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JBZ CAPITAL INC. ANNOUNCES PROPOSED ACQUISITION OF FERTOZ PTY LTD.

^{Published on 2011-06-09 13:16:00 - Market Wire}
 

VANCOUVER, June 9, 2011 /CNW/ - JBZ Capital Inc. (TSXV: JBZ) ("JBZ") is pleased to announce that it has entered into a letter agreement with Fertoz Pty Ltd. ("Fertoz") effective June 9, 2011, relating to a reverse take-over transaction pursuant to which JBZ would acquire all of the issued and outstanding ordinary shares of Fertoz in exchange for the issuance of common shares of JBZ by way of a share exchange (the "Transaction").

JBZ is a Canadian company listed on the TSX Venture Exchange (the "TSXV") that is currently engaged in the exploration and development of phosphate rock properties in Western Australia. Fertoz is an Australian company currently engaged in the assessment of Australia's phosphate mineralization, with properties in the Northern Territory of Australia. Upon completion of the Transaction JBZ is expected to continue its business of exploration and development of phosphate rock properties in Western Australia.

Description of the Transaction and the Resulting Issuer

The Transaction is an arm's length transaction and is expected to be effected by way of a share exchange pursuant to a definitive agreement to be entered into between JBZ and Fertoz (the "Transaction Agreement"). Upon completion of the Transaction and subject to shareholder approval, which will be sought at a meeting of the JBZ common shareholders subsequent to the completion of the Transaction (the "Meeting"), JBZ will change its name to "Fertoz Minerals Ltd." (the "Resulting Issuer").  Concurrently with the Transaction, Fertoz plans to raise at least $5 million by way of a private placement of ordinary shares of Fertoz.  JBZ will announce the details of that private placement when they are determined.

There are currently 59,306,618 issued and outstanding common shares of JBZ and 115,500,000 issued and outstanding ordinary shares of Fertoz, in each case on a fully diluted basis. Pursuant to the Transaction, a Fertoz shareholder will receive 0.9536 common shares of JBZ for each ordinary share held of Fertoz. Upon completion of the Transaction, it is expected that the current shareholders of Fertoz will hold in the aggregate 65% of the issued and outstanding common shares of the Resulting Issuer and the current shareholders of JBZ will hold in the aggregate 35% of the issued and outstanding common shares of the Resulting Issuer, in each case on a non-diluted basis.

On May 17, 2011, JBZ announced that its wholly owned subsidiary, Strata Minerals Limited ("Strata"), had entered into a loan agreement with Fertoz (the "Loan"). Pursuant to the terms of the Loan, Strata has advanced AUD$500,000 by way of secured bridge loan maturing on September 30, 2011. A condition of the Loan is that the directors of Fertoz also advance AUD$500,000 on the same terms as the Loan. The total proceeds of AUD$1 million will be used by Fertoz to fund its current exploration program. Under certain circumstances and, in the case of Strata subject to prior approval by the TSXV, both Strata and the Fertoz directors will be required to fund an additional AUD$500,000 each on the same terms as the initial advance.

Upon completion of the Transaction, the following entities will beneficially own 10% or more of the issued and outstanding common shares of the Resulting Issuer: (i) the Lenark Investment Trust and its associated entity the Kifaco Investment Trust will together hold approximately 13% of the issued and outstanding common shares of the Resulting Issuer, through their respective trustees, namely Lenark Pty Ltd. and Kifaco Pty Ltd., and (ii) the Gynn Family Trust (of which Gary Gynn is a beneficiary) and its associated entity the Peak Energy Trust will together hold approximately 13% of the issued and outstanding common shares of the Resulting Issuer, through their respective trustees, namely Gynn Holdings Pty Ltd. and Peak Energy Pty Ltd. For purposes of Canadian securities laws James Chisholm may be deemed to have beneficial ownership of, or to exercise control or direction over, directly or indirectly, the common shares of the Resulting Issuer that will be owned by the Lenark Investment Trust and the Kifaco Investment Trust, and Gary Gynn may be deemed to have beneficial ownership of, or to exercise control or direction over, directly or indirectly, the common shares of the Resulting Issuer that will be owned by the Gynn Family Trust and the Peak Energy Trust. Mr. Chisholm and Mr. Gynn are both residents of Australia.

The board of directors of the Resulting Issuer is anticipated to be comprised of seven members, including Hugh Agro, Peter Kozicz and Nigel Gellard, each of whom is currently a director of JBZ, and four directors to be nominated by Fertoz and proposed to shareholders of JBZ in the proxy materials to be sent in connection with the Meeting. The Fertoz nominees are Dr. Les Szonyi, Dr. Philip Moore, Greg Hogan and Gary Gynn.

Dr. Szonyi is the CEO of Fertoz and it is anticipated he will become the President and CEO of the Resulting Issuer. He has over 30 years of experience in the chemicals processing industry, and during the last five years was the General Manager of Queensland Nitrates Pty Ltd., an integrated manufacturer of ammonia, nitric acid and ammonium nitrate. Dr. Szonyi holds Bachelor of Engineering and Doctorate degrees in chemical engineering, is a graduate of the Australian Institute of Company Directors (the "AICD") and is a member of Institution of Chemical Engineers. He is based in Brisbane.

Dr. Philip Moore, formerly Managing Director of Sydney Gas Ltd., is presently CEO and a director of Mogal Marine Pty Ltd. as well as Chairman of Fertoz. He has over 25 years of experience in the resources industry, having worked across numerous sectors including upstream and downstream in the oil and gas industry, downstream chemical processing, coal seam methane and power generation. Dr. Moore has worked in Europe and Australia with Royal Dutch Shell and BHP Petroleum as a petroleum engineer, corporate planner and in business evaluations. Dr. Moore is a high profile speaker on the Australian engineering and resources circuit and holds a Bachelor of Science and Doctorate degrees in physics and astronomy and a Bachelor of Arts in economics and statistics. He is a member of the AICD and the Society of Petroleum Engineers.

Greg Hogan has 30 years of experience in resource project development and operations. He spent 18 years with Schlumberger Ltd. in line management operations and staff positions in South-East Asia, the Middle East and Australasia. Mr. Hogan and four partners led the growth of a start-up Australian petroleum engineering company, Upstream Petroleum, through to its reaching AUD$100 million turnover and 450 personnel. Mr. Hogan was company secretary and finance director for most of that time. Mr. Hogan has managed or directed hydrocarbon drilling and development projects, coal seam methane evaluation projects and CO2 geo-sequestration evaluation projects. Recently he has been evaluating the development of stranded gas assets and supply chain economics for the Darwin Port Corporation and a Korean consortium promoting floating liquefied natural gas systems. Mr. Hogan holds an honours degree in engineering and is a graduate of the AICD. He is based in Darwin.

Gary Gynn, a co-founder of Fertoz, has over 30 years of experience in sales and marketing of Australian resources with major domestic and international companies. He has held senior management positions in Santos Ltd. and in Esso Australia Ltd and is an experienced company director.  Mr. Gynn holds a Bachelor of Science degree and is a graduate of the AICD.

Nigel Gellard is the currently a director and the President and Chief Executive Officer of JBZ.  Mr. Gellard has over 20 years experience in the resources and financial services/funds management sectors, and founded Strata.  Previously, he co-founded and was an executive director of a privately-owned boutique funds management firm, following several years experience dealing in the equities markets, most notably with Paterson Securities Limited.  Prior to entering into the financial services and funds management industry, Mr. Gellard was Commercial Adviser to the Director of Exploration for Rio Tinto Plc, and based in London where he was responsible for advising on commercial matters relating to Rio Tinto's activities in Europe, Eastern Europe, South America and Africa.  He was also responsible for the negotiation of commercial agreements and risk management.  It is proposed Mr Gellard will be the Executive Vice Chairman of the Resulting Issuer.

Peter Kozicz is a director of JBZ.  Mr. Kozicz has also been the President of Arlea Corporation, a private investment company, since May 2001.  Mr. Kozicz co-founded Associated Proteins LP, a company involved in the procurement and merchandising of canola seed and related products, which was sold to Viterra Inc. in 2009.  After the sale, Mr. Kozicz was retained by Viterra as a Senior Advisor.  From April 1997 to May 2001, he was President, Chief Executive Officer and a Director of Mad Catz Interactive Inc. He has also held several senior executive positions and directorships at other Canadian listed public companies.  Mr. Kozicz holds a B.Sc. Engineering and an MBA (Queen's University, Canada).  It is proposed Mr Kozicz will be the Chief Financial Officer of the Resulting Issuer.

Hugh Agro is a director of JBZ, and a retired mining executive. Most recently, he was Executive Vice President, Strategic Development at Kinross Gold Corporation responsible for Kinross' growth activities including corporate development and exploration.  He has previously held senior executive positions with Placer Dome Canada, Senator Capital Partners and in investment banking with Deutsche Bank's Global Metals and Mining Group.  Mr. Agro is a director and member of the Audit Committee of Victoria Gold Corp. and a director of Chantrell Ventures Corp.  Mr. Agro also serves on the board of Fort Berens Estate Winery Ltd. Mr. Agro holds a B.Sc. in Mining Engineering (Queen's University, Canada) and an MBA in Finance (University of British Columbia, Canada and London Business School, England).

Conditions Precedent

Completion of the Transaction is subject to a number of conditions, including (i) execution of the Transaction Agreement, (ii) TSXV approval of the Transaction, (iii) TSXV approval of the candidates nominated by Fertoz for election to the board of directors of the Resulting Issuer, (iv) the approval of the respective boards of directors of each of JBZ and Fertoz, (v) the requisite statutory approvals of the shareholders of each of JBZ and Fertoz, and (vi) other customary conditions for a transaction of this nature.

Trading in the shares of JBZ has been halted in accordance with the policies of the TSXV and will remain halted until such time as all required documentation has been filed and accepted by the TSXV and permission to resume trading has been obtained from the TSXV.

Description of JBZ

JBZ is a Tier 2 mining issuer listed on the TSXV and is engaged, through its wholly owned subsidiary Strata, in the exploration and development of prospective phosphate rock properties, including the Mornington Project in Western Australia, with the intention of developing a mine and becoming a supplier of phosphate rock to the global fertilizer industry. JBZ acquired its interest in the Mornington Project pursuant to its acquisition of Strata by way of a reverse take-over transaction which closed April 21, 2011. Prior to its acquisition of Strata, JBZ was a capital pool company with the business of identifying a qualifying transaction.

The Mornington Project is comprised of one tenement covering an area of approximately 347 km² and lies within the Lansdowne 1:250,000 scale geological mapsheet. The tenement is located in the Kimberley Region of Western Australia and is situated approximately 150 km northeast of Fitzroy Crossing and is accessible by road. JBZ, through Strata, owns a 100% interest in the tenement. The exploration licence for the Mornington Project was granted by the Government of Western Australia on December 11, 2009 and is valid for a period of five years. Subject to certain conditions, the license is renewable thereafter for additional periods of five and two years.

In addition to the Mornington Project, Strata's other tenements include the Collison Project (251 km²), the Savory Basin Project (375 km²), both in Western Australia, the Tickalara North Project (561 km²) and the Tickalara South Project (113 km²), which are located in Queensland.

Description of Fertoz

Fertoz is a private Australian mineral exploration company registered in Victoria and established in August 2010. The company was created to assess Australia's phosphate prospectivity. The key focus of Fertoz is deposits of phosphate, limestone and potash for fertiliser applications. Fertoz's current mineral assets are principally located in the Northern Territory of Australia.

Since inception, Fertoz has applied multi-tier screening to various project opportunities. Fertoz's initial focus was on the known geological regions in Australia where demonstrated mineral concentrations occur and within regional proximity to existing discoveries. Fertoz's exploration model is based on the geological criteria considered important to the development of commercial quantities of phosphate. Specifically, the model targets organic-rich carbonate rocks on depositional basin margins. Complementing this strategy has been a focus on projects where scale and proximity to infrastructure including roads, rails, energy and ports exists.

Fertoz's project areas were selected based on historical phosphate exploration results and a more recent Northern Territory Geological Survey compilation of data from numerous water bores, identifying areas with enriched phosphatic sedimentary units.

Further research led Fertoz to acquire a large number of tenements in the Northern Territory in October 2010. Fertoz has now compiled an extensive portfolio of Exploration Licences ("EL"s) and Exploration Licence Applications ("ELA"s) covering an area of approximately 35,000 km² across the Northern Territory. Fertoz is targeting sedimentary phosphorite mineralisation in a number of these areas including the Daly, Wiso and Georgina Basins. Fertoz has embarked on a $1.3 million exploration programme over a twelve month period with drilling expected to commence in July or August 2011 across a number of the tenements in the Northern Territory.

The Fertoz portfolio comprises 29 ELs and ELAs. Fertoz has a 100% interest in the rights to all the minerals within the following projects:

• The Katherine Project comprises three granted ELs covering a combined area of 4,646 km². The Katherine tenements are adjacent to three existing limestone mines. They are 20 km south of Katherine, which is on the Stuart Highway, and the railway line connecting Alice Springs and Darwin and the Amadeus Basin - Darwin natural gas pipeline.
  
  
• The Hodgson Project comprises a single granted EL and a single ELA covering a combined area of 2,940 km². It is 180 km from Katherine, 50 km east of the Stuart Highway and 100 km from the railway line.
  
  
• The Roper Project comprises two granted ELs with a combined area of 3,171 km². It is approximately 350 km from Katherine and 160 km east of the Stuart Highway. It straddles the Carpentaria Highway.
  
  
• The Winnecke Project comprises two granted ELs and 11 ELAs with a combined area of 16,861 km². The tenements are approximately 350 km north-west of Tennant Creek and 250 km west of the Darwin - Alice Springs railway.  The Northern Territory Geological Survey (NTGS) issued a report in October, 2007 entitled "Phosphate testing of waterbores and diamond drillcore in the Georgina, Wiso and Daly basins, Northern Territory" Oct-2007 by Khan, Ferenczi & Kruse. It reports that the tenements are adjacent to a water bore measuring 3 meters at 28% P₂O₅ at 15 meters depth.  For important information regarding information regarding "adjacent properties", see below under the heading "Special Note Regarding Adjacent Property Information".
  
  
• The Barkly Project comprises four granted ELs with a combined area of 4,487 km². Portions of these tenements are adjacent to the Minemakers' phosphate discovery at Wonorah and the project area straddles the Eastern highway to Tennant Creek.
  
  
• The Barrow Creek Project comprises five granted ELs with a combined area of 2,769 km². One of the tenements is immediately adjacent to the recently discovered Rum Jungle Limited (ASX:RUM) phosphate at Barrow Ck-1. The Fertoz tenements straddle the Stuart Highway and are close to the railway and the Amadeus Basin - Darwin gas pipeline .

As at June 1, 2011 Fertoz had AUD$885,000 cash on hand to fund its upcoming drilling programme. Subject to prior approval of the TSXV, Fertoz has access to a further AUD$1 million in loans to allow its first year drilling programme to be completed. Its balance sheet as at March 31, 2011 had net assets of AUD$905,850 dollars and total liabilities of AUD$217,598. For the period from August 24, 2010 through March 31, 2011, Fertoz had a loss of AUD$15,901.  The amounts disclosed in this paragraph are unaudited. Audited financial statements as of March 31, 2011 for Fertoz will be included in the filing statement to be prepared in connection with the Transaction.

Completion of the Transaction is subject to a number of conditions, including TSXV acceptance and disinterested shareholder approval. The Transaction cannot close until the required shareholder approval is obtained. 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 Transaction may not be accurate or complete and should not be relied upon. Trading in securities of JBZ Capital Inc. should be considered highly speculative.

The TSX Venture Exchange has in no way passed upon the merits of the proposed transaction described herein and has neither approved nor disapproved the contents of this news release.

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.

Special Note Regarding Adjacent Property Information

JBZ cautions that information regarding the Northern Territory Geological Survey contained in this press release has been derived from public sources, generally company websites, and has not been verified by JBZ's "qualified person" (as that term is used in National Instrument 43-101 - Standards of Disclosure for Mineral Projects).  The information relating to the Northern Territory Geological Survey does not include any information regarding mineralization on the Winnecke Project, and no assurance can be given by JBZ that any discovery will be made on the Winnecke Project. 

Special Note Regarding Forward-Looking Statements

Certain statements included herein constitute forward-looking statements. The words "expect", "intend", "anticipate", "propose" and "may" and similar expressions identify forward-looking statements. Forward-looking statements include, among other things, statements regarding JBZ, Fertoz, the Transaction, the operation and development of JBZ and Fertoz's respective mineral properties and the structure and management of the Resulting Issuer. Forward-looking statements are necessarily based upon a number of estimates and assumptions, including that the Transaction will be completed as described herein and that shareholder approval for the matters described herein will be obtained at the Meeting. While such estimates and assumptions are considered reasonable by the management teams of JBZ and Fertoz, they are inherently subject to significant business, economic, competitive and regulatory uncertainties and risks and accordingly may not occur as described herein or at all. Investors are cautioned that forward-looking statements are not guarantees of future performance or events and, accordingly are cautioned not to put undue reliance on forward-looking statements due to the inherent uncertainty of such statements.