Not for dissemination in the United States or through U.S. newswires
Calgary, Alberta CANADA, May 07, 2012 /FSC/ - Celeste Copper Corporation (C - TSX Venture), announces that the Company intends to undertake a non-brokered private placement of up to 28,000,000 units, each unit being made up of one common share and one half of a common share purchase warrant ("Unit") at a price of $0.09 per Unit for total gross proceeds of up to $2.52 million (the "Offering"). Each whole common share purchase warrant ("Warrant") shall entitle the holder to acquire one common share of the Company at a price of $0.125 per share for a period of 30 months following the date of closing of the Offering.
As previously announced, Celeste is party to an earn-in agreement to acquire a 60% equity interest (with the ability to increase to 100% based on a valuation after having earned the 60% interest) in Cornish Minerals Limited (together with all amendments, the "Earn-In Agreement") which controls certain tin and copper mineral rights in Cornwall, England, including the assets known as the South Crofty Mine. The proceeds from this financing are being used to fund an increase of Celeste's interest in Cornish Minerals Limited from the current 19% to 25%, which is the maximum interest position available to Celeste at this time under the Earn-in Agreement, and will allow the Company to further increase its position in the future. Upon acquiring the remaining amount and achieving 25% Celeste is in a position to serve notice of its intention to exercise its option to acquire either an additional 25% in Cornish Minerals Limited (for a total interest of 50%) or an additional 35% in Cornish Minerals Limited (for a total interest of 60%) interest upon completion by Celeste of its funding commitments by September 30, 2013.
Liberty Metals & Mining Holdings, LLC ("Liberty Metals") a wholly-owned subsidiary of Boston-based Liberty Mutual Insurance, has expressed an intention to subscribe for up to 23,333,333 Units in the Offering which will amount to $2,100,000 gross proceeds. As Liberty Metals is a control person of Celeste TSX Venture Exchange Policy 5.9 Protection of Minority Security Holders in Special Transactions which adopts, in its entirety, Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions ("MI 61-101") requires shareholder approval unless an exemption is available therefrom. MI 61-101 provides an exemption from minority approval where the fair market value of the related party transaction is not more than $2.5 million (as calculated and determined under MI 61-101). The issuance of Units to Liberty Metals under the proposed Offering would result in their proposed investment having a fair market value (as calculated and determined under MI 61-101) of approximately $3,558,333. Celeste will be seeking minority approval for Liberty Metals' proposed investment in the Offering at its upcoming annual and special shareholder meeting to be held on June 6, 2012.
Assuming the Offering is completed only to Liberty Metals and that Liberty Metals subscribes for 23,333,333 Units Liberty Metals would hold approximately 48% of the issued and outstanding common shares of Celeste and 85% of the issued and outstanding warrants of Celeste. As well, in connection with the proposed Subscription by Liberty Metals under the Offering, Liberty Metals and Celeste intend to amend the existing Investor Rights Agreement to provide that Liberty shall be entitled to designate two nominees for election or appointment to the Board of Celeste. Liberty currently has the right to designate one nominee.
If minority approval is not obtained, Liberty Metals and Celeste intend to complete a financing whereby Liberty Metals will acquire the maximum number of securities permitted to be required under the exemptions from the requirement to obtain minority approval under MI 61-101 with the remainder of the financing to be settled by way of the issuance of a promissory note by Celeste to Liberty Metals or such other financing as may be agreed by Liberty Metals and Celeste.
There is no assurance that the Offering, a transaction with Liberty Metals or any other financing will be completed and the completion of the Offering and any transaction with Liberty Metals will be subject to the execution of definitive agreements (which is subject to certain conditions precedent) and the satisfaction of the conditions precedent contained in any definitive agreement.
Celeste is a Canadian corporation currently focused on developing the historical tin project in Cornwall, England. In addition, Celeste continues to assess other tin, copper and copper-gold properties for exploration and development opportunities.
Celeste shares trade on the TSX Venture Exchange under the symbol C. Celeste's website can be accessed at www.celestecopper.com For further information, please contact:
Investor Cubed Inc. David B. McQuaig
Neil Simon Chief Financial Officer
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.
Caution Concerning Forward-Looking Information
This news release contains forward-looking statements and information within the meaning of applicable U.S. and Canadian securities laws including with respect to closing of the transaction and the timing of receiving results from Celeste's ground exploration and field program in Chile. Words such as "may", "will", "should", "anticipate", "plan", "expect", "believe", "estimate" and similar terminology are used to identify forward-looking statements and information. Such statements and information are based on assumptions, estimates, opinions and analysis made by management of Celeste in light of its experience, current conditions and its expectations of future developments as well as other factors which they believe to be reasonable and relevant. Forward-looking statements and information involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those expressed or implied in the forward-looking statements and information. Risks and uncertainties that may cause actual results to vary include but are not limited to: the conditional nature of the transaction, including the requirement for approval of the transaction by the TSX Venture Exchange; uncertainties relating to the availability and costs of financing needed to complete the transaction; exploration costs varying significantly from estimates; delays in the exploration and development of, and/or commercial production from, the properties in which Celeste has an interest; the speculative nature of mineral exploration and development, including the uncertainty of reserve and resource estimates; operational and technical difficulties; success of future exploration and development initiatives; competition; inability to obtain, or delays in obtaining, necessary permits and approvals from government authorities; fluctuations in foreign exchange rates; as well as other risks and uncertainties which are more fully described in Celeste's annual and quarterly Management's Discussion and Analysis and other filings made by Celeste with Canadian securities regulatory authorities and available at www.sedar.com.
Any forward-looking statement speaks only as of the date on which it is made and, except as may be required by applicable laws, Celeste disclaims any intent or obligation to update any forward-looking statement, whether as a result of new information, future events or results or otherwise. Although Celeste believes that the assumptions inherent in the forward-looking statements are reasonable, forward-looking statements are not guarantees of future performance and accordingly undue reliance should not be put on such statements due to the inherent uncertainty therein.
The securities referred to in this news release have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold within the United States, or to, or for the account or benefit of, U.S. persons or persons in the United States, absent U.S. registration or an applicable exemption from the U.S. registration requirements. This news release does not constitute an offer for sale of securities for sale, nor a solicitation for offers to buy any securities. Any public offering of securities in the United States must be made by means of a prospectus containing detailed information about the company and management, as well as financial statements.