Norwood Assigned Into Bankruptcy

Trading Symbol: NRS

VANCOUVER, Jan. 19 /CNW/ - The board of directors of Norwood Resources Ltd (the "Company": NRS-TSXV) have assigned the Company into bankruptcy and appointed D. Manning & Associates Inc. as Trustee in Bankruptcy over the Company's assets and undertaking. The Company is insolvent and the board is of the view that with its lack of exploration success and deteriorating financial condition, that there are currently no realistic alternatives for financing and as such, that a bankruptcy process including liquidation of assets by an independent party, and possible proposals for reorganization through a bankruptcy process, is in the best interests of the Company's various stakeholders.

In September 2010 the Company entered into negotiations with an investment syndicate led by Graeme Phipps, who had resigned from the board of directors in order to pursue the financing on an arms-length basis. Mr. Phipps had indicated over the several months prior to September 2010 that he had obtained significant financial commitments to complete a re-organization and refinancing of the Company. Following a due diligence period, these negotiations resulted in signing of a letter of intent effective November 15, 2010 for an equity financing of a minimum of US$20,000,000. The financing was subject to a number of significant conditions including settlement of the Company's two lawsuits, completion of definitive documentation, shareholder approval and approval by the Company's secured noteholders. Although the investment syndicate was able to reach tentative settlements which it considered to be acceptable on the Company's lawsuits, and definitive documentation had been negotiated in a form which was considered by all parties to be acceptable for execution, the financing group was unable and/or unwilling to proceed with agreed upon interim deposits and it became apparent that the syndicate was not going to proceed. Accordingly, the financing proposal was not put to shareholders or noteholders for approval.

In conjunction with the assignment into bankruptcy, all board members have resigned their positions with the Company.

SOURCE Norwood Resources Ltd.

For further information:

D. Manning & Associates Inc.
Telephone: 604-683-8030

Organization Profile

Norwood Resources Ltd.

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