Pala announces intention to make offer to Melior Resources shareholders

TORONTO, Sept. 24, 2012 /CNW/ - Pala Investments Limited ("Pala") today announced its intention to make an offer to acquire all of the issued and outstanding common shares of Melior Resources Inc. ("Melior") not already owned by Pala for $0.11 in cash per share (the "Offer").

The offer price represents a premium of approximately 15.8% over the closing market price of the Melior shares on the TSX Venture Exchange on September 21, 2012 and a premium of approximately 16.4% over the 20-day volume weighted average price of the Melior shares on the TSX Venture Exchange.

Pala is supportive of Melior's publicly-disclosed strategy to make strategic investments in small to medium-sized mining opportunities.  However, since Pala is aware that there are Melior shareholders that are not supportive of this approach, Pala intends to make the Offer to give any such shareholders an attractive opportunity, in a highly illiquid stock, to realise immediate value for their holdings.

Pala currently owns approximately 44% of the issued and outstanding common shares of Melior. As such, the Offer will constitute an "insider bid" for purposes of Canadian securities laws and Pala will, in accordance with Multilateral Instrument 61-101 of the Canadian Securities Administrators, include in its offering materials an independent formal valuation of Melior prepared under the supervision of an independent committee of the Melior Board of Directors.

Pala has been advised that the formal valuation has concluded that the value of the Melior shares is in the range of 15.8 to 16.6 cents per share. However, Melior shareholders should note that MI-61-101 requires the valuation to be prepared in a manner that does not include appropriate adjustments to reflect either (i) the illiquidity of the Melior shares, which are so illiquid that the average value of all the shares traded over the past 30 trading days has only been approximately $3,000 per day, or (ii) discounts in view of Pala's 44% ownership stake.

Pala will mail the offering materials containing information concerning the transaction within a few days.

In addition to customary conditions, the Offer will be conditional upon a sufficient number of Melior shares being validly deposited under the Offer and not withdrawn that, combined with the number of Melior shares then owned by Pala and its affiliates, would represent not less than 66 2/3% of the then-outstanding Melior shares, on a fully diluted basis.

About Pala
Pala is a multi-strategy investment company dedicated to investing in, and creating value across the mining sector in both developed and emerging markets. Pala seeks to assist companies in which it has long-term shareholdings by providing strategic advice and innovative financing solutions. For more information, visit www.pala.com.

Forward-Looking Statements
Certain statements in the press release are forward-looking statements and are prospective in nature. Forward-looking statements are not based on historical facts, but rather on current expectations and projections about future events, and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements. These statements generally can be identified by the use of forward-looking words such as ''may'', ''should'', ''will'', ''could'', ''intend'', ''estimate'', ''plan'', ''anticipate'', ''expect'', ''believe'' or ''continue'', or the negative thereof or similar variations.  Such forward-looking statements are based on estimates and assumptions made by Pala in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors that the Pala believes is appropriate in the circumstances, including its expectation of the conclusion as to the market value of the Melior shares to be set out in the formal valuation prepared in connection with the Offer, the timing, and the terms and benefits of the proposed Offer.  Many factors could cause the actual results, performance or achievements to differ materially from those expressed or implied by the forward-looking statements, including, without limitation, general business and economic conditions; the failure to meet certain conditions of the Offer; claims asserted against Pala; and legislative and/or regulatory changes or actions. Such forward looking statements should therefore be construed in light of such factors, and Pala is not under any obligation, and expressly disclaims any intention or obligation, to update or revise any forward looking statements, whether as a result of new information, future events or otherwise.

Where to Find Additional Information About the Proposed Offer
This press release is neither an offer to purchase securities nor a solicitation of an offer to sell securities of Melior. At the time the expected offer is commenced, Pala will file an offer and take-over bid circular with the Canadian securities regulatory authorities and Melior will subsequently file a directors' circular with respect to the offer within the time period permitted by applicable law. Melior shareholders are strongly advised to read the offer documents (including the offer and take-over bid circular, letter of transmittal and related documents) and the related directors' circular when they become available because they will contain important information.  At that time, Melior shareholders may obtain a copy of the offer and take-over bid circular, the related letter of transmittal and certain other offer documents, as well as the directors' circular at www.sedar.com.


SOURCE: Pala Investments Holdings Limited

For further information:

Pala Investments
Janet Darling
+41-41-560-9070

Profil de l'entreprise

Pala Investments Holdings Limited

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