts the responsibility for the adequacy or accuracy of this release.

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