Black Bull Resources Inc. Enters Into a Share Exchange Agreement to Acquire Mineral Streaming Company - KMPH FOX 26 | Central San Joaquin Valley News Source

Black Bull Resources Inc. Enters Into a Share Exchange Agreement to Acquire Mineral Streaming Company

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Shelburne, Nova Scotia / ACCESSWIRE / April 30, 2014 / Black Bull Resources Inc. (“Black Bull” or the “Company“) (TSX-V: “BBS.H”) – announces that it has entered into an arm’s length Share Exchange Agreement (the “Share Exchange Agreement“) dated April 23, 2014, for the acquisition (the “Transaction“) by the Company of all of the issued and outstanding shares of AUS Industrial Minerals Limited (“AUS“), a privately held company incorporated under the laws of British Columbia, in exchange for common shares of the Company.

The Proposed Acquisition

The Share Exchange Agreement provides that the shareholders of AUS will exchange all of the issued and outstanding shares of AUS to the Company, in exchange for 103,333,333 post consolidated common shares of the Company at a deemed price of $0.15 per common share, for an aggregate deemed purchase price of $15.5 million (Cdn.) the (“Purchase Price“). The Purchase Price has been calculated on the assumption that the assets owned by AUS shall have an audited net tangible asset value of $28,000,000 (Cdn.), including $3,000,000 of working capital, on the closing date. In addition, the Company is proposing to issue purchase warrants, on a post consolidation basis as a Dividend in Specie, to all of its existing shareholders at an exercise price of $0.15 per common share and expiring 36 months from the closing date, subject to TSX-V approval. Based on the total number of post consolidated outstanding common shares of the Company, as determined on a record date to be declared by the board of directors and which will be announced in a subsequent news release, the Dividend in Specie will be distributed on the basis of one warrant for each post consolidated outstanding common share of the Company. It is anticipated that 3,028,442 warrants will be issued.

The closing of the Transaction is subject to a number of conditions, including: (i) TSX-V and shareholder approval,
(ii) the Company shall consolidate its existing common shares on a 30 for 1 basis such that immediately prior to closing, it will have 3,028,442 common shares outstanding, and (iii) the Company shall change its name to AUS Industrial Minerals Limited.

Upon completion of the Transaction, the Resulting Issuer will have 106,361,775 common shares outstanding, 3,028,442 warrants at an exercise price of $0.15 and expiring 36 months from the date of issue, and 169,114 stock options having an exercise price of $0.15 and expiring no later than 0.8 years from closing. It is also anticipated that at closing, the resulting issuer will grant additional options to acquire common shares at a price of $0.15 per share to the directors, officers, employees and consultants. Further details will be provided in a subsequent news release.

Pursuant to the Share Exchange Agreement, AUS has advanced a non-refundable deposit in the amount of $50,000 in favour of the Company. In addition, the Company has agreed to advance a deposit of $50,000 to AUS via the issuance of 333,333 common shares of the Company at a deemed issue price $0.15 on the closing date, subject to the prior approval of the TSX-V, which deposit will be applied against the Purchase Price.

About AUS

AUS is a private company incorporated under the laws of British Columbia on April 3, 2014, that has been established as a company that will provide streaming contracts to operating mining companies with a focus on the critical metals and industrial minerals markets.

Commodity streaming agreements are agreements whereby the provider of the commodity stream will make an upfront payment to a mining company in return for a fixed percentage of the production life of a mine at an agreed fixed cost. The upfront payment will typically be made once there is sufficient data to ensure that the mine is economically viable.
The funds from the upfront payment will typically be used to assist the miner to achieve full production. Once a mine is in production, companies will then make a delivery payment upon receipt of the product. Commodity streaming agreements can be entered into at any stage of a mining project’s lifecycle.

AUS has targeted specific critical metals and industrial minerals that are synergistic with its proposed streaming business model. Critical Metals are metals which are essential to an industrial process and for which there is no actual or commercially viable substitute. The initial critical metals that AUS intends to target are Manganese, Nickel, Platinum Group Metals, Chromium, Molybdenum, Titanium, Graphite, Flurospar, Cobalt, Niobium, Tungsten, Zirconium, Magnesium, Antimony and Vanadium. Industrial Minerals are geological materials which are mined for their commercial value, which are not fuel
(fuel minerals or
mineral fuels). They are used in their natural state or after beneficiation either as raw materials or as additives in a wide range of industrial and end-applications. The industrial minerals that AUS intends to target are Bauxite, Asbestos, Borates, Chromite, Feldspar, Ilmenite, Rutile, Kaolin, Potash, and Quartz.

The reverse take-over of the majority of the Company will mark AUS’s first acquisition in the industrial minerals space and AUS will be looking to maximize the potential of the Company’s existing assets in conjunction with selected strategic partners.

The Company will issue a subsequent press release containing key financial information of AUS and details of shareholders holding a controlling interest in AUS.

Board of Directors and Management

The Company’s current board and management will remain with the Company and will collectively bear management and stewardship of the Company along with new appointees upon completion of the Transaction. The Company will issue a subsequent press release regarding the new management appointees shortly.

Sponsorship of Transaction

Sponsorship of the Transaction may be required by the TSX-V unless exempt in accordance with TSX-V policies. The Company intends to apply for an exemption from the sponsorship requirements. There is no assurance that the Company will ultimately obtain an exemption from sponsorship.

Trading Halt

The common shares of the Company will remain halted pending the issuance of a further news release and the receipt by the TSX-V of certain required materials from the Company. The Transaction may result in a change of control and new shareholders holding more than 50% of the outstanding voting securities of the Company and as such, will be considered a reverse take-over under TSX-V policies.

Conditions to closing

The completion of the Transaction is subject to the approval of the TSX-V and all other necessary regulatory approvals.
The completion of the Transaction is also subject to certain other additional conditions precedent, including, but not limited to:
(i) completion of satisfactory due diligence by each of the Company and AUS; (ii) approval of the respective board of directors; (iii) completion of a 30 for 1 consolidation of the Company’s common shares; (iv) the absence of any material change or change in a material fact which might reasonably be expected to have a material adverse effect on the financial and operational conditions or the assets of each of the parties to the Share Exchange Agreement; and (v) certain other conditions typical in a transaction of this nature.

Completion of the Transaction is subject to a number of conditions, including TSX-V acceptance and disinterested shareholder approval. The Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the Management Information Circular or Filing Statement to be prepared in connection with the Transaction, any information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of the Company should be considered highly speculative.

For further information, please contact:

David Wood, Director

Telephone: (604) 720-7307

READER ADVISORY

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.

This news release contains certain statements that may be deemed “forward-looking statements. Forward looking statements are statements that are not historical facts and are generally, but not always, identified by the words “expects”, “plans”, “anticipates”, “believes”, “intends”, “estimates”, “projects”, “potential” and similar expressions, or that events or conditions “will”, “would”, “may”, “could” or “should” occur. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results may differ materially from those in forward looking statements. Forward looking statements are based on the beliefs, estimates and opinions of the Company’s management on the date the statements are made. Except as required by law, the Company undertakes no obligation to update these forward-looking statements in the event that management’s beliefs, estimates or opinions, or other factors, should change.

The forward-looking statements contained in this press release are made as of the date of this press release, and the Company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by securities law.

THIS PRESS RELEASE, REQUIRED BY APPLICABLE CANADIAN LAWS, IS NOT FOR DISTRIBUTION TO U.S. NEWS SERVICES OR FOR DISSEMINATION IN THE UNITED STATES, AND DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO SELL ANY OF THE SECURITIES DESCRIBED HEREIN IN THE UNITED STATES. THESE SECURITIES HAVE NOT BEEN, AND WILL NOT BE, REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO U.S. PERSONS UNLESS REGISTERED OR EXEMPT THEREFROM.

The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.

ReleaseID: 415046

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