YSV Ventures Inc.
NEX BOARD : XSV.H

District Gold Inc.

March 11, 2008 14:44 ET

YSV Ventures Inc. and District Gold Inc.: Press Release

TORONTO, ONTARIO--(Marketwire - March 11, 2008) - YSV Ventures Inc. ("YSV") (NEX BOARD:XSV.H) and District Gold Inc. ("District") are pleased to announce today that on March 6, 2008 they entered into a non-binding letter of intent (the "Letter of Intent") pursuant to which YSV intends to acquire all of the issued and outstanding common shares in the capital of District, a private company incorporated under the laws of the Province of Ontario (the "RTO"). The transaction will constitute a reverse take-over of YSV by the shareholders of District and as such will require, among other things, the approval of the TSX Venture Exchange (the "Exchange") as well as the shareholders of YSV. YSV and District are at arm's length to one another. Upon completion of the RTO, YSV will remain in the business of base metals and mineral exploration and development, with a principal property located in the Republic of Zambia.

Terms of the RTO

Pursuant to the RTO, YSV will issue common shares in the capital of YSV (the "YSV Shares") to the current shareholders of District in exchange for all of the issued and outstanding common shares of District (the "District Shares"), such that upon closing of the RTO (the "Closing") the shareholders of District will hold approximately 90% of the issued and outstanding YSV Shares. The YSV Shares issued to the District shareholders will be issued at a price per share to be determined based on good faith negotiations between the parties. The YSV Shares to be issued to District shareholders may be subject to escrow requirements imposed by the Exchange. District has recently completed some equity financings and may complete additional financings in advance of the Closing. It is a condition to the Closing that District have $1.7 million in cash and no liabilities, and in the event that District completes financings prior to Closing such that it has cash in excess of this amount, additional YSV Shares will be issued equal to the amount of the excess cash divided by the issuance price of the YSV Shares being issued in the RTO. There are currently approximately 20,586,546 YSV Shares issued and outstanding.

The parties have agreed to negotiate in good faith with a view to entering into a definitive agreement to replace the Letter of Intent by April 30, 2008, and will use their reasonable best efforts to close the RTO by no later than June 30, 2008, or as soon as reasonably practicable thereafter. In the event a definitive agreement is not entered into by April 30, 2008 or the RTO hasn't closed by August 30, 2008, and the parties are unable to extend such dates, the Letter of Intent shall terminate. Closing will be conditional on, among other things, the acquisition by District of certain property assets located in the Republic of Zambia through its wholly-owned subsidiary, District Gold Zambia, the delivery of a technical report concerning the property assets so acquired which is compliant with National Instrument 43-101 "Standards of Disclosure for Mineral Projects", delivery of a sponsorship report or a waiver from the Exchange of this requirement, approval of the transactions by the board of directors of each of YSV and District, the satisfactory completion of due diligence, approval of the Exchange, approval of the RTO by the shareholders of YSV, the receipt of all other required third party consents, the absence of any material adverse changes in the business or prospects of YSV or District, District having a minimum of $1.7 million in cash and no liabilities, and the exchange of mutually acceptable legal opinions. There can be no assurance that the RTO will be completed as proposed or at all.

In connection with the RTO, the name of YSV will be changed to a name acceptable to the parties and the shareholders of YSV. Following or concurrently with the execution of a definitive agreement, an Information Circular concerning the RTO will be prepared by management of YSV and District and circulated to shareholders. Concurrently with the Closing, YSV will make application to graduate its common shares to Tier 2 of the TSX Venture Exchange.

Proposed Financing

In anticipation of the RTO, and as a condition to the Closing, District is seeking to raise a minimum of $1.7 million and a maximum of $5 million through private placements of District Shares (the "Financing"). It is a condition to the Closing that District have not less than $1.7 million in cash and no liabilities, which it intends to obtain through the Financing. Subscribers acquiring District Shares prior to the Closing will receive YSV Shares pursuant to the RTO in exchange for their District Shares. The terms of the Financing, including the size and pricing, have not been finalized and will be subject to market conditions. Any agents or brokers involved may receive customary fees, including cash and securities.

Description of YSV Ventures Inc.

YSV is incorporated under the laws of the Province of Ontario, is a reporting issuer in Alberta, British Columbia and Ontario, and has its common shares listed for trading on the NEX board of the TSX Venture Exchange under the symbol "XSV.H". YSV has been engaged in the identification, acquisition, exploration and development of mineral resource properties, primarily those exhibiting gold and base metal mineral resources. Additional information concerning YSV is contained in documents filed by YSV with securities regulators, available under the company's profile at www.sedar.com.

Description of District Gold Inc.

District is a private company incorporated under the laws of the Province of Ontario. District's principal asset is its wholly-owned subsidiary, District Gold Zambia Limited, a company incorporated under the laws of the Republic of Zambia ("District Zambia"). As a condition to the Closing, District Zambia will own certain mining assets relating to mining concessions located in the Republic of Zambia (the "Assets"). Prior to the closing of the RTO, the Assets will be the subject of a technical report compliant with National Instrument 43-101 "Standards of Disclosure for Mineral Projects". Detailed information concerning District, District Zambia and the Assets will be included in an Information Circular which will be prepared by management of YSV and District and circulated to shareholders.

District is widely held among a number of shareholders, the principal shareholder being Jin Ding Mining Limited ("Jin Ding"), a corporation incorporated under the laws of the Republic of Zambia. Immediately prior to the Closing it is anticipated that Jin Ding will hold approximately 30% of District's outstanding voting stock. No other shareholder of District will own 10% or more of its voting stock.

Principals of the Resulting Issuer

Upon completion of the RTO, Jin Ding, a corporation incorporated under the laws of the Republic of Zambia, is expected to be a 25% shareholder of the resulting issuer. It is not expected that any other shareholder of YSV will own 10% or more of the YSV shares upon Closing. The principal and controlling shareholder of Jin Ding is Xiaojun He, a resident of Lusaka, Republic of Zambia. The directors and officers of the resulting issuer have not yet been determined, and will be subject to the approval of the Exchange.

Sponsorship

YSV will be seeking an exemption from the sponsorship requirements of the Exchange.

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 transaction, any information released or received with respect to the reverse take-over may not be accurate or complete and should not be relied upon. Trading in the securities of YSV Ventures Inc. should be considered highly speculative.

Cautionary Note Regarding Forward Looking Statements

Certain information included in this press release, including any information as to our future financial or operating performance and other statements that express management's expectations or estimates of future performance, constitute "forward-looking statements". The words "expect", "will", "intend", "estimate" and similar expressions identify forward-looking statements. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management, are inherently subject to a significant business, economic and competitive uncertainties and contingencies. YSV and District cautions the reader that such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual financial results, performance or achievements of YSV or District to be materially different from its estimated future results, performance or achievements expressed or implied by those forward-looking statements and the forward-looking statements are not guarantees of future performance. These risks, uncertainties and other factors include, but are not limited to: changes in the worldwide price of gold and currencies; risks arising from holding derivative instruments; ability to successfully integrate acquired assets; legislative, political or economic developments in the jurisdictions in which the companies carry on business; operating or technical difficulties in connection with mining or development activities; employee relations; the speculative nature of exploration and development; contests over title to properties, particularly title to undeveloped properties; and the risks involved in the exploration, development and mining business. These factors are discussed in greater detail in YSV's most recent Annual Information Form under the company's profile at www.sedar.com. Management of YSV and District disclaim any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by applicable law.

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

  • YSV Ventures Inc.
    Alpha Pang
    President
    (416) 703-6248
    (416) 368-3151 (FAX)
    Email: alpha@hcmginc.com
    or
    District Gold Inc.
    Paul Pathak
    Director
    (416) 368-0300
    (416) 368-6200 (FAX)
    Email: paul@chitizpathak.com