CALGARY, Aug. 19 /CNW/ - Tuscany Energy Ltd. ("Tuscany") and Goldmark
Minerals Ltd. ("Goldmark") are pleased to announce that they have entered into
an arrangement agreement pursuant to which Tuscany will acquire, subject to
certain conditions, all of the issued and outstanding shares ("Goldmark
Shares") of Goldmark pursuant to a plan of arrangement (the "Transaction").
Under the terms of the Transaction, Tuscany will issue, in aggregate,
approximately 12.2 million common shares of Tuscany ("Tuscany Shares") to
shareholders of Goldmark based on an exchange ratio of 0.6 Tuscany Shares for
each Goldmark Share. Tuscany is also pleased to announce that it is proceeding
with a rights offering to holders of Tuscany Shares (the "Rights Offering").
The combination of the companies provides Goldmark shareholders with the
opportunity to participate in the potential growth of an oil focused junior
oil and gas company with growth prospects on a Saskatchewan horizontal oil
prospect and provides Tuscany with necessary financing in order to develop its
The Boards of Directors of both Tuscany and Goldmark, each established a
Special Committee comprised of an independent director with a mandate, among
other things, to consider the terms and conditions of the Transaction and to
make a recommendation to their respective Board of Directors in respect of the
Transaction. The Special Committee of the Board of Directors of Tuscany and
Goldmark both recommended that their respective Board of Directors approve the
Transaction. Based on the recommendation of the Special Committee of the Board
of Directors of Tuscany and Goldmark, the Board of Directors of Tuscany and
Goldmark have both unanimously approved the Transaction. Additionally,
Goldmark's Board of Directors has concluded that the Transaction is in the
best interests of its shareholders, and has resolved to recommend that
Goldmark shareholders vote their shares in favour of the Transaction. Closing
is expected to occur in early October 2009, subject to regulatory approval,
approval of Goldmark's shareholders (including minority approval), court
approval and certain other conditions. An information circular outlining the
Transaction will be mailed to Goldmark shareholders in connection with a
meeting of shareholders expected to be held in early October 2009.
Certain Goldmark shareholders, including certain members of the Board of
Directors and officers of Goldmark, representing approximately 35 percent of
the outstanding Goldmark Shares, have entered into lock-up agreements pursuant
to which they have agreed to vote their shares in favor of the Transaction,
subject to certain exceptions. Goldmark has agreed that it will not solicit or
initiate discussions regarding any other business combination or sale of
material assets. Goldmark has also granted Tuscany a right to match competing
unsolicited proposals. The arrangement agreement in respect of the Transaction
provides for a $200,000 termination fee payable by either of Goldmark or
Tuscany in certain circumstances if the Transaction is not completed.
Northern Securities Inc. is acting as exclusive financial advisor to
Goldmark with respect to the Transaction and has advised the Board of
Directors of Goldmark that it is of the opinion, as of the date hereof, and
subject to review of the final documentation, that the consideration to be
received by the Goldmark shareholders pursuant to the Transaction is fair,
from a financial point of view, to the disinterested Goldmark shareholders.
Certain of the current directors of Goldmark, being Peter Barker, Glen
Phillips and Jorg Reich, will be nominated as directors of Tuscany at
Tuscany's next annual general meeting, the election of such nominees to be
made subject to the successful completion of the Transaction.
The Rights Offering:
Pursuant to the Rights Offering, holders of Tuscany Shares of record on
September 2, 2009 (the "Record Date") will receive one right (a "Right") for
each Tuscany Share held. For every four Rights held a holder thereof will be
entitled to purchase one Tuscany Share at a price of $0.06 per Tuscany Share.
Tuscany shareholders will also have the opportunity to acquire additional
Tuscany Shares beyond their entitlement through an additional subscription
privilege. Details as to the additional subscription privilege are described
in the Rights Offering Circular to be mailed to shareholders in connection
with the Rights Offering (the "Rights Offering Circular"). Pursuant to the
Rights Offering, a maximum of approximately 8,691,959 Tuscany Shares will be
issued which represents 25% of the currently issued and outstanding Tuscany
The Rights will expire at 10:00 a.m. (Calgary time) on October 1, 2009.
Tuscany has received conditional approval for listing of the Rights and the
Tuscany Shares to be issued upon exercise of the Rights on the TSX Venture
Exchange (the "TSXV"). As the Transaction with Goldmark is scheduled to close
after the Record Date, holders of Goldmark Shares will not be entitled to
participate in the Rights Offering in respect of Tuscany Shares received by
such holders pursuant to the Transaction. The net proceeds of the Rights
Offering are anticipated to be used to reduce Tuscany's bank debt, which will
allow the Corporation to use its cash flow, if any, to finance exploration and
future development of petroleum and natural gas prospects in western Canada.
Humboldt Capital Corporation has indicated its intention to subscribe for
up to 6,000,000 Tuscany Shares, if available under the Rights Offering.
Completion of the Rights Offering is subject to receipt of all necessary
regulatory approvals. For full details of the Rights Offering please see the
Rights Offering Circular which will be available on SEDAR at www.sedar.com.
Issuance of the Tuscany Shares pursuant to the Rights Offering is not
conditional or subject to completion of the Transaction and completion of the
Transaction is not subject to or conditional upon the number of Tuscany Shares
issued pursuant to the Rights Offering. After giving effect to the Transaction
and assuming the Rights Offering is fully subscribed, Tuscany will have
approximately 55.7 million Tuscany Shares issued and outstanding.
Forward Looking Statements
Certain statements contained in this press release constitute
forward-looking statements. The use of any of the words "anticipate",
"continue", "estimate", "expect", "may", "will", "project", "should",
"believe" and "confident" and similar expressions are intended to identify
forward-looking statements. These statements involve known and unknown risks,
uncertainties and other factors that may cause actual results or events to
differ materially from those anticipated in such forward-looking statements.
Goldmark believes that the expectations reflected in those
forward-looking statements are reasonable but no assurance can be given that
these expectations will prove to be correct and such forward-looking
statements included in this press release should not be unduly relied upon.
These statements speak only as of the date of this press release. Goldmark
undertakes no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or
otherwise, except as expressly required by applicable securities laws.
Where amounts are expressed on a barrel of oil equivalent (boe) basis,
natural gas volumes have been converted to barrels of oil at six thousand
cubic feet (mcf) per barrel (bbl). Boe figures may be misleading, particularly
if used in isolation. A boe conversion of six thousand cubic feet per barrel
is based on an energy equivalency conversion method primarily applicable at
the burner tip and does not represent a value equivalency at the wellhead.
References to oil in this discussion include crude oil and natural gas liquids
For further information:
For further information: Peter Barker, Chief Executive Officer, GOLDMARK
MINERALS LTD., Telephone: (403) 299-0357, Fax: (403) 216-9260, TSX-V: GMK,
Website: www.goldmarkminerals.com; John G.F. McLeod, President, TUSCANY ENERGY
LTD., Telephone: (403) 264-2398, Fax: (403) 261-4072, TSX-V: TUS,
Website:www.tuscanyenergy.com; Robert W. Lamond, Chairman of the Board,
GOLDMARK MINERALS LTD. & TUSCANY ENERGY LTD., Telephone: (403) 269-9889, Fax: