Argex Silver Capital revises QT agreement

Argex Silver Capital Inc (C:RGX)
Shares Issued 13,349,000
Last Close RGX.P 11/10/2008 $0.21
Monday March 02 2009 - News Release

Mr. Mark Billings reports

ARGEX SILVER CAPITAL INC. ANNOUNCES MODIFICATIONS TO PROPOSED QUALIFYING TRANSACTION WITH 7013833 CANADA CORP

Argex Silver Capital Inc. has entered into a revised agreement in principle dated Feb. 23, 2009, to acquire all of the assets of 7013833 Canada Corp. The company originally issued a news release on Nov. 18, 2008, in Stockwatch, announcing this proposed qualifying transaction. The modifications to the agreement in principle between the parties follow discussions with the Autorite des marches financiers (AMF), Quebec's securities regulator.

About the Vendor

7013833 Canada Corp (the Vendor), is a privately held company incorporated under the Canada Business Corporations Act and controlled by Francois Dumas. The Vendor acquired titanium, vanadium and iron ore claims, which are described in the section below. The preferred and common shareholders of the Vendor are the following:

                                                Number of

                             Jurisdiction of    Preferred

Preferred Shareholders         Incorporation  Shares Held  As a % of Total

--------------------------------------------------------------------------

Fancamp                     British Columbia,

 Exploration Ltd.                     Canada    2,250,000            64.29%

Sheridan Platinum

 Group                       Ontario, Canada      750,000            21.43%

Exploration

 JF Inc.                      Quebec, Canada      500,000            14.29%

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                                                3,500,000           100.00%



                          Jurisdiction of

                            Incorporation/      Number of

                               Country of          Common

Common Shareholders             Residence     Shares Held  As a % of Total

--------------------------------------------------------------------------

DumasBancorp ULC          Alberta, Canada         750,000            30.00%

Christian Wirth                    Panama         500,000            20.00%

Tsai Investment ULC       Alberta, Canada         500,000            20.00%

G&O Energy               British Columbia,

 Investment Ltd.                   Canada         500,000            20.00%

L.A.D. Ltd.                        Canada         250,000            10.00%

--------------------------------------------------------------------------

                                                2,500,000           100.00%

The preferred shares have a total redeemable face value of $1 per preferred share, or a total of $3,500,000. In the event of a going-public transaction, such as the proposed Qualifying Transaction described below, the total redeemable face value of the preferred shares of the Vendor, i.e. $3,500,000, is convertible into common shares of the Corporation at the share price of the Corporation in connection with the Qualifying Transaction.

About the Assets

The Assets consist of:

1. A group of 18 claims in National Topographic System of Canada map zone 22K04, totalling approximately 995 ha (9.95 km2) in area and featuring titanium, vanadium and iron ore showings within the vicinity of the Lac La Blache area in close proximity to the Manic III hydroelectric dam on the North Shore of the Province of Quebec. Lac La Blache is situated approximately 125 km northwest of the town of Baie-Comeau; and

2. A group of 185 claims in National Topographic System of Canada map zones 22N11, 22N13 and 22N14, totalling approximately 9,845 ha (98.45 km2) in area and generally referred to as the "Hanna Mining", "Consolidated Morrison" and "Fortin" properties; these claims are located north of the Manic V hydroelectric dam reservoir, which is approximately 350 km north of Baie-Comeau on the North Shore of Quebec.

According to a report from the Quebec Ministry of Energy and Resources, dated November 12, 1981, the Lac La Blache titaniferous magnetite deposits were originally discovered in 1952 and subsequently explored by Bersimis Mining Company, a subsidiary of Price Pulp and Paper. The Lac La Blache anorthosite within which the deposits are found is approximately 20 miles by 10 miles and trends northeast - southwest. Bersimis Mining Company used airborne magnetic techniques to identify deposits near Lac Schmoo, Hervieux East, Hervieux West and La Blache East.

The Proposed Qualifying Transaction

The acquisition of the Assets, together with the Proposed Financing hereinafter described, is expected to constitute a "Qualifying Transaction" for Argex Silver Capital Inc. as set forth in the policies of the TSX Venture Exchange (the Exchange). The transaction is subject to a number of conditions precedent including regulatory approval.

Under terms of the Agreement dated February 23, 2009, Argex Silver Capital Inc. will purchase the Assets for the following consideration:

a) $580,000 in cash, payable to the Vendor at closing; and

b) 17,000,000 common shares (Payment Shares) in the share capital of Argex, issuable to the Vendor at closing.

c) 8,000,000 common share purchase warrants (First Milestone Warrants) issuable at the time of closing to the common shareholders of the Vendor. Each First Milestone Warrant will entitle the holder to receive, for no additional consideration, one common share in the capital of Argex. The First Milestone Warrants will only be exercisable upon completion of a technical report compliant with NI 43-101 standards, which demonstrates at least 80,000,000 tonnes of resources grading at least an average of 30% iron and 10% titanium on the Assets; and

d) a further 8,000,000 common share purchase warrants (Second Milestone Warrants) issuable at the time of closing to the common shareholders of the Vendor. Each Second Milestone Warrant will entitle the holder to receive, for no additional consideration, one common share in the capital of Argex. The Second Milestone Warrants will only be exercisable upon completion of a technical report compliant with NI 43-101 standards, which demonstrates at least 300,000,000 tonnes of resources grading at least an average of 30% iron and 10% titanium on the Assets

The Vendor agrees that, upon closing, 14,000,000 Payment Shares shall be immediately distributed to the holders of Vendor's preferred shares. Upon closing, the balance of the Payment Shares shall be immediately distributed to the holders of the Vendor's common shares. Furthermore, the Vendor agrees that the Payment Shares distributed to the shareholders of the Vendor will be escrowed for at least 48 months, post-Transaction. The Vendor agrees to obtain escrow agreements from all of its shareholders in this respect.

The Corporation and the Vendor agree to pay a finder's fee to Gemme Manicouagan Inc. in connection with the Qualifying Transaction, of an amount equal to $252,250 in cash at closing and another amount of $100,000 in cash if and when the First Milestone will be achieved. These amounts are conditional upon the approval of the Exchange and other regulatory authorities, as required.

After the completion of the Qualifying Transaction but prior to the issuance of any shares pursuant to the Proposed Financing as described below, an aggregate of 30,349,000 common shares of the Corporation will be issued and outstanding. The current shareholders of the Corporation will own 13,349,000 common shares (43.98%) while the Vendor will own 17,000,000 common shares (56.02%) of the Corporation. It is anticipated that, immediately upon closing, the Vendor will distribute these common shares by way of dividend to its shareholders. Consequently, Fancamp Exploration Ltd. (TSX VENTURE: FNC) (Fancamp) will own 9,000,000 of the common shares (29.66%) of the Corporation after completion of the Qualifying Transaction but prior to completion of the Proposed Financing. In the event of the minimum Financing, the current shareholders of the Corporation will own 13,349,000 common shares (26.51%) of the Corporation after completion of the Qualifying Transaction, while Fancamp will own 9,000,000 common shares (17.88%) of the Corporation. In the event of the maximum Financing, the current shareholders of the Corporation will own 13,349,000 common shares (14.77%) after completion of the Qualifying Transaction, while Fancamp will own 9,000,000 common shares (9.96%) of the Corporation.

The acquisition of the Assets by the Corporation constitutes an Arm's Length Qualifying Transaction as defined in the policies of the Exchange.

Proposed Financing

Concurrently with the Qualifying Transaction, the Corporation will conduct a non-brokered private equity offering of units (the Units) for minimum gross proceeds of $5,000,000 and maximum gross proceeds of $15,000,000 (the Financing), the whole to be conducted on a best efforts basis. The Financing will consist of a mixed offering of Units consisting of both flow-through and common shares. Each Unit will consist of either:

(a) one flow-through common share in the capital of the Corporation and one common share purchase warrant, offered at a price of $0.25 per Unit; or

(b) one non flow-through common share in the capital of the Corporation and one common share purchase warrant, offered at a price of $0.25 per Unit.

Each warrant forming part of the Units will entitle the holder thereof to acquire one common share in the capital of the Corporation at a price of $0.40 per share at any time prior to the date that is 24 months from the date of issuance. In the event that the volume-weighted average price of the Corporation's common shares trades at or above $0.60 for 20 consecutive trading days, after the expiry of the four-month hold on the Units described above, then the Corporation will have the option to force conversion of the warrants by giving warrant holders 20 days' notice thereof.

Closing of the Financing will be conditional upon the completion of the Qualifying Transaction and acceptance hereof by the Exchange and the relevant securities regulatory authorities.

Board of Directors of the Corporation

Following the Qualifying Transaction, the Board of Directors of the Corporation will consist of the five persons named hereafter.

Mark Billings is currently President, CEO and a director of the Corporation. He is also the President and CEO of Orex Exploration Inc. (TSX VENTURE: OX), a junior gold exploration company with a property at Goldboro, Nova Scotia. Mr. Billings is also a director of a number of other public companies. He has a BA (Honours) from Carleton University and an MBA from the Harvard Business School; he is also a Chartered Financial Analyst.

Roy Bonnell is currently CFO and a director of the Corporation. He is also the Managing Director of Atwater Financial Group, a Montreal-based merchant banking group. He is also the chairman of TI2, a Laval-based technology company and has acted as a corporate finance associate for two investment dealers in 2000 and 2001. Mr. Bonnell has an M.Sc. in Accounting and Finance from the London School of Economics, an MBA from McGill University, a law degree from the University of Western Ontario and a BA (Honours) from Queen's University.

Michael Curtis is President and CEO of Opal Energy Corp. (TSX VENTURE: OPA), an independent exploration and production company focused on developing natural gas resources in South Texas. He is also a director of Roadrunner Oil and Gas Inc. (TSX VENTURE: ROA). Mr. Curtis has over 35 years of experience in the Canadian financial industry in the areas of trading, research, corporate finance and the management of public companies. In 1998, he founded and became President and Director of Cardwell Capital Inc., a private investment and trading corporation that invests in small and mid-capitalization public companies trading in North American markets.

Anthony Garson is President and CEO of Excalibur Resources Ltd. (CNQ: XBR), which has base metal mining properties in Ontario, British Columbia and Nevada. He has a B.Sc. in Earth Sciences from the University of Waterloo and an MBA from the University of Toronto. He has been involved in the brokerage industry as a Mines and Metals Analyst, having served with the following firms, among others: Bank of Nova Scotia (TSX: BNS), Dean Witter Reynolds (Canada) Ltd. and Canaccord Capital (TSX: CCI). Mr. Garson was a principal and founding partner of Union Capital Markets (UK) Ltd. and has served as a director of several public companies.

Peter H. Smith is the President and CEO of Fancamp Exploration Ltd. (TSX VENTURE: FNC), which has an inventory of mining properties in Ontario, Quebec and New Brunswick, with potential resources of gold, iron ore, uranium and nickel. He is also on the board of directors of Golden Hope Mines Ltd. (TSX VENTURE: GNH), which is engaged in mineral exploration in the province of Quebec and the state of Maine. Mr. Smith holds a B.Sc. in geology from McGill University and an MS and Ph.D. from Northwestern University. He is a Professional Engineer in Ontario.

Upon completion of the Qualifying Transaction, Michael Curtis will act as Chief Executive Officer of the Corporation, and Mark Billings will act as Chief Financial Officer of the Corporation.

The Corporation and the Vendor have agreed that trading in the shares of the Corporation will not resume prior to the completion of the Qualifying Transaction.

Completion of the Qualifying Transaction is subject to a number of conditions, including but not limited to, satisfactory reciprocal due diligence reviews by the Corporation, Exchange acceptance, Vendor, shareholder approval and completion of the proposed offering before December 31st of this year. The transaction cannot close until the required regulatory approvals pursuant to laws, regulations and applicable policies are obtained. There can be no assurance that the Qualifying 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 the securities of a capital pool company should be considered highly speculative. The Exchange has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.

Richard Kern, P.Geo., is the Qualified Person as defined in Regulation 43-101 / National Instrument 43-101, who has reviewed and approved the contents of this press release.

© 2009 Canjex Publishing Ltd.