Reservoir Capital Announces Spin-Out of Mineral Exploration Assets

Reservoir Capital Announces Spin-Out of Mineral Exploration Assets

Reservoir Capital Corp. is pleased to announce that it has entered into a letter of intent dated March 24, 2011 regarding the proposed re-organization of its business components into two separately listed public corporations by the spin-out of certain Serbian mineral exploration permits to a new corporation, Reservoir Minerals Inc. (“Minerals”), by means of a plan of arrangement pursuant to the British Columbia Business Corporations Act (the “Spin-out Transaction”). The objective of the Spin-out Transaction is to maximize shareholder value by allowing the market to independently value the Company’s renewable energy projects and mineral exploration business. In addition to allowing the Company to continue to focus efforts on its renewable energy projects, the Company is confident that having a dedicated management team and funding for the mineral exploration business will accelerate development of existing mineral projects and give scope for new acquisitions.

The Spin-out Transaction will result in Minerals being a separate exploration company focused on Serbian mining exploration holding the following Serbian mineral exploration permits:

1. the Stara Planina Exploration Permit;

2. the Plavkovo Exploration Permit;

3. the Lece Exploration Permit;

4. the Parlozi Exploration Permit;

5. the Bobija Exploration Permit;

6. the Jasikovo-Durlan Potok Exploration Permit;

7. the Brestovac-Metovnica Exploration Permit; and

8. the Deli Jovan Exploration Permit

Transaction Terms

Under the proposed Spin-out Transaction, shareholders of the Company on the record date for the Spin-out Transaction would be entitled to receive their pro rata portion of 9,000,000 common shares of Minerals (“Minerals Share”) to be issued pursuant to the Spin-out Transaction. It is currently contemplated that the plan of arrangement will be structured as a return of capital for Reservoir shareholders.

Upon closing of the Spin-out Transaction, the board of directors of Minerals is anticipated to consist of up to 5 directors, including Simon Ingram (previously a director of the Company), Miles Thompson (the Executive Chairman of the Company), Chris MacIntyre (Vice President of Corporate Development of the Company) and Miljana Vidovic (President and Chief Executive Officer of the Company). Additionally, it is currently intended that the composition of the officers of the Corporation will consist of Simon Ingram as President and Chief Executive Officer, Chris MacIntyre as Vice President Corporate Development and Aleksandar Obrenovic as Vice President Exploration. The current directors of Minerals are Miles Thompson, Simon Ingram and Chris MacIntyre. Simon Ingram currently serves as the President and Chief Executive Officer of Minerals. The Company will continue to pursue the acquisition and development of renewable energy projects. The Company’s current board will continue in its capacity.

Dr. Ingram was a founding director of Reservoir Capital and has 20 years international experience in the exploration and mining industry. He is the founder and principal of a resource services firm, through which he has provided technical and managerial expertise to exploration and mining companies world-wide, throughout the project cycle from early-stage exploration projects to feasibility studies, mine start up and production. Projects that Dr. Ingram has been a consultant and advisor to include; Petropavlovsk Plc, a London-listed mining and exploration company with its principal assets located in Russia, Anglo American Zambia copper mine production and expansion, Rio Tinto Technical Services for resource definition to mine start up in the Middle East and the resource expansion, mining start up and subsequent sale of a polymetallic mine in Armenia for a private Swiss company. Dr Ingram holds a B.Sc. (Hon) in Exploration and Mining Geology and Ph.D in Mineral Resource Evaluation from Cardiff University.

It is anticipated that the Spin-out Transaction will take three to four months to complete. The implementation of the Spin-out Transaction is subject to, among other things: further board of directors approval by each of the Company and Minerals of the final structure and terms and the arrangement agreement to be entered into with Minerals, shareholder, court and regulatory approvals, including TSX Venture Exchange acceptance of the Spin-out Transaction, and the continued listing of the Company’s common shares on the TSX Venture Exchange and conditional listing approval of Mineral Shares. No application for listing has been made and there is no assurance that if made that approval will be granted. The TSX Venture Exchange has not approved or disapproved the Spin-out Transaction and there is no assurance that the TSX Venture Exchange will approve the Spin-out Transaction.

The Company will hold a special meeting of shareholders to approve the Spin-out Transaction. Further particulars, including the record and meeting dates, will be announced in due course and a complete description of the Spin-out Transaction will be set forth in a management information circular to be sent to shareholders of the Company in connection with the special meeting to approve the Spin-out Transaction.

In connection with the Spin-out Transaction, Minerals intends to complete a non-brokered private placement raising gross proceeds of up to $7,020,000 by the issuance of up to 10,800,000 subscription receipts (“Subscription Receipts”) of Minerals at a price of $ 0.65 per Subscription Receipt, subject to Minerals’ right to increase such offering up to a maximum of $10,000,000 in Subscription Receipts based on subscriber demand. Each Subscription Receipt shall entitle the holder to receive, without the payment of any additional consideration or further action, in certain circumstances, one unit (“Unit”) in the capital of Minerals, each Unit comprised of one Minerals Share and one Minerals Share purchase warrant (“Warrant”) whereby each Warrant will entitle the holder to acquire one additional Minerals Share at: (i) an exercise price of $0.90 for the first year following the issuance of the Units, and (ii) an exercise price of $1.00 for the second year following the issuance of the Units; subject to accelerated expiry in certain circumstances. Minerals may issue Units to registered dealers equal to up to 4% of the aggregate number of Units issued pursuant to the conversion of Subscription Receipts sold.

On completion of the Spin-out Transaction, it is anticipated that Minerals will have approximately 22 million Minerals Shares outstanding, prior to any increase in the offering of Subscription Receipts and exercise of Warrants and options to purchase Minerals Shares. Minerals presently has 1,900,100 Minerals Shares outstanding issued for aggregate proceeds of $190,010 to persons who will be integrally involved in the business including Serbian residents.

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