VANCOUVER,
Feb. 24, 2014 /PRNewswire/ -
Western Pacific Resources Corp.
(WRP - TSXV) is pleased to announce that it has
completed the acquisition, through its U.S. subsidiary, Western
Pacific Resources (U.S.) Corp. ("Western US"), of the Deer Trail
Mine located in Piute County, Utah
from the Deer Trail Mining Company, LLC ("DTMC"), a subsidiary of
Unico, Inc.
Concurrently with the acquisition of the DTM
project, Western Pacific has closed the initial advance of its
previously announced secured convertible note financing (the
"Initial Advance") with Quintana WRP Holding Company LLC ("Quintana
WRP").
DTM Acquisition
To complete the DTM acquisition, Western Pacific
paid $1,361,000 to DTMC and
transferred to DTMC its interest in the Company's Bombardier
property (valued at $1,500,000 for
the purposes of the transaction). In addition, Western Pacific is
required to pay DTMC post-closing payments of $1,750,000 within twelve months of closing and
$1,675,000 within thirty months of
closing, subject to acceleration of payment if the Deer Trail Mine
is in commercial production. Western Pacific may elect to
satisfy up to 25% of the total post-closing payments of
$3,425,000 and 25% of any make whole
payment in its common shares, where the number of shares will be
calculated based on 85% of the twenty day volume weighted share
price.
For a description of the Deer Trail Mine, see
Western Pacific's news release dated February 26, 2013.
Financing
Pursuant to an Investment Agreement between the
Company and Quintana WRP (the "Investment Agreement"), Quintana WRP
purchased secured convertible notes of the Company ("Secured
Notes") in the principal amount of US$3,500,000. The Secured Notes are secured by
first ranking charges and security interests over all of the
present and future assets of Western Pacific and the Subsidiary,
including assets relating to the Deer Trail Project acquired by the
Subsidiary. The Secured Notes will mature three years from
the closing date of the Financing.
The Secured Notes will be convertible at any
time at the option of Quintana WRP, in whole or in part, into
common shares of Western Pacific at a price of CAD$0.1328 per share, subject to adjustment as
provided in the Investment Agreement. Quintana WRP may also elect
to convert all or part of any accrued interest on the Secured Notes
into shares at a price equal to the greater of (a) CAD$0.1328 per share, and (b) the closing price
of Western Pacific's shares on the TSX Venture Exchange
("TSXV") on the trading day immediately preceding the date
of conversion. The Secured Notes and any Shares issued on
conversion of the Secured Notes are subject to a four month hold
period from their date of issue under applicable securities laws
and the policies of the TSXV.
Pursuant to the Investment Agreement, Quintana
WRP will make a subsequent advance of US$1,500,000 to purchase additional Secured Notes
upon the occurrence of certain milestones. In addition to the
Secured Notes, the Investment Agreement also provides that Quintana
WRP may elect to make available to Western Pacific up to
US$5,000,000 of unsecured notes (the
"Unsecured Notes") at any time prior to the third
anniversary of the closing of the financing. The Unsecured Notes
may be offered in an amount up to the principal amount of Secured
Notes that have been advanced by Quintana WRP to Western Pacific
(up to US$5,000,000 aggregate
principal amount). The Unsecured Notes will be interest free and
will mature three years from the closing of the financing.
The Unsecured Notes will also be convertible at any time at the
option of Quintana WRP, in whole or in part, into common shares of
Western Pacific at a price of CAD$0.1328 per share, subject to adjustment as
provided in the Investment Agreement.
For additional information regarding the
Investment Agreement, see the Company's news release dated
December 10, 2013, available under
Western Pacific's profile at www.sedar.com.
New Board Members
Concurrently with the closing of the DTM
acquisition and the financing, Western Pacific appointed
Alfred Hills, Oliver Rodz and Lawrence
Roulston to its Board of Directors.
Mr. Hills is a graduate of University of British Columbia in Mining and
Mineral Process Engineering and has over 35 years of international
mine evaluation, development and operating experience. From
2006 to 2013, Mr. Hills was the CEO and a director of Kobex
Minerals Inc. and a predecessor company, International Barytex
Resources Ltd. Prior to then, he spent 26 years with the
Placer Dome Group of Companies. He held a number of positions
including Vice President Evaluations, Mine General Manager at the
Kidston Mine, and various positions at Placer Dome's Papua New Guinea operations. He spent five
years at the Misima Mine in Papua New
Guinea during construction, commissioning, start-up and
operations. He also participated in the development of the Porgera
Mine. His role as Vice President Evaluations between 2000-2006
resulted in his involvement with acquisitions for Placer Dome
including the North Mara Mine in Tanzania and AurionGold Ltd. in Australia. Previously, Mr. Hills was a member
of the joint venture board for the South Deep Gold Mine in the
Republic of South Africa.
Mr. Hills also participated in developing the
CIM Best Practice guidelines for Mineral Resource and Mineral
Reserve Estimation and was a corporate member of the SME Resources
and Reserve Committee. Mr. Hills was also a member of the Canadian
Security Administrators ("CSA") Mining Technical Advisory and
Monitoring Committee ("MTAMC") which advised the CSA on
mining-related regulatory issues.
The biographies for Mr. Rodz and Mr. Roulston
are included in Western Pacific's news release dated December 10, 2013.
As well, Warwick Smith, Ralph Rushton and Eric
Saderholm have stepped down from the Board of Directors,
Warwick Smith will resign as CEO, and Michael Callahan will be appointed CEO of
Western Pacific. Mr. Saderholm will remain with the Company as its
VP of Exploration and will be driving the exploration program
forward at the Deer Trail Mine. Michael
Williams will remain on the Board of Directors. Michael Callahan, CEO and President, comments:
"I would like to thank Warwick
Smith for his outstanding achievements in building this company
over the past 6 years. He has played a leading role in marketing
the company and in securing the Deer Trail project. On behalf of
everyone at Western Pacific, I would like to wish him great success
going forward in his career."
Technical Report
A technical report prepared by JBR Environmental
Consultants, Inc, entitled "Technical Report on the Deer Trail
Mine Project Piute County,
Utah" has been filed on www.sedar.com under the
Company's profile. The report, dated effective May 15, 2013, was authored by Mr. Walter Martin, M.Sc., CPG, a "Qualified Person"
as defined by National Instrument 43-101 Standards of Disclosure
for Mineral Projects.
About Western Pacific Resources Corp.
Western Pacific is focused on developing the
polymetallic Deer Trail Mine in Piute
County, Utah. The project includes a 250 tpd flotation mill,
5 miles of underground development, a large scale mining permit and
other extensive infrastructure. Western Pacific's team is led by
industry experts who aim to succeed in creating value for
shareholders. For more information, please visit our website at
www.westernpacificresources.com.
About Quintana Minerals Corporation
Quintana Minerals Corporation ("QMC") is the
management company for a portfolio of energy and natural
resources-based private and publicly-traded companies controlled
and/or operated by the Corbin J. Robertson Jr. family. The
company was formed in 1963 as a division of Quintana Petroleum
Corp. and has actively developed and operated precious and
industrial metals/minerals projects throughout the Americas.
The following are examples of a few of the group's ongoing
ventures: Great Northern Properties L.P., a private company that
holds over 22 billion tons of coal reserves throughout the US;
Corsa Coal Corp., a publicly traded junior mining company (TSXV:
CSO); Quintana Energy Partners, L.P., an energy-focused private
equity fund; and Quintana Shipping Ltd., the group's 2nd dry bulk
shipping venture. For more information please contact Oliver Rodz, Managing Director of QMC, 601
Jefferson Street, Suite 3600, Houston,
Texas 77002 (tel: 713-751-7500).
ON BEHALF OF THE BOARD
Arthur Brown, Chairman of the
Board
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.
The Company has not established a National
Instrument 43-101 - Standards of Disclosure for Mineral Projects
mineral resource estimate for the DTM Project nor has it made a
production decision with respect to such project. Further,
the Company has not based its decision to enter into the Streaming
Transaction on a feasibility study of mineral reserves,
demonstrating economic and technical viability, and, as a result,
there may be an increased uncertainty of achieving any particular
level of recovery of minerals or the cost of such recovery,
including increased risks associated with developing a commercially
mineable deposit. Historically, such projects have a much
higher risk of economic and technical failure. There is no
guarantee that production will begin as anticipated or at
all.
Cautionary Statement Regarding Forward-Looking
Statements
Certain statements contained in this press
release constitute forward-looking statements within the meaning of
Canadian securities legislation. Forward-looking statements
contained in this news release include, without limitation,
statements in respect of the proposed development of the Deer Trail
Mine property and receipt of future cash advances pursuant to the
Investment Agreement. These statements relate to future
events, business prospects or opportunities and product
development. All such statements other than statements of
historical fact are forward-looking statements. Forward-looking
statements are often, but not always, identified by the use of
words such as "seek", "anticipate", "plan", "continue", "estimate",
"expect, "may", "will", "project", "predict", "potential",
"targeting", "intend", "could", "might", "should", "believe" and
similar expressions. The Company believes that the expectations
reflected in those forward-looking statements are reasonable, but
no assurance can be given that these expectations will prove to be
correct and such forward-looking statements should not be unduly
relied upon. Actual results and developments may differ, and may
differ materially, from those expressed or implied by the
forward-looking statements contained in this news
release.
Forward-looking statements involve known and
unknown risks, uncertainties, assumptions of management and other
factors that may cause actual results or events to differ
materially from those anticipated in such forward-looking
statement, including but not limited to: (a) the Company being
unable to meet the milestones for purchases of Secured Notes under
the Investment Agreement; (b) risks associated with the results of
exploration activities, the interpretation of drilling results and
other geological risks, estimation of mineral resources and the
geology, grade and continuity of mineral deposits, project cost
overruns or unanticipated costs and expenses; and (c) such other
risks detailed from time to time in the Company's quarterly and
annual filings with securities regulators and available under the
Company's profile on SEDAR at www.sedar.com.
Although the Company believes that the
expectations conveyed by the forward-looking statements are
reasonable based on the information available to it on the date
such statements were made, no assurances can be given as to future
results, approvals or achievements. Such forward-looking
statements have been made for the purpose of assisting investors in
understanding the Company's business, financial and operational
performance and plans and may not be appropriate for other
purposes. The forward-looking statements contained in this
news release are expressly qualified by this cautionary
statement. The Company disclaims any duty to update any of
the forward-looking statements after the date of this news release
to conform such statements to actual results or to changes in the
Company's expectations except as otherwise required by applicable
law.
SOURCE Western Pacific Resources Corp.