TORONTO, ON / ACCESSWIRE / November 24, 2015 / Norvista Capital Corporation (TSXV: NVV) ("Norvista" or the "Company") is pleased to announce that it has entered into an agreement to acquire Norvista Capital Management Corp. ("NCM") whereupon it will terminate its management agreement (the "Management Agreement") with NCM.
Norvista will acquire 100% of the shares of NCM (the "Internalization Acquisition") for an aggregate purchase price of $400,000 (the "Purchase Price"). The Internalization Acquisition is expected to close on November 27, 2015. Concurrent with the closing of the Internalization Acquisition, the Management Agreement will be terminated without penalty.
The terms of the Internalization Acquisition were negotiated and recommended for approval by an independent, special committee (the "Special Committee") of the board of directors of Norvista (the "Board"). The Special Committee received an independent valuation in support of the Internalization Acquisition and also received independent legal advice.
There will be no management changes or changes in management compensation at Norvista as a result of the Internalization Acquisition.
Rationale and Benefits of the Internalization Acquisition
- The Special Committee made the decision to internalize management to provide investors with improved transparency into the operations of the Company while enhancing the alignment of interests by having all activities within a single entity.
- Terminating the Management Agreement provides the Board with enhanced oversight over the operations, strategic direction, investment process, and the retention and compensation of key members of management.
- The Internalization Acquisition frees Norvista from a substantial termination fee (in excess of two times the Purchase Price) it would otherwise pay should the Company wish to unilaterally terminate the Management Agreement in the future as well as eliminating a 20% profit participation interest in the potential future profits of Norvista granted to NCM in the Management Agreement.
"The internalization of management through the acquisition of NCM and termination without penalty of the Management Agreement continues a process that we began in 2014 to simplify the organization, consolidate the professional staff and exercise more board discretion over pay for performance," says Stan Spavold, lead independent director and Chairman of the Company.
Donald Christie, CEO and Director, as well as Bruce Durham and Gerald McCarvill both directors of Norvista immediately prior to the Internalization Acquisition, had an interest in the Internalization Acquisition. As such, the Internalization Acquisition constitutes a "related party transaction" within the meaning on Multilateral Instrument 61- 101- Protection of Minority Security Holders in Special Transactions ("MI 61-101").
In respect of the Internalization Acquisition, Norvista is relying upon the exemptions from the formal valuation and minority shareholder approval requirements pursuant to sections 5.5(a) and 5.7(1)(a), respectively, of MI 61-101 on the basis that the fair market value of the Internalization Acquisition did not exceed 25% of NCM's market capitalization, as calculated in accordance with MI 61-101. The decision to proceed with the Internalization Acquisition and the terms for doing so were determined by the Special Committee, comprised of independent directors of the Board (and therefore excluding Donald Christie, Bruce Durham and Gerald McCarvill).
In connection with this press release, a Material Change Report has been filed in accordance with applicable securities laws. A copy of the Material Change Report will be available for review under Norvista's profile on SEDAR at http://www.sedar.com.
Norvista is a resource based merchant bank that began operations and was listed for trading on the TSX Venture Exchange in June of 2014. The Company's strategy is to capitalize on the significant asset value contraction that has occurred over the last several years in the resource industry, with particular emphasis on base metal projects. Norvista focuses its efforts on the pursuit of highly prospective exploration projects while balancing exploration risk through investment in small to mid-scale, pre-production, opportunities requiring partial or full completion of feasibility studies. The Company takes a proactive role with its investee companies and in the majority of cases assumes management or advisory roles and/or seats on the board of directors of these companies. Management is of the view that current market conditions allow the Company to significantly mitigate political and country risk by pursuing investments in some of the world's top ranked mining jurisdictions.
Since inception Norvista has completed four strategic investments. The Company has a 10.3% undiluted interest in Nevada Zinc Company the owner of a highly prospective zinc exploration project in Eureka, Nevada. Management of Norvista hold senior officer positions as well as board seats at Nevada Zinc. Nevada Zinc recently purchased the Mountain View mine, a past producing zinc mine in the centre of it property and has completed its phase three drill program. The assay results from all three drill programs to-date have been very positive.
The Company also owns a 19.9%, fully diluted ownership interest in Minera Alamos Inc. the owner of an open pit, high-grade copper/molybdenum resource in Sonora, Mexico. Minera Alamos is targeting a 2016 mine construction start date for its Los Verdes project. The Company is actively involved in Minera Alamos through its board representation.
Norvista holds an 80% ownership interest in Akuna Minerals Inc., a private company with a small scale, pre-production, high-grade copper project in northern Manitoba. Norvista's investment in Akuna funded the acquisition of the property and will assist in the funding of the cost of the feasibility study on the project that is scheduled to commence construction in 2016 and begin production in 2017.
The Company has also made a small portfolio investment in Petrowolf, LLC, a private oil and gas exploration company that has assembled a significant land holding in the Permian Basin in Texas from the proceeds of the initial financing subscribed to by Norvista. Petrowolf just closed a US $7MM second round financing in order to fund its initial drill program in Q1 of 2016 and acquire additional exploration property.
For further information contact:
Norvista Capital Company
390 Bay Street West, Suite 612
Toronto, Ontario M5H 2Y2
Tel: (416) 504-4171
Don Christie, President and CEO
CAUTIONARY STATEMENT: Neither the TSX-V nor its Regulation Services Provider (as that term is defined in the policies of the TSX-V) accepts responsibility for the adequacy or accuracy of this release.
This news release contains forward-looking information that is not comprised of historical facts. Forward-looking information involves risks, uncertainties and other factors that could cause actual events, results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking information. Forward-looking information in this news release includes statements made herein with respect to, among other things, the Company's objectives, goals or future plans, potential corporate and/or share acquisitions, exploration results, potential mineralization, exploration and mine development plans with respect to the Company's investee companies, timing of the commencement of operations, and estimates of market conditions. Factors that could cause actual results to differ materially from such forward-looking information include, but are not limited to, exploration results being less favourable than anticipated, capital and operating costs varying significantly from estimates, delays in obtaining or failures to obtain required governmental, environmental or other project approvals, political risks, uncertainties relating to the availability and costs of financing needed in the future, changes in equity markets, inflation, changes in exchange rates, fluctuations in commodity prices, delays in the development of projects, risks associated with the defence of legal proceedings and other risks involved in the mineral exploration and development industry, as well as those risks set out in the Company's public disclosure documents filed on SEDAR. Although the Company believes that management's assumptions used to develop the forward-looking information in this news release are reasonable, including that, among other things, the investee companies will be able to identify and execute on opportunities to acquire mineral properties, exploration results will be consistent with management's expectations, financing will be available to such companies on favourable terms when required, and commodity prices and foreign exchange rates will remain relatively stable. Undue reliance should not be placed on such information, which only applies as of the date of this news release, and no assurance can be given that such events will occur in the disclosed time frames or at all. The Company disclaims any intention or obligation to update or revise any forward-looking information contained herein, whether as a result of new information, future events or otherwise, except as required by applicable securities laws.
SOURCE: Norvista Capital Corporation