Trade Winds to Sell its Detour Lake Assets to New Company
SUBSIDIARY OF CANADIAN BANK TO INVEST IN TRADE WINDS AND TRADE WINDS TO SELL ITS DETOUR LAKE ASSETS TO NEW COMPANY TO BE FORMED
Toronto, Ontario, December 7, 2007 – Trade Winds Ventures Inc. (“Trade
Winds” or the “Company”) is pleased to announce that, subject to the
conditions set out below, its Detour Lake properties (all Detour assets
including Block A, operated as a 50/50 joint venture with Detour Gold
Corp., and its 100% owned Gowest property) will be transferred to a new
company to be formed, headquartered in Toronto, Ontario (“Newco”).
Trade Winds expects to receive consideration of approximately 50% of
the common shares of Newco, which is anticipated to be financed with a
minimum $15,000,000 private placement followed by an Initial Public
Offering expected later in 2008. In addition, Newco expects to have
the option to fund Trade Winds’ expenditures related to the Detour Lake
properties from the earlier of the completion of the transaction or May
31, 2008. Newco intends to conduct an aggressive exploration program
at the Detour Lake project during 2008 and 2009 with the objective of
increasing the current resource and work toward initiating a
feasibility study. RBC Dominion Securities Inc. has the option to
provide up to 100% of the funding for Newco.
Ian Lambert, President and CEO of Trade Winds, stated: “With an NI
43-101 compliant gold resource of 804,321 indicated ounces of gold and
1,499,552 inferred ounces of gold, the Detour Lake Block A and Gowest
properties are now ready for the next level in the mine development
life cycle. We believe that the logical next step is to bring in new
exploration management expertise and the necessary funding going
forward, and augmenting that team with the experience that we have
gained over the last several years of exploration at Detour Lake.” Mr.
Lambert added: “This proposed transaction is consistent with Trade
Winds’ partnership and spin-out strategies which are being designed to
improve the identification and valuation of each specific Trade Winds’
property, enabling Trade Winds to separately finance and develop its
various assets, selectively reducing stock dilution. We believe our
shareholders will realize greater upside value through a 50% equity
ownership in Newco than is currently being recognized at this point in
time.”
General Terms of the Agreement
The transaction is subject to:
1. Regulatory approvals, including acceptance by the TSX Venture Exchange (“TSX-V”);
2. Approval from the shareholders of Trade Winds by April 30, 2008;
3. Completion by Newco of a minimum $15 million private placement within 45 business days of the date of the agreement; and
4. Other customary conditions.
If Newco fails to close the private placement within the required time
or if shareholder approval is not obtained by Trade Winds, Trade Winds
shall retain its interest in the Detour Lake Block A and Gowest
properties.
Upon closing of the transaction, Trade Winds will have two
representatives on Newco’s board of directors, which shall consist of
at least five members. Trade Winds expects to call a special meeting
of its shareholders to seek approval for the transaction in April,
2008. Octagon Capital Corporation is acting as advisor in this
transaction.
Detour Lake Block A and Gowest Properties
The Detour Lake Block A and Gowest properties contain the M Zone
structural corridor. The M Zone structural corridor is a gold bearing
structure that begins near surface at the eastern boundary of Block A,
and plunges gently westward along strike for over four kilometres on to
the immediately adjacent 100% owned Gowest property. Two significant
mineralized zones occur along a komatiite structure, the Upper and
Lower M Zone gold zones. The near surface and other portions of the M
Zone structural corridor drilled to date are the subject of our NI
43-101 compliant resource estimate (October 2006). The 2008 and 2009 M
Zone drilling program will be designed to test the westward extension
of the known gold mineralization both near surface and at depth, with
the purpose of adding new gold ounces to the resource estimate and
upgrading the current near surface inferred resource to the indicated
category.
Golder Associates Ltd. (Golder) was commissioned by Trade Winds to
provide an independent Mineral Resource Estimate in conformance with
the Canadian Institute of Mining, Metallurgy and Petroleum (CIM)
Mineral Resource and Mineral Reserve definitions referred to in the
National Instrument NI 43-101, Standards of Disclosure for Mineral
Projects. The resource estimation work was completed in October 2006
and is based on information contained within the Technical Report
prepared by Golder for Trade Winds and filed on SEDAR, which, using a
cut-off of 1.0 grams/tonne, outlines an indicated resource of
14,158,000 tonnes grading 1.77 grams Au/t containing 804,321 ounces of
gold and an inferred mineral resource of 24,796,000 tonnes grading 1.88
g Au/t containing 1,499,552 ounces of gold.
Trade Winds Announces a Private Placement of up to $6.25 Million
Trade Winds further announces that it has agreed to a brokered private
placement led by Octagon Capital Corporation as lead agent (the
“Agent”) of up to 14,000,000 non-flow-through units (“Units”) at $0.25
per Unit for gross proceeds of up to $3,500,000 (the “Brokered
Offering”). RBC Dominion Securities Inc. has agreed to subscribe for
8,000,000 Units.
Each Unit consists of one non-flow-through common share and one-half of
one transferable non-flow-through common share purchase warrant, with
each whole warrant entitling the holder to acquire one additional
common share of the Company for a period of two years from closing at
an exercise price of $0.30.
The Agent will receive a cash commission of 8.0% of the gross proceeds
raised in the Brokered Offering, payable in cash or, in whole or in
part, at the option of the Agent, in units of the Company having the
same attributes as the Units. In addition, the Agents will receive
compensation warrants equal in number to 8.0% of the aggregate number
of Units sold pursuant to the Brokered Offering (“Agent’s Compensation
Warrants”) exercisable for two years following closing at the offering
price of the Units.
Concurrent with the Brokered Offering, the Company is undertaking a
non-brokered financing for up to 3,333,334 flow-through units at a
price of $0.30 per flow-through unit (“FT Units”) for gross proceeds of
up to $1,000,000, consisting of one flow through common share and
one-half of one transferable non-flow through common share purchase
warrant (“Warrant”). Each whole Warrant entitles the holder to acquire
one additional common share of the Company for a period of one year
from the date of closing at a price of $.50 per share. The
non-brokered financing will also consist of up to 7,000,000 non-flow
through units having the same attributes as the Units for gross
proceeds of up to $1,750,000. A finder’s fee in cash and/or Units is
payable in connection with the non-brokered financing. In addition,
The Company will issue finders warrants having the same attributes as
the Agent’s Compensation Warrants equal in number to 8% of the
aggregate number of units and FT Units sold under the non-brokered
financing.
The net proceeds from the issue of FT Units will be used for
exploration and development of the Company’s Birch Lake Property in
Ontario and Treasure Mountain Property in British Columbia. The
flow-through funds will constitute Canadian Exploration Expenses and
will be renounced for the 2007 taxation year. The net proceeds raised
from the issue of Units and non-brokered units will be used for
exploration and development costs, property acquisition costs,
investments, and working capital.
FOR FURTHER INFORMATION PLEASE CONTACT:
Ian D. Lambert, CEO/President (604) 742-2522
Terry McGee, Investor Relations Toll Free (877) 811-4518 ext 228 or (604) 742-2531
Email: info@tradewindsventures.com
Visit our Website at www.tradewindsventures.com
