Amseco Sells Yasinski Lake Properties to Kanosak

Kanosak Venture Capital Corporation is to acquire the Quebec-based Yasinski Lake properties. Amseco Exploration, a publicly traded Montreal-based corporation is selling the properties.


KANOSAK VENTURE CAPITAL CORPORATION (TSX VENTURE:KKV.P) (the “Corporation” or “Kanosak”), a capital pool company, is pleased to announce that it has entered into an agreement in principle (the “Agreement”) dated March 12, 2012 regarding the acquisition of all rights, title and interests held by Amseco Exploration Ltd. in copper, gold and silver prospects at Yasinski Lake, Quebec (the “Property”). The acquisition of the Property will be Kanosak’s qualifying transaction (the “Qualifying Transaction”) pursuant to the policies of the TSX Venture Exchange (the “Exchange”). The vendor of the Property is Amseco Exploration Ltd. (the “Vendor”) (TSX VENTURE:AEL), a publicly traded Montreal-based corporation incorporated under the Canada Business Corporations Act.
Under the Agreement, as consideration for the acquisition of the Property, the Corporation will issue 500,000 common shares to the Vendor at a deemed price of $0.30 per share, pay $60,000 in cash consideration to the Vendor and grant the Vendor a 1% Net Smelter Royalty. Kanosak currently anticipates completing a brokered private placement concurrently with the closing of the Qualifying Transaction by the issuance of a minimum of 2,000,000 common shares and a maximum of 3,333,333 common shares at a price per share of $0.30 for minimum gross proceeds of $600,000 and maximum gross proceeds of $1,000,000 (the “Private Placement”), in order to have sufficient capital to complete the first phase of its expected exploration plan (which is described further below). A broker has not yet been retained in connection with the Private Placement. Kanosak’s current cash on hand is approximately $445,000.
Kanosak currently has an aggregate of 5,239,213 common shares issued and outstanding, together with 471,528 stock options and 297,255 agent’s options (issued in connection with its initial public offering).
The proposed Qualifying Transaction is not a “Non-Arm’s Length Qualifying Transaction” within the meaning of Policy 2.4 of the Exchange and, as such, shareholder approval is not required, unless otherwise determined by the Exchange.
A Filing Statement in respect of the proposed Qualifying Transaction will be prepared and filed in accordance with Policy 2.4 of the Exchange on SEDAR at no less than 7 business days prior to the closing of the proposed Qualifying Transaction. A press release will be issued once the filing statement has been filed as required pursuant to Exchange policies.
Completion of the Qualifying Transaction is subject to a number of conditions, including, but not limited to: the satisfaction of the initial listing requirements of the Exchange; Exchange approval of the Qualifying Transaction; a satisfactory due diligence review by Kanosak; receipt of a report completed in accordance with National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”); completion or waiver of sponsorship; and the approval of the board of directors of Kanosak.
The common shares of the Corporation will remain halted pending receipt by the Exchange of certain required materials from the Corporation. The Corporation will issue a further press release upon finalization and filing of the aforementioned report pursuant to NI 43-101.
The Property
The Yasinski Lake Property is located in the Northern Mining District of Quebec, approximately 75 kilometres by air south of the town of Radisson, Bay James. The Vendor currently holds a 100% interest in 63 mining claims on the Property.
It consists of two claim blocks located in the northeast corner of the 33F/04 sheet. The North block comprises of 11 contiguous designated cells covering an area of 568.31 ha. The South block comprises of 52 contiguous designated cells covering an area of 2689.91 ha.
Exploration work on the property began in 1958 with the discovery of numerous mineralized showings. Sporadic exploration work occurred on the property until 1980 when Les Mines J.A.G. performed systematic exploration until 1984. Since 1984 and until 2008, only sporadic exploration was done on the property. Over 40 Au-Ag-Cu-Zn-Pb surface occurrences were found on the Patica property and 24 diamond drill holes were completed on the property for approximately 2500 m. On the North block, exploration work started in 1989 when Noranda Explorations performed general reconnaissance exploration in the area. From 1998 to 2004, Dianor Resources executed geological and geophysical surveys leading to the discovery of 8 surface mineralized occurrences, mainly Au-Ag showings.
The geology of the Yasinski Lake area comprises two large Archeandomains and Proterozoic dykes. The two Archean domains are the plutonic Bienville sub-Province, in the north, and the plutonic and volcanic La Grande sub-Province, in the south. The La Grande sub-Province is a volcano-plutonic domain. In the area, it comprises a large variety of rock types represented by an ancient tonalitic gneiss, a volcano-sedimentary sequence and multiple intrusions of tonalite, granite, ultramafic, gabbro and lamprophyre. Late Proterozoic dykes are present throughout the area.
The North block is underlain by a volcanic and sedimentary pile intruded in the south by a tonalite intrusion. The South block is underlain by a 400-800 m thick volcano-sedimentary sequence within tonalite intrusions.
Three types of mineralization are found on the North block. The first type is a low grade Au- Ag- Cu-Pb-Zn mineralization found in syngenetic Algoma type, sulphide faciesiron formation. The second type of syngenetic mineralization is present in lenses of disseminated and thinly bedded sulphides in quartz arenites. Theses lenses are preferentially mineralized in Pb-Zn-Ag and, locally, with gold. These lenses can reach up to 10 m in thickness. The third type of mineralization is an epigenetic mineralization represented by late polymetallic veins and is found in disseminated sulphides or concordant quartz veins containing sulphides in shear zones in sedimentary wackes, volcanic rocks or iron formations. They are characterized by important Cu- Ag-Au mineralization and they can reach up to 5 m in thickness.
Two types of mineralization are found on the South block. The first type is a late polymetallic vein type mineralization similar to the third type found on the North block. The second type is a gold mineralization found within longitudinal shear zones and regional deformation. It is particularly found within the North Deformation Zone (“NDZ”), which can be followed for at least 3.5 km. The mineralization is found in quartz veins or in shear zones within atonalite intrusive. The veins have a maximum thickness of 1.5 m and the shear zone can reach up to 10 m.
During the past 36 months, the Vendor incurred expenditures totalling approximately $250,000 on the Property, including a 2011 exploration program of approximately $103,000.
Under the Agreement, the Vendor will promptly engage an independent geological service provider to complete a report in accordance with NI 43-101. That report will include a proposed budget for the exploration and development of the Property. Based on the Vendor’s preliminary assessments of the Property, it is anticipated that the first exploration phase will consist of a drill program to test known geophysical targets and that the budget for completion of this phase will be approximately $250,000. It is expected that the Corporation will be able to cover the costs of this program with its existing resources, but should the phase one budget be greater than this amount, the Corporation may need to obtain further financing.
The technical information contained in this press release is taken from the technical report titled “43-101 Technical Evaluation Report on the Patica Property Yasinski Lake Area, James Bay”, dated October 2008 and prepared by Pierre O’Dowd and Gilles Laverdière, geologists. Yves Rougerie, geo, is the Qualified Person, as defined in National Instrument 43-101, who has reviewed and approved of the disclosure of that information.
Proposed Management
Kanosak’s current board and management will continue with the Corporation upon completion of the Qualifying Transaction. Accordingly, the directors of the Corporation upon closing of the Qualifying Transaction will be Francois Ruel, Yves Grou, René Lopez, Yves Rougerie and Jean- Francois Lalonde. Mr. Ruel will continue to serve as President, Chief Executive Officer and Chief Financial Officer and Mr. Lopez will serve as Corporate Secretary.
Upon completion of the Qualifying Transaction, the Vendor’s President, Mr. Jean Desmarais, will be appointed as director of the Corporation. Furthermore, the Corporation will issue to Mr. Desmarais, upon his appointment, 200,000 stock options at a strike price of $0.30 per share. Since 2008, Mr. Desmarais has been President, Chief Executive Officer and director of the Vendor. Previously, he was Vice-President, Branch Manager and Investment Advisor at Desjardins Securities.
François Ruel
François Ruel was the founding President and CEO of Central Uranium Corporation from May 2007 until its acquisition by Abitex in September 2008 at which time he became a Director and Co-chairman of the Corporation. Prior to that, he was Executive Vice-President of Equity Capital Markets for Desjardins Securities from March 2002 to May 2007. Mr. Ruel has a B.Sc. in Economics and over twenty years experience in the financial industry and is now the President and CEO of Tundra Finance Inc.
Jean-François Lalonde
Mr. Jean-François Lalonde is an engineer (BSc. Civil Engineering from Concordia University) and an international relations consultant. Mr. Lalonde has been a member of the Quebec Order of Engineers since 1984. He has worked on behalf of multinational engineering and construction firms such as SNC-Lavalin (Canadian firm based in Montreal) and Bouygues Travaux Publics (a French firm based in Saint-Quentin-en-Yvelines). Mr. Lalonde also participated in the commercial development of the Quebec-based firm POMERLEAU Construction on the international scene. Mr. Lalonde is a director of Stellar Pacific Ventures Inc. (TSXV: SPX), Corporation Capital Quinto Real (TSXV: QIT), Corporation Rutel Networks (TSXV: RTX) and Corporation Carbon2Green (TSXV: CGN).
Yves Grou
Yves Grou is a Chartered Accountant, who received his Bachelor in Commerce degree from McGill University. He is a member of the Quebec Institute of Chartered Accountants. He was co- founder in 1980 and a partner until 2004 of Grou, La Salle & Associates CA, an accounting firm. Prior to 1980, Mr. Grou worked with Ernst & Young for 3 years. He sat on the board of directors of several public natural resources companies.
Yves Rougerie
Yves Rougerie, P.Geo. is a graduate of the University of Quebec in Earth Sciences and brings over 30 years of experience in the mining exploration and development business. Mr. Rougerie was named President and CEO of the Company in March 2007 and became Co-Chairman in September 2008. He has since negotiated an option and joint venture agreement with AREVA and SOQUEM as well as the acquisitions of privately-owned explorer Central Uranium Corporation and the Epsilon U-Au property. Throughout his career, Mr. Rougerie has worked for several companies, including AREVA and AUR Resources, and has spent the last 14 years with Abitex. He played a significant role in the exploration and development phases of Aur Resources’ Louvicourt Cu-Zn-Ag-Au Mine near Val-d’Or, and participated in the discovery and definition of the “L” uranium-gold deposit in the Otish Mountains, Quebec. Mr. Rougerie has acquired a wide range of experience in exploration techniques and project management pertaining to Uranium, narrow-vein Gold and VMS Cu-Zn deposits. Mr. Rougerie was also a founding Director of Scorpio Mining Corporation.
René Lopez
René Lopez is trained as an electrical and electronic engineer as well in marketing and business from McGill and HEC Jouy-en-Josas. He has more than 40 years experience in this sector, as well in as the manufacturing and finance sectors at an international level. Mr. Lopez was the President and Director General in Canada of Alcaltel-Alsthom and GEC Alsthom. Mr. Lopez was also a director of MittalSteel Corporation. He is currently Chair of the board of directors of ArcelorMittal Montreal and a member of the board of directors of ArcelorMittal Kazakhstan.
Jean Desmarais
Mr. Jean Desmarais is president and Director of Amseco Exploration ltd. He previously was Vice-president at Desjardins Securities and investment advisor at BMO Nesbitt Burns. After attending HEC in business management, he acted as a consultant in the financial sector. Mr. Desmarais was also on the board of Aston Hill Financial in Calgary and Bikini Village in Longueuil.
Other Information
Completion of the Qualifying Transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable pursuant to Exchange Requirements, majority of the minority shareholder approval. Where applicable, the Qualifying Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Qualifying Transaction will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the Qualifying Transaction, any information released or received with respect to the Qualifying Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.
This news release discusses items that may constitute forward-looking statements within the meaning of securities laws and that involve risks and uncertainties. Such statements include those with respect to the completion of the Qualifying Transaction, the composition of Kanosak’s management following the Qualifying Transaction, the preparation of the geological report regarding the Property, the funds to be raised in connection with the Private Placement and Kanosak’s business plans and operations following the Qualifying Transaction. Although Kanosak believes in light of the experience of its officers and directors, current conditions and expected future developments and other factors that have been considered appropriate that the expectations reflected in such forward-looking statements are based on reasonable assumptions, they can give no assurances that those expectations will be achieved and actual results may differ materially from those contemplated in the forward-looking statements and information. Such assumptions, which may prove incorrect, include the following:
(i) the Qualifying Transaction will obtain all required regulatory approvals and any applicable shareholder approvals, (ii) the Vendor’s management will not identify and pursue other business objectives following the Qualifying Transaction, (iii) Kanosak will succeed in obtaining any necessary future financing to fund its ongoing operations and work plans, (iv) no material obstacles, technical or otherwise, will hinder Kanosak’s operations following the Qualifying Transaction and (v) the price of metals will remain sufficiently high and the costs of advancing Kanosak’s projects sufficiently low so as to permit those corporations to implement their business plans in a profitable manner. Factors that could cause actual results to differ materially from expectations include (i) Kanosak’s failure to make effective use of its available funds following the Qualifying Transaction, (ii) the failure of Kanosak’s drilling projects for technical, logistical, labour- relations or other reasons, (iii) the inability of the Vendor and Kanosak to obtain the necessary approvals for the Qualifying Transaction, (iv)a decrease in the price of metals below what is necessary to sustain Kanosak’s operations, (v) an increase in Kanosak’s operating costs above what is necessary to sustain its operations, (vi) accidents, labour disputes or the materialization of similar risks, (vii) a deterioration in capital market conditions that prevents Kanosak from raising the funds that it requires on a timely basis, (viii) an inability or unwillingness of the Vendor or Kanosak to complete the Qualifying Transaction for whatever reason, (ix) an inability or unwillingness of the individuals named above to serve as directors or officers of Kanosak following the Qualifying Transaction, (x) an inability to secure subscribers or obtain funds under the Private Placement and (xi) generally, an inability of Kanosak to develop and implement a successful business plan for any reason. These factors and others are more fully discussed in the filings of the Vendor and of Kanosak with Canadian securities regulatory authorities available at
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.