Pacific Coal Completes CDN$201,825,000 Private Placement and Reverse Takeover of Vega Resources Inc.

TSX VENTURE EXCHANGE: PAK

Mar 11, 2011, 07:30 ET from Pacific Coal Resources Ltd.

TORONTO, March 11, 2011 /PRNewswire/ -- Pacific Coal Resources Ltd. (TSXV: PAK, formerly VGR) (the "Company") is pleased to announce the completion of the reverse takeover transaction (the "Transaction") previously announced in the press release of Vega Resources Inc. ("Vega") dated December 7, 2010.

Pursuant to the Transaction, Vega indirectly acquired all of the issued and outstanding securities of Pacific Coal, S.A. ("Pacific Coal") in exchange for the issuance of securities of Vega, by way of a three-cornered amalgamation, and changed its name to Pacific Coal Resources Ltd.

The TSX Venture Exchange (the "Exchange") has granted final approval of the Transaction. Trading of the common shares (the "Common Shares") and warrants (the "Warrants") of the Company on the Exchange is anticipated to commence under its new name at market open on March 14, 2011. The Common Shares will trade under the symbol "PAK" and the Warrants will trade under the symbol "PAK.WT".

Private Placement

Prior to the completion of the Transaction, Pacific Coal completed a "best efforts" private placement of subscription receipts (the "Subscription Receipts") of Pacific Coal (the "Private Placement") pursuant to which Pacific Coal issued 149,500,000 Subscription Receipts for gross proceeds to Pacific Coal of CDN$201,825,000. Each Subscription Receipt was automatically exchanged, without payment of any additional consideration and with no further action on the part of the holder thereof, for one unit of Pacific Coal (each a "Unit"). Each Unit consisted of one common share of Pacific Coal and one half of one common share purchase warrant of Pacific Coal. 

GMP Securities L.P. and Citigroup Global Markets Canada Inc. as co-lead agents, along with Byron Capital Markets Ltd., Canaccord Genuity Corp., and EAS Advisors, LLC (the Riverbank Partners division of Merriman Capital, Inc.) (collectively, the "Agents") acted as agents in respect of the Private Placement. As consideration for the Agents' services in connection with the Private Placement, Pacific Coal paid the Agents a cash commission equal to 6.0% of the gross proceeds of the Private Placement and granted to the Agents compensation options entitling the Agents to subscribe for 4,485,000 Units at CDN$1.35 per Unit until the date that is two years from the date the Common Shares are listed and posted for trading on the Exchange, which is anticipated to be until March 14, 2013.

Reverse Takeover

Upon closing of the Transaction, the securities of Pacific Coal, including those issued pursuant to the Private Placement, were exchanged for Common Shares and Warrants on a one-for-one basis. Each such whole Warrant entitles the holder to purchase one additional Common Share at an exercise price of CDN$2.10 per share until the date that is five years from the date the Common Shares are listed and posted for trading on the Exchange, which is anticipated to be until March 14, 2016. 

Pursuant to the terms of the agency agreement dated February 25, 2011 entered into among the Agents, Vega and Pacific Coal in connection with the Private Placement, each holder of Common Shares following the completion of the Transaction who was a Pacific Coal shareholder prior to the completion of the Private Placement is restricted from selling, transferring or otherwise disposing of a 25% tranche of such Common Shares until each of the dates that is 30, 60, 90 and 120 days from the date the Common Shares are listed and posted for trading on the Exchange. 200,000 of these Common Shares are also subject to a four month Exchange seed share resale restriction period commencing on the date of the Transaction.

Pursuant to the requirements of the Exchange, 138,282,000 Common Shares will also be subject to a value security escrow agreement, with 25% of such Common Shares being released from escrow following receipt of final Exchange approval of the Transaction and 25% every six months thereafter. 

Directors and Senior Management

The board of directors of the Company is comprised of the following individuals: Serafino Iacono, Miguel de la Campa, Luis Carvajales, José Francisco Arata, Ronald Pantin, Laureano von Siegmund, Federico Restrepo Solano, Juan Manuel Peláez, Michael Steven Greene, Jaime Perez Branger, Miguel Rodriguez and Oscar Ordonez. The Company's senior management will be comprised of Serafino Iacono - Co-Chairman; Miguel de la Campa - Co-Chairman; Luis Carvajales - Chief Executive Officer; Miguel Velasquez - Chief Financial Officer; and Peter Volk - General Counsel and Secretary.

Directors, officers, employees and consultants of the Company as well as certain charities and certain former officers of Pacific Coal have been granted options to acquire 30,620,000 Common Shares at an exercise price of CDN$1.35, exercisable until March 10, 2016.

Assets

Pacific Coal, directly and indirectly through its subsidiaries, has entered into agreements to acquire interests in several mining projects in Colombia. As at the date hereof, Pacific Coal principal assets are its interests in three mineral projects in Colombia: the Caypa project, the C.I. Jam project and the La Tigra project, each of which is described below. 

The Caypa project is located in the Barrancas Municipality, Guajira Department in Colombia and currently has an annual production of, and successfully exports, approximately 1.0 to 1.2 million tonnes of high CV bituminous steam coal.

The Caypa project is an open cast mining operation with approximately three years of remaining mine life within the current open pit. An opportunity has been identified to develop a south pit to recover additional bituminous coal from an area that was previously designated for waste. Furthermore, the Caypa mine demonstrates the potential for an underground mining operation that could lead to the recovery of additional high CV bituminous steam coal. 

C.I. Jam Internacional S.A. ("C.I. Jam") is a Colombian company engaged in the mining of coking coals and the upgrading of coking coal to coke for sale in local and export markets. The company's operations are located in Samaca in the Boyaca Department of Central Colombia. 

C.I. Jam owns a coking coal project together with a beehive coker oven infrastructure composed of 80 units, 40 of which are fully operational and 40 of which are under construction. The Company intends to add an additional 80 units in approximately three months.

La Tigra is a steam coal and asphaltite exploration project located in the Santander Department in Central Colombia. 

Pacific Coal retained SRK Consulting (UK) Limited, based in Cardiff, United Kingdom, to prepare National Instrument 43-101 - Standards for Disclosure of Mining Projects compliant technical reports in respect of the Caypa project, the C.I. Jam project and the La Tigra project. Copies of these technical reports are available under the Company's profile on SEDAR at www.sedar.com.

Acquisitions by Blue Pacific & Pacific Rubiales

Pursuant to the Transaction, Blue Pacific indirectly acquired 67,200,000 Common Shares which, together with the 1,800,000 Common Shares previously indirectly owned, represents an aggregate of 69,000,000 Common Shares or 20.85% of the current issued and outstanding shares of the Company. The Company is advised that the securities were acquired by Blue Pacific for investment purposes. While Blue Pacific does not currently have any intention to acquire further securities of the Company, it may in the future acquire or dispose of securities of the Company, through the market or otherwise, as circumstances or market conditions warrant.

Pursuant to the Transaction and Private Placement, Pacific Rubiales acquired 22,223,000 Common Shares which, together with the 24,000,000 Common Shares previously owned, represents a total of 46,223,000 Common Shares or 13.97% of the current issued and outstanding shares of the Company. Pacific Rubiales also acquired 11,111,500 Warrants pursuant to the Private Placement. Assuming exercise of all of the Warrants held, Pacific Rubiales would own an aggregate of 57,334,500 Common Shares, or 16.76% of the then issued and outstanding shares of the Company (assuming no other Common Shares are issued). The Company is advised that the securities were acquired by Pacific Rubiales for investment purposes. While Pacific Rubiales does not currently have any intention to acquire further securities of the Company, it may in the future acquire or dispose of securities of the Company, through the market or otherwise, as circumstances or market conditions warrant. 

In addition, as long as Pacific Rubiales owns at least 2% of the Company's equity, it: (i) will have the right to nominate one director to the board of directors of the Company; and (ii) has an exclusive option for one year from the date of the start of commercial production at the La Tigra project to negotiate and enter into (a) an agreement for the purchase at prevailing market prices of up 500,000 tonnes of the project's total production of asphalt and/or coal each year, for a period of up to 10 years from the date of the start of such commercial production, and (b) a joint venture to build a plant to produce, refine and market asphalt and/or asphaltite produced at the project.

Investor Relations Arrangements

The Capital Lab Inc. ("The Capital Lab"), a Toronto based investor relations firm, is assisting the Company with marketing and is building its investor relations strategy.

Under the terms of the investor relations agreement between the Company and The Capital Lab, The Capital Lab will be paid a monthly fee of CDN$11,000, and was granted options to acquire 50,000 Common Shares at an exercise price of CDN$1.35, exercisable until March 10, 2016.

In addition to the options granted pursuant to the investor relations agreement, The Capital Lab currently holds 5,000 Common Shares.

The Capital Lab provides strategic investor relations and business development solutions for international, publicly listed companies in various industry sectors. It focuses on advising global companies during transition periods, as a part of their team, to provide immediate and full support throughout their growth and evolution.

Additional Information

Additional details regarding the Transaction, including with respect to the business and properties of the Company, are contained in the filing statement of Vega dated February 28, 2011, copies of which are available under the Company's profile on SEDAR at www.sedar.com.

About Pacific Coal Resources Ltd.

Pacific Coal Resources Ltd. is a Canadian-based mining company focused on coal, coking coal, asphalt and asphaltite exploration, development and production from prospective producing, development-stage and exploration-stage properties in Colombia. The Company has acquired or entered into agreements to acquire various interests in several operating coal mines and projects, representing a substantive coal and asphaltite exploration and production area throughout Colombia.

Forward-Looking Information

This news release contains forward-looking information, including with respect to the commencement of trading of the Company's common shares and warrants on the Exchange. Although the Company believes that the assumptions and factors used in preparing the forward-looking information in this news release are reasonable, undue reliance should not be placed on such forward-looking information. No assurance can be given that such results or events will occur in the disclosed time frames or at all. This news release and the information contained herein is made as of the current date and the Company assumes no obligation to update or revise it to reflect new events or circumstances.

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 news release.

For further information:

Belinda Labatte

Investor Relations Representative

(647) 436-2152



SOURCE Pacific Coal Resources Ltd.