LÉVIS, QUÉBEC--(Marketwire - Oct. 1, 2012) - GRANIZ MONDAL INC. (the "Company") (TSX VENTURE:GRA.H) announces that trading in the shares of the Company has been suspended by the TSX Venture Exchange (the "TSX-V"), effective September 26, 2012.
Background of Trading Halt and Announcement of Trading Suspension
Trading of the Company's shares has been halted since June 16, 2011. At that time, the Company was pursuing a reactivation of the Company though an earn-in arrangement with respect to a Saskatchewan mineral resource exploration property owned by Nightstar Resources Inc. ("Nightstar"), as well as a related private placement. The trading halt was imposed pending the Company's submission of acceptable documentation to the NEX board of the TSX Venture Exchange (the "NEX"), and the review and approval of such documentation by the NEX, with respect to the proposed transaction with Nightstar.
The Company did not submit the required documents to the NEX, and this transaction was abandoned in February 2012 when the option agreement (as amended) entered into with Nightstar was terminated. (See the Company's press release of February 7, 2012.) However, following the termination of that agreement, the trading halt remained in place as the Company did not complete the required application and other steps to have trading of its shares resume.
On September 25, 2012, the NEX announced that trading in Company shares would be suspended because of the Company's failure to submit, by September 20, 2012, the required application and other documents seeking to have trading of Company shares resume. The Company will now prepare and submit that application and those documents and request that trading of Company shares be permitted to resume.
The Shareholder Meeting Results
The Company also announces that Donald Théberge, Gilles Roy, Martin Lafrance, Berthe Lambert and Martin Lacasse have been elected to the Company's Board of Directors at the 2012 Annual and Special Meeting of its shareholders held on September 27, 2012 in Lévis, Québec (the "Meeting"). At the Meeting, KPMG LLP were also re-appointed auditors of the Company for the current financial year.
The Company is also pleased to announce that at the Meeting, the shareholders of the Company granted disinterested shareholder approval for the Company's proposed acquisition of a 75% interest in the Mousseau West graphite property ("Mousseau West") from the current owners of that property: Berthe Lambert (a newly-elected director of the Company) as to 45%, Richard-Marc Lacasse (a former director and President of the Company), as to 45% and Donald Théberge (currently a director and the President of the Company) as to 10% (collectively, the "Vendors").
Shareholders are advised that the acquisition of the "Mousseau West" described in this press release and the completion of the proposed concurrent private placement are being pursued to reactivate the Company. However, these transactions do not constitute a reverse takeover under the policies of the TSX-V, and the Company has been advised that they are not at this time sufficient to allow the Company to graduate to Tier 2 on the TSX-V. Therefore, the Company will remain on the NEX following the completion of these transactions.
Mousseau West is comprised of 12 mining claims covering a total of approximately 489 hectares straddling the boundaries of Brunet and Mousseau Townships in Québec, approximately 12 km north of the town of St-Véronique (near Mont-Laurier) Québec. The mining claims comprising Mousseau West are identified in Schedule "A" to the Management Information Circular prepared by the Company and sent to shareholders in advance of the Meeting. (A copy of the Management Information Circular may be viewed at www.sedar.com.) The Company intends to acquire Mousseau West for the purpose of exploring for graphite. The Company and the Vendors entered into a letter of intent dated June 26, 2012 which sets out the proposed terms of the acquisition. A copy of the letter of intent has been filed on SEDAR. Prior to completing this acquisition, the Company and the Vendors will enter one or more definitive agreements relating to the acquisition (the "Definitive Agreements"), which agreements will include customary terms and conditions for the acquisition consistent with, and in addition to, those set out in the letter of intent. Completion of the acquisition is also subject to any required approval of the NEX and/or TSX-V.
The consideration payable by the Company to the Vendors for Mousseau West will be the following, payable to the Vendors pro rata according to their ownership interests:
- on or before the later of the closing of the Private Placement (as defined below) or the date when the TSX-V or the NEX grants such approval as the Company is required to obtain under TSX-V and NEX policies (as the case may be) (the "Exchange Approval"), the Company will:
- pay the Vendors, pro rata in accordance with their percentage ownership of Mousseau West, a cash payment equal to one hundred and sixty-five thousand dollars ($165,000);
- issue the Vendors, pro rata in accordance with their percentage ownership of Mousseau West, two million (2,000,000) Common Shares;
- on or before the date that is one (1) year after the Exchange Approval, the Company will pay the Vendors a cash payment equal to twenty-five thousand dollars ($25,000) plus issue one million (1,000,000) Common Shares;
- on or before the date that is two (2) years after the Exchange Approval, the Company will pay the Vendors a cash payment equal to twenty-five thousand dollars ($25,000) plus issue one million (1,000,000) Common Shares; and
- the Company will recognize Berthe Lambert and Richard-Marc Lacasse as retaining, collectively, a 2% net smelter returns royalty over and with respect to any and all graphite concentrate produced from Mousseau West, subject to the additional condition that the Company will retain a right of first refusal over any proposed sale of that royalty, it being understood that such royalty and right of first refusal will be on industry standard terms and conditions to be set forth in greater detail in the Definitive Agreements.
- in each of the two (2) years following the completion of the acquisition, the Company will be required to undertake, or cause to be undertaken, and to pay for at least two hundred thousand dollars ($200,000) of "Approved Expenditures" (as defined under the policies of the TSX-V) on or with respect to Mousseau West;
- the Company will be solely responsible for undertaking and paying for four hundred thousand dollars ($400,000) of Approved Expenditures as set forth in the paragraph above, without any contribution or other payment from the Vendors, and without limiting such obligation and until such time as the Company has obtained a pre-feasibility study (as generally understood in the mineral resource exploration industry) on Mousseau West and filed such study on SEDAR, the Company will be responsible for paying any and all costs related to and/or arising from the ownership, management, maintenance in good standing and exploration of Mousseau West (collectively, the "Maintenance and Exploration Costs");
- from and after the date when a pre-feasibility study on Mousseau West has been filed on SEDAR and delivered to the Vendors, the Vendors will be responsible for paying for (or reimbursing the Company for) that portion of the Maintenance and Exploration Costs that is equal to their ownership interest in Mousseau West, subject to the further requirement that a joint venture will be formed to manage and operate Mousseau West (with the parties entering into a commercially reasonable joint venture agreement or, in lieu of a joint venture agreement, forming a new corporation to hold title to and to manage and operate Mousseau West);
- the Vendors will be required to provide reasonable cooperation to the Company so as to permit the Company to register its 75% ownership interest in and to Mousseau West on any appropriate registries or records maintained by or on behalf of the Government of Québec with respect to Mousseau West, such registration(s) to be made at the cost and expense of the Company;
- with respect to the 25% ownership interest in and to Mousseau West retained by the Vendors (the "Residual Interest"), the Company will hold, and the Vendors will recognize the Company as holding:
- an option to purchase the Residual Interest for four million five hundred thousand dollars ($4,500,000) which will be exercisable at any time by the Company; and
- a right of first refusal over any proposed transfer or disposition of the Residual Interest by the Vendors (either collectively or by any Vendor individually), subject to customary exemptions to permit, for example, transfers to related parties of the Vendors; and
- the Company is required to complete a private placement of up to 6,250,000 common share units of the Company at a price of $0.12 per unit, for gross proceeds of up to $750,000, with each unit consisting of one common share and one half of one warrant, and each whole warrant being exercisable at $0.24 per share for 12 months from closing (the "Private Placement").
It is proposed that the ownership by the Company (or any successor to the Company) of a 75% interest in Mousseau West will be subject to the following additional conditions:
In other decisions reached at the Meeting, the shareholders of the Company granted disinterested shareholder approval for the Private Placement, and also authorized Berthe Lambert to participate in the Private Placement by investing up to $100,000 to purchase 833,333 common share units. Although this investment would not, in and of itself, cause Dr. Lambert to qualify as a "Control Person" (as defined under the policies of the TSX-V), in light of her role as a Vendor and a new director of the Company, approval of Dr. Lambert's purchase of common share units in the Private Placement as described was nonetheless sought and obtained because it could cause Dr. Lambert and her spouse, collectively, to qualify as Control Persons. However, the Company has been advised that Dr. Lambert and her spouse, Mr. Lacasse, do not own, beneficially or of record, or control each other's shares of the Company, and Dr. Lambert has not confirmed (nor has the Company accepted) her investment of $100,000 in the Private Placement.
Another matter approved by shareholders of the Company was a change of the Company's name to "Graniz Graphite Inc.", or to such other variant of that name as may be approved by the TSX-V or the NEX. This name change requires approval of the TSX-V or the NEX before being implemented, and the Board of Directors of the Company was authorized by shareholders to pursue or abandon the name change in its discretion.
Finally, the shareholders of the Company ratified the revised bylaws that were approved by the Board of Directors of the Company in connection with its continuance from Alberta to the Canada Business Corporations Act.
Following the Meeting, the newly elected Board of Directors of the Company appointed the following directors to the following committees of the Board:
| Audit Committee: | Berthe Lambert |
| Gilles Roy | |
| Martin Lafrance | |
| Compensation and Governance Commitee: | Berthe Lambert |
| Martin Lacasse | |
| Martin Lafrance |
In addition, the Board of Directors determined that rather than striking a disclosure committee, for the time being the responsibilities of the disclosure committee would be assumed by the entire Board of Directors.
The Board of Directors also appointed the following individuals as officers of the Company:
| Donald Théberge - Chairman of the Board, President and Chief Executive Officer |
| Bernard Hénault - Chief Financial Officer and Treasurer |
| Martin Lacasse - Secretary |
Having obtained shareholder approval of the acquisition of Mousseau West and of the Private Placement, the Company is ready to proceed to the completion of both. With respect to the Acquisition, the Company will negotiate the Definitive Agreements with the Vendors and post the final, executed agreement(s) at www.sedar.com as soon as possible. With respect to the Private Placement, since a first closing raising gross proceeds of $317,000 has been completed, the amount that remains to be raised is at least $283,000, and not more than $467,000. The Company will also proceed to the completion of the Private Placement as soon as possible.
As stated, the acquisition of Mousseau West and the completion of the Private Placement are being pursued to reactivate the Company. However, these transactions do not constitute a reverse takeover under the policies of the TSX-V, and the Company has been advised that they are not at this time sufficient to allow the Company to graduate to Tier 2 on the TSX-V. Therefore, the Company will remain on the NEX following the completion of these transactions.
Cautionary Statement
Neither the 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. No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein.
Completion of the acquisition of Mousseau West and of the Private Placement are subject to a number of conditions, including but not limited to Exchange acceptance. There can be no assurance that the acquisition of Mousseau West and of the Private Placement will be completed as proposed or at all.
The foregoing information may contain forward-looking statements relating to the future performance of Graniz Mondal Inc. Forward-looking statements, specifically those concerning future performance, are subject to certain risks and uncertainties, and actual results may differ materially from the plans and expectations of Graniz. These plans, expectations, risks and uncertainties are detailed herein and from time to time in the filings made by Graniz with the TSX Venture Exchange/NEX and securities regulators. Graniz does not assume any obligation to update or revise its forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
Contact Information:
(418) 572-0648