Willowstar Capital Inc.
TSX VENTURE : WWM.P

December 23, 2009 16:00 ET

Willowstar Announces Amended and Restated Agreement With Creso Resources Inc.

TORONTO, ONTARIO--(Marketwire - Dec. 23, 2009) - WILLOWSTAR CAPITAL INC. ("Willowstar" or the "Corporation") (TSX VENTURE:WWM.P), a Capital Pool Company, is pleased to announce that it has entered into an amended and restated binding letter agreement (the "Amended Agreement") in connection with its previously announced proposed acquisition of all of the issued and outstanding securities of Creso Resources Inc. ("Creso") (see the Corporation's press release dated June 11, 2009 for further details). The acquisition of Creso will be Willowstar's qualifying transaction (the "Qualifying Transaction") pursuant to the rules and policies of the TSX Venture Exchange (the "Exchange").

Under the Amended Agreement, Willowstar has agreed to acquire all of the issued and outstanding common shares of Creso in exchange for Willowstar common shares (each, a "Willowstar Share"), to Creso shareholders in exchange for all of their common shares in the capital of Creso (each, a "Creso Share"). Each Creso shareholder will be entitled to receive one Willowstar Share for each Creso Share. In addition, Willowstar has agreed to issue replacement options, warrants, broker warrants and a debenture to all holders of Creso options, warrants, broker warrants and a debenture who surrender such securities to Willowstar pursuant to the Amended Agreement. The replacement options, warrants, broker warrants and debenture issued by Willowstar will have identical exercise terms as the Creso options, warrants, broker warrants and debenture that are surrendered.

The foregoing terms are identical to those established under the initial binding letter agreement entered into between Willowstar and Creso and announced by press release on June 11, 2009. The principal reasons behind the Amended Agreement are to reflect updated transaction dates and to account for various additional issuances of securities that have been completed by Creso. Such issuances reflect both financing activities and the issuance of shares as consideration for the acquisition of additional property rights in and around Creso's primary area of interest. As of the date of news release, Creso presently has an aggregate of 51,384,481 Creso Shares issued and outstanding, together with 850,000 Creso Shares that are issuable in connection with certain property acquisitions that are pending, 4,000,000 options to acquire Creso Shares outstanding, 14,004,467 share purchase warrants, 300,000 broker warrants and a convertible debenture in the principal amount of $1,900,000 (convertible at the lower of (i) $0.75 per common share or (ii) the price per common share at which the common shares are issued pursuant to any issuance of common shares (or financial instruments or securities convertible into or exercisable or exchangeable for common shares) by the Creso or any other person (including any selling shareholder) in connection with which application is made to list the common shares (or financial instruments or securities convertible or exercisable or exchangeable for common shares) for trading on a recognized stock exchange in Canada, the United States, the United Kingdom or elsewhere, the whole subject to adjustment. There are no parties that hold a controlling interest in Creso.

Completion of the Qualifying Transaction will be subject to the satisfaction of a number of conditions, including, but not limited to: completion of a concurrent financing in an amount and at an offering price to be determined; completion or waiver of sponsorship; receipt of all necessary consents, approvals, etc.; completion of all due diligence reviews; the entering into of a definitive agreement in respect of the business combination; the approval of the respective board of directors of Willowstar and Creso; and satisfaction of the Minimum Listing Requirements of the Exchange and all requirements under Exchange rules relating to completion of a "Qualifying Transaction". It is expected that, upon completion of the Qualifying Transaction, Willowstar will change its name to "Creso Resources Inc." or some similar such name as the directors determine and as is acceptable to applicable regulatory authorities.

The proposed Qualifying Transaction is not a "non-arm's length qualifying transaction" within the meaning of Policy 2.4 of the Exchange and, as such, shareholder approval is not required, unless otherwise required by the Exchange. Willowstar also intends to apply for a waiver from the requirement to retain a Sponsor in connection with the Qualifying Transaction.

A filing statement in respect of the proposed Qualifying Transaction will be prepared and filed in accordance with Policy 2.4 of the Exchange on SEDAR at www.sedar.com no less than 7 business days prior to the closing of the proposed Qualifying Transaction. A press release will be issued once the filing statement has been filed as required pursuant to Exchange policies.

Creso Resources Inc.

Creso Resources Inc. is a private mineral exploration company that was incorporated on February 22, 2005 under the Canada Business Corporations Act. Its registered and head offices are located at 2750, 600 de Maisonneuve Blvd. West, Montreal, Quebec H3A 3J2. Creso's principal mining exploration holdings are located in the Shining Tree mining camp of Northern Ontario within a 100 kilometres of the Timmins and Kirkland mining camps and additional interests are held in past producing copper, zinc and lead properties in Guatemala. Creso is engaged, through its subsidiary, in the identification and acquisition of early stage gold and base metals properties with demonstrable potential of hosting higher grade ore deposits.

Completion of the transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable pursuant to Exchange Requirements, majority of the minority shareholder approval. Where applicable, 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 or filing statement to be prepared in connection with the transaction, 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 a capital pool company should be considered highly speculative.

Forward Looking Statements

Except for statements of historical fact relating to the Corporation, certain information contained herein constitutes forward-looking statements. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. The Corporation undertakes no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change. The reader is cautioned not to place undue reliance on forward-looking statements.

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

Contact Information

  • Willowstar Capital Inc.
    Mark Raguz
    President and CEO
    (416) 200-3847
    (416) 447-1381 (FAX)
    or
    Creso Resources Inc.
    Pierre R. Gauthier
    Chairman
    (514) 866-6001 x 239
    (514) 866-6193 (FAX)