/THIS NEWS RELEASE AND THE INFORMATION CONTAINED HEREIN ARE NOT FOR
DISTRIBUTION IN THE UNITED STATES./
VANCOUVER, Feb. 23 /CNW/ - EurOmax Resources Limited ("EurOmax") (TSX-V: EOX) and Silk Road Resources Ltd. ("Silk Road") (TSX-V: SIL) are pleased to announce that they have entered into a letter of intent with regard to a proposed business combination (the "Transaction") to create a stronger mineral exploration company with enhanced financing potential.
The Transaction will be structured as a Plan of Arrangement under the Canada Business Corporations Act.
HIGHLIGHTS OF THE TRANSACTION - On completion of the transaction each Silk Road common share will be automatically exchanged for 2.2535 EurOmax common shares and Silk Road will become a wholly owned subsidiary of EurOmax. - On completion of the Transaction, EurOmax will have approximately 112 million shares outstanding. - The President & CEO of the resulting Company will be John C. Menzies and the non Executive Chairman of the board of directors will be appointed by Silk Road. The board of directors will have three representatives of each of EurOmax and Silk Road. - The board of directors of each company have approved the Transaction unanimously. - Shareholders representing 26% of EurOmax and 35% of Silk Road have agreed to enter agreements to vote in favour of the Transaction.
THE NEW EUROMAX
After the combination, EurOmax will have a broad portfolio of gold and base metal mineral exploration properties in Southeast Europe and gold exploration properties in Gansu Province, China.
Significant expressions of interest have been received for the sale of a number of the Chinese gold exploration properties.
In Southeast Europe, the combined company's assets will include:
- The Ceovishte project in Serbia, where recent exploration has
identified a series of ancient gold and lead-silver workings extend
over a strike of nearly 5 kilometres. At the southern end of this
trend a 2 square kilometer gold bearing silica breccia has been
identified surrounding an altered diorite intrusion. Ancient overgrown
open pits up to several hundred metres wide cover much of the silica
breccia. At the northern end of this trend one drill hole encountered
12.4 metres at 1.5% copper, 1.4% lead, 0.8% zinc, 62 grams per tonne
silver and 1.6 grams per tonne gold.
- The Karavansalija project in Serbia covers a 60 square kilometre
alteration zone and two mineralized centres. Drilling on the property
has produced numerous significant intersections including 42 metres at
2.05 grams per tonne gold, 0.76% nickel and 0.06% cobalt included in
111 metres at 1.30 grams per tonne, 0.43% nickel, 0.03% cobalt in
drill hole 0828; 120 metres grading 0.55 grams per tonne gold, 0.48%
copper and 3.2 grams per tonne silver in drill hole 0829; 235 metres
grading 1.08 grams per tonne gold in drill hole 0831 and 166 metres
grading 0.63 grams per tonne gold, 0.58% copper, including 63 metres
at 1.01 grams per tonne and 1.05% copper in drill hole 0611.
- The Ilovitza copper-gold-molybdenum project in Macedonia, where it has
received an independent Mineral Resource estimate by Broad Oak
Associates of Toronto, Ontario ("Broad Oak") dated August 7, 2008. The
results conclude that the Ilovitza deposit contains an inferred
resource of copper 303 million tones grading 0.23% copper, 0.31 grams
per tonne gold and 0.005% molybdenum. This inferred resource contains
approximately 1.6 billion pounds of copper, 2.9 million ounces of gold
and 3.5 million pounds of molybdenum. In copper equivalent terms this
equals 3.5 billion pounds of copper. Geophysics conducted subsequent
to the Broad Oak Report has identified a chargeable resistivity low
which is interpreted to be the core of the metallogenic system
immediately east of the inferred resource with the potential for the
addition of significant tonnage at higher grades.
- The Kazandol oxide copper project in Macedonia, where exploration
conducted in 2008 identified a near surface shallow dipping copper
oxide zone 25 to 100 metres thick over a length of approximately five
kilometres with widths up to in excess of 200 metres. Preliminary
drilling encountered 47 metres grading 0.59% copper. Surface trenching
encountered 210 metres at 0.4% copper, 175 metres at 0.44% copper and
175 metres at 0.39% copper. This project offers the potential for an
early oxide copper production.
In China, the combined Company's assets will include:
- The Bulagou project in Gansu Province where it has received an
independent Mineral Resource estimate by B.J. Price Geological
Consultants Inc. dated April 30, 2008. The results conclude that a
43-101 compliant in-situ inferred resource of 3.8 million tonnes
grading 3.17 grams per tonne gold for a total of 390,524 ounces of
gold is contained in the Labuzaika and Yidi zones.
John C. Menzies, Chairman & CEO commented, "The suite of properties in Southeast Europe offers the potential for the discovery of world class mineral deposits. In these particularly challenging economic times, raising necessary financing for their exploration and development is in the best interests of EurOmax shareholders. The combination of EurOmax and Silk Road offers the opportunity to finance an accelerated exploration and development program.
"We are excited to be a part of the exploration and development of the potentially world class projects in Southeast Europe and realize the economic value of Silk Road's Chinese gold properties." added Allen J. Palmiere, President & CEO of Silk Road.
BOARD RECOMMENDATION
The Transaction has been unanimously approved by the boards of directors of EurOmax and Silk Road. The board of directors of EurOmax recommends that EurOmax shareholders vote in favour of the Transaction. The board of directors of Silk Road recommends that the holders of Silk Road shares vote in favour of the Transaction.
The definitive agreement will include a commitment by both EurOmax and Silk Road not to solicit or initiate discussions concerning alternate transactions.
CLOSING
Completion of the Transaction is subject to customary conditions, including a favourable vote of two-thirds of the EurOmax and Silk Road shares at special meetings of shareholders called to approve the Transaction, and receipt of court and all necessary regulatory approvals.
An information circular for the special meetings of EurOmax and Silk Road are expected to be mailed in the second quarter of 2009. The Transaction is expected to close during the second quarter.
Qualified Person
John C. Menzies, a qualified person as defined by National Instrument 43-101, supervised the preparation of the information regarding the Southeast Europe properties in this release. Barry J. Price MSc., P.Geo., a qualified person as defined by National Instrument 43-101, supervised the preparation of the information regarding the Chinese properties.
FORWARD-LOOKING INFORMATION
This news release contains "forward-looking information" within the meaning of applicable securities laws. Forward-looking information includes, but is not limited to, information concerning the proposed business combination between EurOmax and Silk Road and matters relating thereto. Generally, forward-looking information 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 statements that certain actions, events or results "may", "could", "would", "might", or "will be taken", "occur", or "be achieved". Forward-looking information is based on the opinions and estimates of management at the date the information is made, and is based on a number of assumptions and subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking information. Assumptions upon which such forwardlooking information is based include, without limitation, that the shareholders of EurOmax and Silk Road will approve the Transaction, that all required third party, court, regulatory and governmental approvals to the Transaction 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 EurOmax and Silk Road and there is no assurance they will prove to be correct. Factors that could cause actual results to vary materially from results anticipated by such forward-looking information include changes in market conditions, variations in ore grade or recovery rates, risks relating to international operations, fluctuating metal prices and currency exchange rates, changes in project parameters, the possibility of project cost overruns or unanticipated costs and expenses, labour disputes and other risks of the mining industry, failure of plant, equipment or processes to operate as anticipated, the business of the companies not being integrated successfully or such integration proving more difficult, time consuming or costly than expected as well as those risk factors discussed in the Annual Financial Statements for the year ended December 31, 2007 for each of EurOmax and Silk Road available at www.sedar.com. Although EurOmax and Silk Road have attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results not to be anticipated, estimated or intended. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. EurOmax and Silk Road undertake no obligation to update forward-looking information if circumstances or management's estimates or opinions should change except as required by applicable securities laws. The reader is cautioned not to place undue reliance on forward-looking information.
This news release and the information contained herein are not for distribution in the United States.
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release. On Behalf of the Boards of Directors "John C. Menzies" David R. Bell Chairman and CEO Chairman EurOmax Resources Ltd. Silk Road Resources Ltd.