VANCOUVER, Oct. 20, 2015 /CNW/ – Alternative Earth Resources Inc. (“AER”) (TSX.V: AER) is pleased to announce that it has signed a non-binding letter of intent (“LOI“) with Black Sea Copper & Gold Corp. (“BSCG“) outlining the terms of a transaction whereby AER will acquire 100% of the outstanding securities of BSCG. It is intended that the LOI will be replaced by a definitive and binding security exchange agreement by the end of November, 2015, and the transaction is expected to close by December 18, 2015. BSCG is a non-reporting corporation that holds interests in various mineral properties that are located in Eastern Europe. Subject to execution of a definitive agreement, the principal property of BSCG is an option to acquire 100% of the Alankoy copper-gold Project located in Turkey.
Under the LOI, AER will acquire the all of the shares of BSCG (the “Acquisition“) in exchange for the issuance of approximately 33 M common shares in the capital of AER, representing an equivalent number of AER shares as will be outstanding after completion of the Financing (defined below), based upon an estimated exchange ratio of 1.71 shares of AER for each share of BSCG (the “Exchange Ratio“). The final Exchange Ratio, which is subject to due diligence, a fairness opinion and the Financing, will be settled in the definitive agreement. AER will also acquire all outstanding convertible securities of BSCG (options, warrants and convertible debt) in exchange for the issue of replacement securities by AER based upon the Exchange Ratio.
Concurrently with the Acquisition, AER will complete a non-brokered private placement of 8,000,000 units at a price of $0.06 per unit, with each unit consisting of one (1) common share, and one (1) warrant to purchase an additional common share exercisable for two (2) years at a price of $0.115 per share, to raise gross proceeds of $480,000 (the “Financing“). AER may, in appropriate circumstances, pay finder’s fees in connection with the Financing.
After completion of the Acquisition and the Financing, AER will have approximately 66 M shares outstanding (87 M fully diluted) and the directors and officers of AER will be reconstituted to consist of four (4) directors, with two (2) nominees from each of AER and BSCG. The Acquisition and the Financing are subject to TSX Venture Exchange (the “Exchange“) acceptance.
In addition, and subject to receipt of applicable regulatory approvals, AER expects to complete up to a 2:1 share consolidation following completion of the Acquisition.
Further information concerning the progress of the proposed Acquisition and the Financing will be disclosed in due course. Take note that the Acquisition contemplated by the LOI is subject to numerous conditions, and there is no certainty that will be completed on the schedule, or in accordance with the terms described in this News Release, or at all. Accordingly, investors should use caution when trading in the securities of AER.
Forward Looking Statements: This news release contains forward looking statements that are subject to a number of known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those anticipated in our forward looking statements. Forward-looking statements in this release include statements regarding the timing and completion of the Financing, the execution of the definitive agreement, closing of the Acquisition and completion of a share consolidation. Factors that could cause such differences include: the Financing, the Acquisition and the share consolidation may not be completed for any reason whatsoever, including that the regulators may not approve them, changes in world commodity markets, equity markets, costs and supply of materials relevant to the mining industry, change in government and changes to regulations affecting the mining industry. In addition to other factors and assumptions which may be identified in this press release, assumptions have been made regarding and are implicit in, among other things, the timely receipt of any required regulatory approvals. Although we believe the expectations reflected in our forward looking statements are reasonable, results may vary, and we cannot guarantee future results, levels of activity, performance or achievements.
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.
