Tad Capital Corp. has signed a property purchase agreement dated March 16, 2009, with Golden Sabre Resources Ltd., a private Canadian corporation, further to its news release in Stockwatch of Feb. 20, 2009. Under the terms of the agreement, Tad has agreed to purchase, subject to a 1.5-per-cent net smelter return, 94 per cent of all right, title and interest in the 28 mineral claims lying within the Omineca mining district as described below and all assets related to the claims from Golden Sabre in consideration for Tad issuing 5,202,000 common shares to Golden Sabre. The transaction is intended to represent Tad’s qualifying transaction that is to be conducted in accordance with TSX Venture Exchange Policy 2.4 concerning capital pool companies. The acquisition has been negotiated and carried out by the parties dealing at arm’s length to one another and therefore is not a non-arm’s-length qualifying transaction, as such term is defined under the rules and policies of the TSX Venture Exchange. As a result, the acquisition will not require shareholder approval from the shareholders of Tad. Immediately following the closing of the acquisition, Golden Sabre intends to wind up its corporate existence and distribute all of the Tad shares to its shareholders on a pro-rata basis. The shares issuable to Golden Sabre on closing will be subject to a hold period as required by applicable securities laws.
Conditions of closing
The parties have agreed to close the transaction on or before April 15, 2009, or such other date as the parties may agree to in writing. Completion of the proposed acquisition will be subject to certain conditions including:
- (a) Completion of Tad’s satisfactory due diligence review with respect to the assets;
- (b) Golden Sabre providing financial information from which to prepare financial statements as required by applicable securities laws and a technical report on the claims in accordance with National Instrument 43-101;
- (c) The TSX Venture Exchange waiving the requirement to appoint a sponsor;
- (d) Approval of the transaction by the shareholders of Golden Sabre;
- (e) The appointment of a qualified person, as that term is defined in National Instrument 43-101, to the board of directors of Tad on the closing of the transaction;
- (f) Golden Sabre providing a title opinion on the claims;
- (g) Tad having cash and cash equivalents of $200,000 prior to closing and completion of a private placement as described below;
- (h) Receipt of conditional approval from the TSX Venture Exchange of the proposed transaction.
Financing
The closing of the transaction is conditional upon Tad completing a non-brokered unit financing of at least $300,000 at five cents per unit, each unit consisting of one common share and one share purchase warrant. Of the six million common shares issued in the unit financing, TAD anticipates that 5,000,000 common shares will be issued on a flow-through basis and one million common shares will be issued on a non-flow-through basis, although the ratio of flow-through to non-flow-through will be determined in the sole discretion of Tad at the time of the offering. Each warrant will allow the holder to purchase an additional common share at the exercise price of 10 cents for a period of five years from the closing date. Tad intends to use the proceeds from the private placement and cash on hand to carry out the phase two recommended work program on Golden Sabre’s American Boy claims.
Loan
Pursuant to the terms of the letter agreement, Tad has loaned Golden Sabre $15,000 on the condition that Golden Sabre use the proceeds solely to renew certain claims. Additionally, Golden Sabre has agreed that the loan will be repaid in full in the event the transaction does not close for any reason. Upon the closing of the transaction, and pursuant to the terms of the loan, Tad will credit Golden Sabre with the costs related to renewing the claims against the outstanding amount of the loan on a per diem basis.
Sponsorship
TAD will be seeking an exemption from the sponsorship requirements in accordance with TSX Venture Exchange Policy 2.2.
Golden Sabre’s mineral claims
Golden Sabre is a private Canadian company, established in 2006. Its controlling shareholders consist of three individuals, each resident of British Columbia. The claims comprise 28 mineral claims covering an area of approximately 8,792 hectares, lying within the Omineca mining district of British Columbia. The claims are located immediately northeast of Hazelton, B.C., at the southern extent of the Skeena Mountains, lying to the east of the Skeena River. Golden Sabre owns a 94-per-cent interest in the claims, with Cadre Capital Inc. of Vancouver, B.C., owning the remaining 6-per-cent interest and a 1.5-per-cent net smelter return. The claims consist of three main claim blocks, known as:
- (i) The American Boy/Mohawk claims;
- (ii) The Sunrise/Silver Cup claims;
- (iii) The Sidina claims.
The American Boy/Mohawk claim block is contiguous to the Sunrise/Silver Cup claim group. The Sidina claims are located approximately five kilometres north of the Sunrise/Silver Cup claims. A technical report has been prepared on the American Boy, Sunrise-Silver Cup, Sidina-Silverton and Mohawk claim groups in accordance with National Instrument 43-101. Upon the closing of the qualifying transaction, Tad intends to use the proceeds from the financing and cash on hand to carry out the phase two recommended work program on the American Boy claims.
Finders
Subject to TSX Venture Exchange approval, Tad intends to issue 500,000 common shares to two finders (250,000 common shares to each) upon the closing of the qualifying transaction in consideration for services provided by the finders with respect to the transaction. Each finder is not a non-arm’s-length party and such shares will be issued pursuant to an exemption under applicable securities laws.
Board of directors
Upon completion of the proposed acquisition, Tad anticipates that its current board of directors and management team will remain the same with the exception of the appointment of a qualified person under National Instrument 43-101 to its board of directors. The identity of the qualified person is not known as of the date of this release.
