St. John’s – Newfoundland – Vulcan Minerals Inc. (“the Company” TSX-V: VUL) announces that it has been advised by NWest Energy Inc. (“NWest”) that NWest is being acquired on a share for share basis by Trilogy Metals Inc. (“Trilogy”), a public company as described in Trilogy’s news release recited below.
Vulcan and its partners created NWest in 2006 through the merger and acquisition of four offshore Western Newfoundland petroleum exploration licenses. NWest has initiated the permitting and environmental review process for a 2008 offshore seismic program. Proposals have been requested and received from qualified seismic acquisition companies and are currently being evaluated.
Mr. Francois Gauthier, a highly qualified industry executive, has been recruited as a Director and Chief Executive Officer. He is currently assembling a management team to aggressively pursue exploration of the company’s licences. The proposed transaction with Trilogy and the planned financing will allow NWest to execute its business plan.
Vulcan’s ultimate shareholding in the public company, post financing, is anticipated to be in the 15-20% range depending on the amount and pricing of the financing (see below). Vulcan will continue to focus its efforts exploring for petroleum in the onshore Bay St. George Basin, Western Newfoundland where the company just completed its 2007 seismic program. This seismic program was designed to identify deep drilling targets in the Hurricane Deeps structure for 2008.
The following news release by NWest and Trilogy is repeated as follows:
(“Trilogy”) has entered into a share purchase agreement dated October 16, 2007 with the shareholders of NWest Energy Inc. (“NWest”) to acquire 100% of the issued share capital of NWest. Trilogy will acquire NWest on a one for one basis by issuing NWest shareholders 49,531,250 Trilogy common shares in consideration for 49,531,250 NWest common shares. The shares issued to the NWest shareholders will be subject to standard TSX-V escrow release restrictions.
NWest is a St. John’s based private corporation engaged in East Coast frontier oil and gas exploration of which Vulcan owns 30% interest. NWest’s principal assets are four exploration licenses (the “Exploration Licenses”) located offshore western Newfoundland. The Exploration Licences were issued by the Canada-Newfoundland and Labrador Offshore Petroleum Board in 2006 and 2007 and cover a combined area of 659,880 hectares or 1,630,599 acres. Total consideration paid by NWest for the Exploration Licenses was $1,322,020.
Subject to TSX-V approval for its acquisition of NWest, Trilogy will effect a name change and will welcome the following management team from NWest:
- Francois Gauthier as its Director, President and CEO. Mr. Gauthier’s experience includes more than 30 years of developing drilling and exploration programs in varying environments domestically and internationally. Mr. Gauthier most recently served as Vice President and Resident Manager for Anadarko in Algeria where he played a key role in the management of the company’s exploration program. Mr. Gauthier has worked closely with the investment community, local governments and regulators in implementing exploration and development programs.
- Wade Dawe as a Director. Mr. Dawe is the Founder, President and Chief Executive Officer of Linear Gold Corp. Mr. Dawe brings extensive experience in resource financing. He has worked and consulted for numerous publicly traded (TSX and TSX Venture) Canadian companies. He is also a cofounder and director of Keeper Resources Inc., a Calgary based producer of oil and gas, and also serves on the Board of ImmunoVaccine Technologies Inc.
- Patrick Laracy as a Director and Corporate Secretary. Mr. Laracy is President of Vulcan Minerals Inc, a public, junior petroleum and mineral exploration company. Mr. Laracy has extensive knowledge of the geology and petroleum potential of western Newfoundland. Vulcan Minerals has been one of the most active exploration companies in western Newfoundland. Mr. Laracy has 25 years experience as an exploration geologist and lawyer with multi-national and junior exploration companies. This experience includes geological and geophysical basin analysis and exploration of numerous sedimentary basins worldwide.
- Carl Sheppard as a Director and Chief Financial Officer. Mr. Sheppard is the President and Managing Partner of Strategic Concepts, Inc., a business planning and advisory company. At Strategic Concepts, Mr. Sheppard is responsible for overseeing the company’s strategic planning, economic modelling and financial feasibility consulting services. Mr. Sheppard has provided consulting services to numerous new and expanding resource development companies operating in Canada. Mr. Sheppard serves on the Board of Directors of Linear Metals Corporation.
Trilogy expects that its acquisition of NWest will qualify its shares for graduation to Tier 2 of the TSX Venture Exchange.
Sproule Associates Limited (“Sproule”) of Calgary, Alberta has completed a report on the Exploration Licenses under National Instrument 51-101 on behalf of NWest. Sproule has also undertaken a technical review and valuation of the Exploration Licenses. NWest has acquired all readily available modern 2D seismic data shot in the area in the 1990’s. No wells have been drilled on the properties covered by the Exploration Licenses and there are no known reserves. Sproule’s principal objective in the technical review and valuation of the Exploration Licenses was to interpret the seismic data and conduct a resource assessment. The top 11 non contiguous targets were identified, most of which involved stacked target reservoirs, presenting multiple exploration targets.
NWest will seek to expand its understanding of the preliminary findings of the Sproule report by focusing on the following:
- stratigraphic and structure relationships
- hydrocarbon trap configurations
- refining a reservoir development concept based on the integration on available structural stratigraphic sedimentological and petrophysical data
- development of a model for source rock maturation and hydrocarbon migration in the prospective area
The company’s initial exploration plan involves acquisition of additional seismic data over the more prospective prospects identified by Sproule. Subject to financing, seismic acquisition will commence as soon as practical, most likely in the spring of 2008.
NWest is in discussions with a fiscal agent for a best efforts flow through financing of up to $20 million. If successful in raising the necessary financing, NWest’s use of proceeds will be as follows:
Primary Financing $20 million
- Seismic Program – $17 to $18 million
- pay cost associated with carrying out additional seismic data collection and interpretation;
- pay costs associated with the further evaluation of oil and gas properties including seismic interpretation;
- pay cost associated with a preliminary assessment of the best targets for further exploration, drilling and development of oil and gas leases.
- Administrative/Corporate Minimum $2 million to Maximum $3 million
- provide the necessary working capital to fund ongoing operations administration and contingencies,
- Pay costs associated with financings;
Subject to successful completion of the seismic program and seismic evaluation, NWest will seek additional financing to carry out a three to five hole exploratory drill program.
Completion of the transaction is subject to a number of conditions, including Exchange acceptance and disinterested Shareholder approval. The transaction cannot close until the required Shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the filing statement to be prepared in connection with the transaction, any information released or received with respect to the proposed acquisition of NWest may not be accurate or complete and should not be relied upon. Trading in the securities of Trilogy Metals Inc. should be considered highly speculative.
The TSX Venture Exchange has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.
For information please contact Mr. Patrick Laracy, President of Vulcan Minerals Inc. Phone: (709) 754-3186, Fax: (709) 754-3946, or Email:firstname.lastname@example.org
The TSX Venture Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.