July 30, 2008, Toronto, Ontario -- Antioquia Gold Inc. ("Antioquia" or the "Company"), formerly known as High American Gold Inc., is pleased to announce that it has closed its previously announced business combination (the "Transaction") (see press releases dated February 28, 2008 and April 18, 2008 ) with Am-Ves Resources Inc. ("Am-Ves").
Pursuant to the terms of the Transaction, Antioquia has acquired all of the issued and outstanding common shares of Am-Ves (the "Am-Ves Shares", including the Am-Ves Unit Shares, as defined below) in consideration for the issue of the common shares of the Company (the "Consideration Shares") to the shareholders of Am-Ves on a one-for one basis and all of the issued and outstanding warrants of Am-Ves (the "Am-Ves Warrants", including the Am-Ves Unit Warrants, as defined below) in consideration for the issue of warrants of the Company (the "Consideration Warrants") to the warrant holders of Am-Ves on a one-for-one basis.
Immediately prior to the closing of the Transaction, the Company changed its name to "Antioquia Gold Inc." and consolidated its shares on a 1 for 10 (1:10) basis. Consequently, the Consideration Shares, the Consideration Warrants and the common shares of the Company issuable upon due exercise of the Consideration Warrants in accordance with the provisions thereof have been issued under the name of Antioquia Gold Inc. on a post-consolidated basis.
Concurrent with the completion of the Transaction, Am-Ves also closed its previously announced brokered private placement (the "Brokered Private Placement") of 4,380,000 units of Am-Ves (the "Units") at $0.20 per Unit (on a post-consolidated basis) for gross proceeds of $876,000, with one Unit comprised of one common share of Am-Ves (an "Am-Ves Unit Share") and one half of a warrant (a "Am-Ves Unit Warrant"), with one full Am-Ves Unit Warrant entitling the holder to purchase one Am-Ves Share at $0.30 per Am-Ves Share (on a postconsolidated basis) for 18 months from closing of the Private Placement.
Blackmont Capital Inc. ("Blackmont") acted as agent for the Brokered Private Placement. In consideration of its services in connection with the Brokered Private Placement, Blackmont received a corporate finance fee of $40,000 (plus applicable taxes). Blackmont also shared a cash commission of $87,600 and 438,000 broker warrants with members of the selling group. The broker warrants allow their holders to purchase, at any time until the 18-month anniversary of the closing of the Offering, 438,000 Units at $0.20 per Unit (on a post-consolidated basis).
Concurrent with the Brokered Private Placement, Am-Ves also completed a non-brokered private placement (collectively with the Brokered Private Placement, the "Private Placements") of 1,140,000 Units for gross proceeds of $228,000. Total finders fees of $1,500 were paid in connection with the closing of the non-brokered private placement.
Upon the completion of the Private Placements and the Transaction, the estimated working capital available to the Company will be approximately $875,000, after deducting costs associated with the Private Placements and the Transaction. Of this amount, $215,000 will be spent on exploration, $450,000 will be spent on the Guayabito property acquisition payments, $30,000 will be spent on legal and accounting expenses and $180,000 will fund the general administrative and corporate requirements of the Company.
The activities of Am-Ves, now a wholly-owned subsidiary of Antioquia, constitute the entirety of the operations of Antioquia. As part of the Transaction, the former shareholders of Am-Ves received 23,603,000 common shares of Antioquia, of which 6,129,100 will be subject to an escrow period of 3 years with 10% of the shares being released from escrow upon completion of the Qualifying Transaction and 15% the balance of the shares being released every 6 months. In addition, a four-month TSXV hold period will be imposed on 6,930,000 common shares of Antioquia that are held by certain founders of Am-Ves pursuant to section 10.7 of the TSXV Policy 5.4. The Company now has a total of 26,151,188 common shares issued and outstanding.
The TSX Venture Exchange has conditionally approved listing of the common shares of the Company, subject to receipt from the Company of final submission documents, and it is expected that trading of the common shares of the Company under the new symbol "AGD" will commence on or about August 5, 2008.
Board of Directors and Management
At the annual and special shareholders meeting held on April 15, 2008, the shareholders of the Company elected Messrs. Richard Thibault, Brad Van Den Bussche, Gregory Harris and R. Brian Murray to the board of directors (see press release dated April 18, 2008).
Mr. Thibault has a B.Sc. (Honors) from Queen's University and is a registered mining engineer (P. Eng.) with 29 years of engineering, operations, management and consulting experience in North and South America. Over the past seven years, Mr. Thibault had been providing mining engineering services to international clients through a base in Santiago, Chile where he was the general manager of a Canadian consulting firm's subsidiary. Before becoming a consultant, Mr. Thibault worked for a major western Canadian coal company in progressively responsible positions: as the Vice President and general manager of a junior exploration company based out of Buenos Aires, Argentina; as the managing director of an operating industrial minerals company in northwestern Argentina; and as the Vice-President, Minerals of a junior mining company responsible for the exploration, development and commercialization of its industrial mineral properties situated in the United States. He serves as a director of Argentex Mining Corporation. He is fluent in English, Spanish and French. He is the Chairperson of the Industrial Minerals Society of the Canadian Institute of Mining, Metallurgy and Petroleum (CIM). He is also the recipient of the CIM's District 5 Distinguished Service Award.
Mr. Van Den Bussche has over 20 years experience in the resource industry where he has worked mainly as a geologist and project manager. Most recently he has focused on exploration and new business development as a consultant. He has worked on numerous feasibility studies, exploration programs, due diligence evaluations and project assessments of both minerals and energy projects in Canada, the United States, Asia, Latin America, and the UK.
Mr. Harris is a lawyer and has been a member of the Law Society of Alberta since 1979 and was previously a member of the Law Society of British Columbia from 1972 to 1979. Mr. Harris received his B.A. in 1971 and his LL.B. in 1972 from the University of Alberta. He has served as a director and officer of several public companies. His legal practice is limited to securities law. Mr. Harris currently serves as a director of Am-Ves and is a director of the following companies listed on the TSXV: Canadian Shield Resources Inc., a mineral exploration company, and Chrome Capital Inc., Poplar Creek Resources Inc. and Brass Capital Inc., capital pool companies. Mr. Harris is the President, the Chief Executive Officer and the Chief Financial Officer of Chrome Capital Inc. and Brass Capital Inc.
Mr. Murray has over 15 years of experience in both the resources and investment markets. In addition to his position with the Company, Mr. Murray has been the President and director of Sea Green Capital Corp., a mining exploration company listed on the TSXV since December 2003. Mr. Murray has also been the President of Murcon Ltd., a private financial consulting company involved in merchant banking since 1990. He is a Chartered Accountant and holds a Masters degree in Business Administration. Mr. Murray is currently a director of the following TSXV listed companies: Process Capital Corp., Sea Green Capital Corp. and Nebu Resources Inc. In addition, Mr. Murray has been a director of Pure Diamonds Exploration Inc. and Virgin Metals Inc., companies listed on the Toronto Stock Exchange. Mr. Murray is also a director of Range Metals Inc. and Range Gold Corp. CNQ listed companies.
It is expected that upon completion of the Transaction, Mr. Thibault will be appointed the President and the Chief Executive Officer of the Company, Mr. Bussche the President, Exploration, Mr. Robert James the Chief Financial Officer and Tonya Pizzey the Corporate Secretary.
Mr. James is a certified management accountant. He has been the President and a director of Opertec Inc. since February 2002. Mr. James was the President and the Chief Executive Officer of Consolidated Beacon Resources Ltd., a TSXV listed company, from March 2004 to November 2005. In addition, Mr. James was the President, the Chief Executive Officer and a director of Emercor Building Systems Ltd. from 1994 to February 2002.
Pizzey owns a private office services consulting company. Ms. Pizzey is the Corporate Secretary and a director of Chrome Capital Inc. and Brass Capital Inc. and the Corporate Secretary of Poplar Creek Resources Inc.
The Company is subject to a number of risks due to, among other things, the nature of the business in which the Company holds an interest and the limited extent of its assets. These risks and uncertainties are not the only ones facing the Company. Additional risks and uncertainties not presently known to the Company, or that the Company currently deems immaterial, may also impair the operations of the Company. If any such risks actually occur, the business, financial condition and/or liquidity and results of operations of the Company could be materially adversely affected. In evaluating the Company, the following factors should be considered in addition to the factors disclosed under the heading "Risk Factors" in the Company's management information circular dated March 20, 2008 available on SEDAR (the "Information Circular"):
Risks Factors of the Business
The Company's operations will be subject to all of the hazards and risks normally incidental to exploring, developing and exploiting natural resources. Some of these risks include:
unusual or unexpected geologic formations or other geological or grade problems;
unanticipated changes in metallurgical characteristics and gold recovery;
unanticipated ground or water conditions, cave-ins, pit wall failures, flooding, rock bursts;
periodic interruptions due to bad or hazardous weather conditions and other acts of God; and
unfavourable operating conditions.
If any of these risks and hazards adversely affect the Company's exploration activities or mining activities, if any, they may:
increase the cost of exploration, development or production to a point where it is no longer economically feasible to continue;
require the Company to write down the carrying value of one or more properties or mines;
cause delays or a stoppage in the exploration, development or production of gold;
result in damage to or destruction of mineral properties or processing facilities; and
result in personal injury or death or legal liability.
All of these adverse consequences may have a material adverse effect on the Company's financial condition, result of operation and future cash flows.
Mining Industry Risks
The exploration for and development of mineral deposits involves a high degree of risk that even a combination of careful evaluation, experience, knowledge and sufficient financial resources may not eliminate. Few properties that are explored are ultimately developed into producing mines. Substantial expenses may be required to locate and establish ore reserves, to develop metallurgical processes and to construct mining and processing facilities at a particular site. It is impossible to ensure that the exploration programs planned by the Company will result in a profitable commercial mining operation. Whether a mineral deposit will be commercially viable depends on a number of factors, some of which are: the particular attributes of the deposit, such as size, grade and proximity to infrastructure; metal prices, which are inherently cyclical and cannot be predicted with certainty; and government regulations, including regulations relating to prices, taxes, royalties, land tenure, land use, importing and exporting of minerals and environmental protection.
As a result, it is possible that actual costs and economic returns will differ significantly from those currently estimated for the Guayabito property. In addition, it is also not unusual in mining operations to experience unexpected problems both during the start-up and during ongoing operations. To the extent that unexpected problems occur affecting the production in the future, the Company's revenues may be reduced, costs may increase and the Company's profitability may be adversely affected.
Foreign Country Risk
The Company's principal mineral property will be located in Colombia. Operations in Colombia are subject to risk due to the potential for social, political, economic, legal and fiscal instability. The government in Colombia faces ongoing problems of inflation, unemployment and inequitable income distribution. Colombia is also home to South America's largest and longest running insurgency and large swaths of the countryside are under guerilla influence. In addition, Colombia experiences narcotics-related violence, a prevalence of kidnapping and extortionist activities and civil unrest in certain areas of the country. Although the Company and Am-Ves are not presently aware of any circumstances or facts which may cause the following to occur, other risks may involve matters arising out of the evolving laws and policies in Colombia, any future imposition of special taxes or similar charges, as well as foreign exchange fluctuations and currency convertibility and controls, the unenforceability of contractual rights or the taking or nationalization of property without fair compensation, restrictions on the use of expatriates in the Company's operations, or other matters. the Company will also bear the risk that changes can occur in the government of Colombia and a new government may void or change the laws and regulations that the Company is relying upon.
No Assurance of Titles or Boundaries
Am-Ves is not the registered holder of any of the licenses that comprise the Guayabito property. The licenses that comprise the Guayabito property are registered in the names of certain of the vendors of the property. Am-Ves' interest in the Guayabito property is derived from the option agreement dated October 18, 2007 and amended on July 1, 2008 between Am-Ves and Mario de Jesus Ramirez Maya and Manuel Mejía Vallejo, pursuant to which Am-Ves holds the right to earn up to a 100% interest in the Guayabito property (the "Guayabito Agreement"). Under the Guayabito Agreement, the optionors have agreed to transfer the licenses and rights that comprise the Guayabito property to Am-Ves (or its successor entity) on exercise of the option. There can be no assurance, however, that such transfers will be effected. In addition, in the event of a dispute between the parties to the Guayabito Agreement, the Company's only recourse against the optionors will be to seek enforcement of the terms of the Guayabito Agreement. If the Company is required to commence legal proceedings to enforce the terms of the Guayabales Agreement, there is no assurance that the Company will succeed in such proceedings, and, therefore, may never succeed in obtaining title to the Guayabito property. Am-Ves has obtained a title opinion from its Colombian legal counsel with respect to title to the Guayabito property but this should not be construed as a guarantee of title. Other parties may dispute title to any of Am-Ves' and the Company's mineral properties and any of the Company's properties may be subject to prior unregistered agreements or transfers and title may be affected by undetected encumbrances or defects or governmental actions.
Mining, processing, development and exploration activities depend, to one degree or another, on adequate infrastructure. Reliable roads, bridges, power sources and water supply are important determinants, which affect capital and operating costs. Unusual or infrequent weather phenomena, sabotage, government or other interference in the maintenance or provision of such infrastructure could adversely affect the operations, financial condition and results of operations of the Company.
Uncertainty as to Calculations of Mineral Deposit Estimates
There is a significant degree of uncertainty attributable to the calculation of mineral deposit estimates and corresponding mineralization grades. Until the mineralized material is actually mined and processed, mineral deposit estimates, mineralization grades and recovery rates must be considered as estimates only. Consequently, there can be no assurance that any mineral deposit estimates or ore-grade information contained in the Information Circular (including in the documents incorporated therein by reference) will prove accurate. In addition, the value of mineral deposits may vary depending on mineral prices and other factors. Any material change in ore grades, stripping ratios or other mining and processing factors may affect the economic viability of the Company's projects. Furthermore, mineral deposit estimate information should not be interpreted as any assurance of mine life or of the potential profitability of existing or future projects.
Further information about the Transaction as well as the financial statements of Am-Ves are available on SEDAR.
This discussion includes certain forward-looking statements that are based upon current expectations, which involve risks and uncertainties associated with our business and the environment in which the business operates. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking, including those identified by the expressions "anticipate", "believe", "plan", "estimate", "expect", "intend", and similar expressions to the extent they relate to the Company or its management. All statements regarding use of proceeds, title matters and planned exploration programs are forward-looking statements that involve various risks and uncertainties. Important factors that could cause actual results to differ materially from these forward-looking statements include: adverse weather, regulatory changes, delays in receiving permits, accidents, delays in completing exploration activities, results of exploration activities if and when completed and the price of gold changing from current levels and other factors disclosed under the heading "Risk Factors" herein, in the Information Circular and elsewhere in the Company's documents filed from time to time with the Ontario Securities Commission and other regulatory authorities. The Company assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those reflected in the forward-looking statements.
The TSX Venture Exchange has in no way passed upon the merits of the proposed transactions and neither approves nor disapprove the content of this press release.
For further information, please contact:
Rick Thibault President Telephone No. (484) 319-7807 firstname.lastname@example.org