NOT FOR DISSEMINATION IN THE UNITED STATES
Universal Infrastructure Corp. ("Universal")(TSX VENTURE:UIC.P) and Global
Alternative Investments Inc. ("Global")(TSX VENTURE:GLI.P) (collectively, the
"CPCs") announce that they have entered into a binding letter of intent dated
June 10, 2009 (the "Letter of Intent") with Ra Resources Ltd. ("Ra"), pursuant
to which Global and Universal will acquire all of the issued and outstanding
securities of Ra (the "Acquisition"). Ra is a company that was formed under the
laws of Ontario, and is focused on exploring gold and base metal projects in the
Shining Tree region of northeastern Ontario.
It is proposed, subject to legal and tax analysis, that the Acquisition will
involve the following transactions: (1) Universal and Global will amalgamate
under the laws of Alberta (the "CPC Combination") to form a combined entity (the
"Resulting Issuer"); and (2) Ra will amalgamate under the laws of Ontario with a
wholly-owned subsidiary of the Resulting Issuer to be established immediately
following the completion of the CPC Combination (the "Amalgamation"). Upon
completion of the Amalgamation, the entity resulting from the Amalgamation
("Amalco") will be a wholly-owned subsidiary of the Resulting Issuer. The
Resulting Issuer will be known as "Ra Resources Ltd." The Acquisition will
constitute a "Qualifying Transaction" for each of Universal and Global in
accordance with the policies of the TSX Venture Exchange Inc. (the "Exchange").
About Universal and Global
Universal and Global are publicly-traded capital pool companies as defined by
the Exchange. Following the Acquisition, the Resulting Issuer will, through
Amalco, carry on the business of Ra, as described below.
About Ra Resources Ltd.
Ra Properties
Ra was founded for the purpose of acquiring gold and base metal projects in the
Shining Tree region of northeastern Ontario. Ra has assembled a management and
technical team which will remain with the Resulting Issuer. Ra currently has
acquired through various option contracts a 100% interest in six mineral
properties (comprised of two gold and four base metal properties) known as
Churchill, Browning, MacMurchy, Nursey, Asquith and Amyot. These are known
collectively as the "Ra Properties."
Ra's principal focus is the development of the Churchill Township gold prospect,
located three kilometres north of Shining Tree village. The Churchill Township
property package consists of six mineral claims, divided into 16 contiguous
units, covering an area of 256 hectares. During the summer of 2007, Ra began an
extensive program of surface work on the Churchill Township property including
mapping, stripping, trenching and a three hole diamond drilling program
totalling 901 metres. In 2008, an additional twelve hole diamond drilling
program totalling 1,032 metres was completed. Work to date has indicated three
gold-bearing zones, namely Main Zone, Hi-Grade Zone and 10E Zone.
A National Instrument 43-101 ("NI 43-101") Technical Report entitled "Technical
Report on Churchill Township Property, Churchill Township, Shining Tree Area,
Larder Lake Mining Division, Ontario for Ra dated May 25, 2009 is available
under Ra's issuer profile on SEDAR at www.sedar.com. The technical report was
prepared by Fred J. Sharpley P. Geo. (ON), a "qualified person" within the
meaning of NI 43-101, who is independent to Ra and is independent to the CPCs. A
2009 drilling program to test the Main Zone laterally and at depth is planned
for August. Ra's goal is to outline the resource in the near term. In addition,
Ra intends to further develop its other properties of interest through programs
of mapping, airborne surveys and diamond drilling later in 2009.
Financial Information
For the six-month financial period ending January 31, 2009, Ra's unaudited
financial statements indicate that Ra had a working capital deficiency of
$312,496. In addition, as at January 31, 2009, Ra had current assets of $17,435,
other assets of $571,148, long-term liabilities of $nil and current liabilities
of $329,931.
Corporate History and Structure
Ra was incorporated under the laws of Ontario on December 20, 2006. The
registered head office of Ra is located at 174 Spadina Ave, Suite 304, Toronto,
Ontario, M5T 2C2.
Ra has issued and outstanding 5,925,000 common shares (the "Ra Common Shares")
and 200,000 options. Each such option entitles the holder to acquire one Ra
Common Share at a price of $0.10 until October 6, 2010.
Further information concerning Ra can be found in its prospectus dated August
18, 2008 available under its issuer profile on SEDAR at www.sedar.com.
About the Proposed Qualifying Transaction
In order to facilitate the Acquisition, Universal and Global will complete the
CPC Combination. The CPC Combination constitutes a "business combination" for
the purposes of applicable securities laws and will be subject to shareholder
approval, as described below. Pursuant to the terms of the CPC Combination, each
common share of Universal (a "Universal Common Share") and each common share of
Global (a "Global Common Share") will be exchanged for one Resulting Issuer
Share at a deemed value of $0.20. Immediately following the completion of the
CPC Combination, the Resulting Issuer will incorporate a wholly-owned subsidiary
under the laws of Ontario for the sole purpose of completing the Amalgamation
and thereby acquiring all of the issued and outstanding securities and assets of
Ra. All of the outstanding Ra Common Shares will be exchanged for common shares
of the Resulting Issuer ("Resulting Issuer Shares") at a ratio of 1.25 Resulting
Issuer Shares for each Ra Common Share (the "Exchange Ratio"). All of the
outstanding convertible securities of Ra will be exchanged for convertible
securities of the Resulting Issuer to be issued on similar terms and conditions
and exercisable to acquire the number of Resulting Issuer Shares equal to the
number of Ra Common Shares subject to such convertible securities, adjusted in
accordance with the Exchange Ratio. The Amalgamation will be subject to
shareholder approval, as described below.
Concurrent with the completion of the Amalgamation, Ra intends to use its
commercially reasonable best efforts to obtain subscriptions for (i) the
issuance of a minimum of 2,000,000 and a maximum of 6,000,000 subscription
receipts which will be convertible for Ra Common Shares (or securities
convertible into Ra Common Shares) at a price of not less than $0.20 per
subscription receipt for gross proceeds of $400,000 to $1,200,000, and (ii) the
issuance of up to 2,000,000 subscription receipts to be issued on a
"flow-through" basis under the Income Tax Act (Canada) which will be convertible
for Ra Common Shares (or securities convertible into Ra Common Shares) at a
price of not less than $0.20 per subscription receipt for gross proceeds of up
to $400,000 (collectively, the "Ra Financing"). The subscription receipts issued
under the Ra Financing will be automatically converted into securities of Ra in
connection with the completion of the Acquisition. Ra may engage registered
dealers to act as agents (the "Agents") of Ra in connection with the Ra
Financing, and in connection therewith may pay a cash commission and/or other
compensation to the Agents, subject to regulatory approval. The Resulting Issuer
intends to use the net proceeds of the Ra Financing for exploration, property
payments, and general corporate purposes.
The parties have agreed to the issuance of (i) 125,000 Resulting Issuer Shares
with a deemed value of $0.20 per share, and a cash fee of $25,000 to Euroglobal
Capital Partners Inc. and (ii) a cash fee of $4,000 to Taylor MacDonald, subject
to regulatory approval and compliance with applicable law. These payments are
proposed to be made as compensation for services rendered in connection with the
proposed Qualifying Transaction.
Proposed Management and Directors after the Amalgamation
In connection with the completion of the Acquisition, the Board of Directors of
the Resulting Issuer will be reconstituted to consist of five directors, which
shall include two nominees of Ra, one nominee of Universal, one nominee of
Global, and one independent director to be mutually agreed upon, subject to
Exchange approval and other applicable laws. The officers of the Resulting
Issuer following completion of the Acquisition are expected to include William
Koble (Chief Executive Officer) and Jack Tindale (Vice President, Exploration),
Suzanne Abate (Secretary) and John Dyer (Chief Financial Officer).
In addition to the directors of the Resulting Issuer, the following individuals
and entities will constitute Insiders (as defined in the Exchange's Corporate
Finance Manual) of the Resulting Issuer following the completion of the
Acquisition:
William Koble, the proposed Chief Executive Officer of the Resulting Issuer, is
a corporate development and capital finance professional with over 20 years'
experience in sales, marketing, and management. He previously worked for the
Canadian Miner newspaper and sat on the board for several exploration companies
including Lakota Resources and International PBX Ventures. William currently
plays an integral part in Ra's development and communication strategies.
Jack Tindale, the proposed VP of Exploration of the Resulting Issuer, is a
Canadian exploration geologist and professional engineer with over 50 years'
experience in Canada, the United States, Europe, Africa, and the Middle East. He
is skilled in the development of exploration projects from grass roots through
to feasibility, and production in base and precious metals, and in the oil and
gas industry. Jack currently manages the Ra exploration program in northeastern
Ontario.
Suzanne Abate, the proposed Secretary of the Resulting Issuer, brings over 15
years' experience in service, administrative and management roles to Ra. She is
accomplished in many aspects of business development, including marketing and
communications, and is the co-founder of Toronto-based corporate development
consulting firm, Lighthouse Media & Communications Ltd.
John Dyer, the proposed Chief Financial Officer of the Resulting Issuer, is a
Certified Management Accountant with over 20 years experience in finance,
management and consulting roles. Mr. Dyer has extensive experience in aiding
listed companies prepare and comply with their financial and other continuous
disclosure obligations, as well as their internal control policies. Mr. Dyer has
also assisted US-listed entities institute their Sarbanes Oxley compliance
regimes. In addition to his financial expertise, John currently supports various
aspects of Ra's administrative operations.
DCT Investment Corp. ("DCT"), an entity owned and controlled by John F.
Driscoll, will beneficially own or control more than 10% of the outstanding
voting rights of the Resulting Issuer. John F. Driscoll is the Chief Executive
Officer, a Director and the Chairman of C.A. Bancorp Inc. and Sentry Select
Capital Inc. Mr. Driscoll received his Bachelor of Science degree from the
Boston College Business School and attended the New York Institute of Finance
for advanced business studies. He has more than 35 years of diversified business
experience. Mr. Driscoll is a member of the CFA Institute and also attained the
professional manager designation with the Canadian Institute of Management. He
has founded numerous public partnerships as well as public and private energy
and investment companies.
C.A. Bancorp Inc. ("CAB") is a publicly traded Canadian merchant bank and
alternative asset manager that provides investors with access to a range of
private equity and other alternative asset class investment opportunities. CAB
is focused on investments in small- and middle-capitalization public and private
companies, with emphasis on the industrials, real estate, infrastructure and
financial services sectors.
The securities which may be issued and/or issuable in connection with the Ra
Financing have been excluded for the purposes of determining the anticipated
Insiders of the Resulting Issuer immediately following the completion of the
Acquisition.
Interested Parties in the Proposed Transactions
The Acquisition does not constitute a "Non-Arm's Length Qualifying Transaction"
pursuant to Policy 2.4 of the Exchange's Corporate Finance Manual. However, the
CPC Combination is considered a non-arm's length transaction and a "business
combination" within the meaning of the rules of the Exchange and applicable
securities laws, respectively, due to DCT and CAB being control persons of each
of the CPCs.
As at the date hereof, CAB, with a head office in Toronto, owns 950,000 shares
(approximately 27.1% equity interest) of each of Universal and Global. As at the
date hereof, DCT with a head office in Toronto which is wholly owned by John F.
Driscoll of Toronto, owns 950,000 shares (approximately 27.1% equity interest)
of each of Universal and Global. Upon completion of the Acquisition, CAB and DCT
will each own approximately a 13.2% equity interest in the Resulting Issuer.
The securities which may be issued and/or issuable in connection with the Ra
Financing have been excluded for the purposes of determining each of CAB's and
DCT's anticipated ownership interest in the Resulting Issuer following the
completion of the Acquisition.
Multilateral Instrument 61-101 (the "Rule 61-101") provides that an issuer
involved in a "business combination" must obtain a formal valuation (subject to
certain exceptions), unless an exemption from this valuation requirement can be
relied upon, and must obtain minority shareholder approval for the transaction,
unless an exemption from this minority approval requirement can be relied upon.
In respect of the CPC Combination, Universal and Global are relying upon the
exemption set out in section 4.4(a) of Rule 61-101 in order to exempt the CPC
Combination from the valuation requirements.
Shareholder Meetings
As the CPC Combination constitutes a "business combination" under applicable
securities laws, a special meeting of shareholders of Universal and Global will
be required to approve the CPC Combination. The Acquisition will be considered
an arm's length transaction, however, shareholder approval will still be
required to approve the Amalgamation under applicable corporate law.
Conditions of Completion
The completion of the Acquisition is also subject to a number of conditions
precedent, including Exchange approval, approval by the shareholders of each of
the CPCs and Ra, the completion of the Ra Financing, satisfactory due diligence
reviews by Global, Universal and Ra, board of director approval, the entering
into of formal agreements, the entering into of employment and non-competition
agreements with certain senior officers of Ra, and certain other customary
conditions for a transaction of this type.
Trading of the Universal Common Shares and the Global Common Shares have been
halted and will not resume until the Exchange has reviewed the NI 43-101 report
prepared regarding the Churchill Township Properties and until all other
documents required by the Exchange have been filed. A further news release will
be issued when the Exchange has received the necessary documentation and trading
of such securities is to commence.
Sponsorship Exemption
A general policy of the Exchange requires that a sponsor be retained to prepare
a report in compliance with Policy 2.2 of the Exchange's Corporate Finance
Manual. Universal and Global will apply for an exemption from sponsorship
requirements based on the extensive reporting issuer experience of the current
board of directors of each of Universal and Global. However, there is no
assurance that Universal and/or Global will obtain this exemption. Trading in
the shares of Universal and Global will remain halted until receipt by the
Exchange of satisfactory documentation.
As indicated above, completion of the Acquisition 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. The Acquisition cannot close until the required shareholder approval
is obtained. There can be no assurance that the Acquisition will be completed as
proposed or at all.
Investors are cautioned that, except as disclosed in the Information Circulars
of Global, Universal and Ra to be prepared in connection with the Acquisition,
any information released or received with respect to the Acquisition may not be
accurate or complete and should not be relied upon. Trading in the securities of
Global and Universal should be considered highly speculative.
Information in this press release concerning Ra has been furnished to Global and
Universal by Ra and is not known directly to Global and/or Universal.
The TSX Venture Exchange Inc. has in no way passed upon the merits of the
Acquisition and has neither approved nor disapproved the contents of this press
release.
This press release contains forward-looking information which is not comprised
of historical facts, including those identified by the expressions "expect,"
"believe," "intend," "will" and similar expressions. The forward-looking
information reflects Global's, Universal's and Ra's current expectations
regarding future results or events. Forward-looking information involves risks,
uncertainties and other factors that could cause actual events, results,
performance and opportunities to differ materially from those expressed or
implied by such forward-looking information. Forward looking information in this
press release includes, but is not limited to, the Ra Financing, the proposed
structure and terms of the Ra Financing, and the intended use of the net
proceeds of the Ra Financing, the expected directors and other Insiders of the
Resulting Issuer, the proposed structure of the Acquisition, the expected timing
for the completion of the Acquisition and related matters and transactions,
expectations respecting the Resulting Issuer's future business plans or goals
and principal focus, including Ra's planned drilling program for 2009 and other
exploration activities respecting the Ra Properties intended to be undertaken
during 2009, and the CPCs' expectations with respect to the resumption of
trading of its respective securities on the Exchange. Factors that could cause
actual results or events to differ materially from those described in such
forward-looking information include, but are not limited to, the various
parties' respective and/or collective ability to satisfy all applicable
regulatory requirements, including the parties' ability to obtain the requisite
approval of the Acquisition from their respective shareholders, the ability of
Ra and/or the Agents to raise funds in the current market environment, adverse
general market conditions, adverse changes in commodity prices, particularly
with respect to the prices of gold and base metals, and those other risks set
out in the respective public documents of each of the CPCs and Ra which are
filed on SEDAR. Although the CPCs believe that the assumptions and factors used
in preparing the forward-looking information are reasonable, readers are
cautioned not to place undue reliance on such forward-looking information, which
only applies as of the date of this press release, and no assurance can be given
that such events will occur in the disclosed time frames or at all. Each of the
CPCs disclaim any intention or obligation to update or revise any
forward-looking information, whether as a result of new information, future
events or otherwise, other than as required by law.
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