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October 14, 2011
Reservoir Capital Corp. and Reservoir Minerals Inc. Announce Closing of Arrangement
Vancouver, British Columbia (TSX Venture: REO) -- Reservoir Capital Corp. ("Reservoir" or the "Company") and Reservoir Minerals Inc. ("Minerals") are pleased to announce the closing of their previously announced arrangement (the "Arrangement"), under which Reservoir has spun-out certain Serbian mineral exploration permits to Minerals by means of a plan of arrangement pursuant to the Business Corporations Act (British Columbia) (the "Spin-out Transaction").
Under the terms of the statutory plan of arrangement which received shareholder approval on October 11, 2011 (the "Plan of Arrangement"), Reservoir distributed to Reservoir shareholders (the "Shareholders"), as a return of capital, 0.191482444 of a common share of Minerals for each common share of Reservoir, subject to the terms of the Plan of Arrangement, held at the effective time of 12:01 a.m. on October 13, 2011 (the "Effective Time").
As more fully described in Reservoir's management information circular (the "Circular") dated September 12, 2011, each Shareholder must, for the purposes of the Income Tax Act (Canada), subtract from the adjusted cost base of the common shares of Reservoir held at the Effective Time an amount equal to the fair market value of the common shares of Minerals received under the Plan of Arrangement. Reservoir has allocated $0.65 as the value of each common share of Minerals received by it and distributed to the Shareholders under the Plan of Arrangement.
Reservoir will prepare its tax returns based on this allocation of value. However, the allocation of value is not binding on the Canada Revenue Agency or the Internal Revenue Service.
The foregoing is qualified entirely by the Circular and is not intended to be tax advice to any particular Shareholder. Shareholders are encouraged to read the Circular in full and consult with their own tax advisors having regard to their own circumstances.
Pursuant to the previously completed private placement financing of approximately $9.6 million in non-transferable subscription receipts ("Subscription Receipts") of Minerals ("Minerals Private Placement"), and concurrent with the closing of the Arrangement, the Subscription Receipts have been converted into common shares and warrants of Minerals. Specifically, in connection with the completion of the Arrangement each Subscription Receipt was converted, for no additional consideration, into one common share of Minerals and one non-transferable common share purchase warrant of Minerals for a period of two years from the date of conversion of the Subscription Receipts at an exercise price of $0.90 in the first year and $1.00 in the second year subject to accelerated expiry in certain circumstances. The proceeds from the Minerals Private Placement have been released from escrow.
Minerals also announces that Michael Winn, Miljana Vidovic, Geoff Chater and David Knox have been appointed as additional directors of Minerals.
The common shares of Reservoir will continue to trade on the TSX Venture Exchange ("TSX-V") under the symbol "REO" and on the Frankfurt and Berlin Exchanges under the symbol "ROC". At this time the common shares of Minerals are not currently listed on any exchange. Minerals continues to work toward obtaining final listing approval of the TSX-V with respect to the listing of its common shares and further updates in this regard will be provided when available.
About the Company
Reservoir Capital Corp. is a renewable energy company, engaged in development of a 58.4 MW hydroelectric project at Brodarevo in southwest Serbia. Reservoir holds four geothermal exploration licenses in Serbia and has applied for three hydroelectric licenses on the Cehotina River in Bosnia (17.75 MW) and one to develop a 32 MW project from an existing reservoir dam at Vrutci in Serbia. Reservoir's common shares trade on the TSX Venture Exchange (symbol "REO") and on the Frankfurt and Berlin Exchanges (symbol "ROC").
Reservoir Minerals Inc. is an international mineral exploration and development company run by a seasoned technical and management team. Minerals holds a portfolio of precious and base metal exploration properties in Serbia.
For further information on Reservoir Capital Corp. or Reservoir Minerals Inc., please contact Chris MacIntyre at +1.416.703.0010 or via e-mail at [email protected] or [email protected].
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