OTTAWA, April 20 /CNW Telbec/ - Blue Fyre One Inc., (TSXV: BLU.P)
(the "Corporation"), an Ottawa-based Capital Pool Company, announced today it
has reached an agreement in principle concerning the acquisition of
Soltoro Ltd., an Ontario corporation ("Soltoro"). The acquisition, if
completed, will be the Corporation's qualifying transaction pursuant to the
policies of the TSX Venture Exchange Inc. (the "Exchange"). The proposed
transaction is arm's length.
The acquisition price for all of the outstanding shares, warrants and
options of Soltoro will be satisfied by the issuance of 13,120,000 common
shares in the capital of the Corporation. The Corporation will also assume the
obligations under 480,000 broker's warrants of Soltoro to be issued under the
Soltoro financings as described below, each entitling the holder to purchase
one common share of the Corporation at $0.50 share per share for an 18-month
period. The Corporation will also assume the outstanding options of Soltoro,
permitting upon exercise the issue of 1,310,000 common shares of the
Corporation. All of the options are held by directors with 380,000 exercisable
at $0.10 and expiring on November 30, 2009 and 450,000 exercisable at $0.25
and expiring September 30, 2008. The balance of 480,000 options will be issued
to directors upon the closing of the proposed transaction and will be
exercisable at $0.50 with the expiration date to be determined by the
directors and shall be no longer than five years from the date of issue.
It is a condition of the transaction that Soltoro complete, prior to the
transaction, a $500,000 private placement of 2,000,000 common shares at $0.25
per share and have paid or secured the conversion to common shares of
substantially all of its debt. The shares issued in this private placement by
Soltoro will be acquired by the Corporation as part of the transaction, and
the shares of the Corporation to effect this acquisition are included in the
purchase consideration above. Union Securities Ltd. ("Union") has been engaged
by Soltoro on a best efforts basis to complete this private placement.
It is a further condition of closing of the transaction that Soltoro must
have raised by way of a $2,000,000 private placement of 4,000,000 common
shares at a price of $0.50 per share, provided that the proceeds of this
placement will not be released from escrow until closing of the acquisition of
Soltoro by the Corporation. The shares issued by Soltoro in this private
placement will be acquired by the Corporation as part of the acquisition, and
the shares of the Corporation to effect this acquisition are also included in
the purchase consideration above. Union has also been engaged by Soltoro on a
best efforts basis to complete this private placement. Union will receive a
commission of 8% in cash of the total amount raised by both financings and
additional warrants equal to 8% of the total shares subscribed for under the
financings. Each warrant will entitle Union to purchase a share at $0.50 for a
period of 18 months. The total number of outstanding shares at the closing of
the proposed transaction shall be 16,620,000.
The Corporation anticipates that post-closing of the acquisition of
Soltoro, the consent of the shareholders of the Corporation to change its name
and its auditors will be sought.
Completion of the transaction is subject to a number of matters,
including, but not limited to the negotiation and signing of a definitive
agreement, satisfactory completion of due diligence, board and other requisite
approvals. The transaction is also subject to the execution of employment
agreements for all key personnel of Soltoro and the satisfaction of the
minimum listing requirements of the Exchange and Exchange approval. There can
be no assurance that the transaction will be completed.
Soltoro is a mineral exploration company exclusively active in south-
western Mexico through its wholly owned Mexican subsidiary, Soltoro S.A. de
C.V. ("Soltoro Mexico"). Soltoro Mexico holds 100 % title interest to two
separate mineral concessions located in the State of Jalisco, Mexico: El Rayo
& La Tortuga. The entire El Rayo silver-lead-gold concession and a portion of
the La Tortuga copper-gold-silver concession were part of the National Mine
Reserve until denationalization in 1993, at which time, the Mexican Government
privatized a large portion of its governmental mining holdings in order to
encourage their development
The El Rayo silver-lead-gold project is comprised of 3,848 hectares and
hosts 3 former producing silver-lead mines, (Catarina, Matachines / Las Bolas
& Ocote) with gold and copper credits. The silver-lead mines within the
concession were last mined for high-grade silver at the turn of the 19th
century. The Mexican Government Geological Agency (CRM) carried out numerous
studies within the main mine area of the property with very little work
conducted on the balance of the property to investigate other regional
prospects, including several gold prospects. Eleven other prospects have been
identified to date from historical data. All of these mineralized zones
surround 3 large magnetic highs. Soltoro believes the project has the
potential to host a bulk tonnage silver-lead deposit in the main area studied
by the CRM with the balance of the property largely unexplored. Management of
Soltoro is currently conducting a regional reconnaissance program with plans
to further assess, then drill test for a bulk tonnage silver-lead deposit in
the main mine area. Local infrastructure and access to the property are
excellent.
The La Tortuga copper-gold-silver project is comprised of 9,064 hectares
(4,481 which are titled, with the remainder under application) and hosts
numerous former producing precious metal mines. Soltoro is currently
investigating the property for a potential porphyry source as the feeder for
the various mineralized systems outlined to date. In March 2006, a total of
25 kilometres of line cutting was completed and an Induced Polarization survey
is currently underway. It is hoped that the survey will outline limits of the
potential porphyry system. Once results have been obtained from the I.P.
program, data from a recent stream sediment program will be correlated, and
drill targets will be selected. Further information about Soltoro, may be
obtained from its website.
The management of Soltoro currently consists of Andrew Thomson of
Toronto, Ontario who is the President and Treasurer. In addition, Andrew
Thomson controls 19.6% of Soltoro.
Upon completion of the transaction, the following individuals will be
elected as directors or officers of the resulting company:
Andrew Thomson, is currently the President and a director of Soltoro, has
10 years of experience in mineral exploration in South-Western Mexico;
Chris Lloyd, is the current Geologist and Vice President of Soltoro
Mexico and was formerly a Senior Geologist for Minera Cominco (Mexico) S.A. de
C.V. Mr. Lloyd is a full time Mexican resident;
Phillip Walford, is currently a director of Soltoro, and has 35 years
experience in mining and mineral exploration. Mr. Walford was the former Vice
President for a junior producer, Geomaque Explorations Ltd. and is currently
the President of Marathon PGM Corporation;
Bill McGuinty, is currently a director of Soltoro, and has 20 years in
mineral exploration including experience in Central America. Mr. McGuinty is a
Senior Geologist and was formerly part of the Marwest discovery team on the
San Martin deposit in Honduras. Mr. McGuinty is currently Vice President
Exploration of Intrepid Minerals Corporation;
Douglas Reeson, is currently a director of Soltoro who has 25 years of
experience in capital markets. Mr. Reeson has held a number of positions in
the investment industry including the Executive Director of Listings for the
Toronto Stock Exchange. Currently, Mr. Reeson is the President of Gossan
Resources Limited, a director of Mega Uranium Ltd. and the Chief Financial
Officer of Mengold Resources Inc.; and
Mark Lawrence, is currently a director of the Corporation and the
managing director of NorthCrest Partners Inc. Mr. Lawrence was a former
director and senior analyst of Loewen Ondaatje McCutcheon Limited, a Vice
President of Midland Walwyn Capital Inc. and a Vice President of Prudential-
Bache Securities.
The proposed transaction is an arm's length transaction and will not, as
currently contemplated, be subject to approval by the shareholders of the
Corporation. Further details of the proposed transaction will be announced
when available. The agreement in principle contemplates that the transaction
shall be completed no later than September 30, 2006.
Completion of the transaction is subject to a number of conditions,
including but not limited to, Exchange acceptance and if applicable pursuant
to Exchange Requirements, majority of the minority shareholder approval. Where
applicable, the transaction cannot close until the require 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 a capital pool company
should be considered highly speculative. The TSX Venture Exchange Inc. has in
no way passed upon the merits of the proposed transaction and has neither
approved nor disapproved of the contents of this press release.
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