TORONTO, May 30 /CNW/ - Atikokan Resources Inc. (TSX VENTURE: AKN)
("Atikokan" or the "Company") is pleased to announce the meeting date seeking
shareholder approval of the agreed business combination (the "Business
Combination") between Atikokan and Silvermet Corporation ("Silvermet") to form
a new company called "Silvermet Corporation" ("Newco"). The shareholders
meeting will be held Thursday, June 29, 2006.
Under the terms of the Business Combination, the common shares of the
Company will be consolidated on a 1 for 5 basis and immediately thereafter:
(i) the Company will acquire all of the issued and outstanding common shares
of Silvermet in exchange for common shares of the Company on a one-for-one
basis; (ii) all of the warrants of Silvermet will be exchanged for replacement
warrants of the Company on a one-for-one basis; and (iii) all of the options
of Silvermet will be exchanged for replacement options of the Company on a
one-for-one basis. In connection with the Business Combination, Silvermet will
complete an equity financing of at least 3,333,333 flow-through shares of
Silvermet at a price of $0.30 per share and at least 10,000,000 units of
Silvermet at a price of $0.30 per unit, each unit comprising of one common
share and one-half of one common share purchase warrant, each warrant
exercisable into a common share at a price of $0.45 per share for a period of
12 months from the date of issue. Silvermet has received commitments for
5,419,997 flow-through shares and 11,436,500 units for aggregate gross
proceeds of $5,056,949 upon completion of the equity financing. On completion
of the Business Combination and the financing, on a non-diluted basis, the
shareholders of Silvermet and Atikokan will own approximately 92.9% and 7.3%
of Newco, respectively.
Dominick & Dominick Securities Inc., subject to the completion of
satisfactory due diligence, has been retained to act as sponsor of the
transaction. An agreement to sponsor should not be construed as any assurance
with respect to the merits of the transaction or the likelihood of completion.
In accordance with TSXV policies, Atikokan is finalizing documentation
providing full disclosure of the transaction required to be filed in
accordance with Policy 5.2 of the TSXV, which includes the Management
Information Circular. The shareholders meeting has been set for Thursday June
29, 2006 in Toronto. Completion of the transaction is subject to a number of
conditions, including final TSXV acceptance and approval of the shareholders
of Atikokan. 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 shareholders' meeting, any information released or received with
respect to the transaction may not be accurate or complete and should not be
relied upon. Trading in the securities of Atikokan should be considered highly
speculative.
The TSX Venture Exchange does not accept responsibility for the adequacy
or accuracy of this 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.
