VANCOUVER, BC--(Marketwired - November 18, 2014) - Prominex Resource Corp. (the "Company" or "Prominex") (TSX VENTURE: PXR) announced that as a result of a review by the British Columbia Securities Commission, we are issuing the following press release to clarify the disclosure of our activities in the medical marijuana and hemp industries.
Activities of the Company
On March 25, 2014, the Company announced its intention to evaluate projects with these industries. See new releases March 25 and May 30, 2014 at www.sedar.com and www.prominex.ca. On March 31, 2014, Prominex incorporated a wholly owned subsidiary under the BC Company Act called Cannabinoid Capital Corporation ("Cannabinoid"). Cannabinoid was incorporated to acquire a project of merit; if, as, or when identified during our evaluation of this industry. To date, Prominex's capital expenditures have been under $5,000 for the incorporation of Cannabinoid and associated legal fees. The registered office of Cannabinoid is 1001, 1010 Howe Street Vancouver, BC, V6Z 1P5.
- the company clarifies, that it is not a licensed producer, and it has no intention to file an application with Health Canada to become a licensed producer under the Marijuana for Medical Purposes Regulations;
- the company continues to be in the initial evaluation phase only, and has not entered into any preliminary or definitive form of agreement that would result in the company entering the medical marijuana or hemp industries, nor can there be any assurance that such an agreement will be reached in the future;
- any transaction to acquire a medical marijuana or hemp business will be subject to the approval of the board of directors of the company, its shareholders and the TSX Venture Exchange, none of which has occurred as of the present date;
- The company will provide further updates as required.
RISKS AND UNCERTAINTIES OF THE MEDICAL MARIJUANA AND HEMP INDUSTRIES
The company cautions investors to carefully consider the risks and uncertainties associated with these industries during an evaluation of the Company or any other company that it may invest in or acquire.
Reliance on Licence
The licensing requirements mandated by Health Canada are stringent and must be complied with before any licence is granted by Health Canada under the MMPR, including;
- the significant infrastructural requirements of attaining and maintaining a licence (such as an indoor growing facility with physical barriers, visual monitoring, recording devices, intrusion detection, air filtration systems, as well as other important controls around distribution and access),
- a facility meeting the rigorous licensing requirements of Health Canada must be available for inspection by Health Canada before any license can be granted,
- once a license is issued, a holder of a producer license must comply with a number of ongoing requirements, including (i) physical security and storage measures, (ii) good production practices, and (iii) proper packaging, labelling and shipping practices, and
- in order to obtain and maintain a license, a licensee must ensure that it complies with the terms of its other permits and ancillary licenses such as the import or export permit from the Minister of Health, and;
- ensure that all of its management and designated personnel have passed the security clearance provided for under MMPR.
There can be no guarantee that Health Canada will issue, extend or renew the License or, if it is extended or renewed, that it will be extended or renewed on the same or similar terms. Failure to comply with the requirements of the license or any failure to maintain this license would have a material adverse impact on the business, financial condition and operating results of the Company or any company that it may invest in or acquire.
Change in Laws, Regulations, and Guidelines
The Company's operations are subject to a variety laws, regulations and guidelines relating to the manufacture, management, transportation, storage, and disposal of medical marijuana and hemp but also including laws and regulations relating to health and safety, the conduct of operations and the protection of the environment. Any delays in obtaining, or failure to obtain regulatory approvals would significantly delay the development of markets and products and could have a material adverse effect on the business, results of operations and financial condition of the Company or any company that it may invest in or acquire.
Limited Operating History
The Company and any company that it may invest in or acquire is subject to many of the risks common to early-stage enterprises, including under-capitalization, cash shortages, limitations with respect to personnel, financial, and other resources and lack of revenues. There is no assurance that the Company will be successful in achieving a return on shareholders' investment and the likelihood of success must be considered in light of the early stage of operations.
The Company and any company that it may invest in or acquire will require financing for the building and operation of facilities and business, which are capital intensive. In order to execute on an anticipated growth strategy, the Company will require equity and/or debt financing to support start up and on-going operations, to undertake capital expenditures or to undertake acquisitions or other business combination transactions. There can be no assurance that additional financing will be available to the Company when needed, if ever, or on terms which are acceptable. The Company's inability to raise financing to support on-going operations or to fund capital expenditures or acquisitions would limit the Company's plans and would have a material adverse effect start-up and planned operations.
TSX Venture Exchange Approval Required and Possible Restrictions on Business of the Issuer
There is no guarantee that the TSX Venture Exchange would approve any transaction of the Company to invest in or acquire a project in the medical marijuana and or hemp industries. The Company or any Company that it may invest in or acquire would require the conditional approval of the TSX Venture Exchange prior to the finalization of any acquisition and or agreement. As part of its conditional approval, the Exchange may require as a condition to listing that the Company deliver an undertaking confirming that, while listed on the Exchange, the Issuer will only conduct the business of production, acquisition, sale and distribution of medical marijuana or hemp in Canada as permitted under the Health Canada License.
Any undertaking could have an adverse effect on the Issuer's ability to expand its business into other areas including the provision of non-medical marijuana in the event that the laws were to change to permit such sales. Any undertaking may prevent the Issuer from expanding into new areas of business when the Issuer's competitors have no such restrictions. All such restrictions could materially and adversely affect the growth, business, financial condition, and results of operations of the Issuer.
Other Risk Factors
Other risk factors that should be carefully considered in evaluating the Company or any Company that it may invest in or acquire are; the Reliance on a Single Facility, Reliance on Management, Factors which may Prevent Realization of Growth Targets, Competition, Risks Inherent in an Agricultural Business, Vulnerability to Rising Energy Costs, Transportation Disruptions, Unfavourable Publicity or Consumer Perception, Product Liability, Product Recalls, Reliance on Key Inputs, Dependence on Suppliers and Skilled Labour, Difficulty of Forecast, Operating Risk and Insurance Coverage, Conflicts of Interest, Litigation, and Environmental and Employee Health and Safety Regulations.
There can be no assurance that any one of these risk factors would not impact the Company's ability to fund capital expenditures or acquisitions associated with the medical marijuana and hemp industries and would limit and may have a material adverse effect on start-up and planned operations.
Prominex is a TSX-Venture listed exploration and development company trading under the symbol "PXR." During the past several years, Prominex has been exploring primarily for zinc-lead-copper-silver-gold mineral deposits. Currently, Prominex is evaluating two projects within a base metal rich area of central Newfoundland, home to formerly producing world-class base metal deposits at Buchans and the currently producing Duck Pond zinc-copper mine owned and operated by Teck. The Company's two major assets are the historic Tulks Hill and the Reid Lot 50 projects, both situated in central Newfoundland.
ON BEHALF OF THE BOARD
President and CEO
Neither the TSX-V nor its Regulation Services Provider (as that term is defined in the policies of the TSX-V) accepts responsibility for the adequacy or accuracy of this release, and no securities regulatory authority has approved or disapproved of the contents of this release.