Trading Symbol: TSX-V: ERA
Shares Issued: 22,453,163
(Not for distribution to US wire services or for
dissemination in the United States of
America)
HALIFAX,
Feb. 20, 2014 /CNW/ - Elcora
Resources Corp. ("Elcora" or the "Company") announces the Company
has signed a binding letter of intent ("LOI") to acquire 40% of the
outstanding shares of Sakura Graphite (Pvt) Ltd.
Sakura Graphite (Pvt) Ltd ("Sakura") controls 99
acres in Sri Lanka, which includes
the past producing Ragedara graphite mine (the "Property"). The
Property has an unrestricted exploration license covering 4 square
kilometres and a mining license for unlimited monthly production.
Historically, the state owned Ragedara mine operated between 1974
and 1985 and produced as much as 18,000 tons per year of high
purity graphite. The Ragedara graphite is of natural crystalline
vein type. Sakura has developed the mining project over the last 3
years and is now nearing readiness to begin production with much of
the mining equipment having been upgraded over the last two years.
Upgrading of the remaining equipment will continue as the Company
progresses the project towards becoming a fully integrated graphite
producer. Through this transaction Elcora will be the operator of
the mine with the intention of beginning production. A
feasibility study was completed for Sakura for the Property, but it
has not yet been verified by Elcora and there is no certainty the
proposed operation will be economically viable. The
transaction is not a non-arms length transaction.
The Transaction
Under the terms of the LOI to acquire the common
shares of Sakura, Elcora will issue 5,066,667 common shares of
Elcora and 7,856,000 warrants to purchase common shares of
Elcora.
The LOI is subject to TSX Venture Exchange (the
"Exchange") and other regulatory approvals. As well, the closing is
subject to satisfactory due diligence being completed by
Elcora.
Private Placement
Elcora also intends to complete its previously
announced non-brokered private placement offering with a full
warrant attached entitling the holder to acquire one common share
of Elcora for $0.30 for 18 months
(the "Offering") for a minimum offering of $500,000 and a maximum offering of $750,000.
The Offering is subject to certain conditions,
including but not limited to the receipt of all required regulatory
approvals and consents, including the approval of the
Exchange. The securities issued pursuant to the Offering will
be subject to a hold period expiring four months and one day after
the closing of the Offering in accordance with applicable
securities laws and, if required, the policies of the Exchange.
Termination of LOI
Elcora also announces that it has terminated its
previously announced Letter of Intent with Graphene Corp. (Pvt)
Ltd. to enter into an option agreement to acquire exploration
application licenses for 100 metric grid units for graphite located
in Sri Lanka.
Trading of Elcora's stock has been halted and
will remain halted, pursuant to Exchange Policy 5.3.
CAUTIONARY STATEMENT:
The TSX Venture Exchange does not accept
responsibility for the adequacy or accuracy of this
release. No stock Exchange, securities commission or other
regulatory authority has approved or disapproved the information
contained herein. This News Release includes certain
"forward-looking statements". All statements other than
statements of historical fact, included in this release, including,
without limitation, statements regarding potential mineralization
and reserves, exploration results, and future plans and objectives
of Elcora, are forward-looking statements that involve various
risks and uncertainties. There can be no assurance that such
statements will prove to be accurate and actual results and future
events could differ materially from those anticipated in such
statements. Important factors that could cause actual results
to differ materially from Elcora's expectations are exploration
risks detailed herein and from time to time in the filings made by
Elcora with securities regulators.
Investors are cautioned that, except as disclosed in the
filing statement 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.
SOURCE Elcora Resources Corp.