Windfire to Acquire Off-Shore Oil Blocks in Namibia

Source: 7/24/2017, Location: Africa

Windfire Capital Corp. (Windfire) has signed a letter of intent (the "Letter of Intent"), dated July 24, 2017, with DMiner Asset Management Inc. (DMiner), pursuant to which Windfire proposes to acquire 91.5% of the issued and outstanding shares of Riviera Mina Ltd. (Riviera), a company incorporated under the laws of the Common wealth of The Bahamas, from DMiner (the "Acquisition").

Riviera indirectly owns a 76.5% interest in Petroleum Exploration License No. 0079 in relation to Blocks 2815 and 2915 (the "License"). The License is a strategically located off-shore petroleum exploration license with extensive technical studies already concluded, including 1137 km2 of 3D seismic covering a significant prospective resource, that offers a drill-ready, multiple zone, oil and gas target in the Orange Basin of Namibia. The remaining interest in the License is held by the National Petroleum Corporation of Namibia (Namcor) and local Namibian partners.

King Frans Indongo, a Namibian local partner and proposed director of Windfire, commented, "This transaction is expected to result in another major investment into the Namibian oil and gas sector and demonstrates the confidence that a globally respected company like Windfire and its management team has in the immense potential for discovering oil or additional gas in Namibia. We will work closely with our Canadian partners not only with the goal of finding oil in Namibia, but also in striving to ensure that we contribute to the advancement of the Namibian nation. Windfire brings capital expertise, leading technical experts with significant offshore discovery success, and a work program to lead to oil development in our great country. With our international partners, Namibia is well positioned to realize its goal of energy independence."

The Letter of Intent provides that, in consideration for the Acquisition, Windfire will pay a non-refundable deposit of US$150,000 (the "Deposit") to DMiner, issue 15,000,000 common shares of Windfire (each, a "Windfire Share") to DMiner, and pay an additional US$850,000 to DMiner in connection with the closing of the Acquisition (the "Closing"). The Deposit will be paid upon approval of the TSX Venture Exchange (the "TSX-V"). Under the Letter of Intent, the parties have also agreed to deal exclusively with each other until the earlier of December 29, 2017, entry into a definitive agreement with respect to the Acquisition, or termination of the Letter of Intent.

In connection with the Acquisition, Windfire intends to complete a private placement of subscription receipts for aggregate gross proceeds of up to $5,000,000 at a price of $0.25 per subscription receipt (or such other price and/or type of securities as may be mutually agreed to by Windfire and DMiner) (the "Financing"). The proceeds of the Financing are expected to be used for the payment of the closing cash consideration to DMiner, interpretation of existing data in connection with the License, preparation of a go-forward work program and for general working capital purposes. Finder's fees are expected to be paid in connection with the Financing on such terms, and to such finders, as are to be determined at a future date.

Upon the Closing, the management and board of directors of Windfire are expected to consist mainly of individuals who were directly involved in the completion of the C$730m merger between UNX Energy Corp. (UNX Energy) and HRT Participacoes em Petr?leo S.A. (HRT). The proposed appointments include:

- Kevin Broger, CEO, President and Director - Mr. Broger was formerly CEO of Chariot Oil and Gas and HRT Canada.
- Duane Parnham, Chairman - Mr. Parnham was formerly Chairman of UNX Energy.
- Mark Frewin, Independent Director - Mr. Frewin was formerly a director of UNX Energy and provided legal guidance on all corporate and UNX/HRT merger matters.
- Donald Sharpe, Independent Director - Mr. Sharpe was formerly an independent Director of UNX Energy and Chairman of the Special Committee assigned to consider the UNX/HRT merger.

King Frans Indongo, Independent Director - Mr. Indongo is Namibian national who is a shareholder in the License. "It is an absolute pleasure to work once again with my colleagues from UNX as well as the new members of the team who all share a goal in making a significant oil/gas discovery in Namibia" states Duane Parnham, Director of DMiner. Duane Parnham further states: "This transaction provides the shareholders of Windfire with the opportunity to participate in the enormous potential of what our team believes is the undrilled crown jewel in Namibia. We have always been committed to completing this transaction with Windfire and believe the timing is now ideal to proceed and complete this RTO as shown through the improvement in the energy sector since 2015, increased investor sentiment being more favorable to energy and more locally (in Namibia) the increased presence and drill commitments of major players in the oil and gas industry".

Mr. Parnham is the controlling shareholder of DMiner, which has an arms's length relationship with Windfire. The Acquisition will constitute a reverse takeover of Windfire as defined under the policies of the TSX-V. Completion of the Acquisition remains subject to, among other things, satisfactory due diligence by the parties, entry into a definitive agreement, approval of the TSX-V, completion of the Financing, approval of the applicable regulatory bodies in Namibia, if applicable, and other conditions which are customary for transactions of this nature. Upon completion of the Acquisition, Windfire is expected to be a Tier 2 Oil and Gas issuer on the TSX-V.

Approval of the Acquisition by the shareholders of Windfire is not expected to be required under the policies of the TSX-V because: (i) the Acquisition will not be a Related Party Transaction and Windfire believes that there are no other circumstances that may compromise the independence of Windfire or other interested parties (including directors and senior officers of Windfire) with respect to the Acquisition; (ii) as a NEX issuer, Windfire has no active operations; (iii) Windfire is not subject to a cease trade order or suspended from trading; and (iv) approval of shareholders is not required under applicable corporate or securities laws.

Windfire has not yet retained a sponsor in connection with the Acquisition. In the event that the Company determines to conduct the Financing on a brokered basis, it expects to apply for an exemption from the sponsorship requirements in accordance with the policies of the TSX-V.

The Windfire Shares issued to DMiner as consideration for the Acquisition are expected to be subject to a hold period expiring four months and one day after the closing of the Acquisition and such other escrow or pooling restrictions as may be applicable under the policies of the TSX-V or under the terms of the definitive agreement. Completion of the transaction is subject to a number of conditions, including TSX-V acceptance. There can be no assurance that the transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the Filing Statement to be prepared in connection with the transaction, any information released or received with respect to the Acquisition may not be accurate or complete and should not be relied upon. Trading in the securities of Windfire should be considered highly speculative.

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Related Articles: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 

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