/THIS NEWS RELEASE AND THE INFORMATION CONTAINED HEREIN ARE NOT FOR
DISTRIBUTION IN THE UNITED STATES/
VANCOUVER, May 26 /CNW/ - EurOmax Resources Ltd. ("EurOmax") (TSX-V: EOX)
and Silk Road Resources Ltd. ("Silk Road") (TSX-V: SIL) today announced that
they have entered into a definitive agreement (the "Combination Agreement")
pursuant to which EurOmax and Silk Road will combine by way of a plan of
arrangement (the "Arrangement") further to the business combination announced
by the companies on February 23, 2009. In the Arrangement, each outstanding
common share of Silk Road will be exchanged for 2.2535 common shares of
EurOmax and Silk Road will become a wholly-owned subsidiary of EurOmax.
Based on the 10-day volume-weighted average price of EurOmax's common
shares of Cdn$0.174 on the TSX Venture Exchange (the "TSX-V") as at May 15,
2009, the transaction value per Silk common share is Cdn$0.39. This represents
a premium of 57.7% based on the 10-day volume-weighted average price of both
companies' common shares on the TSX-V as at May 15, 2009. The board of
directors of both companies have unanimously supported the Arrangement and
recommend their shareholders vote their shares in favour of the business
Shareholders holding approximately 40% of the outstanding shares of Silk
Road and approximately 29% of the outstanding shares of EurOmax have agreed to
enter into agreements to vote in favour of the Arrangement.
Highlights of the Transaction:
- Combined company will have a broader asset base and capitalization
and stronger balance sheet.
- Combined company can take advantage of operating synergies and
efficiency, and eliminate the duplication of public company costs.
- Shareholders of both companies will have a broader share trading
market with potential for greater liquidity.
- Combined company will have a highly experienced management team and
current directors of both companies will be represented on the board
of directors of the combined company.
The Business Combination
The Arrangement is subject to approval by the shareholders of EurOmax and
the shareholders of Silk Road. Full details of the Combination Agreement and
the Arrangement will be included in the Management Information Circulars of
each of EurOmax and Silk Road to be filed with the regulatory authorities and
mailed to EurOmax and Silk Road shareholders, respectively, in accordance with
applicable securities laws.
Under the transaction, EurOmax will acquire all of the issued and
outstanding shares of Silk Road in consideration for the issue of EurOmax
common shares on the basis of 2.2535 EurOmax common shares for each Silk Road
common share. The outstanding options and warrants of Silk Road will be deemed
to be exchanged for EurOmax options and warrants, adjusted based on the
aforementioned exchange ratio.
On a pro forma basis, the combined company will be held by approximately
48% of existing EurOmax shareholders and 52% by existing Silk Road
shareholders. The total number of EurOmax common shares outstanding will be
approximately 119 million, on a pro forma basis.
The Combination Agreement includes a commitment by both companies not to
solicit alternatives to the proposed transaction. Each party has also been
provided with certain other rights, representations and warranties and
covenants customary for a transaction of this nature.
The board of directors of Silk Road has received a fairness opinion from
Evans & Evans, Inc. in respect of the transaction and are recommending Silk
Road shareholders vote in favour of the transaction.
Conditions to Closing
Silk Road and EurOmax expect to mail their respective Management
Information Circulars on or about May 29, 2009. The transaction is subject to
the approval of not less than 66 2/3% of the shares of Silk Road voted with
respect to the transaction at the meeting of Silk Road shareholders, the
approval of a simple majority of the shares of EurOmax voted with respect to
the transaction at the meeting of EurOmax shareholders and certain customary
conditions, including receipt of all necessary court and regulatory approvals.
The transaction is expected to close by the end of June 2009.
Cautionary Note Regarding Forward Looking-Statements
This news release contains "forward-looking information" within the
meaning of applicable Canadian securities legislation. Forward-looking
statements include, but are not limited to, statements with respect to the
satisfaction of the conditions to the Arrangement and the completion of the
Arrangement. Generally, these forward-looking statements can be identified by
the use of forward-looking terminology such as "plans", "expects" or "does not
expect", "is expected", "budget", "scheduled", "estimates", "forecasts",
"intends", "anticipates" or "does not anticipate", or "believes", or
variations of such words and phrases or state that certain actions, events or
results "may", "could", "would", "might" or "will be taken", "occur" or "be
achieved". Assumptions upon which such forward looking statements are based
include that Silk Road and EurOmax will be able to satisfy the conditions in
the Combination Agreement, that the required approvals will be obtained from
the shareholders of each of Silk Road and EurOmax, that all third party
regulatory and governmental approvals to the transactions will be obtained and
all other conditions to completion of the transaction will be satisfied or
waived. Many of these assumptions are based on factors and events that are not
within the control of Silk Road and EurOmax and there is no assurance they
will prove to be correct. Forward-looking statements are subject to known and
unknown risks, uncertainties and other factors that may cause the actual
results, level of activity, performance or achievements of Silk Road and
EurOmax to be materially different from those expressed or implied by such
forward-looking statements, including but not limited to: risks related to the
integration of acquisitions, risks related to international operations, actual
results of current exploration activities, conclusions of economic
evaluations, changes in project parameters as plans continue to be refined and
although Silk Road and EurOmax have attempted to identify important factors
that could cause actual results to differ materially from those contained in
forward-looking statements, there may be other factors that cause results not
to be as anticipated, estimated or intended. There can be no assurance that
such statements will prove to be accurate, as actual results and future events
could differ materially from those anticipated in such statements.
Accordingly, readers should not place undue reliance on forward-looking
statements. Silk Road and EurOmax do not undertake to update any
forward-looking statements that are incorporated by reference herein, except
in accordance with applicable securities laws.
The TSX-V has in no way passed upon the merits of the transaction
discussed above and has not reviewed and does not accept responsibility
for the adequacy or accuracy of the contents of this press release.
On Behalf of the Boards of Directors
"John C. Menzies" David R. Bell
Chairman and CEO President & CEO
EurOmax Resources Ltd. Silk Road Resources Ltd.
For further information:
For further information: www.euromaxresources.com, Investor Relations:
David Stothart, T: (347) 284-0062, email@example.com;
www.silkroadresources.ca, Investor Relations: Connie Dos Santos, T: (416)
363-6040, firstname.lastname@example.org or David Bell, T: (416) 624-8794,