Castle Peak Announces Agreement in Principle for a Two Million Dollar Strategic Investment

Marketwired

VANCOUVER, BRITISH COLUMBIA--(Marketwired - May 23, 2013) -

THIS NEWS RELEASE IS INTENDED FOR DISTRIBUTION IN CANADA ONLY AND IS NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES

Castle Peak Mining Ltd. ("Castle Peak" or the "Company") (TSX VENTURE:CAP) is pleased to announce that the Company has reached an agreement in principle with representatives of Grizal Enterprises Ltd. ("Grizal") and Candel and Partners SAS ("Candel") with respect to a strategic investment. Grizal, Candel and/or their respective affiliates would form a newly-incorporated entity (the "Subscriber") which would acquire 40,000,000 units ("Units") of the Company at an issue price of $0.05 per Unit, for gross proceeds of $2,000,000 (the "Investment").

The Company plans to use the total gross proceeds of the Investment to further exploration and development at its Akorade Project working towards a preliminary economic assessment, and for general working capital purposes.

Each Unit will consist of one common share (a "Unit Share") and one transferable share purchase warrant (a "New Warrant"). Each New Warrant will allow the holder thereof to purchase one additional common share (a "Warrant Share") of the Company at a price of $0.10 per Warrant Share for a period of 36 months from the closing of the Investment, subject to adjustment in certain stated events. The securities to be issued upon closing of the Investment will be subject to customary securities legislation hold periods.

The Investment is subject to several conditions precedent, including the receipt of conditional approval from the TSX Venture Exchange (the "Exchange" or "TSXV"), the receipt of disinterested shareholder approval pursuant to the requirements of Multilateral Instrument 61-101 ("MI 61-101"), the receipt of disinterested shareholder approval with respect to the Subscriber as a new "Control Person" (as such term is defined in the TSXV's policies), the receipt of any other necessary approvals or consents, as well as the Subscriber and the Company entering into a mutually satisfactory final agreement.

The terms of the agreement in principle would provide the Subscriber with the right to nominate one individual to be appointed to the Board of Directors of Castle Peak after closing of the Investment. In addition, conditional upon the closing of the Investment, Grizal, Candel and their respective affiliates have agreed to cancel their existing warrant holdings in the Company.

The Subscriber will be an entity controlled by Grizal, a "Control Person" of the Company (as that term is defined in the TSXV's policies) and also may be controlled by Candel or its affiliates, an insider of the Company. Accordingly, the Investment will constitute a "related party transaction" within the meaning of Multilateral Instrument 61-101 and TSXV Policy 5.9. After giving effect to the Investment, the Subscriber, Grizal, Candel and their respective affiliates will hold an aggregate of 65,318,706 common shares and 40,000,000 warrants representing 56.26% of the issued and outstanding common shares of the Company (63.98% on a fully-diluted basis).

The Board formed an independent committee on May 15, 2013 to consider the financing alternatives available to Castle Peak, including the proposed Investment. After considering all financing options available to the Company, the Company's capital requirements, and the synergies with the Subscriber, the independent committee unanimously recommended to the Board that the Company proceed with the Investment. The Board subsequently unanimously approved the proposed terms of the Investment.

The Independent Committee and the Board determined that an exemption from the formal valuation requirement in MI 61-101 is available, but that no exemption was available from the requirement for minority shareholder approval. Therefore, the Company plans to seek disinterested shareholder approval at its upcoming Annual and Special Meeting of Shareholders to be held in June 2013. Further details will be included in the Company's Management Information Circular to be mailed in connection with that meeting.

The securities being offered 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 in the United States, or to, or for the account or benefit of, U.S. persons absent registration or an applicable exemption from registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdictions in which such offer, solicitation or sale would be unlawful. Any offering made will be pursuant to available prospectus and registration exemptions and restricted persons to whom the securities may be sold in accordance with the laws of such jurisdictions and by persons permitted to sell the securities in accordance with the laws of such jurisdictions.

About Castle Peak

Castle Peak Mining Ltd. is a Canadian-based exploration and development company focused on advancing greenfields and early stage gold projects. The Company holds a strategic land package in the Ashanti belt adjacent to several producing gold mines in Ghana, West Africa. The Ashanti belt is known as one of the most prolific gold belts in the world, putting Ghana as the second largest gold producer in Africa with past production of >150 million ounces. The investment inflow for Ghana's mining sector was $2.5 billion from 2009 to 2011, with increasing annual production reaching 3.6 million ounces in 2011 (source: Ghana Business News, November 11, 2012).

On behalf of the Board of Castle Peak Mining Ltd.:

Darren Lindsay, President and Chief Executive Officer

FORWARD-LOOKING STATEMENTS

Except for statements of historical fact, this news release contains certain 'forward-looking information' and 'forward-looking statements' within the meaning of applicable securities laws including statements regarding the timing or completion of the Investment. Such forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are subject to known and unknown risks, uncertainties and assumptions that could cause actual results to vary materially from the anticipated results or events predicted in these forward-looking statements, including those risk factors identified in the Company's Annual MD&A filed under the Company's SEDAR profile. As a result, readers are cautioned not to place undue reliance on these forward-looking statements. The forward-looking statements contained in this news release are made as of the date of this release. Except as required by applicable law, Castle Peak disclaims any intention and assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Contact:
Castle Peak Mining Ltd.
Marlo Hamer-Jackson
Investor Relations Manager
604 681 1466 (X225)
604 681 1404
marlohj@castlepeakmining.com
www.castlepeakmining.com

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