ARMSTRONG, BC, June 17 /CNW/ - GWR Resources Inc. (TSX Venture: GWQ)
announces that it has entered into a Letter of Intent (the "LOI") with Deep
Creek Oil & Gas Inc. ("Deep Creek") in order to acquire 100% of Deep Creek
through an all share transaction. Aside from legal fees, this acquisition will
not require any cash outlays by GWR. The purpose of this acquisition is to
provide GWR with long term positive monthly cash flow, which can be utilized
by GWR in the best manner possible (including ongoing exploration of GWR's Lac
La Hache copper-gold property). In addition, GWR intends to grow its oil and
gas division in order to provide enhanced value to GWR's shareholders.
Deep Creek will come with experienced management. In addition, GWR's
President, Irvin Eisler, has over 20 years of past experience in the oil and
Deep Creek is a private BC company, which owns various interests in
natural gas and light and heavy oil producing wells in AB, SK and ON. Largely
as a result of aggressive acquisitions over the last couple of years and the
subsequent decline in oil prices, Deep Creek was forced to make application
for creditor protection in March of this year. Accordingly, GWR found what it
believes to be a "business opportunity". Deep Creek must make a formal
proposal to creditors (the "Proposal"), which must be accepted or else Deep
Creek will go into receivership. The transaction with GWR is instrumental for
Deep Creek's restructuring proposal with creditors.
It is proposed that GWR acquire Deep Creek in consideration of the
issuance of 7,666,666 common shares. The deemed value of the acquisition is
$2,000,000. It is expected that, upon closing, Deep Creek will have
approximately $100,000 of working capital and approximately $800,000 of bank
debt (which will be serviced by Deep Creek's positive cash flow).
Assuming the Proposal is accepted by Deep Creek's creditors, GWR will
determine the optimum structure of the acquisition of Deep Creek (ie. share
exchange, amalgamation or plan of arrangement) and enter into a definitive
agreement. In addition to GWR completing its due diligence, the closing of
this acquisition will be subject to a number of conditions, including all
necessary shareholder and creditor approvals on the Deep Creek side, and
approval by the TSX Venture Exchange on the GWR side. In addition, Deep Creek
must complete a $600,000 equity financing, for which GWR's management is
providing assistance. It is anticipated that this acquisition will be
completed within a couple of months from the date hereof.
Further news will follow, as appropriate.
About GWR Resources Inc.
SOURCES INC. is an active mineral exploration company, currently
exploring multiple zones containing commercial grades of copper and gold
within its large Lac La Hache copper-gold porphyry project. GWR's project is
in the prolific Quesnel Trough area of British Columbia, between producing
mines at Imperial Metals' Mt. Polley Copper-Gold Mine and New Gold Inc.'s New
Afton Copper-Gold project (Teck-Cominco's legendary Afton mine). The Lac La
Hache project is well-served by rail, road and power infrastructure.
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.
For further information:
For further information: Responsible Officer: Irvin Eisler, President,
Company Telephone Number: (250) 546-8048