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TORONTO, April 11 /CNW/ --
TORONTO, April 11 /CNW/ - RAP Acquisition Corp. ("RAP") (NEX: RAP.H) is
pleased to announce that it has entered into a letter of intent dated
April 11, 2011 with Ferrum Americas Mining Inc. ("Ferrum Americas") and
the principals thereof (the "Principals"), Nick Tintor and Laurence
Curtis, both resident of Ontario, pursuant to which Ferrum Americas
will complete a going public transaction (the "Proposed Transaction")
by way of a reverse takeover of RAP in a transaction valued at over
C$22.725 million.
Ferrum Americas is a federally incorporated iron ore mineral exploration
company with properties in Bolivia. Ferrum Americas, and its Bolivian
subsidiary, Empresa Minera Yacuses S.A., have secured a beneficial
interest of 50% and the right to earn up to a 98% beneficial interest
in an iron project in Bolivia known as Cerro Rojo, pursuant to joint
ventures with private Bolivian corporations. The concessions cover a
portion of the Cerro Rojo Iron Range which is a 19 kilometre
discontinuous banded iron formation close to the Mutún Iron Deposit in
southeastern Bolivia. Cerro Rojo is located approximately 50
kilometres west of the city of Puerto Suarez located on the
Paraguay-Parana River, also known as the Hidrovia. The Mutún Iron Range
is currently under active development by an Indian Steel Company,
Jindal Steel Bolivia, in joint venture with the Bolivian Government.
All of the concessions under option by Ferrum Americas host banded iron
formations of unknown quantity and grade. Very limited past exploration
has been carried out on these concessions, including a preliminary
reconnaissance program completed by Rio Tinto in 1999. Ferrum Americas
presently has working capital of approximately $305,000.
In conjunction with the Proposed Transaction, Ferrum Americas or an
affiliate thereof intends to complete a private placement (the "Private
Placement") of not less than $10 million. In addition, in connection
with the Proposed Transaction and subject to all necessary approvals,
RAP will consolidate its shares on a 5:1 basis. It is intended that
common shares of RAP will be issued to holders of shares of Ferrum
Americas on the basis of 4.5 post-consolidation common shares of RAP
for every one share of Ferrum Americas. Subject to regulatory approval,
exchangeable securities of Ferrum Americas will be exchanged for
comparable securities of RAP.
Upon execution of the letter of intent, RAP paid a deposit of $25,000 to
Ferrum Americas which is non-refundable other than in limited
circumstances. An additional non-refundable deposit of $50,000 will be
paid in certain circumstances.
A comprehensive press release with further particulars relating to the
Proposed Transaction will follow in accordance with the policies of the
TSX Venture Exchange (the "Exchange").
Completion of the transaction is subject to a number of conditions
including, but not limited to, completion of satisfactory due
diligence, completion of the Private Placement, execution of a
definitive agreement in respect of the Proposed Transaction, regulatory
approvals, Exchange acceptance, the principal shareholders of Ferrum
Americas entering into and complying with support agreements and
disinterested shareholder approval. The transaction cannot close until
the required shareholder approval is obtained. There can be no
assurance that the Proposed Transaction will be completed as proposed
or at all.
Investors are cautioned that, except as disclosed in the management
information circular or filing statement of RAP to be prepared in
connection with the Proposed Transaction, any information released or
received with respect to the Proposed Transaction may not be accurate
or complete and should not be relied upon. Trading in the securities of
RAP should be considered highly speculative.
The Exchange has in no way passed upon the merits of the Proposed
Transaction and has neither approved nor disproved the contents of this
press release.
Notice on forward-looking statements:
This release includes forward-looking statements regarding RAP, Ferrum
Americas and their respective businesses. Such statements are based on
the current expectations of the management of each entity. The
forward-looking events and circumstances discussed in this release,
including completion of the Proposed Transaction and the Private
Placement, may not occur and could differ materially as a result of
known and unknown risk factors and uncertainties affecting the
companies, including risks regarding the insurance industry, economic
factors and the equity markets generally. No forward-looking statement
can be guaranteed. Except as required by applicable securities laws,
forward-looking statements speak only as of the date on which they are
made and RAP and Ferrum Americas undertake no obligation to publicly
update or revise any forward-looking statement, whether as a result of
new information, future events, or otherwise.
RAP is a corporation governed by the policies of the Exchange and listed
on the NEX. RAP's current business is the identification and evaluation
of assets or businesses with a view to completing a business
combination.
Neither 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.
To view this news release in HTML formatting, please use the following URL: http://www.newswire.ca/en/releases/archive/April2011/11/c3226.html
p Ronald Schmeichel, Director of RAP Acquisition Corp. at 416-972-6574 /p