African Metals Corporation Completes Acquisition of Chevalier Resources Inc. and Luisha Mining Project
March 29, 2010
VANCOUVER, BC – Nigel Ferguson, the President of African Metals Corporation (TSX Venture Exchange: AFR) would like to announce that the Company has completed the acquisition (the “Acquisition”) of all of the issued and outstanding securities of Chevalier Resources Inc. (“Chevalier”) which was first announced on November 6, 2009.
Chevalier, a private company incorporated in Canada, has a wholly-owned subsidiary, Luisha Mining Company Sprl., which holds a 57% interest in the Luisha Project which consists of 20 parcels of land with an area of 16.2 square kilometers located 75 kilometers northwest of Lubumbashi, the capital of Katanga Province, Democratic Republic of Congo.
The Acquisition was completed pursuant to a share exchange agreement entered into by the Company, Chevalier and shareholders of Chevalier dated January 29, 2010 (the “Agreement”). As consideration under the Agreement, the Company issued one common share in exchange for each Chevalier share outstanding for a total of 32,500,000 shares at a deemed price of $0.335 per share, and one common share purchase warrant in exchange for each Chevalier share purchase warrant outstanding for a total of 700,000 share purchase warrants. Each warrant is exercisable into one common share of the Company at a price of $0.50 per share at any time up to and including 17h00 (Montreal time) the date that is twenty-four (24) months from July 21, 2008. The total value of the Acquisition is $10,887,500 based on a deemed price of $0.335 per share issued.
In connection with the Acquisition, the Company paid a finder’s fee to M Partners Inc., an arm’s length entity, payable 50% in cash ($81,656.25) and 50% in shares (243,750 shares of the Company having a deemed price of $0.335 per share). In addition, Chevalier paid a finder’s fee to PowerOne Capital Markets Limited, an arm’s length entity, payable by the issuance of 385,634 shares of the Company having a deemed price of $0.335 per share.Nigel Ferguson, President and CEO, stated that “I am very pleased to have the deal concluded withChevalier. The project area shows great promise, being located between areas of historical and current mining to the north and a development project to the south. Field work has begun at the project and aprogram of drilling will follow on the back of receipt of these results. I look forward to being able to update the market in the near future”