VANCOUVER, April 8 /CNW/ - The Pacific Road Resources Funds ("PRRF") are pleased to announce that, further to the press release issued by Bayswater Uranium Corporation (the "Company") on March 3, 2010, PRRF has executed a definitive investment agreement (the "Investment Agreement") with the Company and its subsidiary, Bayswater Holdings Inc. ("BHI") and, pursuant to the Investment Agreement, subscribed for common shares of a wholly-owned subsidiary of BHI ("Newco"), which has indirectly acquired a 100% interest in the Reno Creek Property (the "Property"), an acquisition previously announced by the Company.
No shares of the Company were acquired in the transaction.
PRRF will be entitled to exchange its shares in Newco for common shares of the Company at any time up to six months following the later of the completion of a feasibility study on the Property or receipt of all required permits for production, but in any event not later than the fifth anniversary after closing. Conditional upon receipt of shareholder approval for PRRF to become a "control person" of the Company, PRRF's investment in Newco will be exchangeable into common shares of the Company, at PRRF's discretion, either:
(a) (i) as to PRRF's initial capital contributions into Newco at closing,
at a price of $0.60 per share; (ii) as to subsequent PRRF
contributions into Newco prior to such time as PRRF and the Company
each hold a 50% interest in Newco, at a price equal to the 30 day
volume weighted average price of the Company's shares calculated to
the day of contribution, provided that such price shall not be more
than $0.60 per share and (iii) as to subsequent PRRF contributions
into Newco following the date on which the Company and PRRF each hold
a 50% interest in Newco, at a price equal to the 30 day volume
weighted average price of the Company's shares calculated to the day
of contribution; or
(b) at an amount defined by multiplying the market capitalization of the
Company, calculated using the 30 day volume weighted average price of
the common shares of the Company on the date PRRF elects to convert
by the percentage interest of the overall equity value of the Company
represented by 100% of Newco (and thereby the Property), and further
multiplied by the percentage interest held by PRRF in Newco, all
divided by the greater of the 30 day volume average price of the
common shares of the Company on the TSX-V or $0.60.
As the number of shares of the Company issuable to PRRF is contingent, in part, upon future values and share prices, the number of such shares which PRRF may acquire should it exercise its exchange rights, cannot be determined at this time. However, assuming exchange of PRRF's initial contributions to Newco at a rate of $0.60 per Company common share, PRRF would be entitled to receive in respect of its Newco common shares, approximately 33,373,300 Company common shares (based on a conversion rate of $1.0012 for USD$1.00, being the Bank of Canada noon-day rate on April 6, 2010). After giving effect to the subscription and assuming full exchange of PRRF's Newco common shares, PRRF will hold approximately 33,373,300 common shares in the Company or approximately 55.95% of the common shares of the Company on a fully-diluted basis.
The Company and PRRF will enter into a shareholders' agreement in respect of Newco which will permit Bayswater to contribute additional amounts to Newco in order to achieve a 50% ownership interest. In addition, the parties have agreed to appoint Bayswater as the initial project manager. The shareholders' agreement also provides on for equal representation on the board of Newco, subject to adjustment, as well as unanimous shareholder approval for certain key decisions including annual work programmes and budgets for the Property. If the shareholder approval for PRRF to become a control person of the company is not obtained, PRRF will have a call right to purchase all of Bayswater's shares in Newco.
PRRF purchased the Newco common shares for investment purposes and may or may not exchange its Newco common shares for Company common shares and may or may not purchase or sell securities of the Company in the future on the open market or in private transactions, depending on market conditions and other factors.
A copy of the early warning report filed in connection with the investment is available on the Company's profile on SEDAR at www.sedar.com or may be obtained by contacting (Greg Dick) at +61 2 9241 1000.
About Pacific Road Resources Funds and Pacific Road Capital Management Pty Limited
The Pacific Road Resources Funds are private equity funds investing in the global mining industry. They provide expansion and buyout capital for mining projects, mining related infrastructure and mining services businesses located throughout resource-rich regions of the world. The Pacific Road Resources Funds are managed or advised by Pacific Road Capital Management Pty Ltd ("PRCM"). The PRCM team, located in Sydney, Australia, San Francisco and New York, USA, is comprised of experienced mining investment professionals that have extensive knowledge and experience in the mining and infrastructure sectors, including considerable operating, project development, transactional and investment banking experience.
SOURCE PACIFIC ROAD RESOURCES FUNDS
For further information: For further information: on the Pacific Road Resources Funds and PRCM, please go to their website at www.pacroad.com.au.