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GSEh General Strategies hammers away at Landdrill RTO

2004-09-24 14:56 ET - News Release

Mr. Jeffrey Lightfoot reports

General Strategies Ltd. has provided a progress review on its proposed acquisition of Landdrill Ltd., as previously announced in Stockwatch on May 18, 2004.

The company advises it has raised $4,556,250 through a non-brokered private placement of 9,112,500 units at 50 cents per unit. Each unit will comprise one postsplit common share and one-half share purchase warrant; each whole warrant entitling the holder to acquire one additional postsplit common share of the company for a period of two years at a price of 75 cents. The private placement has not closed, and is expected to close concurrently with TSX Venture Exchange approval of the acquisition. However, in accordance with subscription agreements used, all funds are available to the company for it to loan to Landdrill pending regulatory approval. The company advises that the net proceeds of the private placement have been advanced to Landdrill. In the event the acquisition fails to close, subscribers to the company's private placement will receive shares of Landdrill instead.

Landdrill has used the funds received from the company to finance its acquisition of Can-Asia Drilling Services Ltd. and Eager Logistics Inc., and to repay some of Landdrill's existing loans. The balance of approximately $363,750 of existing loans owing to certain lenders by Landdrill will be converted into the company's shares on the basis of 50 cents per share. However, should the acquisition fail to close, some or all of the repaid Landdrill loans may be converted back into equity of Landdrill.

Can-Asia carries on mineral exploration drilling operations in Mongolia. Since 1996, Can-Asia has operated as a contract drilling company in Mongolia. For the year-ended Dec. 31, 2003, Can-Asia had revenue in excess of $9-million (Canadian) (or $7-million (U.S.)) (unaudited). Landdrill intends to expand Can-Asia's business in Mongolia and expand its operations in Asia and Canada. Management believes current operations are significant enough for the company to be able to meet the listing requirements of the Toronto Stock Exchange and upon receiving the most recent audited financial statements from Can-Asia, the company intends to make application to list directly on the TSX.

The company has engaged Haywood Securities Inc. to sponsor the listing application.

In accordance with TSX-V policy, the company's shares are currently halted from trading. As the contemplated acquisition constitutes a reverse takeover under TSX-V policies, trading of the company's shares will remain halted until the company's sponsor has made adequate filings with the TSX-V in respect to the reverse takeover.