VANCOUVER, March 2 /CNW/ - Solex Resources Corp. (TSX-V: SOX) ("Solex" or the "Company") and Homeland Uranium Inc. ("Homeland") are pleased to announce the signing of a Letter of Intent whereby Solex will acquire from Homeland C$4.00 million in cash and approximately 7.619 million common shares of Macusani Yellowcake Inc. ("Macusani") as well as a right to purchase the shares issuable if Homeland exercises up to approximately 4.57 million Macusani warrants (the "Homeland Assets"). As consideration for the Homeland Assets, Solex will issue to Homeland approximately 81.65 million common shares of Solex. The terms of the proposed transaction have been unanimously approved by both companies' Board of Directors. The parties are commencing due diligence immediately and will negotiate a definitive agreement pending completion of due diligence.
"The proposed transaction would result in a well-funded uranium exploration company with a strategic property position in the Macusani uranium district in Peru. We believe that this strategic combination would yield increased value for all shareholders," said Nick Tintor, President and CEO of Homeland.
"We believe this agreement would result in a well funded exploration company and create shareholder value by the addition of new technical expertise and strengthened leadership," stated Jonathan Challis, President of Solex. "We are confident that the resulting company would be better positioned to advance the development of our combined assets and would therefore, ultimately be more attractive to a greater number of potential investors."
Proposed Transaction Highlights
- Major strategic & largest land position in the Macusani uranium
district in Peru.
- Strong balance sheet.
- A 12.7% interest in Macusani Yellowcake (YEL: TSXV).
- 100% owned mobile leach test laboratory.
- Portfolio of lead + zinc +/- silver resource properties in Peru.
Proposed Transaction Details
Pursuant to the Letter of Intent, the proposed transaction is anticipated to be structured as a purchase by Solex of the Homeland Assets. If the transaction proceeds, it would be subject to certain standard conditions including shareholder approval and both companies would plan to hold special meetings to approve the proposed transaction and related matters before the end of May, 2010. Solex shareholders would also be asked to approve a possible share consolidation and name change. The Proposed Transaction would also be conditional on obtaining the agreement of Eldorado Gold Corporation on certain aspects of this transaction.
If a definitive agreement is executed, senior officers and members of the Board of Directors of Solex and Homeland have agreed to support the Proposed Transaction and would enter into lockup agreements comprising approximately 10% and 3% of Homeland and Solex' issued and outstanding shares, respectively, at that time. Details of the offer would be included in a formal definitive agreement and would be described in a Management Information Circular to be filed with the regulatory authorities and mailed to Solex and Homeland shareholders in accordance with applicable securities laws. Under certain circumstances if the Proposed Transaction is not completed, a break fee of $250,000 may be payable by Solex or a reverse break fee of $250,000 may be payable by Homeland Uranium.
If the Proposed Transaction is completed, the resulting Board of Directors would comprise both Solex and Homeland nominees with a representative of Homeland becoming the President and CEO, and a representative of Solex becoming the Chairman.
Homeland has agreed to arrange Tranche 1 of a private placement of up to 6,250,000 units at C$0.08 for gross proceeds of C$500,000 (subject to approval by the TSX Venture Exchange) within 7 days of the execution of the Letter of Intent. Each unit will consist of one common share and one full share purchase warrant. Each full share purchase warrant entitles the holder to purchase, for a period of 18 months from the closing of the private placement, one common share at a price of C$0.15 per share. Within 5 days of the completion of the aforementioned private placement, Solex has the option to complete an additional private placement (Tranche 2) of up to 3,125,000 units for gross proceeds of C$250,000 on the same terms and conditions as Tranche 1. The private placement is not conditional on any aspect of the Proposed Transaction, and the Proposed Transaction is not conditional on the completion of the private placement. The proceeds will be used to advance the exploration and development of Solex's uranium projects in the Macusani Plateau region of Peru and for general corporate purposes.
Solex has engaged Haywood Securities Inc. as its financial advisor and Ogilvy Renault LLP as its legal advisor. Homeland has engaged Cassels Brock & Blackwell LLP as its legal advisor.
About Solex Resources Corp.
Solex Resources Corp. is the dominant landholder in southern Peru's Macusani Uranium District with concessions covering over 904 km(2). The Company is also exploring its other 100% owned proximal Picotani uranium project. NI 43-101 reports were filed during 2008 on the Princesa silver, lead and zinc property and on the Pilunani lead and zinc project.
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.
This news release may contain forward-looking statements that are based on Solex' expectations, estimates and projections regarding its business and the economic environment in which it operates. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to control or predict. Therefore, actual outcomes and results may differ materially from those expressed in these forward-looking statements and readers should not place undue reliance on such statements. Statements speak only as of the date on which they are made, and the Company undertakes no obligation to update them publicly to reflect new information or the occurrence of future events or circumstances, unless otherwise required to do so by law.
SOURCE SOLEX RESOURCES CORP.
For further information: For further information: Investor Relations, Joanna Longo, Vice President, The Equicom Group, (416) 815-0700 ext. 233, firstname.lastname@example.org; Jonathan Challis, President and Director, (604) 646-7210, email@example.com, www.solexresources.com