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Port Louis - TransAfrika Resources Limited (the "Company") is pleased to announce that pursuant to a share exchange agreement (the "Share Exchange Agreement") dated June 20, 2011 between TransAfrika Resources Cyprus Limited, an indirect subsidiary of the Company, and Desert Gold Ventures Inc. ("Desert Gold") (TSX-V: DAU), it has acquired 10,000,000 common shares of Desert Gold at a deemed price of $0.75 per share. In addition, on the closing of the Share Exchange Agreement, the Company acquired, as a result of the automatic conversion of previously held subscription receipts, a further 2,666,666 common shares and 1,333,333 common share purchase warrants of Desert Gold, each warrant entitling the holder to acquire one additional common share of Desert Gold at an exercise price of $1.00 for a period of 24 months, subject to earlier acceleration of the expiry date in certain circumstances.
TransAfrika is pleased with the process undertaken by the Company and the Desert Gold advisors as well as the TSX Venture Exchange, which enabled the transaction with Desert Gold to take place. It is expected that the Desert Gold shares issued directly to the Company's shareholders will increase the trading liquidity of the Desert Gold shares.
After giving effect to this transactions contemplated in the Share Exchange Agreement, the Company owns or controls, directly or indirectly, an aggregate of 12,666,666 common shares of Desert Gold. The 12,666,666 common shares represent approximately 28% of the issued and outstanding common shares of Desert Gold. In addition, after giving effect to the transactions contemplated in the Share Exchange Agreement, the Company now owns or controls 1,333,333 Desert Gold warrants, representing approximately 53% of the outstanding warrants of Desert Gold. If these warrants were exercised, the Company would own or control a total of 13,999,999 Desert Gold common shares, representing approximately 30% (calculated on a partially diluted basis) of the approximately 46,500,000 then issued and outstanding common shares of Desert Gold.
This news release is being issued as required by National Instrument 62-103 - The Early Warning System and Related Take-Over Bid and Insider Reporting Issues in connection with the filing of the Early Warning Report dated December 1, 2011. The Early Warning Report respecting this acquisition has been filed on the System for Electronic Document Analysis and Review ("SEDAR").
For further information, please contact:
Roeland van Kerckhoven, President of TransAfrika Resources Limited
Tel +230 211 8625
Email: roelandvk@transafrikaresources.com
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