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Press release from CNW Group

International LMM Ventures Corp. Announces Letter of Intent for the Acquisition of Earth Energy Resources Inc.

Monday, January 24, 2011

International LMM Ventures Corp. Announces Letter of Intent for the Acquisition of Earth Energy Resources Inc.09:00 EST Monday, January 24, 2011/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/VANCOUVER, Jan. 24 /CNW/ - International LMM Ventures Corp. (the "Corporation") (TSXV: LMM.H) is pleased to announce that it has entered into a letter of intent dated January 18, 2011 (the "Letter of Intent") to acquire all of the outstanding securities of Earth Energy Resources Inc. ("Earth Energy"), an Alberta corporation that is engaged in the development of oil sands properties located in the State of Utah, U.S.A. using its patent-pending extraction and remediation technologies (the "Proposed Transaction").Trading in the shares of the Corporation has been halted in accordance with the policies of the TSX Venture Exchange (the "Exchange") and will remain halted until such time as all the required documentation has been filed with and accepted by the Exchange and permission to resume trading has been obtained from the Exchange.Proposed TransactionPursuant to the terms of the Letter of Intent, the Corporation has agreed to acquire all of the issued and outstanding common shares of Earth Energy ("Earth Energy Shares"), by the issuance of 105,631,324 common shares of the Corporation ("Common Shares"), such that Earth Energy will become a wholly-owned subsidiary of the Corporation. Common Shares will be issued on the basis of four (4) Common Shares for every one (1) Earth Energy Share. In addition, it is intended that 13,400,000 options to purchase Common Shares will be issued to securityholders of Earth Energy in exchange for their outstanding Earth Energy options based on the same exchange ratio.The Proposed Transaction will be subject to the approval of the Exchange. The Proposed Transaction will constitute a "reactivation" of a NEX issuer pursuant to Exchange Policy 2.6 which will require approval as a "reverse takeover" pursuant to Exchange Policy 5.2. The Proposed Transaction is an arm's length transaction pursuant to the policies of the Exchange. In connection with the Proposed Transaction, it is expected that the Corporation will apply to be classified as a Tier 2 oil and gas issuer under the policies of the Exchange and that it will continue the business currently carried on by Earth Energy. It is anticipated that the Corporation will change its name upon closing of the Proposed Transaction to reflect the business conducted by Earth Energy.It is expected that the Proposed Transaction will occur by way of plan of arrangement or other business combination subject to review of tax, accounting, corporate and securities law issues. Completion of the Proposed Transaction is subject to a number of conditions, including, but not limited to, completion of due diligence, the entering into of a formal agreement between the Corporation and Earth Energy, completion of the Financing and Pre-closing Acquisition described below and receipt of all required regulatory and shareholder approvals, as applicable. There can be no assurance that the Proposed Transaction will be completed as proposed or at all.Pursuant to its mandate agreement, Endeavour Financial Ltd., will be issued 2,100,000 Common Shares of the resulting issuer in connection with the Proposed Transaction.Concurrent Financing and Related TransactionsPrior to the closing of the Proposed Transaction, Earth Energy expects to complete a private placement of subscription receipts which will convert on closing of the Proposed Transaction into up to 42,000,000 units of the Corporation at a price of $0.30 per unit, each unit consisting of one Common Share and one-half of one Common Share purchase warrant exercisable at a price of $0.40 per share for a period of two years, for gross proceeds of $12,600,000 (the "Financing").  Any securities issued pursuant to the Financing may be subject to applicable statutory hold periods.  The net proceeds of the Financing will be used by the Corporation to finance the development of its oil sands properties and its extraction and remediation technology. Earth Energy will pay finder's fees in the amount of 6% of the gross proceeds of the Financing.Prior to completion of the Proposed Transaction, it is intended that some of the placees of the financing will loan $3,000,000 to Earth Energy (the "Bridge Loan") to fund the acquisition of an additional 23,850 acres of undeveloped oil sands leases in the State of Utah (the "Pre-closing Acquisition") and to provide working capital for certain operating activities, including a coring program and engineering activities. The Bridge Loan shall be subject to any approvals required from and any conditions imposed by NEX or the Exchange. The parties agree that in the event the Proposed Transaction does not proceed, the Bridge Loan will be converted to 3,750,000 Earth Energy Shares at a deemed value of $0.80 per share.The Corporation currently has 99,275,005 Common Shares issued and outstanding. In addition, there are 4,250,000 options that have been granted to the Corporation's directors and officers under its current stock option plan. Upon completion of the Proposed Transaction and the Financing, it is expected that the Corporation will have approximately 249,006,329 Common Shares issued and outstanding with outstanding warrants to acquire 21,000,000 Common Shares and stock options to acquire up to 24,500,000 Common Shares.Earth Energy Resources Inc.The following information relating to Earth Energy, its operations and resource properties, has been provided to the Corporation by Earth Energy.Incorporated in 2003 by the Founder, Kevin Ophus, Earth Energy is a private corporation which has in excess of 400 shareholders of which Mr. Ophus is the only shareholder owning more than 10%.  Since inception, Earth Energy has invested $16.2 million on the development of the technology, land acquisition and resource delineation, and regulatory permitting.  At December 31, 2010 Earth Energy had, on an unaudited basis, total assets of $3,298,376 and $188,625 in net working capital.Earth Energy has developed an environmentally responsible process to extract hydrocarbons from solids. A bio-based solvent is used to rapidly liberate the hydrocarbons, reducing the mechanical energy and eliminating the pH control typically used to recover bitumen in surface mineable projects. The patent-pending process effectively extracts bitumen from water-wet and oil-wet oil sands. Earth Energy has successfully developed the process at its facility in Grande Prairie, Alberta. Since inception, Earth Energy has devoted its efforts to commercialize the water efficient and scalable process, which has no requirement for tailings ponds. Earth Energy, through its wholly owned Utah subsidiary, owns a 100% leasehold interest in 7,835 acres of Utah State land. Earth Energy internally estimates, as of October 31, 2009, that in respect of this interest it has 177.8 MMbbl of bitumen which would be classified as Discovered Bitumen Initially-In-Place. In conjunction with the coring program on the existing lands, resource evaluations will commence on the lands included in the Pre-Closing Acquisition."Discovered Bitumen Initially-In-Place" is that quantity of bitumen that is estimated, as of a given date, to be contained in known accumulations prior to production. The recoverable portion of Discovered Bitumen Initially-In-Place includes production, reserves, and contingent resources; the remainder is unrecoverable. Further review of Earth Energy's resource evaluation procedures is required to assign the estimate of Discovered Bitumen Initially-In-Place to a more specific resource category.The resource estimate indicated above is a best estimate of the quantity of bitumen actually in place. It is equally likely that the actual in-place quantity will be greater or less than the best estimate. If probabilistic methods are used, there should be at least 50 percent probability that the quantity actually in place will equal or exceed the best estimate. There is no certainty that any portion of the resources will be developed and, if developed, there is no certainty as to either the timing of such development or whether it will be commercially viable to produce any portion of the resources.A significant factor relevant to the above resource estimate is the regulatory permitting process. Regulatory permitting for the initial bitumen extraction operation has been a focus for Earth Energy for the last four years.  Approval by the Utah Division of Oil, Gas and Mining for Earth Energy's Notice of Intention to Commence Large Mining Operations was conditionally granted on September 19, 2009.  This decision was appealed through a Request for Agency Action dated September 27, 2010 by an environmental advocate and the matter is ongoing.  Earth Energy management anticipates a favourable resolution.Directors and Officers of the Resulting Issuer In connection with the completion of the Proposed Transaction, the current directors and officers of the Corporation will resign. It is anticipated that the current directors and officers of Earth Energy will be appointed to positions with the Corporation that are similar to their respective positions with Earth Energy.The following is a brief description of the background and experience of the proposed directors and officers of the Corporation upon completion of the Proposed Transaction:D. Glen Snarr, C.A. - President and Chief Financial OfficerSince 1994, Glen Snarr has been involved in the senior financial management of numerous companies as Vice President of Finance at BanCor Inc., a successor company to Travis Chemicals Inc. He was treasurer of Decarson Rentals (2000) Inc. until it was sold to Builders Energy Services Trust in January 2005. Glen is currently a director of ESG Filtration Ltd. Prior to joining Travis in 1994, Glen worked 13 years for Deloitte and Touche Chartered Accountants where he concentrated on mergers & acquisitions, public company auditing and reporting.Barclay Cuthbert, MBA, B.Sc - Vice-President, OperationsBarclay Cuthbert has over fifteen years of experience in the oil and gas industry, working with oil companies and oilfield service companies in Canada, Russia and the Middle East. Barclay worked with LUKoil Overseas to develop international exploration and production operations, focusing principally on projects in Latin America including analysis of several heavy oil deposits in the region. Prior to that, Mr. Cuthbert managed the western partners' interest in a production chemical joint venture with LUKoil in Western Siberia.Tim J. Wall, P. Eng. - Vice-President, Engineering  Tim Wall is a graduate civil engineer from the University of British Columbia with over 25 years of oil industry project engineering experience. Prior to joining the Company, he was a senior project manager with a major oil company in Calgary, where he was responsible for geophysical and geotechnical field investigations and infrastructure planning for a $10 billion oil sands mine/bitumen production operation in the Athabasca Oil Sands region of northern Alberta.H. Douglas Hunter - Director and ChairmanMr. Hunter is a Professional Engineer and has over thirty years experience in the oil and gas industry. He is currently the President of RFM Capital Corporation, a private investment company. Mr. Hunter has been active in several public and private oil and gas companies including Viking Energy Royalty Trust (Chairman of the Board), Bluesky Oil & Gas Ltd., Triumph Energy Corp., Petromark Minerals Ltd., Petroleum Capital Corporation and Ricinus Resources Ltd.Verne G. Johnson - DirectorMr. Johnson received a Bachelor of Science degree in Mechanical Engineering from the University of Manitoba in 1966. He worked with Imperial Oil Limited until 1981 (including two years with Exxon Corporation in New York from 1977 to 1979). From 1981 to 2000, Mr. Johnson served in senior capacities with companies such as Paragon Petroleum Ltd., ELAN Energy Inc., Ziff Energy Group and Enerplus Resources Group. He currently serves on a number of public company boards including Fort Chicago Energy Partners L.P., Gran Tierra Energy Inc. and Petromanas Energy Inc. He is currently President of his private family company, KristErin Resources Ltd.James A. Banister - DirectorMr. Banister is President and CEO of BanCor Inc., a private investment firm and successor company to Travis Chemicals Inc., a private company that he owned from 1985 to 1997. Mr. Banister is the Chairman of Essential Energy Services Ltd. He has also served on a number of public and private company and not-for-profit boards during his career.Ken M. Stephenson - DirectorMr. Stephenson, a graduate in Civil Engineering from the University of Saskatchewan, brings to the board a very diverse experience base. He has held private investments and directorships in the oil industry in contract drilling, exploration and development, pipeline construction, manufacturing, heavy construction, gas processing plants and industry camp and catering. Mr. Stephenson has held major investments in an automobile dealership, hotel supplies and real estate development. He currently holds investments in a diverse portfolio of public and private companies in various sectors including oil and gas.Additional InformationCompletion of the Proposed Transaction is subject to a number of conditions including, but not limited to, the closing of the Financing and the Pre-closing Acquisition, the satisfaction of the Corporation and of Earth Energy in respect of certain due diligence investigations to be undertaken by each party, the completion of a definitive agreement setting forth the terms and conditions set out in the Letter of Intent, closing conditions customary to transactions of the nature of the Proposed Transaction, Exchange acceptance and, if required by Exchange policies, disinterested shareholder approval. Where applicable, the Proposed Transaction cannot close until the required shareholder approval is obtained and 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 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 the Corporation should be considered highly speculative.Cautionary StatementsThis news release contains "forward-looking information" within the meaning of applicable securities laws relating to the proposal to complete the Proposed Transaction and associated transactions, including statements regarding the terms and conditions of the Proposed Transaction and associated transactions.  Readers are cautioned not to place undue reliance on forward-looking statements. Actual results and developments may differ materially from those contemplated by these statements depending on, among other things, the risks that the parties will not proceed with the Proposed Transaction and associated transactions, that the ultimate terms of the Proposed Transaction and associated transactions will differ from those that currently are contemplated, and that the Proposed Transaction and associated transactions will not be successfully completed for any reason (including the failure to obtain the required approvals or clearances from regulatory authorities). The statements in this news release are made as of the date of this release. The Corporation undertakes no obligation to comment on analyses, expectations or statements made by third parties in respect of the Corporation, Earth Energy, or their respective financial or operating results or (as applicable), their securities.The TSX Venture Exchange has in no way passed upon the merits of the Proposed Transaction and associated transactions and has neither approved nor disapproved of the contents of this press release. Not for distribution to U.S. Newswire Services or for dissemination in the United States. Any failure to comply with this restriction may constitute a violation of U.S. Securities laws.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 new release.For further information: For further information, please contact:Thomas O'Neill - Chief Executive Officer Phone: (604) 609-6110