Panorama Resources Ltd. announces terms of Ethiopian Potash Corp.'s concurrent private placement financing and update on proposed reverse takeover

VANCOUVER, Jan. 28 /CNW/ - Panorama Resources Ltd. (TSXV:PRA) ("Panorama" or the "Company"), is pleased to announce the terms of Ethiopian Potash Corp.'s ("EPC") private placement of subscription receipts, to be completed prior to and as a condition to the completion of the proposed amalgamation of Panorama and EPC (the "Amalgamation"), as previously announced in the Company's press release dated October 26, 2010.

The Company has set Friday, February 25, 2011 as the date of its special meeting of shareholders to consider the Amalgamation and related transactions. A management information circular detailing the transaction and matters for shareholder consideration will be mailed next week.

The Amalgamation and related transactions remain subject to the receipt of all applicable shareholder and regulatory approvals.

EPC's Private Placement

EPC has entered into an engagement letter with BayFront Capital Partners Inc. pursuant to which EPC proposes to complete a brokered private placement (the "EPC Private Placement") of subscription receipts of EPC for gross proceeds of up to $11 million to EPC. Each subscription receipt being offered at a price of $0.50 will be convertible into one unit of EPC ("EPC Unit"), as detailed below. The EPC Private Placement is expected to be completed next week, and in any event, prior to and as a condition to the completion of the Amalgamation.

Gross proceeds from the EPC Private Placement will be deposited with and held in escrow by the subscription receipt agent until the satisfaction of certain release conditions ("Escrow Release Conditions"), including the receipt of all regulatory approvals required to complete the Amalgamation.

Following the satisfaction or waiver of the Escrow Release Conditions, each EPC subscription receipt will entitle the holder thereof to receive, automatically and without payment of additional consideration, one EPC Unit. Each EPC Unit will be comprised of one EPC common share ("EPC Common Share") and one EPC common share purchase warrant ("EPC Warrant") entitling the holder thereof to acquire one EPC Common Share at an exercise price of $0.75 for a period of 18 months from the date of the satisfaction of the Escrow Release Conditions.

Upon completion of the Amalgamation, the EPC Common Shares and the EPC Warrants comprising the EPC Units will be exchanged for common shares (each, a "Resulting Issuer Common Share") of the resulting issuer and warrants of the resulting issuer (the "Resulting Issuer Warrants"), respectively, in accordance with the terms and conditions of the Amalgamation. Conditional on the completion of the Amalgamation, each Resulting Issuer Warrant will entitle the holder thereof to receive, upon exercise of the Resulting Issuer Warrant within 18 months of satisfaction of the Escrow Release Conditions and payment of the $0.75 exercise price, one additional Resulting Issuer Common Share, subject to the terms set forth in the certificate representing the Resulting Issuer Warrant.

The net proceeds of the EPC Private Placement will be used to meet expenditure requirements of the resulting issuer post-Amalgamation, as will be described in the management information circular of the Company that will be sent to shareholders in the coming weeks.

In the event the Escrow Release Conditions are not met prior to 5:00 p.m. (Toronto time) on the date that is 45 days following the closing of the EPC Private Placement (the "Release Deadline"), the subscription receipt agent shall return the subscription proceeds held by it to each holder of EPC subscription receipts on a pro rata basis, following which such EPC subscription receipts shall be automatically cancelled and be of no further force and effect.

Fees Payable to Agents

BayFront Capital Partners Ltd., Salman Partners Inc. and Fraser Mackenzie Limited (collectively, the "EPC Agents") will, upon satisfaction of the Escrow Release Conditions, receive a cash commission equal to 7% of the aggregate gross proceeds of the EPC Private Placement and that number of EPC broker warrants (each, an "EPC Broker Warrant") equal to 8% of the number of EPC subscription receipts sold in the EPC Private Placement.  Each EPC Broker Warrant will be exercisable to acquire one EPC Unit, comprised of one EPC Common Share and one EPC Warrant, at an exercise price of $0.50 for a period of 18 months from the closing date of the EPC Private Placement. 

Upon completion of the Amalgamation, any unexercised EPC Broker Warrants will be exchanged for broker warrants of the resulting issuer having the same terms and conditions as the EPC Broker Warrants and any EPC Common Shares and EPC Warrants issued upon the exercise of EPC Broker Warrants prior to the completion of the Amalgamation will be exchanged for Resulting Issuer Common Shares and Resulting Issuer Warrants, respectively, on the same terms as set out above, all in accordance with the terms and conditions of the Amalgamation.

The EPC Agents will also be reimbursed for their reasonable expenses.

Other EPC financing

On January 3, 2011, EPC closed a $1,000,000 financing (the "Financing") of units of EPC with an arm's length party at $0.50, resulting in the issuance of 2,000,000 EPC Common Shares and 2,000,000 EPC warrants entitling the holder to acquire one EPC Common Share at an exercise price of $0.75 for a period of 18 months from closing.  In connection with the Financing, EPC paid a finder's fee equal to 7% of the aggregate gross proceeds of the Financing and that number of EPC finder's warrants ("EPC Finder's Warrants") equal to 8% of the number of units of EPC sold pursuant to the Financing.  Each EPC Finder's Warrant is exercisable to acquire one unit of EPC, having the same terms and conditions as the units issued pursuant to the Financing, at an exercise price of $0.50 for a period of 18 months from closing.  Upon completion of the Amalgamation, all of the securities issued pursuant to the Financing will be exchanged for securities of the resulting issuer having the same respective terms and conditions, all in accordance with the terms and conditions of the Amalgamation. 

Update on G&B Option Agreement

On December 1, 2010, EPC, G and B Central African Resources Ltd. ("G&B") and the shareholders of G&B amended certain payment terms of the option agreement (the "Option Agreement") dated September 7, 2010, as amended and restated as of October 18, 2010.

The amendment to the Option Agreement provides that all payments that were to be made to or to the order of the shareholders of G&B under the Option Agreement shall now be split equally between: (i) the shareholders of G&B, payable to or to the order of such shareholders, in the first part; and (ii) Jalata Moa Inc., Hirmata Inc., Cambremont S.A. and XPCT S.A., in the second part, as consideration for their respective roles in reorganizing, financing and developing the business of G&B, except for the $500,000 cash payment payable on closing of the option, which shall be paid exclusively to or to the order of the G&B shareholders. As previously disclosed, such payment may be made in additional shares of the resulting issuer at a deemed price per share of $0.50 at the election of the G&B shareholders. The aggregate amounts payable under the Option Agreement remain the same.

Sponsorship

The Company intends to rely on an exemption from the sponsorship requirements of the TSX Venture Exchange.

Forward Looking Statements

Certain information set forth in this press release, including management's assessment of future plans and operations and the completion of the Amalgamation and EPC Private Placement, contains forward looking statements. The use of any of the words "anticipate", "continue", "estimate", "expect", "may", "will", "project", "should", "believe" and similar expressions are intended to identify forward looking statements. By their nature, forward looking statements are subject to numerous risks and uncertainties, some of which are beyond management's control, including the receipt of third party approvals, including shareholder and regulatory approvals, satisfaction or waiver of the Escrow Release Conditions, impact of general economic conditions, industry conditions, volatility of commodity prices, currency fluctuations, imprecision of reserve or resource estimates, environmental risks, competition from other industry participants, the lack of availability of qualified personnel or management, stock market volatility and ability to access sufficient capital from internal and external sources.

Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward looking statements. Actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward looking statements. No assurance can be given that any of the events anticipated will transpire or occur, or if any of them do so, what benefits will derive from them. Except as required by applicable securities laws, the Company disclaims any intention or obligation to update or revise any forward looking statements, whether as a result of new information, future events or otherwise.

Completion of the transaction is subject to a number of conditions, including TSX Venture Exchange acceptance and disinterested shareholder approval. The transaction cannot close until the requisite shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the Management Information Circular to be prepared in connection with the transaction, any information released or received with respect to the RTO may not be accurate or complete and should not be relied upon. Trading in the securities of Panorama Resources Ltd.  should be considered highly speculative.

The TSX Venture Exchange has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.

Neither the 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.


SOURCE Panorama Resources Ltd.

For further information:

Panorama Resources Ltd., Suite 2150-885 West Georgia Street, Vancouver, British Columbia, Canada, V6C 3E8, Telephone: (604) 683-0564, Fax: (604) 602-9311

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Panorama Resources Ltd.

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