Kesselrun Resources (formerly Aleeyah Capital) Announces Completion of Qualifying Transaction and Concurrent Financing
VANCOUVER, BC – July 24, 2012 – Kesselrun Resources Ltd. (TSXV: KES) (the “Company” or “Kesselrun” or “KES”), formerly Aleeyah Capital Corp. (TSXV: AAY.P) (“Aleeyah”), is pleased to announce that it closed its Qualifying Transaction and concurrent financing on July 18, 2012 (the “Closing Date”).
Resumption of Trading
The Company anticipates that its common shares will resume trading on the TSX Venture Exchange (the “Exchange”) on or about July 25, 2012 under the symbol “KES”.
The Qualifying Transaction
The Company acquired (the “Transaction”) options to acquire up to a 100% interest in and to 713 units (the “Property”) covering 11,408 hectares located in Bluffpoint Lake Township, with portions extending into the townships of Lawrence Lake, Napanee Lake and Barker Bay in the Kenora Mining Division of Northwestern Ontario.
First Option
To exercise its first option to acquire a 60% undivided interest in the Property, the Company must make the cash payments and issue 4,000,000 common shares as set out below:
- on the Closing Date, issue to Michael Thompson (the “Optionor”) 2,000,000 common shares (issued); and
- on or before the 1st anniversary of the Closing Date, pay the Optionor $100,000 and issue to the Optionor an additional 1,000,000 Resulting Issuer Shares; and
- on or before the 2nd anniversary of the Closing Date, pay the Optionor $100,000 and issue to the Optionor an additional 1,000,000 Resulting Issuer Shares.
The Company may accelerate the payment to the Optionor at any time and such accelerated payment shall be credited against any share issuance and/or cash payment obligations under the terms of the Options.
The Property is subject to a royalty payable to the Optionor equal to a 2.0% NSR, of which 1.0% may be purchased by the Resulting Issuer at any time for the payment of $1,000,000; leaving the Optionor with a final 1.0% NSR. If the Optionor decides to dispose of its remaining 1.0% NSR, the Resulting Issuer shall have the first right of refusal to acquire that remaining 1% NSR on the same terms and conditions that the Optionor proposes to dispose of its NSR. If the Optionor proposes to dispose of its NSR, the Optionor shall deliver to the Resulting Issuer written notice of the Optionor’s intention to dispose of its NSR and the terms of the proposed disposition.
The Resulting Issuer shall have thirty (30) days from receipt of such disposal notice to notify the Optionor in writing that the Resulting Issuer intends to exercise its option (s) and acquire the Optionor’s NSR. If the Resulting Issuer has duly exercised its option to acquire the NSR from the Optionor, the Resulting Issuer shall then have sixty (60) days to deliver to the Optionor the full payment price for the NSR.
Option Committee
The Company has established a three member committee comprised (the “Option Committee”) comprised of Ali Hakimzadeh, James Beesley and John Da Costa. The Option Committee is expected to meet on a periodic basis to assess the results of exploration conducted by the Company to date and determine whether the Company should continue to exercise the First Option or, if applicable, the Second Option. The Option Committee may take advice from Michael Thompson, Caitlin Jeffs, and any experts that the Option Committee considers necessary or advisable into consideration in its deliberations. The Option Committee shall have the power to:
- Retain appropriately skilled technical advisors to assist the Option Committee in its ongoing evaluation of the Property and to pay such advisors accordingly through cash and incentive stock options;
- Determine whether the Resulting Issuer shall make the cash payments and/or share issuances to the Optionor under the terms of the First Option and/or the Second Option and, upon the majority of the Option Committee determining to make required cash payments and/or share issuances for the period, Aleeyah shall make the particular cash payments and/or share issuances, as the case may be;
- Determine whether the Resulting Issuer shall enter into the Joint Venture with the Optionor in accordance with the terms of the Joint Venture Agreement;
- Assess any Acquired Interest and, upon a majority decision in favour, give notice to the Optionor that the Resulting Issuer intends to exercise its option to purchase the Acquired Interest, and to effect the purchase thereof; and
- Determine whether the Resulting Issuer shall acquire any portion of the Optionor’s NSR on the terms and considitons set out in Section 2.3 of the Option Agreement.
For greater certainty, other than the initial share issuance of 2,000,000 Resulting Issuer Shares, the Resulting Issuer is prohibited from paying any amount to the Optionor or issuing any Resulting Issuer Shares to the Optionor unless a majority of the Option Committee gives its approval for the particular cash payment or share issuance.
Second Option
Within sixty (60 days) of the Resulting Issuer exercising the First Option and acquiring a 60% undivided interest in and to the Property, the Option Committee shall notify (the “Second Option Notice”) the Optionor whether the Resulting Issuer intends to exercise the Second Option to acquire a 100% interest in and to the Property. If the Option Committee does not deliver the Second Option Notice to the Optionor within this sixty (60) day timeframe, the Second Option shall automatically terminate and the Resulting Issuer shall be deemed to have elected to enter into the Joint Venture with the Optionor.
Upon duly delivering the Second Option Notice to the Optionor, the Resulting Issuer shall earn the exclusive and irrevocable right and option (the “Second Option”) to acquire the outstanding 40% interest in and to the Property (so that the Resulting Issuer would have a 100% interest in and to the Property). In order to exercise the Second Option, the Resulting Issuer must pay the Optionor a cash amount of Two Hundred Thousand dollars ($200,000) and issue to the Optionor an additional two million Resulting Issuer Shares at or before the third anniversary of the Closing.
Pursuant to the terms of an Option Agreement dated March 31, 2012 between Aleeyah and Michael Thompson, Aleeyah issued 2,000,000 common shares to Mr. Thompson on close of the Transaction. These shares have been deposited into escrow with Computershare Investor Services Inc. in accordance with the terms and conditions of a Form 5D escrow agreement. Aleeyah also issued 200,000 shares to RAB Holdings Corp as a finder’s fee.
Upon close of the Transaction, the concurrent financing, as described below, and the Finder’s Fee, the Company has 16,900,000 common shares issued and outstanding, 1,690,000 share purchase options and 200,000 warrants. The Company is now a Resource Issuer listed on Tier 2 of the Exchange.
Name Change
Concurrent with the Closing of the Transaction, the Company changed its corporate name from Aleeyah Capital Corp. to Kesselrun Resources Ltd.
Concurrent Financing
Concurrent with the closing of the Transaction, the Company completed a concurrent, non-brokered financing (the “Offering”). Pursuant to the Offering, the Company sold 10,700,000 common shares at a price of $0.10 per share for gross proceeds of $1,070,000. No finder’s fees were paid in connection with the Offering. The securities sold in the Offering are subject to a six month hold period expiring January 18, 2013. The proceeds from the Offering will be used to fund the exploration program recommended in the Company’s National Instrument 43-101 technical report entitled “Aleeyah Capital Corp. Technical Report On The Bluffpoint Gold Project Kenora Mining Division Ontario, Canada” dated April 12, 2012 (effective December 31, 2011)(as filed on Sedar.com), option costs and for general working capital.
Board of Directors & Management
Concurrent with closing of the Transaction, the board of directors of the Company was restructured. Don Graham and Rich Joyes resigned from the board of directors of the Company. The Company would like to thank Mr. Graham and Mr. Joyes for their respective contributions to the Company. Michael Thompson, Caitlin Jeffs and John Da Costa were appointed to the board. The board of directors of KES is now comprised of Michael Thompson, Caitlin Jeffs, John Da Costa, James Beesley and Ali Hakimzadeh. Mr. Thompson was appointed President and CEO of the Company and John Da Costa was appointed to act as CFO and Corporate Secretary of the Company.
Transfer within escrow
Concurrent with the Closing of the Transaction, 1,200,000 common shares of the Company held in escrow under the terms of a CPC Escrow Agreement dated July 27, 2011 were transferred from former directors and officers of the Company to the incoming directors and officers. Don Graham, Rich Joyes and Ke Feng (Andrea) Yuan each transferred 400,000 common shares to Michael Thompson, Caitlin Jeffs and John Da Costa at a price of $0.10 per share. These shares remain in escrow under the terms of the CPC Escrow Agreement.
Stock Options
Concurrent with the Closing of the Transaction, the Company granted 1,290,000 incentive stock options to its directors, officers, employees and consultants. The Stock Options shall be exercisable at a price of $0.10 per share for a period of five (5) years from the Closing Date of the Transaction.
Description of the Property
The Bluffpoint property is an early stage exploration property covering 11,408 hectares in Northwest Ontario’s Wabigoon Subprovince. The Wabigoon Subprovince is host to recent multi-million ounce gold discoveries such as the Hammond Reef and Rainy River deposits. The Bluffpoint property is a large tonnage granodiorite hosted gold target with similar geology, structural controls and mineralization styles as Osisko Mining’s Hammond Reef deposit (NI 43-101 compliant inferred resource of 530.6 million tonnes at a grade of 0.62 grams/tonne gold for 10.52 million ounces of gold – News Release November 7th, 2011). The Bluffpoint property was previously explored by Homestake Mining in the early 1990’s outlining an approximately 400m by 100m zone of gold mineralization.
On Behalf of the Board of Directors of
KESSELRUN RESOURCES LTD.
Per: “Michael Thompson”
Michael Thompson, President, CEO and Director
For any additional information please contact Adam Rabiner at 604-868-7881.
“Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release."