VANCOUVER, Dec. 24, 2014 /CNW/ - Rio Cristal Resources
Corporation (TSXV:RCZ) ("Rio
Cristal" or the "Company") announces that, to
preserve its cash in light of the Company's current working capital
position, it has agreed to issue units ("Debt Units"), each Debt
Unit comprised of one common share and one common share purchase
warrant (a "Debt Warrant"), to settle an aggregate debt of
$1,180,020.96 owing to Augusta
Investments Inc. and Iris Consulting Limited. A total of
23,600,419 Debt Units will be issued at a deemed price of
$0.05 per Debt Unit. The Debt
Warrants will have an exercise price of $0.05 per common share and will be exerciseable
for a five year term. Augusta Investments Inc. and Iris
Consulting Limited each hold an equal amount of the Company's
debt. The debt for units transaction is subject to TSX
Venture Exchange and shareholder approval.
Augusta Investments Inc. and Iris Consulting Limited are both
private companies which are at arm's length to Rio Cristal. Augusta Investments Inc. is
beneficially owned or controlled by Mr. Richard W. Warke. Iris Consulting Limited
is beneficially owned or controlled by Mr. Robert Pirooz,
Q.C. Following the issuance of the Units, both Augusta
Investments Inc. and Iris Consulting Limited will become control
persons of Rio Cristal and together
they will hold approximately 93% of the Company's outstanding
common shares on a non-diluted basis
As part and parcel of the units for debt transaction, the
Company will also undertake a $200,000 private placement financing (the
"Private Placement"), under which Rio
Cristal will issue 4,000,000 units ("Private Placement
Units") at a deemed price of $0.05
per Private Placement Unit. Each Private Placement Unit will
be comprised of one common share and one common share purchase
warrant (a "Private Placement Warrant"). The Private
Placement Warrants will have an exercise price of $0.08 per common share and will be exerciseable
for a three year term. The Private Placement is conditional
on closing of the unit for debt transaction. Both Augusta
Investments Inc. and Iris Consulting Limited will participate in
the Private Placement. The Private Placement is subject to TSX
Venture Exchange and shareholder approval.
Rio Cristal will hold an annual
and special general meeting of shareholders on Thursday, February 26, 2015. At the
meeting, among other things, disinterested shareholders will be
asked to pass ordinary resolutions approving the issuance of the
Debt Units to Augusta Investments Inc. and Iris Consulting Limited
as well as the Private Placement. At the meeting, conditional
upon the approval of the issuance of the Debt Units, shareholders
will also be asked to elect three new directors to the Company's
board – Richard W. Warke,
Robert Pirooz Q.C. and Purni
Parikh.
Mr. Warke is the founder, Chairman and CEO of Wildcat Silver
Corporation and President, Chief Executive Officer and Director for
Catalyst Copper Corporation. Previously, he was the founder and
Executive Chairman for both Augusta Resource Corporation, which was
acquired for over $550 million in
July 2014, and Ventana Gold
Corporation, which was acquired in early 2011 for $1.5 billion. Throughout his 25 years of
experience in corporate finance and marketing in the global
resource industry, Mr. Warke has been involved in raising over
$1 billion dollars in equity for
resource companies. Mr. Warke's endeavours have primarily involved
mineral resource operations, however, he has an array of experience
with oil and gas, forestry, technology and manufacturing operations
as well.
Mr. Pirooz has been a distinguished member of the Canadian Bar
for over two decades and was a 2012 Queen's Counsel
appointee. Mr. Pirooz has been instrumental in the formation,
development and operation of over 11 different companies, and
played a key role in the sale of five of these companies – Regalito
Copper Corp., Northern Peru Copper Corp., Global Copper Corp.,
Lumina Royalty Corp. and Lumina Copper Corp. - which generated
proceeds of over $1.6 billion.
Currently, Mr. Pirooz serves as General Counsel and a director for
Pan American Silver Corp. and is the Executive Chair of Network
Media Group Inc.
Ms. Parikh brings extensive business and corporate governance
experience from 20 years in the mining sector and is currently Vice
President Corporate Secretary of Wildcat Silver Corporation,
Catalyst Copper Corp. and Plata Latina Minerals Corporation and
previously held the same positions with Augusta Resource
Corporation and Ventana Gold Corp.
The Debt Units and the Private Placement Units will be issued in
reliance on certain propectus and registration exemptions available
under applicable securities legislation and will be subject to a
hold period of four months and one day in accordance with
applicable securities legislation and TSX Venture Exchange
requirements. The shares comprising the Debt Units and any
shares issued upon exercise of the Debt Warrants may also be
subject to escrow in accordance with applicable TSX Venture
Exchange requirements.
Any halt in trading in the Company's shares resulting from the
proposed transactions will extend at the discretion of the TSX
Venture Exchange. In the ordinary course, management would
expect such a halt to last until an information circular for the
annual and special general meeting had been reviewed and accepted
for filing by the TSX Venture Exchange and mailed to
shareholders. That is expected by the end of January
2015.
About Rio Cristal Resources Corporation
Rio Cristal Resources Corporation is a Canadian company listed
on the TSXV under the symbol RCZ. For further information for
investors, please contact the Company via email at
mgwatson@shaw.ca.
Neither 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.
This release contains forward-looking statements as that term is
used in Canadian securities law. Often, but not always,
forward-looking statements can be identified by the use of words
such as "expected", "will" or variations of such words and
phrases. Forward-looking statements involve known and unknown
risks, uncertainties, and other factors which may cause the actual
results, performance, or achievements of the Company to be
materially different from any future results, performance, or
achievements expressed or implied by the forward-looking
statements. These statements are based on management's current
expectations and beliefs and are subject to a number of risks and
uncertainties. Examples of forward-looking information in this news
release include, but are not limited to, statements with respect to
closing of the units for debt transaction and the Private
Placement, shareholder and TSX-V approval of the issuance of the
Debt Units or the Private Placement, shareholder approval of the
election of Richard W. Warke,
Robert Pirooz Q.C. and Purni Parikh
to the Company's board, escrow of the shares comprising the Debt
Units and any shares issued upon exercise of the Debt Warrants, the
duration of any halt in trading of the Company's common shares and
the date on which an information circular will be reviewed and
accepted for filing by the TSX Venture Exchange and mailed to
shareholders. For additional information on risks and
uncertainties, see the Company's MD&A for the year ended
March 31, 2014, which is available on
SEDAR at www.sedar.com. The risk factors identified in the
Company's annual MD&A are not intended to represent a complete
list of factors that could affect the Company. Accordingly, readers
should not place undue reliance on forward-looking statements. The
Company does not assume any obligation to update the
forward-looking information contained in this press release.
SOURCE Rio Cristal Resources Corporation