Athabasca Minerals Inc.
TSX VENTURE : ABM

Athabasca Minerals Inc.

November 24, 2008 14:07 ET

Athabasca Minerals Inc. Completes Acquisition of Aggregates Management Inc.

EDMONTON, ALBERTA--(Marketwire - Nov. 24, 2008) - Athabasca Minerals Inc. ("Athabasca" or the "Corporation") (TSX VENTURE:ABM) today announced the completion on November 20, 2008 of: (i) the acquisition ("Acquisition") by the Corporation from certain vendors of all of the issued and outstanding shares of Aggregate Management Inc. ("AMI"); and (ii) the amalgamation ("Amalgamation") of the Corporation, AMI, and Pitts Holdings Ltd.

Athabasca completed its Acquisition of an aggregate of 200 common shares of AMI (the "AMI Shares"), as well as all of the issued and outstanding shares (the "Pitts Shares") of Pitts Holdings Ltd. ("Pitts"). Pitts is a private company that has recently been restructured and own the balance of 100 common shares of AMI. Athabasca had agreed to indirectly acquire the balance of the AMI Shares by purchasing the Pitts Shares in order to effect the Acquisition on a tax efficient basis.

About the Acquisition

Athabasca entered into a non-arm's length security purchase agreement dated as of September 25, 2008 with AMI, as well as Pitts, Hopkins Construction (Lacombe) Ltd., Shaun O'Connor-Parsons, Dale Nolan, DK Consulting Services Ltd., Udomdej Kriangkum and certain other vendors (collectively, the "Vendors"), pursuant to which Athabasca agreed to acquire the AMI Shares and the Pitts Shares for an aggregate purchase price of $13,500,000.

The purchase price for the AMI Shares will be $9,000,000, paid by $5,600,000 in cash, $400,000 in promissory notes and the issuance of 5,000,000 common shares of Athabasca (the "Athabasca Shares").

The purchase price for the Pitts Shares will be $4,500,000, paid by $2,800,000 in cash, $200,000 in promissory notes and the issuance of 2,500,000 Athabasca Shares.

The Athabasca Shares will be issued pursuant to the Acquisition at a deemed price of $0.60 per Athabasca Share.

The effective date of the Acquisition is June 30, 2008 and the Vendors will be paid interest on the cash component of the purchase price from the effective date of June 30, 2008 to and including the closing date of the Acquisition.

The Board of Directors of Athabasca received an independent valuation of AMI from Evans & Evans Inc. of Calgary, Alberta (the "Independent Valuation"), as previously announced on May 1, 2008. It is the opinion of Evans & Evans Inc. that the fair market value of AMI at the valuation date of January 31, 2008 was in the range of CDN$12,900,000 to CDN$13,500,000. The Acquisition will be completed for an aggregate purchase price of $13,500,000 for the AMI Shares and the Pitts Shares. A complete copy of the Independent Valuation was attached as a schedule to information circular of Athabasca prepared for circulation to shareholders (the "Information Circular").

The Acquisition is a "related party transaction" within the meaning of TSX Venture Policy 5.9 (which incorporates Multilateral Instrument 61-101) ("Policy 5.9") as certain of the Vendors are Related Parties. As a result, Multilateral Instrument 61-101 ("MI 61-101") provides that a "related party transaction", such as the Acquisition, must be approved by a majority of the votes cast by holders of securities, excluding holders of securities whose votes cannot be included for the purposes of minority approval, as that term is defined in MI 61-101. Under MI 61-101, as applied to the Acquisition, minority approval of the resolution concerning the Acquisition required the approval by a majority of all the votes cast by minority shareholders.

In order to finance the cash component of the purchase price, Athabasca had arranged a credit facility from the Bank of Montreal in the form of a $9,000,000 demand loan to be repaid in 60 monthly instalments of $150,000 each, plus interest at a floating rate of prime plus 1.50%.



Pro Forma After Completion
of the Acquisition
----------------------------
Existing Athabasca Shareholders 20,478,165
Vendors 7,500,000
----------------------------
Total New Athabasca Outstanding Common Shares 27,978,165


The Board of Directors of Athabasca consists of Udomdej Kriangkum, Theodore Rousseau, Wylie Hamilton, Shaun O'Connor-Parsons, Dale Nolan, Murray Hinz and Ray Harris. The officers of Athabasca are Udomdej Kriangkum as President and Chief Executive Officer and Kevin Spitzmacher as Chief Financial Officer.

The completion of the Acquisition has received conditional approval of TSX Venture and is subject to its final approval, which Athabasca expects to receive this week after certain filings are completed.

The common shares of Athabasca will continue trading under the symbol "ABM".

About Athabasca Minerals:

Athabasca Minerals Inc. is a resource company engaged in the management, exploration and development of industrial minerals in Canada. The Corporation's aim is to find and develop local sources of industrial minerals essential to the economic development of specific high growth regions. The Corporation has substantial land holdings in the vicinity of Fort McMurray, Alberta and Peace River, Alberta. Independent from its mineral exploration activities, the Corporation is also pursuing sand and gravel exploration and development projects throughout northern Alberta. These activities include contracts works, gravel pit management, new gravel development and acquisitions of sand and gravel operations.

The securities of Athabasca being offered have not been, nor will be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons absent U.S. registration or an applicable exemption from U.S. registration requirements. This release does not constitute an offer for sale of securities in the United States.

Except for historical information contained herein, this news release contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially. Neither Athabasca nor AMI will update these forward-looking statements to reflect events or circumstances after the date hereof. More detailed information about potential factors that could affect financial results is included in the documents filed from time to time with the Canadian securities regulatory authorities by Athabasca and AMI.

The TSX Venture Exchange Inc. has in no way passed upon the merits of the Acquisition and has neither approved nor disapproved the contents of this press release.

Contact Information

  • Athabasca Minerals Inc.
    Udomdej Kriangkum
    President
    (780) 465-5696
    or
    Boardmarker Group
    Dean Stuart
    (403) 517-2270