Everfront Ventures Corp. Enters into Letter of Intent to Acquire Canagco Mining Corp.

TORONTO, Sept. 6, 2012 /CNW/ - Everfront Ventures Corp. ("Everfront") (EVC.P), a capital pool company, is pleased to announce that it has entered into a letter of intent dated September 4, 2012 ("LOI") with Canagco Mining Corp. ("Canagco"), a private Ontario company, pursuant to which Everfront will directly or indirectly acquire all of the outstanding common shares of Canagco in exchange for common shares of Everfront on the basis of one Everfront common share for each Canagco common share outstanding at the time of such exchange (the "Business Combination").

The Business Combination is subject to TSX Venture Exchange ("TSXV") approval and is intended to constitute Everfront's Qualifying Transaction under the policies of the TSXV.  The Business Combination will not be a Non-Arm's Length Qualifying Transaction (as that term is defined under the TSXV policies) and as such, unless the agreed-upon structure to effect the Business Combination otherwise requires, it is not expected that approval of the Everfront shareholders will be required.

Additional information concerning the Business Combination, including the terms of the Private Placement related to the Business Combination referred to below and details relating to the directors, officers and other insiders of the resulting issuer, will be provided in subsequent communication from Everfront.

Business of Canagco

Canagco is a private corporation incorporated under the laws of the Province of Ontario on March 18, 2011 with its principal office in Toronto, Ontario.  Northfield Capital Corp. is the only shareholder which beneficially owns more than 10% of the outstanding common shares of Canagco. Upon completion of the Business Combination, it is not expected that any shareholder of Canagco will beneficially own greater than 10% of the outstanding common shares of the resulting issuer.

Canagco is an exploration stage mining company and its current principal mineral project is the Langis Silver Project which consists of 35 patented contiguous mining claims located in Casey and Harris Townships in Ontario's famed Cobalt Silver Mining Camp, which has seen historical production of some 500,000,000 ounces of silver from numerous mines. The property is located approximately 500 kilometres north of Toronto.  The Langis Project includes the past-producing Langis and Dolphin-Miller silver-cobalt deposits.

Canagco reported, as at December 31, 2011, total assets of approximately $1.2 million, total liabilities of approximately $0.1 million and total shareholders' equity of approximately $1.15 million, and total net loss of approximately $0.05 million (or loss per share of $0.005) for the period from March 18, 2011 to December 31, 2011.  All of the above figures are presented on an audited basis.

Terms of the Agreement

The Qualifying Transaction will be effected pursuant to a Business Combination which contemplates the acquisition of all of Canagco's common shares, directly or indirectly, by Everfront in exchange for common shares of Everfront on the basis of one Everfront common share for each Canagco common share outstanding at the time of such exchange.

Canagco has agreed to negotiate exclusively with Everfront until October 31, 2012 in order to pursue the Business Combination.  The parties have also agreed to negotiate in good faith and use reasonable commercial efforts to settle a definitive agreement (the "Definitive Agreement") in the near future and are targeting the execution of such Definitive Agreement by no later than October 31, 2012.

Capitalization

As of the date hereof, Everfront has 3,840,550 common shares issued and outstanding, 384,054 management options exercisable at $0.20 per share and 233,550 agent's options exercisable at $0.20.  Prior to the completion of the Business Combination, Canagco is expected to have up to 40,055,555 Canagco common shares issued and outstanding.  This includes up to 5,400,000 common shares to be issued pursuant to certain transactions already contemplated by Canagco and agreed to by Everfront (the "Permitted Transactions").

Conditions for Closing

The Business Combination is expressly subject to: (a) the completion of a due diligence review by Everfront of the business and affairs of Canagco to the sole satisfaction of Everfront, including, without limitation, audited financial statements of Canagco, documents used in connection with prior distributions of securities by Canagco, filings with regulatory or governmental authorities with respect to prior distributions of securities of Canagco and the continuing development of the business of Canagco on a timely basis without significant delays; (b) the completion of a due diligence review by Canagco of Everfront to the sole satisfaction of Canagco; (c) the availability of exemptions from the registration and prospectus requirements of applicable Canadian securities laws to facilitate the issuance of the Everfront securities to Canagco's security-holders pursuant to the Business Combination; (d) the Private Placement referred to below; (e) the receipt of a technical report for Canagco's current principal mineral project, the Langis Property,  prepared in compliance with National Instrument 43-101 Standards of Disclosure for Mineral Projects, together with all necessary consents to disclosure thereof; (f) the approval of the Business Combination by the board of directors of each of the parties; (g) the agreement of the board of directors and officers of Everfront to resign their current director and officer positions in and to Everfront (other than Mr. Joshua Gerstein who will remain as a director following completion of the Business Combination) as a condition to the completion of the Business Combination; (h) the approval of the Business Combination by the shareholders of Everfront, if required; (i) the final approval of the Business Combination by the TSXV; and (j) Canagco will not sell or otherwise issue any additional securities prior to the closing of the Definitive Agreement except pursuant to the Permitted Transactions.

Proposed Financing

Prior to or concurrently with the closing of the Business Combination, Canagco is required to complete a private placement (the "Private Placement") of securities (each an "Offered Security") for gross proceeds of not less than the amount necessary to ensure that there are sufficient funds to satisfy any working capital requirements of the TSXV to obtain the final approval of the Business Combination by the TSXV, on terms whereby each Offered Security is currently expected to be offered at a minimum subscription price of $0.20 and will entitle the holder thereof to receive, without payment of any additional consideration, one common share in the capital of Everfront upon the satisfaction of certain conditions.

The Resulting Issuer

On the closing of the Business Combination, Everfront, the resulting issuer, anticipates being classified as a "Tier 2" issuer that will meet the TSXV's initial listing requirements for a mining company.

Management of the Resulting Issuer

It is expected that management of the resulting issuer would be as follows:

George A. J. Monteith, B.Sc. Geology - Chairman and Chief Executive Officer and Director

Mr. Monteith is an exploration Geologist with over 30 years of experience. He has developed and managed resource projects on four continents. His experience ranges from precious and base metals exploration to oil and gas. He has been involved in projects in Africa, South America, Asia, Europe and the North America having spent the last 16 years in the United States. George attended the School of Mines in Northeastern Ontario and earned his Honours degree in geology from Brock University in 1976.

Gino P. Chitaroni, B.Sc. Geology - President and Director

Mr. Chitaroni has lived in the Town of Cobalt all his life and has been in the mining business for over 30 years. He has worked, variously as an underground miner in the 1980s and as a consulting geologist as well as corporate director for various exploration entities. Since 1997, Gino has been the founding president of Blackstone Development Inc., a consultant firm and contractor for the mining exploration industry. He is also the owner and president of Polymet Labs, an assay analytical laboratory which he founded in Cobalt in 1998.

Harold J. Clifford - Treasurer and Secretary and Director

Mr. Clifford's forty years in the investment business focused primarily on the Natural Resources sectors, and included: Director of Mining Research for former TSE member J.P. Cannon and, subsequently, Manager of Retail Research and an officer of Merrill Lynch Canada. Harold was a director of a gold exploration company active in Mexico in the 1990s and also spent a number of years as a consultant on mining company research and investor relations.

They, together with current Canagco directors John R. Aschwanden, Contract Manager, Orbit Garant Drilling Services Inc. and Robert S. Richardson, Registered and Senior Trading Officer, W.D. Latimer Co. Limited, as well as Joshua Gerstein, the current C.E.O. of Everfront, will form the board of directors of the resulting issuer. Such appointments are subject to the approval of the TSXV.

Sponsorship

Sponsorship of a qualifying transaction of a capital pool company is required by the TSXV unless an exemption from the sponsorship requirement is available.  Everfront intends to apply for an exemption from the sponsorship requirement.  There is no assurance that Everfront will be able to obtain such an exemption.

Trading Halt

Everfront's common shares are currently halted and Everfront anticipates they will remain halted until the documentation required by the TSXV for the proposed Business Combination can be provided to the TSXV.

Completion of the Business Combination is subject to a number of conditions, including but not limited to, TSXV acceptance and, if applicable pursuant to TSXV requirements, majority of the minority approval of the shareholders of Everfront. Where applicable, the Business Combination cannot close until the required shareholder approval is obtained. There can be no assurance that the Business Combination 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 Business Combination, any information released or received with respect to the Business Combination may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.

The TSXV has in no way passed upon the merits of the proposed Business Combination and has neither approved nor disapproved the contents of this press release. Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.

This press release contains forward-looking information within the meaning of Canadian securities laws. Such information includes, without limitation, information regarding the completion of the proposed Business Combination, the proposed Private Placement, and the anticipated business plan of Everfront subsequent to completion of the Business Combination. Although Everfront believes that such information is reasonable, it can give no assurance that such expectations will prove to be correct.

Forward looking information is typically identified by words such as: believe, expect, anticipate, intend, estimate, postulate and similar expressions, or are those, which, by their nature, refer to future events. Everfront cautions investors that any forward-looking information provided by Everfront are not guarantees of future results or performance, and that actual results may differ materially from those in forward looking information as a result of various factors, including, but not limited to: Everfront's ability to complete the proposed Business Combination; the state of the financial markets for Everfront's equity securities; the state of the market for minerals that may be produced generally by the resulting issuer in the event the Business Combination is completed; recent market volatility; Everfront's ability to raise the necessary capital or to be fully able to implement its business strategies; and other risks and factors that Everfront is unaware of at this time. The reader is referred to Everfront's most recent annual and interim Management's Discussion and Analysis for a more complete discussion of all applicable risk factors and their potential effects, copies of which may be accessed through Everfront's page on SEDAR at www.sedar.com.

SOURCE: Everfront Ventures Corp.