Chesstown Capital Inc. (TSX VENTURE:CHC.P) Announces the Signing of an Agreement in Principle
BURLINGTON, ONTARIO–(Marketwire – Mar 8, 2010) –
Letter of Intent
On Feb 5th, 2010, Chesstown Capital Inc. (“Chesstown”) (TSX VENTURE:CHC.P) announced which it entered in to an arm’s length and non-binding minute of vigilant (“LOI”) with Canadian Star Minerals Limited (“CSML”) pursuant to which Chesstown would, theme to a series of conditions, take sure resources of CSML, namely an amount one hundred percent authorised and profitable seductiveness in and to sure mining claims located nearby High Lake in northwestern Ontario (the “Transaction”). The LOI was theme to assorted conditions.
Chesstown is right away gratified to have good good good good known that, after gratifying sure conditions in the LOI, Chesstown and CSML have reached an Agreement in Principle, antiquated the 5th day of March, 2010.
Chesstown is a Capital Pool Company underneath the policies of the TSX Venture Exchange (“TSXV”) and it is dictated which the Transaction, if completed, will consecrate Chesstown’s Qualifying Transaction underneath TSXV policies. It is approaching which the Resulting Issuer will encounter the Tier 2 inventory mandate of the TSXV for a Mining Issuer on execution of the Transaction.
The Proposed Transaction:
Significant Assets
Chesstown proposes to squeeze from CSML a 100% interest, theme to a 2% Net Smelter Return kingship (NSR), in the High Lake Gold Property (“High Lake”) and an choice agreement to take a 51% seductiveness in the diagonally opposite Electrum Lake skill (“Electrum Lake”). In addition, Chesstown proposes to squeeze from CSML a 100% seductiveness in a 1-unit explain which was acquired by staking (“Canadian Star Claim”) located in between the alternative dual properties. The total High Lake, Electrum Lake and Canadian Star Claim (the “Property”) is host to 7 good good good good known bullion prospects, as good as countless gold-copper-molybdenum occurrences and covers a large area of enlightened host rocks and has scrutiny intensity for alternative vegetable deposits. The Property is located in Ewart Township, Indian Bay Map area, nearby Kenora, Ontario.
There is an underlying 2% NSR on credit to the strange owners for any metals constructed from the High Lake Property and a 2% NSR on credit to the strange optionee for steel constructed from the Electrum Lake Property. The High Lake Property includes twenty mining claims hold underneath a 21- year renewable mining franchise postulated by the Mining Lands Section of the Ontario Ministry of Northern Development and Mines (MNDM). The Electrum Lake Property contains 10 unpatented mining claims (63 explain units).
The Property is at the primary scrutiny stage. None of the good good good good known mineralized zones on the Property have been utterly explored and tangible by drilling.
A multi-phased scrutiny module on the Property has been endorsed (the “Work Program”) as follows:
The initial proviso (Phase I) is written to endorse the bullion mineralization reported in the most explored zone, the Purdex Zone. This involves aspect mapping (including relocation of the ancestral cavalcade collars, trenches, etc.) and a small solid training module to “twin” multiform ancestral holes as good as to magnify the right away good good good good known mineralization. An guess of the cost of such a module is $222,915.
Assuming which the formula from this work have been encouraging, a second proviso (Phase II) written to fix up and representation all of the reported mineralized zones on the “Property” is recommended. This proviso should additionally embody aspect geological mapping and a little exam geophysical surveys (Magnetometer and IP) for have use of in identifying and evaluating alternative identical zones. The identified mineralized zones should be stripped, mapped and sampled and a medium cavalcade module carried out to endorse the estimate measure and Au content.
If Phases 1 and 2 of the Work Program have been successful in verifying the life and intensity of the 7 right away good good good good known targets on the High Lake/Electrum Lake Property, a third proviso module consisting essentially of clarification solid training will be required. The Work Program should be enough to determine the mineralization summarized by before explorers on the High Lake/Electrum Lake Property and yield the inform indispensable to have a preference per an modernized scrutiny and growth program.
The Vendor:
CSML was incorporated pursuant to the Ontario Business Corporations Act on Oct 9, 1996. Since then, CSML has carried on commercial operation as a vegetable scrutiny and growth association by the acquisition, sale and corner venturing of multiform modernized bullion projects in Canada. The following persons own 10% or some-more of the expelled and superb shares of CSML: Marco Chu, a proprietor of Markham, Ontario (10.80%), Lawrence Anderson, a proprietor of Oakville, Ontario (12.96%), and Christopher North, a proprietor of Scarborough, Ontario (65.35%).
Terms of the due Qualifying Transaction:
The squeeze cost for the Property will be $2,000,000, confident by the distribution to CSML of 10,000,000 usual shares in the collateral of Chesstown at an emanate cost of $0.20 per share.
Description of financing arrangement:
A in isolation chain will be finished before to or in and with the shutting of the Qualifying Transaction (the “Financing”). The Financing will lift we estimate $300,000 at $0.20 per usual share or higher. The supports from the Financing will be used to account the Work Program.
The Resulting Issuer:
New insiders of the Resulting Issuer:
Lawrence Anderson of Oakville, Ontario, is Vice-President of CSML, a on all sides which he has hold for over thirteen years. Mr. Anderson has over twenty years of endless knowledge as a General Manager of a association which imports healthy mill products. Prior to Mr. Anderson’s impasse in the mill attention he was lerned and scholastic in the Nuclear Electronics margin portion in the US Military Nuclear module as good as operative as a Senior Field Engineer for General Instruments in New York USA.
Vernon K. Drylie, P.Eng., of Oakville, Ontario, binds a BASc. in Metallurgical Engineering from the University of Toronto. Mr. Drylie has some-more than thirty years knowledge in production and routine plant operations management. He was before Plant Manager at NTN Bearing Corporation of Canada and a partial of of the Board of Directors. NTN is one of the world’s largest temperament producers and a heading retailer to the industrial, healthy apparatus and automotive markets. Prior to that, he was Technical Services Manager as good as a partial of of the Board of Directors of Bundy of Canada Ltd., a heading retailer and falsifier of small hole tubing systems and assemblies for the automotive and industrial markets. He has additionally hold the positions of Silver Refinery Supervisor and Engineering Manager for Johnson Matthey Ltd., a changed metals refiner and fabricator, Research Engineer in the vegetable estimate territory of a investigate lab of Inco, and Pellet Plant Engineer for Iron Ore Company of Canada. Mr. Drylie is the hilt of a US obvious for cadmium-free bullion solder alloys.
Christopher North, of Scarborough, Ontario, has been concerned in vegetable scrutiny and growth for over twenty-eight years. He is right away the President and CEO of CSML, a on all sides which he has hold for the past 10 years. Mr. North has an join forces with diploma in Geological Engineering Technology and degrees in geology as good as an MBA from Lake Superior State University. He has been partial of the universe category Hemlo-Williams scrutiny and growth group and as good as multiform alternative poignant mining projects in Canada, Latin America and Africa with companies such as Noranda Inc., Lac Minerals Ltd. (now Barrick Gold Corporation), Northgate Minerals Corporation and Etruscan Resources Inc.
Contemplated care make up of the Resulting Issuer:
It is contemplated that, following the shutting of the Transaction, dual of Chesstown’s stream directors, Jeffrey Wood and Kenneth Dube will renounce from the house of directors of Chesstown (the “Board”) and Lawrence Anderson, Vernon Drylie and Christopher North will be allocated to the Board. Peter Clausi and Brian Crawford will sojourn on the house of directors of Chesstown.
It is contemplated which Lawrence Anderson will turn Chief Executive Officer of Chesstown. Jeffrey Wood will renounce as Chief Financial Officer and Brian Crawford will turn Chief Financial Officer. It is contemplated which Peter Clausi will sojourn as carry out of the Audit Committee.
Sponsorship of a subordinate contract of a collateral pool association is compulsory by the Exchange unless free in suitability with the Exchange’s policies. Chesstown intends to request for an grant from sponsorship mandate formed on the carry out of a non-brokered in isolation chain in tie with the Transaction and/ or the basement of the already rebuilt stream geological inform for the property, which includes recommendations for scrutiny work. However, no declaration can be since which Chesstown will acquire this exemption.
TSXV Approval
Completion of the Transaction is theme to a series of conditions, together with but not singular to, TSXV acceptance and, if applicable, pursuant to TSXV requirements, infancy of the minority shareholder approval. Where applicable, the Transaction cannot tighten until the compulsory shareholder capitulation is obtained. There can be no declaration which the Transaction will be finished as due or at all.
Investors have been cautioned that, solely as disclosed in the government inform round or filing matter to be rebuilt in tie with the Transaction, any inform expelled or perceived with apply oneself to the Transaction might not be correct or finish and should not be relied upon. Trading in the bonds of a collateral pool association should be deliberate rarely speculative.
For Investors
This press recover might embody statements about approaching destiny events and/or monetary formula which have been forward-looking in inlet and theme to risks and uncertainties. Chesstown cautions which tangible opening will be influenced by a series of factors, most of which have been over the control. Future events and formula might change almost from what Chesstown right away foresees. Discussion of the assorted factors which might start destiny formula is contained in Chesstown’s new filings, accessible on SEDAR.
Neither TSX Venture Exchange nor the Regulation Services Provider (as which tenure is tangible in the policies of the TSX Venture Exchange) accepts shortcoming for the endowment of this release.
The TSX Venture Exchange Inc. has in no approach upheld on the merits of the due contract and has conjunction authorized nor disapproved the essence of this press release.
