CALGARY, July 28, 2011 -
Lakota Resources Inc. (the 'Company' or 'Lakota') is pleased to announce the closing of a shares for debt transaction, which forms part of its recapitalization plan (the 'Recapitalization') that will result in its debt burden being significantly reduced and is expected to allow Lakota to resume its exploration activity.
The Recapitalization process involves three principle stages (two of which have already been implemented).
1. Private Placement. As detailed in the press release of Lakota dated July 15, 2011, the Company has completed a private placement of 172,710,000 of its common shares to new management and other investors at a price of $0.01 per common share for proceeds of $1,727,100 (the 'Private Placement').
2. Shares for Debt Settlement. All of the debt owed by Lakota to BEC International Corporation ('BEC') and 49 North Resources Inc. ('49 North'), two if its most significant creditors, in the aggregate amount of $1,300,000, has been settled in exchange for the issuance of an aggregate of 130,000,000 common shares in Lakota. As a result of these shares for debt transactions, BEC and 49 North have direction and control over approximately 17.7% and 18.1%, respectively, of the current issued and outstanding shares of the Company. In addition, approximately (i) $200,000 in unpaid compensation owed to former members of management and a consultant; and (ii) $132,070 owed to an arm's length party arising in respect to a finder's fee and certain professional services rendered in connection with the Private Placement, have both been settled in exchange for the issuance of an aggregate of 33,207,219 common shares in Lakota. The conversion of all such debt was completed on the basis of one share for each $0.01 of debt. The shares issued in respect to each of the shares for debt transactions are subject to a 4 month hold period.
3. Consolidation. The Corporation intends to seek approval of an 18 to 1 rollback of the outstanding Lakota shares (the 'Consolidation') at the annual and special meeting of shareholders scheduled for August 31, 2011 (the 'Meeting').
It is anticipated that following closing of the shares for debt transactions noted above, Lakota will have sufficient financial resources to begin actively implementing the work program on its Tanzanian properties as contemplated by its geological report, a copy of which is available at
www.sedar.com.
In order to complete step (3) to the Recapitalization, the Company has set a shareholder meeting scheduled for August 31, 2011, at which it will ask shareholders to approve, among other things; (i) the Consolidation; (ii) the election of directors; and (iii) the re-naming of the Company to 'Valiant Gold Corporation.'
President and Chief Executive Officer of Lakota, David Scott states:
'We know that it has been a long hard road for shareholders to reach this point and we look forward to a new and promising future for the Company. We anticipate that initial work programs will commence shortly and that with the resumption of work the Company will be able to realize value from its portfolio of assets in Tanzania. '
Forward Looking Statements
This news release contains certain forward-looking statements and forward-looking information (collectively referred to herein as 'forward-looking statements') within the meaning of Canadian securities laws. All statements other than statements of historical fact are forward-looking statements. In particular, this press release contains forward-looking statements pertaining to the Annual and Special Meeting of Shareholders scheduled for August 31, 2011, use of funds expected to made available as a result of the Recapitalization, reduction in the debt burden, the implementation of the work program on its Tanzanian properties, the consolidation of its common shares, and the name change of the Company to 'Valiant Gold Corporation'.
Undue reliance should not be placed on forward-looking statements, which are inherently uncertain, are based on estimates and assumptions, and are subject to known and unknown risks and uncertainties (both general and specific) that contribute to the possibility that the future events or circumstances contemplated by the forward-looking statements will not occur. Assumptions are based in part on the future capital expenditure levels, the ability to secure regulatory approval; future commodity prices, particularly those in respect to gold; geopolitical stability in Tanzania; the ability to obtain equipment in a timely manner to carry out development activities; and the impact of increasing competition.
Although the Company believes that the expectations reflected in the forward looking statements contained in this press release, and the assumptions on which such forward-looking statements are made, are reasonable, there can be no assurance that such expectations will prove to be correct. Readers are cautioned not to place undue reliance on forward-looking statements included in this document, as there can be no assurance that the plans, intentions or expectations upon which the forward-looking statements are based will occur. These risks and uncertainties include, among other things, the following: volatility in market prices for gold; incorrect assessment of the value of the Company's properties; general economic conditions in Canada; and the other factors. Readers are cautioned that this list of risk factors should not be construed as exhaustive.
The forward-looking statements contained in this news release are made as of the date hereof and the Company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, except as required by applicable law. The forward-looking statements contained herein are expressly qualified by this cautionary statement.
Lakota Resources Inc.
Marc Cernovitch
Phone: (647) 203-7868
Colin Taylor
Phone: (306) 664-4626
