Yonge Street Capital Corp.

November 29, 2007 14:50 ET

Yonge Street Capital Corp. Has Signed LOI With Tamaka Holdings Inc. to Complete Qualifying Transaction and Pursue Gold Exploration Business

TORONTO, ONTARIO--(Marketwire - Nov. 29, 2007) - Yonge Street Capital Corp. ("Yonge Street" or the "Company") (TSX VENTURE:YSC.P) is pleased to announce that it has entered into a letter of intent with Tamaka Holdings Inc. ("Tamaka" or the "Private Company") dated November 19, 2007 (the "LOI") to complete an arm's-length business combination with Tamaka (the "Proposed Amalgamation") to continue Tamaka s gold exploration business.

About the Proposed Amalgamation

Yonge Street and Tamaka propose to combine pursuant to a reverse take-over transaction (the "RTO") by amalgamating into a new corporation (the "Amalgamated Company") to be named Tamaka Gold Inc., if available, or such other name as the Private Company may determine.

As part of the completion of the RTO, it is proposed that:

(a) Yonge Street will transfer from its current federal jurisdiction and be continued under the laws of the Province of Ontario,

(b) the Yonge Street common shares will be consolidated on a one for two basis on the Proposed Amalgamation (reducing to approximately 1,514,375 common shares (1,717,250 fully diluted) of the Amalgamated Company), and

(c) the shareholders of Tamaka will receive one common share of the Amalgamated Company in exchange for each issued and outstanding common share of the Private Company.

Yonge Street has approximately 3,028,750 common shares issued and outstanding. The Company s shares are currently listed for trading on the TSX Venture Exchange (the "Exchange"). The Company has a stock option plan and there are 302,875 exercisable options outstanding under such plan with an exercise price of $0.20 per share. The agents of the Company s initial public offering also hold 102,875 non-transferable options exercisable at $0.20 per share. There are no other exercisable rights, warrants or options currently outstanding to acquire shares of the Company.

Prior to the closing of the RTO, Tamaka proposes to continue its current private placement of up to 8,000,000 "flow-through" common shares and up to 2,500,000 common shares at a price of $0.65 per flow-through share and $0.50 per common share (of which 1,538,461 flow-through shares and 1,540,000 common shares have already been issued for gross proceeds of $1,770,000). The proceeds of this private placement will be used to fund exploration activities and working capital for Tamaka or, upon completion of the RTO, for the Amalgamated Company (the "Continuing Private Placement").

At or about the time of closing of the RTO, Tamaka and Yonge Street will use their reasonable best efforts to arrange for a private placement for the Amalgamated Company to provide financing of up to $20,000,000 comprised of up to approximately $5,000,000 of flow-through financing (at a price in excess of $0.65 per flow-through share) and up to $15,000,000 of financing (at a price in excess of $0.50 per common share) for the further exploration and development of the Rundle/Swayze and Goldlund properties or such other amounts and terms as Tamaka may determine, acting reasonably (the "Concurrent Private Placement").

It is proposed that the Amalgamated Company will issue to a third party who is currently arm s length to Yonge Street and Tamaka (namely Donald A. Sheldon or his nominee) 150,000 common shares of the Amalgamated Company at a deemed issue price of $0.50 per share and warrants entitling the holder to acquire up to 150,000 common shares at an exercise price of $0.50 per share at any time within 2 years after the listing of the Amalgamated Company s shares on the TSXV, as finder s fees and for structuring and corporate finance advice in regards to the completion of the RTO transaction.

Frank Zoebelein of King City, Ontario, a shareholder of Tamaka and a proposed director of the Amalgamated Company, will likely be the largest shareholder of the Amalgamated Company, holding or controlling 56,250,000 shares (approximately 60% of the outstanding shares (or approximately 55% fully diluted)). It is not anticipated that any other person will own or control more than 10% of the Amalgamated Company.

Yonge Street is a "capital pool company" and intends that the Proposed Amalgamation shall constitute the "Qualifying Transaction" of the Company as such terms are defined in the policies of the Exchange The Proposed Amalgamation will be an arm's length transaction.

The completion of the Proposed Amalgamation is subject to Exchange approval and any other necessary regulatory approvals. It is also subject to additional conditions precedent, including such security holder approvals of both Yonge Street and Tamaka as may be required by applicable corporate or securities laws; satisfactory completion of due diligence reviews by both parties; approvals of the boards of directors of Yonge Street and Tamaka; completion of a definitive agreement setting forth the terms and conditions of the Proposed Amalgamation consistent with the LOI; and certain other conditions customary for transactions of this nature.

The completion of the Proposed Amalgamation is also conditional on the completion of the Continuing Private Placement and the Concurrent Private Placement in an aggregate amount of not less than $2,000,000 (excluding funds raised by Tamaka prior to the date of the LOI) or such greater amounts as Tamaka may determine.

The Company will be applying to have the Amalgamated Company listed as a Tier 2 Mining Issuer on the Exchange upon completion of the Proposed Amalgamation.

On completion of the Proposed Amalgamation, the Amalgamated Company will be in the mineral exploration industry in the Province of Ontario. Further information on the business of Tamaka is detailed below.

Sponsorship of a Qualifying Transaction of a capital pool company is required by the Exchange unless an issuer is granted an exemption in accordance with Exchange policies. The Company intends to apply for an exemption from sponsorship requirements. However, there is no assurance that the Company will obtain an exemption.

About Yonge Street

Yonge Street is a company incorporated under the Canada Business Corporations Act. It is a reporting issuer in the Provinces of Alberta, British Columbia, Manitoba, and Ontario.

Further information concerning Yonge Street can be found in the prospectus of Yonge Street dated March 27, 2006 and is available at www.sedar.com.

About Tamaka

The following information relating to Tamaka has been provided to the Company by Tamaka. Tamaka was incorporated pursuant to the Business Corporations Act (Ontario). Tamaka is a private corporation with its head office located in King City, Ontario.

Business of Tamaka

Tamaka carries on the business of mineral exploration in the Province of Ontario. It currently has agreements to acquire, from corporations wholly-owned by Frank Zoebelein, the following gold exploration properties:

- South Rundle, located some 72 km south of Foleyet, Ontario, along a year-round lumber road, which comprises in excess of 324 hectares. South Rundle is a well-advanced property complete with underground development and infrastructure including a development campsite as well as a number of pieces of major mining equipment. A mine closure plan has been accepted for this project by the Province of Ontario and a certificate of approval has been issued for its tailings disposal areas; it is designated under the Mining Tax Act (Ontario) as a remote mine . Further information about the South Rundle property will be provided in information to be sent to shareholders for the meeting to be called to approve the Qualifying Transaction.

- North Rundle, located in close proximity to the South Rundle property, comprises in excess of 525 hectares. It is a grass-roots exploration property.

- Swayze, located 14 km north the South Rundle property, comprising in excess of 453 hectares. The Swayze property also has underground development in place. Further information about the Swayze property will be provided in information to be sent to shareholders for the meeting to be called to approve the Qualifying Transaction.

- Goldlund Group and Greater Goldlund, located midway between Dinorwic and Sioux Lookout, Ontario, consisting of a total of approximately 20,500 hectares. The Goldlund Group property has an underground development on three levels; it operated from July 1982 until February 1985 producing approximately 17,500 ounces of gold. Some infrastructure and milling equipment has been acquired by Tamaka for this project. Greater Goldlund is a grass-roots exploration property. Tamaka has completed approximately 8,500 metres of drilling on these projects in 2007 but has not received or compiled all of the assay results. Further information about the Goldlund Group will be provided in information to be sent to shareholders for the meeting to be called to approve the Qualifying Transaction.

Management and Board of Directors of the Amalgamated Company

Upon completion of the Proposed Amalgamation, it is proposed that the board of directors of the Amalgamated Company will initially be comprised of approximately 5 members, including the following:

Frank Zoebelein,

Gerald Ruth,

Donald A. Sheldon, and

Eric Zoebelein.

The officers of the Amalgamated Company are to include the following:

President and CEO to be designated by the Private Company

Gerald Ruth Interim CFO

Karel Pieterse, A.C.S.M., P.Eng COO

Frank Zoebelein Director

Mr. Zoebelein is an independent businessman who has devoted substantial time and funds to mining related projects. Previously, Mr. Zoebelein, together with two brothers and a cousin, was a private owner of a highly successful furniture manufacturing business known as REFF. REFF were leaders in the field of innovation and mechanization and were very progressive and forward thinking. REFF concepts were used in the furnishing of Habitat at the time of Expo 67. REFF became a public company in 1986 and its shares were listed on the Toronto Stock Exchange until December, 1989, when REFF was acquired by Westinghouse.

Gerald Ruth Director, and Interim Chief Financial Officer

Mr. Ruth is a seasoned financial professional with 20 years experience in the Canadian capital markets. He provides strategic advisory services to companies in a broad range of industries focusing on going public, corporate finance, capital markets, corporate governance and stock exchange related matters. Mr. Ruth is currently a Director of Western Goldfields, Inc., a gold mining company listed on the Toronto Stock Exchange and American Stock Exchange, and a Director and Chief Financial Officer of Greenwich Global Capital Inc., a capital pool company that is listed on the TSX Venture Exchange, President, CEO and Director of Yonge Street and CFO and Director of Stans Energy Corp., a uranium exploration and development company.

From 1988 to 2003, Mr. Ruth held various positions at the Toronto Stock Exchange, serving as the head of Listings Department from 1997 to 2003 where he was responsible for all operations, policy development and general management within the Listings Group. Mr. Ruth is a Chartered Accountant who was employed in private practice with KPMG Peat Marwick and Coopers and Lybrand prior to joining the Toronto Stock Exchange. Mr. Ruth received a Bachelor of Business Administration (Honors) from Wilfrid Laurier University.

Donald A. Sheldon, B.A.Sc., M.A.Sc., LL.B., P.Eng, - Director

Mr. Sheldon is a securities lawyer with the law firm of Sheldon Huxtable Professional Corporation in Toronto. He has been called to the bar in Ontario and Alberta. He has been practising corporate and commercial law for over 30 years, with an emphasis on corporate finance and securities regulation, particularly in the mining and mineral exploration fields. He has appeared as counsel before numerous securities regulatory authorities, including the Ontario Securities Commission, British Columbia Securities Commission, Alberta Securities Commission and appeal panels of stock exchanges. During the past 20 years he has been a director and/or officer of other public companies listed on Canadian exchanges, including Multimedia Nova Corporation, Cavell Energy Corporation, Vedron Gold Inc., Wolfden Resources Inc. and currently, Metalcorp Limited, Greentree Gas & Oil Ltd. and Fletcher Nickel Inc.

Eric Zoebelein - Director

Mr. Eric Zoebelein is an independent businessman who was, together with two brothers and a cousin, a private owner of a highly successful furniture manufacturing business known as REFF. REFF were leaders in the field of innovation and mechanization and were very progressive and forward thinking. REFF concepts were used in the furnishing of Habitat at the time of Expo 67. REFF became a public company in 1986 and its shares were listed on the Toronto Stock Exchange until December, 1989, when REFF was acquired by Westinghouse. Since that time, Mr. Eric Zoebelein has pursued personal business interests.

Karel Pieterse Chief Operating Officer

Mr. Pieterse is a mining engineer. He has had considerable mine construction and operating experience. He advanced through various stages of mine operations from shift-boss to general manager at various operations. During a decade and a half (1980 s to mid-1990 s) Mr. Pieterse, at a senior level, was involved with the construction of David Bell and Golden Giants mines at Hemlo, reactivation of Inco s Shebandowan mine and start-up of Inco s Whistle open-pit mine. Mr. Pieterse has the distinction of being the lead during construction of "The deepest single-lift shaft in the Western Hemisphere" at Agnico-Eagle Laronde No. 3 mine.

General Qualifications

Completion of the transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable pursuant to Exchange Requirements, majority of the minority shareholder approval. Where applicable, the transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the Proposed Amalgamation, any information released or received with respect to the transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.

The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.

Contact Information

  • Yonge Street Capital Corp.
    Gerald Ruth
    President & CEO
    (416) 899-3304
    Tamaka Holdings Inc.
    Frank Zoebelein
    (905) 833-3711