VANCOUVER, BRITISH COLUMBIA--(Marketwire - April 7, 2011) -
NOT FOR DISTRIBUTION TO UNITED STATES WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES
The following corrects and replaces the release issued earlier today at 9:30am ET on behalf of Silver Lake Resources Inc. The website provided in the contact information was incorrect, it should have been www.silverlakeresources.ca.
Silver Lake Resources Inc. (TSX VENTURE:SKZ) ("Silver Lake") is pleased to announce that it has entered into an arm's length letter of intent (the "LOI") with Pacific Canada Potash Ltd. ("PCPL") effective April 5, 2011, relating to an acquisition by Silver Lake of all of the issued and outstanding securities of PCPL from the shareholders thereof (the "Transaction").
The Transaction is expected to be effected by way of share purchase agreement whereby the shareholders of PCPL (the "Shareholders"), will sell all of the issued and outstanding shares of PCPL to Silver Lake and PCPL will become a wholly-owned subsidiary of Silver Lake. Silver Lake will concurrently change its name to Pacific Potash Corporation to reflect its new business. PCPL is a privately-owned company incorporated under the laws of Alberta. Under the terms of the Transaction Silver Lake will acquire all of the issued and outstanding shares of PCPL from the Shareholders in consideration for:
- the payment of $85,000 on signing of the LOI of which $25,000 shall be non-refundable if the Transaction does not close by April 30, 2011;
- the payment of $225,000 and the issuance of 4,000,000 common shares on closing of the Transaction; and
- the payment of $225,000 six months from closing.
In addition, effective on Closing Silver Lake intends to grant up to an additional 4,900,000 incentive stock options to new directors, officers and consultants of the Company at $0.80 per share for a five year period.
The Transaction is subject to the prior approval of the TSX Venture Exchange (the "Exchange").
The Transaction is an arm's length transaction.
In connection with or prior to Closing, Silver Lake intends to complete a private placement financing (the "Private Placement") for aggregate gross proceeds of up to $13,875,000, consisting of:
- up to 16,500,000 non-flow-through units (each a "Unit") at a price of $0.65 per Unit. Each Unit shall consist of one Common Share of Silver Lake and one-half of one share purchase warrant (a "Warrant") with each whole Warrant exercisable to acquire one additional Common Share at a price of $0.90 for a period of five years from Closing, with early acceleration in the event that the Company's common shares trade at $1.30 for ten consecutive trading days; and
- up to 3,500,000 flow-through units (each an "FT Unit") at a price of $0.90 per FT Unit. Each FT Unit shall consist of one flow-through Common Share of Silver Lake and one-half of one share purchase warrant on the same terms as the Warrants issued as part of the non-flow through units.
Silver Lake will pay a finder's fee to various persons on the gross proceeds of the Private Placement as permitted by the policies of the Exchange. Silver Lake has also agreed to pay a cash finder's fee of 5% relating to the Transaction.
Conditions Precedent to Completing the Transaction
The parties' obligations to complete the Transaction are subject to the satisfaction of a number of conditions including, but not limited to, completion of satisfactory due diligence reviews, negotiation and execution of definitive documentation including a formal share purchase agreement (the "Definitive Agreement"), completion of a minimum of the Private Placement for minimum gross proceeds of $3,000,000, Exchange approval, and other conditions customary for a transaction of this type.
Directors of the Resulting Issuer
On Closing, the board of directors of the Silver Lake will be reconstituted such that it will consist of four members will shall include Barry Price and Balbir Johal, both of whom are currently existing directors of Silver Lake, and two additional directors who are anticipated to be:
Steven Khan - Mr. Khan, MBA, CFA, previously spent close to twenty years in all aspects of the investment industry, including retail, institutional sales, corporate finance, capital markets, and investment banking. He has held several senior management roles including: Executive Vice-President, President, Chief Executive Officer, and Chairman of a number of regional and national full service Canadian investment brokerage houses that mostly focused on venture capital financings. Subsequently, in 2003, he started his own consulting firm that focused on business plan development and capital fund raising for a number of early stage private and public companies. In the past several years, Mr. Khan has successfully initiated, completed or partnered several major corporate development initiatives both domestically and internationally, including joint ventures in China, Japan and Korea. Mr. Khan currently serves as President, Director and Chairman of Strathmore Minerals Corp., a TSX publicly listed company and was a founding officer of Fission Energy Corp., a TSX-Venture publicly listed company. He also sits on the board of directors of a number of other TSX-Venture listed companies and other private companies, primarily focused in the resource sector. A graduate of the University of British Columbia with a BSc. (1978) and MBA (1983), Mr. Khan also holds a Chartered Financial Analyst designation (CFA), is a member of the CFA Institute.
Jody Dahrouge - Mr. Dahrouge, B.Sc., Sp.C., P.Geol., has been the President, Principal and Owner of Dahrouge Geological Consulting Ltd. since March 1998. Mr. Dahrouge is past-President of Fission Energy Corp. and has been a director since September 2008. He serves as Vice President of Exploration at Commerce Resources Corp. He has been a Director of Equitas Resources Corp. since March 8, 2010. He also serves as a Director of Quantum Rare Earth Developments Corp. He is Professional Geologist and has over 20 years of experience both in Canada and internationally. Mr. Dahrouge has been a member of the Association of Professional Engineers, Geologists and Geophysicists of Alberta since August 1994. Mr. Dahrouge received a Bachelor of Science in Geology (BSc. 1988) and Special Certificate in Computer Science from the University of Alberta in 1993.
In addition, it is anticipated that the following persons will be appointed as officers of the Company on closing of the Transaction:
Balbir Johal - Executive Chairman
Steven Khan - Chief Executive Officer
Jody Dahrouge - Senior Vice-President, Exploration
Steven Butrenchuk - President
Bryce Clark - Chief Financial Officer
Steve Butrenchuk is currently a director of Passport Potash Inc. and has also served as President and Chief Executive Officer of Passport Potash Inc. Mr. Butrenchuk has over 40 years of mining exploration experience, including project evaluation and management, supervising drilling programs and negotiations with Government Agencies. Since leaving the government, Mr. Butrenchuk has spent time as an Exploration Manager for a private industrial minerals company and as a Consulting Geologist. He held positions of increasing responsibility with major mining companies including Cominco Ltd., where he spent 16 years as their Exploration Geologist. He spent 4 years on contract to Geological Survey of British Columbia.
Silver Lake also intends to form an advisory board to consult on the future exploration programs on the company's properties.
PCPL currently holds a 100% interest in the Provost Potash Property near the town of Provost, Alberta. The property consists of two Metallic and Industrial Minerals (MAIM) permits covering an area of 17,781 ha. PCPL also holds a 50% interest, along with Grizzly Discoveries Inc. ("Grizzly") in approximately 185,000 ha of MAIM permit applications surrounding the Provost Property.
PCPL's wholly-owned Provost Potash Property and the adjoining Pacific/Grizzly lands are located within the Western Canada Sedimentary Basin ("WCSB"), a vast sedimentary basin extending from the southeast corner of Yukon to southern Manitoba, and south into the northern United States. Potash in eastern Alberta and western Saskatchewan occurs in the Devonian Prairie Evaporite Formation, which consists of near flat-lying sequences of interbedded halite, sylvite, carnallite, and clay, with minor anhydrite and dolomite. The potash usually occurs in the upper 60 m of the formation (Holter, 1969) in four distinct members, separated by salt beds.
The Prairie Evaporite Formation ranges in depth from 1,000 to 1,450 m below surface and does not outcrop at or near the properties. Approximately 10 drill holes completed for oil and gas exploration have penetrated the Prairie Evaporite Formation, either within the boundaries of the property, or within several kilometres thereof. Of these, only the Provost No. 2 well, located within the southwest part of the joint-venture property, has previously been analyzed for Potash, with between 4.03 to 4.06% K2O across 11 feet from 4,610 to 4,622 feet depth. Several other wells, within both the Provost Potash Property and joint-venture property, have sufficiently high-responses on gamma ray logs to indicate the presence of significant concentrations of potash. In a 43-101 Technical Report on the Eyehill Creek Property (now partly within the Pacific Canada and Grizzly Discoveries permit applications), Klarenbach (2009) suggested that gamma-ray responses from historic oil and gas wells in the area may indicate 1-5 metre thick potash beds with grades ranging from 15% to 25% K2O.
In 2009, PCPL commissioned Boyd Petrosearch of Calgary, Alberta, to complete a 2D seismic study on the Provost Property. The study did not indicate the presence of any significant structures within the Prairie Evaporite Formation underlying the property. Structures such as large faults may result in the dissolution of potash beds or provide challenges to any future mining of a deposit.
PCPL recently commissioned Fugro Airborne Surveys to complete an EM survey on the Provost Property, which will further explore the development potential of the Prairie Evaporite Formation underlying the property.
Balbir Johal, CEO and President
This news release contains "forward-looking information", which may include, but is not limited to, statements with respect to the future financial or operating performance of Silver Lake and PCPL. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or believes" or variations (including negative variations) of such words and phrases, or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Silver Lake and PCPL to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Forward-looking statements contained herein are made as of the date of this press release and Silver Lake and PCPL disclaim, other than as required by law, any obligation to update any forward-looking statements whether as a result of new information, results, future events, circumstances, or if management's estimates or opinions should change, or otherwise. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, the reader is cautioned not to place undue reliance on forward looking statements.
All information contained in this news release with respect to PCPL was supplied by PCPL for inclusion herein.
Steve Butrenchuk, P.Geo., a "Qualified Person" for the purposes of NI 43-101 supervised the preparation of the technical information in this news release.
The securities of Silver Lake being offered have not been, nor will be, registered under the U.S. Securities Act 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 news release does not constitute an offer or sale of securities in the United States.
This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.
The TSX Venture Exchange has in no way passed upon the merits of the proposed transaction described herein and has neither approved nor disapproved the contents of this news release. Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.