Canadian Phoenix Resources Corp.
TSX VENTURE : CXP

Canadian Phoenix Resources Corp.

April 29, 2010 19:24 ET

Canadian Phoenix Enters Into Voting Agreement and Calls Special Meeting to Dispose of Shares in Marble Point

CALGARY, ALBERTA--(Marketwire - April 29, 2010) - CANADIAN PHOENIX RESOURCES CORP. ("Canadian Phoenix" or the "Corporation")(TSX VENTURE:CXP) is pleased to advise that it has entered into a voting agreement dated April 27, 2010 with Marble Point Energy Ltd ("Marble Point") and 7515197 Canada Ltd ("AcquisitionCo") pursuant to which the Corporation has agreed to vote its shares held in Marble Point in favour of an amalgamation between Marble Point and AcquisitionCo ("the Amalgamation"), subject to receipt of requisite shareholder and regulatory approval. Canadian Phoenix currently owns 58.2% of the outstanding common shares of Marble Point.

If the Amalgamation is approved by the shareholders of Marble Point and given effect to, non management shareholders of Marble Point including the Corporation will receive one redeemable preferred share of the amalgamated entity which will in turn be immediately redeemed for $0.50 per share. Total expected proceeds to the Corporation are $45 million. 

"The sale of our Marble Point shares, if completed, will be another successful step in maximizing the value of our holdings," said Michael Atkinson, President and Chief Executive Officer of Canadian Phoenix Resources Corp. "Our team has done a tremendous job in generating a significant amount of cash from the sale of our assets and has positioned itself to redeploy its capital in compelling opportunities in the natural resource sector. Members of our board and management team have a long track record of consistently creating shareholder value in the resource sector and upon completion of the Serrano and Marble Point sales, will be in a position to capitalize on opportunities that are presented."

It is a condition to completion of the Amalgamation that the shareholders of Canadian Phoenix and the TSX Venture Exchange approve the sale of the Marble Point shares held by Canadian Phoenix. The Corporation has scheduled a special meeting ("Special Meeting") of the Corporation's shareholders for 9am May 26, 2010, to seek shareholder approval of a resolution ("Sale Resolution") to dispose of the Corporation's shares in Marble Point, should the Amalgamation proceed. The Board of Directors of Canadian Phoenix, with Mr David Tuer abstaining, have unanimously approved the proposed transaction and has concluded that the transaction is in the best interests of Canadian Phoenix and the Canadian Phoenix shareholders and will recommend that its shareholders vote in favour of the Sale Resolution. The Corporation has executed agreements with certain of its shareholders, representing in excess of 50% of the outstanding common shares of the Corporation, to vote in favour of the Sale Resolution.

If the Shareholders of the Corporation do not approve the Corporation voting for the Sale Resolution, the Corporation will be required to pay AcquisitionCo a fee in the amount of $500,000 pursuant to the Marble Point Voting Agreement. If the Corporation is in compliance with its obligations and the Amalgamation is not consummated due to either Marble Point or AcquisitionCo not satisfying one of the respective conditions in the Amalgamation Agreement which are not waived, the Corporation will receive a $500,000 payment pursuant to the Marble Point Voting Agreement.

A full description of the Amalgamation and related matters will be included in an information circular of the Corporation dated April 29, 2010 prepared for the purposes of the Special Meeting to be mailed to shareholders of the Corporation. The information circular will also be available on SEDAR (www.sedar.com).

At the Special Meeting, shareholders will also be asked to vote on the disposal of Canadian Phoenix's shareholding in Serrano Energy Ltd. This transaction was announced publicly on April 15, 2010. Full details of the Serrano share disposition will also be included in the information circular noted above.

Canadian Phoenix's estimated proceeds from disposition of its shares in Serrano and Marble Point, after transaction costs and the settlement of the Corporation's $2.1 million short-term debt owed to a private mezzanine lender is approximately $66.7 million ($1.44 per share), should both transactions be completed. The Corporation's intent is to use the proceeds for general corporate purposes and other opportunities as they present themselves in the resource sector. The Corporation and its Special Committee will continue with its ongoing strategy of maximizing shareholder value by analyzing its own assets and evaluating other opportunities.

About Canadian Phoenix

Canadian Phoenix Resources Corp. is a publicly-traded junior oil and gas exploration, development and production company with operations in Western Canada. Canadian Phoenix's shares trade on the TSX Venture Exchange under the symbol "CXP".

FORWARD-LOOKING STATEMENTS: This news release may contain forward-looking information. All statements and information other than statements of historical fact are forward-looking information. In some cases, forward-looking information can be identified by terminology such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "potential", "continue", or the negative of these terms or other comparable terminology. By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond the control of Canadian Phoenix, including the impact of general economic conditions, industry conditions, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other industry participants, the lack of availability of qualified personnel or management, stock market volatility and ability to access sufficient capital from internal and external sources. Readers are cautioned that actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits Canadian Phoenix will derive therefrom. The forward-looking statements and information contained in this news release are made as of the date hereof and Canadian Phoenix undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

Neither the 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 release.

Contact Information

  • Canadian Phoenix Resources Corp.
    Michael Atkinson
    President & CEO
    (604) 689-1428
    or
    Canadian Phoenix Resources Corp.
    Tim Moran
    Chief Financial Officer
    (403) 920-0040