- Mongolian government approval process ongoing for the IBEX transaction
- Extension to closing date agreed
VANCOUVER, Sept. 30, 2016 - Kincora Copper Limited (TSX.V: KCC) ("Kincora" or the "Company"). Following the 10 for 1 consolidation of its outstanding share capital (the "Consolidation") and the closing of its $1,053,060 private placement, (the "Private Placement") as detailed in a news release dated July 28, 2016, Kincora wishes to update the terms of its Share Exchange Agreement with High Power Ventures Inc., ("HPV") as originally disclosed in the Company's news releases dated May 25, 2016 and June 8, 2016, (the "IBEX transaction").
As result of the Consolidation, on closing of the proposed IBEX transaction, Kincora would now issue 5,895,000 common shares and 2,947,500 warrants having an exercise price of $0.54 and a term of 24 months, subject to acceleration in certain circumstances as detailed in the July 28, 2016 news release. There is no cash consideration relating to the IBEX transaction. It is intended that these securities would ultimately be held by the shareholders of HPV, the largest of whom are HPX Techco as to 65.78%, a subsidiary of High Power Exploration Inc., a private company, and GoviEx Uranium Inc., a TSX venture exchange listed company, as to 21.64%.
Closing of the IBEX transaction remains subject to Mongolian governmental approvals, with this process ongoing, and has been impacted by an adverse non-binding tax assessment. Independent advice has confirmed Kincora and HPV's original tax position in respect of the existing deal structure under Mongolian tax and corporate law, and discussions are continuing. However, in order to accommodate the ongoing discussions with Government officials, Kincora and HPV have agreed to extend the deadline for closing the IBEX transaction to October 31, 2016.
While Kincora is encouraged by Prime Minister Jargaltulgyn Erdenesat's establishment of a working group, headed by the Minister of Justice and Internal Affairs, to assist in situations such as this, it is not certain that efforts to overcome the tax assessment will be successful.
Sam Spring, Kincora President and CEO, stated: "A technical workshop and site visit review of targets across the proposed consolidated Kincora-IBEX license portfolio has recently been completed. The Company will continue to inform the market of progress relating to the completion of the IBEX transaction and its implications to field season activities."