Hodgins closes acquisition of uranium claims and private placement to fund acquisition

MELFORT, SK, Aug. 15, 2014 /CNW/ - Further to the press releases issued on March 6, 2014 and April 22, 2014, Hodgins Auctioneers Inc. ("Hodgins" or the "Corporation") (TSXV: HA) wishes to announce that a wholly owned subsidiary of the Corporation, 1839579 Alberta Ltd. ("1839579") has acquired a 25% undivided interest in a group of nine contiguous mineral claims with a combined total of 39,125 hectares (98,233 acres)("Majesta Mineral Claims") located 230 km NW of La Ronge and 445 km north of Prince Albert, Saskatchewan from Majesta Resources Inc. ("Majesta").    

Terms of the Agreement

1839579 has purchased a 25% undivided interest and acquired two options (the "Options") to acquire up to an additional 65% in separate tranches.  1839579 has expended $300,000 for exploration expenditures, issued a promissory note for $100,000 payable on December 31, 2015 for $100,000 of exploration expenditures and the Corporation has issued 2,000,000 common shares at a deemed price of $0.05 per share for the 25% undivided interest.   Majesta will be the operator and will conduct all exploration activities under the terms of a joint operating agreement.  Any party failing to make cash call are subject to dilution of their respective working interest.  If any party is diluted below an undivided 10% their interest is converted to a 0.75% net smelter royalty which can be purchased for fair market value. The Corporation will issue additional shares to Majesta, along with cash and required work commitments, upon exercise of the Options as follows:

Nature of Transaction	Interest	Date	Cash or Assumption of Debt	Common Shares (value of Shares)	Exploration Work Commitments	Total
Purchase	25%	August 15, 2014	Assumption of debt $100,000	2,000,000	$300,000	$500,000
Option #1	35%	December 31, 2014	Nil	4,000,000	400,000	600,000
Option #2	30%	December 31, 2015	Cash $400,000	2,000,000	Nil	500,000
	90%		$500,000	8,000,000	$700,000	$1,600,000

 

Private Placement

The Corporation has closed a non-brokered private placement of 7,300,000 units at a price $0.05 per unit for gross proceeds of up to $365,000.  Six of seven of every common share issued has flow through attributes. Each unit is comprised of one common share in the capital of Hodgins and one half of one common share purchase warrant.  Each full warrant will entitle the holder to purchase one common share at a price of $0.075 per common share exercisable no later than August 8, 2015.   All of the securities issued under the private placement will be subject to a four month resale restriction.  The proceeds of the private placement will be used to make the claims acquisition. The Corporation has agreed to pay $18,700 in finders fees.  The Corporation has agreed to issue 467,000 common shares as finders commissions and has granted rights to the finders to acquire 467,000 common shares at a price of $0.075 per common share exercisable no later than August 8, 2015.

Upon closing there will be 22,717,500 common shares issued and outstanding.  There exists 4,350,000 warrants which entitle the holders to acquire 4,350,000 common shares at an exercise price of $0.25 per common share exercisable until June 19, 2014.  There are 4,117,000 warrants which entitle the holders to acquire 4,117,000 common shares at an exercise price of $0.075 per common share which expire on August 8, 2015.  There are 1,000,000 options which entitle the holders to acquire 1,000,000 common shares.  On a fully diluted basis there will be 32,182,500 common shares.

Interest of Insiders in Majesta

Grant Hodgins and Barrie Jung are officers and directors of the Corporation.  Grant Hodgins and Barrie Jung, directly or indirectly, own 33.8% of the issued (12,948,500) and outstanding shares of the Corporation. Grant Hodgins is an officer and director of Majesta. Grant Hodgins and Barrie Jung own 33.66% of the common shares of Majesta.  

Randy Studer is a director and officer of Majesta.  Randy Studer, directly or indirectly, and together with family members own 64.79% of the common shares of Majesta. Randy Studer lives in La Ronge, Saskatchewan, and his primary occupation for 35 years has been conducting exploration work for mining companies, through a legal entity called Durama Enterprises Limited. Randy Studer was a director and president of a publicly owned mining exploration company on the TSXV from 1995 to 2006 (Explor Resources Inc.  "EXS"). Mr. Studer will not become an officer and director of the Corporation.  Mr. Studer will not become a control person of the Corporation.

About Hodgins Auctioneers Inc.

Hodgins Auctioneers is an auction company conducting business in Western Canada.  For further information, please contact Grant Hodgins, CEO, 306.752.2075 or visit www.hodginsauctioneers.com

Reader Advisory

Except for statements of historical fact, this news release contains certain "forward-looking information" within the meaning of applicable securities law. Forward-looking information is frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur.  In particular, forward-looking information in this press release includes, but is not limited to, statements with respect to the timing and completion of the proposed private placement and related information. Although we believe that the expectations reflected in the forward-looking information are reasonable, there can be no assurance that such expectations will prove to be correct. We cannot guarantee future results, performance or achievements. Consequently, there is no representation that the actual results achieved will be the same, in whole or in part, as those set out in the forward-looking information. The forward-looking information contained in this news release is expressly qualified by this cautionary statement. We undertake no duty to update any of the forward-looking information to conform such information to actual results or to changes in our expectations except as otherwise required by applicable securities legislation. 

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)

SOURCE Hodgins Auctioneers Inc.

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