TORONTO, March 2 /CNW/ - Atikokan Resources Inc. (TSX VENTURE: AKN)
("Atikokan" or the "Company") is pleased to provide an update on its proposed
business combination (the "Business Combination") with Silvermet Corporation
("Silvermet") to form a new company called "Silvermet Corporation" ("Newco").
The terms of the Business Combination have been amended such that: (i)
the holders of Silvermet common shares (the "Silvermet Common Shares") will
receive 1 common share of Newco (a "Newco Common Share") for each Silvermet
Common Share; and (ii) the holders of Atikokan common shares (the "Atikokan
Common Shares") will receive 1 Newco Common Share for every 5 Atikokan Common
Shares. The outstanding stock options of Silvermet and the stock options and
warrants of Atikokan will be exchanged for stock options and warrants,
respectively, of Newco based on the same ratio as the common shares of the
respective companies have been exchanged for Newco Common Shares.
Silvermet has entered into an engagement letter with Dominick and
Dominick Securities Inc. pursuant to which Silvermet is proposing to issue up
to: (i) 3,333,333 flow-through shares of Newco at a price of $0.30 per share;
and (ii) up to 10,000,000 units (the "Units") of Newco at a price of $0.30 per
unit, each unit comprising of one common share and one-half of one common
share purchase warrant (a "Warrant"), each Warrant exercisable into a common
share at a price of $0.45 per share. The financing will first be completed by
issuing special warrants of Silvermet, which will be exercisable into the
underlying securities of Newco automatically without payment of any additional
consideration upon completion of the Business Combination.
On completion of the Business Combination and the financing, on a
non-diluted basis, the shareholders of Silvermet and Atikokan will own
approximately 92.0% and 8.0% of Newco, respectively.
The Business Combination is subject to certain regulatory approvals and
is conditional upon the completion of satisfactory due diligence by both
Atikokan and Silvermet and the negotiation of a definitive agreement.
Completion of the transaction is subject to a number of conditions,
including but not limited to, TSX-V acceptance and disinterested shareholder
approval. The transaction cannot close until the required 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 Business Combination and
the financing may not be accurate or complete and should not be relied upon.
Trading in the securities of Atikokan should be considered highly speculative.
The Company also wishes to announce that Claude Durocher has resigned
from his position as President and Chief Executive Officer of the Company due
to personal reasons. Bruce Robertson, Chairman of the board, has been
appointed as President and Chief Executive Officer on an interim basis until
completion of the Business Combination.
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.
FORWARD-LOOKING STATEMENTS
This press release includes certain "forward-looking information" within
the meaning of the Securities Act (Ontario). All statements regarding the
Business Combination, the financing, use of proceeds, the anticipated closing
dates and the application to the TSX Venture Exchange are forward-looking
statements that involve various risks and uncertainties. There can be no
assurance that the Business Combination and financing will be completed or
that the transactions will close on the dates anticipated. Important factors
that could cause actual results to differ materially from these
forward-looking statements include: the failure to close the financing; the
failure to receive the requisite approvals from the TSX Venture Exchange and
other factors disclosed under the heading "Risk Factors" and elsewhere in
Atikokan documents filed from time to time with the Ontario Securities
Commission and other regulatory authorities.
%SEDAR: 00010721E
