Oct 30 2010
Corsa Capital Ltd. (TSX VENTURE:CSO) has provided an update on the acquisition announced in the Corporation's press release dated August 17, 2010.
As previously announced, the Corporation entered into an agreement dated August 16, 2010 (the "Agreement") with Wilson Creek Energy, LLC ("Wilson Creek") and the owners of Wilson Creek, pursuant to which Corsa will acquire Wilson Creek (the "Acquisition Transaction"), subject to the terms and conditions of the Agreement.
Private Placement
As announced on September 30, 2010, the Corporation's private placement of 154,319,800 subscription receipts was successfully completed on September 30, 2010 for gross proceeds of $69,443,910. The net proceeds will be released from escrow and delivered to the Corporation on satisfaction of the release conditions specified in the subscription receipt indenture entered into between the Corporation, Cormark Securities Inc., GMP Securities L.P. and Computershare Trust Company of Canada, including satisfaction of conditions to the completion of the Acquisition Transaction.
Bridge Financing
In addition, the Corporation has completed the previously announced loan arrangement pursuant to which two investors have advanced to the Corporation an aggregate principal amount of U.S.$5 million, evidenced by a debenture. The funds were advanced in two equal tranches, with the first advance completed on September 24, 2010 and the second advance completed on October 15, 2010. An aggregate of 2,000,000 common shares of the Corporation were issued in connection with the debenture.
Coal Preparation Plant
Construction of Wilson Creek's coal preparation plant (the "Coal Preparation Plant") is proceeding on schedule and on budget. The Coal Preparation Plant is expected to be completed and commissioned by the end of the first calendar quarter of 2011.
New Mining Lease
Subject to the execution of the agreement, Wilson Creek entered into an option to enter into a lease (the "Garrett Lease") in respect of certain coal mining rights. The Garrett Lease must be exercised by Wilson Creek by November 9, 2010. Once the option is exercised, Wilson Creek will have the right to extract the coal from the Upper Freeport Seam under an approximately 869.43 acre parcel in Somerset County, Pennsylvania. This project is located approximately 9 miles from the site of the Coal Preparation Plant. Coal royalties are payable to the landowner on production from this site.
Other
The completion of the Acquisition Transaction is subject to approval of the TSX Venture Exchange (the "TSXV") and requires the approval and filing of a Filing Statement. Review of the Corporation's application for approval is proceeding. Once the Filing Statement has been approved by the TSXV, the Corporation will seek shareholder approval for the Acquisition Transaction (by way of consent in writing from holders of a majority of its shares). The Corporation and the members of Wilson Creek would then be in a position to complete the acquisition once all conditions to the Acquisition Transaction have been satisfied or waived.
The Corporation will provide further details in respect of the Acquisition Transaction in due course by way of press release as required under the policies of the TSXV.
The Corporation's common shares are listed for trading on the TSXV. However, in accordance with TSXV policy, the Corporation's common shares are currently halted from trading and the Corporation expects that trading in the common shares of the Corporation may remain halted pending completion of the Acquisition Transaction.
Source: Corsa Capital Ltd.