VANCOUVER, Dec. 3, 2015 /CNW/ – Alternative Earth Resources Inc. (“AER”) (TSX.V: AER) is pleased to announce that it has signed a definitive and binding Share Exchange Agreement dated December 2, 2015, among AER, Black Sea Copper & Gold Corp. (“BSCG“) and all of the securityholders of BSCG (the “Agreement“), whereby AER shall acquire all of the outstanding securities of BSCG (the “Acquisition“). The Acquisition is expected to close on or before December 18, 2015. Refer to the News Release dated October 20, 2015 for details.
BSCG is a non-reporting British Columbia corporation that holds interests in various mineral properties located in Eastern Europe. The principal property of BSCG is an option to acquire 100% of the Alankoy copper-gold project located in Turkey (the “Alankoy Project“). A director of AER serves as the CFO and is a minor shareholder of BSCG, therefore at the outset of this matter AER formed a special committee of disinterested directors to deal with all aspects of the Acquisition.
Under the Agreement, AER will acquire the all of the common shares of BSCG in exchange for the issuance to the thirty-seven shareholders of BSCG of a total of 32,912,115 common shares in the capital of AER, based upon an exchange ratio of 1.7 shares of AER for each share of BSCG (the “Exchange Ratio“). The Exchange Ratio was determined after completion of AER’s due diligence review of BSCG, and is supported by a fairness opinion prepared by a qualified independent consultant. 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 of BSCG, 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 will, in appropriate circumstances, pay finder’s fees (10% cash and 10% warrants) in connection with the Financing. The Financing has been fully subscribed.
Pending completion of the Acquisition, AER has agreed to loan BSCG the sum of $100,000, which shall be applied to an option payment on the Alankoy Project and costs related to the technical report and title opinion. The loan shall accrue interest at a rate of 10% per annum and is repayable in three (3) months with a $10,000 bonus payment.
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 will not result in a change of control of AER.
AER has obtained conditional acceptance from the TSX Venture Exchange (the “Exchange“) for both the Acquisition and the Financing. An NI 43-101 compliant technical report on the Alankoy Project, and a title opinion on the Alankoy Project are currently being reviewed by the Exchange.
AER has formally opposed the claim brought by Jaguar Financial Corporation in its petition to the British Columbia Supreme Court, and its legal representatives shall appear at a hearing on December 4, 2015, to oppose the relief sought. Refer to the News Release dated November 26, 2015 for details.
In addition, and subject to receipt of applicable regulatory approvals, AER plans to complete up to a 2:1 share consolidation following completion of the Acquisition. The 2015 annual general meeting of shareholders of AER was deferred, with an extension from the British Columbia Registrar of Companies, until early 2016, pending completion of due diligence on BSCG. AER has convened an annual and special meeting of shareholders of AER in order to elect directors, consider the share consolidation and ratify the existing shareholder rights plan, which will be held on February 26, 2016.
Further information concerning the progress of the Acquisition and the Financing will be disclosed in due course. Take note that the Acquisition contemplated by the Agreement 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, closing of the Acquisition, the outcome of the Court proceedings and completion of a share consolidation. Factors that could cause such differences include: an order issued by the Court, 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.
