Etna Resources Inc.
TSX VENTURE : ETN

December 07, 2009 11:14 ET

Etna Resources Inc. Announces Closing of Share Exchange Transaction and $2.95 Million Financing

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Dec. 7, 2009) -

NOT FOR DISTRIBUTION OR DISSEMINATION IN THE UNITED STATES OR TO U.S. NEWSWIRE SERVICES

Etna Resources Inc. ("Etna") (TSX VENTURE:ETN) is pleased to announce that, on December 4, 2009, it closed the share exchange transaction contemplated under the Amended and Restated Securities Exchange Agreement dated September 18, 2009 (the "Agreement"), as amended, among Etna, Sociedad Gareste Limitada ("Gareste"), PGM International S.A. Cerrada ("PGM") and the shareholders of South American Lithium Company S.A. Cerrada ("SALICO"). Simultaneously, Etna closed a non-brokered unit private placement financing of $2,954,640.30 as further described below.

Share Exchange Transaction

Following the closing of the Agreement, Etna acquired 99% of the shares of SALICO in consideration for the issuance of 10,494,000 common shares in the capital of Etna to the former shareholders of SALICO. SALICO holds concessions and other interests in a total of nine lithium salars in Chile as set out in Etna's press release dated October 29, 2009. The existing portfolio of rights in the nine salars includes surface brine lakes or surface flow at Laguna Verde, Lagunas Bravas and Rio Salado/Pedernales, and six additional lithium brine projects, all located in the mineral-rich Atacama Region III. Etna filed a National Instrument 43-101 compliant technical report for these lithium salar projects in Chile (the "NI 43-101 Report") on November 13, 2009 which can be viewed on SEDAR at www.sedar.com. Etna anticipates concentrating its initial efforts on the brine lake at the Laguna Verde salar, which is the primary focus of the NI 43-101 Report. The rights in these nine lithium salars cover a cumulative area in excess of 11,700 hectares and an additional 1,500 hectares of overstaked junior rights, all accessible via serviceable roads. It is believed that the salars collectively carry the potential to host lithium in three distinct brine types: surface water, shallow and deep brines. Etna issued 613,333 common shares to one finder in connection with the closing of the Agreement, which shares are subject to a hold period expiring April 5, 2009.

Financing

On December 4, 2009, Etna closed a non-brokered unit private placement and sold a total of 9,848,801 units at $0.30 per unit for gross proceeds of $2,954,640.30. Each unit is comprised of one common share and one-half of one common share purchase warrant. Each whole warrant entitles the holder to purchase one additional common share at a price of $0.50 until expiry on June 4, 2011. Etna intends to use proceeds from the financing to carry out the exploration program of its Chilean property interests as set out in the NI 43-101 report and for general working capital purposes.

Etna issued 782,836 warrants and paid cash of approximately $234,851 to finders in connection with the closing of the financing. The number of warrants was calculated as 8% of the number of units issued in the financing and the cash payment was calculated as 8% of the gross proceeds of the financing. The finder's warrants have the same terms as the warrants issued to subscribers in the financing. The securities issued in the financing and to the finders are subject to a hold period expiring April 5, 2009.

NSRs and Payments

In connection with the closing of the Agreement, SALICO granted a 2% net smelter return royalty to Gareste on future production from seven salars, and a 2% net smelter return royalty to PGM on one salar, payable following commencement of commercial production to a maximum of US$6 million per salar. In addition, at the Piedra Parada salar, where SALICO obtained only contractual rights to exploit lithium and light metals, SALICO granted a 2% net smelter return royalty to Gareste on the proceeds from the sale of lithium and light metals to a maximum of US$6 million. Prior to commencement of commercial production at any salar, SALICO may re-purchase one-half of each net smelter return royalty for US$2 million on a per salar basis. SALICO is obligated to continue to pay Gareste a payment of US$2,000 per month as a lease and rental remittance fee to maintain the Piedra Parada concessions through the exploration stage, which payments will increase to US$5,000 per month at such time as these concessions are converted to exploitation status.

Change in Directors, Management and Office

On the closing date, Joseph Grosso resigned as President, Chief Executive Officer and a director of Etna and Andrew A. Brodkey was appointed to such positions. Mr. Brodkey, who is a mining engineer and a lawyer, is also currently the President and Chief Executive Officer of Pacific Copper Corp. and Zoro Mining Corp., both companies with a class of securities registered under the United States Securities Exchange Act of 1934, with properties in Chile. Mr. Brodkey previously worked in a senior executive position for BHP Billiton with a focus on Latin American projects. Jerry A. Minni resigned as Corporate Secretary. In addition to Mr. Brodkey, Jodi Henderson was appointed Corporate Secretary and David Hackman was appointed Vice President – Exploration.

On the closing date, Etna changed its head office from Vancouver to Tucson, Arizona located at 3040 North Campbell Ave., Suite 110, Tucson, Arizona 85719, telephone: (520) 989-0020 fax: (520) 623-3326. Etna intends to maintain its Vancouver office located at 200 – 551 Howe Street, Vancouver, British Columbia V6C 2C2, telephone: (604) 683-8610 fax: (604) 683-4499. As the exploration program on its Chilean property interests and administrative functions will be coordinated out of the Tucson, Arizona office, proceeds from the financing were wired to such office on closing.

ETNA RESOURCES INC.
/s/ Jerry A. Minni
Jerry A. Minni
Director & Chief Financial Officer

This press release contains projections and forward-looking information that involve various risks and uncertainties regarding future events. Such forward-looking information can include without limitation statements based on current expectations involving a number of risks and uncertainties and are not guarantees of future performance of the Company such as the statement that: (i) the Company may concentrate on the Laguna Verde salar; and (ii) the belief that the salars may carry the potential to host lithium in three distinct brines types. There are numerous risks and uncertainties that could cause actual results and the Company's plans and objectives to differ materially from those expressed in the forward-looking information, including: (i) adverse market conditions; (ii) a decrease in demand for and the price of lithium; (iii) risks associated with title to property interests; (iv) political risks involving Chile, including changes to legislation affecting mineral exploration and development activities; and (v) general uncertainties with respect to mineral exploration in general. Actual results and future events could differ materially from those anticipated in such information. These and all subsequent written and oral forward-looking information are based on estimates and opinions of management on the dates they are made and are expressly qualified in their entirety by this notice.

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", as such term is defined in regulations under the U.S. Securities Act, unless an exemption from such registration requirements is available.

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 release.

Contact Information

  • Etna Resources Inc.
    Jerry A. Minni
    Director & Chief Financial Officer
    604-683-8610