Terraco Gold to Acquire Western Standard Metals
November 01 2010 - 2:47PM
Marketwired
Terraco Gold Corp. (TSX VENTURE: TEN) ("Terraco" or the "Company")
and Western Standard Metals Ltd. (TSX VENTURE: WSM) ("Western") are
pleased to announce that the companies have entered into a binding
letter agreement dated October 29, 2010 (the "Letter Agreement"),
providing for Terraco to acquire all of the outstanding securities
of Western in an all-share transaction, by way of a plan of
arrangement.
Under the plan of arrangement, Western shareholders will receive
0.75 common shares of Terraco for each Western common share held.
The outstanding Western warrants will be adjusted so that, upon
exercise subsequent to completion of the transaction, for each
Western share that would previously have been issued, the
warrantholder will receive 0.50 of a common share of Terraco. In
accordance with their terms, the outstanding options to purchase
Western shares will be adjusted so that, upon exercise subsequent
to completion of the transaction, for each Western share that would
previously have been issued, the optionholder will receive 0.75 of
a common share of Terraco. Based on the currently issued and
outstanding common shares of Western, Terraco will issue
approximately 38.41 million common shares to acquire all of the
currently outstanding Western common shares and approximately 22.75
million Terraco warrants and options to acquire all of the
currently outstanding Western warrants and options. As a result,
Western shareholders will hold approximately 40% of the combined
entity. The post-merger issued and outstanding common shares of
Terraco will be approximately 102.43 million. The transaction has
been approved and recommended by the Board of Directors of each
company.
The transaction is to be effected pursuant to a court approved
plan of arrangement under the Business Corporations Act (British
Columbia), which will require approval of at least 662/3% of the
votes cast by securityholders of Western at a securityholders'
meeting, expected to be held in January, 2010 (the "Meeting"), with
the transaction closing shortly thereafter. Completion of the
transaction is subject to a number of other conditions precedent,
including receipt by Western of a favorable fairness opinion from
an independent financial advisor, due diligence reviews and receipt
of all necessary securityholders, stock exchange, court and
regulatory approvals. Terraco intends to retain the Terraco Gold
Corp. name and trading symbol TEN on the TSX Venture Exchange after
completion of the transaction.
The Letter Agreement sets out the the terms upon which the
proposed acquisition will be implemented and requires that the
parties promptly negotiate a definitive agreement to implement the
acquisition on or before December 6, 2010. Under the Letter
Agreement, both Western and Terraco have agreed to pay the other
party a break fee of $450,000 in certain circumstances.
Full details of the transaction will be included in the
Management Information Circular to be filed with the regulatory
authorities and mailed to Western securityholders in accordance
with applicable securities laws.
Todd Hilditch, Terraco's President and CEO commented that,
"Combining with Western creates a strong platform to implement our
business plan and continue an aggressive exploration program on the
combined companies' advanced and earlier stage properties."
Zahir ("Zip") Dhanani, Western's Chairman, added, "This
transaction delivers excellent value to our shareholders while
allowing them to share in the upside of an impressive portfolio of
exploration projects through their Terraco shares. The Terraco
management team, led by Todd Hilditch, has experience, skills and
access to capital in order to advance its projects into production.
We look forward to our continued involvement as shareholders of
Terraco."
Terraco (TSX VENTURE: TEN) is a junior exploration company with
exploration properties in Nevada, USA. Terraco's Moonlight property
adjoins the Barrick Gold Corp. / Midway Gold Corp. Spring Valley
joint venture.
Western (TSX VENTURE: WSM) is a Canadian based company with a
focus on acquisition, exploration and development of gold
properties in North America. Western recently acquired a 100%
interest in the Almaden Gold Project in Idaho.
This release was prepared by management of Terraco and Western,
who take full responsibility for its contents.
Forward-Looking Statements
This release contains "forward-looking statements" which reflect
the current expectations of the companies. These statements reflect
managements' current beliefs with respect to future events and are
based on information currently available to management.
Forward-looking statements involve significant known and unknown
risks, uncertainties and assumptions. Many factors could cause
actual results, performance or achievements to be materially
different from any future results, performance or achievements that
may be expressed or implied by such forward-looking statements.
Should assumptions underlying the forward-looking statements prove
incorrect, actual results, performance or achievements could vary
materially from those expressed or implied by the forward-looking
statements contained in this release. Although the forward-looking
statements contained in this release are based upon what the
companies believe to be reasonable assumptions, the companies
cannot assure investors that actual results, performance or
achievements will be consistent with these forward-looking
statements. These forward-looking statements are made as of the
date of this release and the companies do not assume any obligation
to update or revise them to reflect new events or
circumstances.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Contacts: Terraco Gold Corp. Todd Hilditch CEO 604-443-3830 or
Toll free: 1-877-792-6688 Terraco Gold Corp. Bryan McKenzie CFO
604-443-3830 or Toll free: 1-877-792-6688 604-682-3860 (FAX)
www.terracogold.com Western Standard Metals Ltd. Zip Dhanani
Chairman 604-604-568-4653 or Toll Free: 1-888-500-4587 604-569-2575
(FAX) www.westernstandardmetals.com
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