Caldera Resources Inc.
TSX : CDR

Caldera Resources Inc.

April 29, 2008 08:33 ET

Caldera Signs Letter of Intent to Acquire Western Australian Diamonds Inc.

SOUTH PERTH, WESTERN AUSTRALIA--(Marketwire - April 29, 2008) - Caldera Resources Inc. (TSX:CDR) is pleased report that it has entered into a letter of intent ("LOI") with Western Australian Diamonds Inc. ("WAD") of Vancouver B.C. to enter into a friendly merger ("the Transaction").

Highlights of the Transaction

Under the terms of the Transaction, Caldera and WAD will enter into a statutory plan of arrangement, whereby Caldera and WAD will merge their businesses into a new or pre-existing entity ("Amalco") pursuant to an arrangement agreement, the result of which will have each common share or convertible security of WAD exchanged for one common share or convertible security of Amalco, and each common share or convertible security of Caldera exchanged for 0.20 (the "Conversion Ratio") of an Amalco common share or convertible security of Amalco. The exercise price of the Caldera convertible securities shall be adjusted in accordance with the Conversion Ratio.

Both Caldera and WAD have agreed to pay the other a break fee of $200,000 in certain circumstances if the Transaction is not completed.

Completion of the Transaction is subject to the negotiation and execution of a definitive agreement, and the receipt of all required approvals, including those from the Shareholders of Caldera and the TSX as well as the completion of a private placement or other equity financing to raise a minimum of $4,000,000 concurrently with the closing of the Transaction. There can be no assurance that the Transaction will be completed as proposed or at all. It is intended that a meeting of the shareholders of Caldera will be held as soon as possible to seek approval of the Transaction and it is anticipated that this meeting will be held on or before September 15, 2008.

WAD has agreed to advance Caldera up to $500,000 to fund its ongoing expenses pending closing of the Transaction. WAD will fund these expenses through a private placement financing of WAD. Caldera has the right to complete its own financing by way of private placement to fund its ongoing expenses subject to certain conditions.

As at April 28, 2008, 104,960,279 common shares of Caldera are issued and outstanding, while WAD has 34,110,545 common shares issued and outstanding and authorised for issuance. Upon completion of the Transaction, an aggregate of 55,102,600 common shares of Amalco will be issued and outstanding, before giving effect to any private placement financings to fund Caldera's ongoing expenses.

About Caldera

Caldera is engaged in exploring for diamondiferous kimberlites, as well as gold, base and precious metals in the States of South Australia and Western Australia. It has interests in or a right to acquire interests in a total of 22 Exploration Licences in the States of South Australia and Western Australia, some of which are being explored as joint ventures with third parties. Caldera's key projects in Western Australia are the Ellendale East and Ellendale South, Runton and Cromer Cone projects.

The Ellendale projects are strategically located within the Ellendale lamporite diamond field in the West Kimberley region. The Ellendale field hosts two large operating diamond mines owned by the London listed Gem Diamonds group. The closest of these mines is approximately 20 kilometres from the Caldera Ellendale East project. In addition to the two producing mines there are also numerous alluvial diamond resources in this field that are producing highly valuable gem quality diamonds. Caldera's exploration on these projects has recovered numerous diamond indicator minerals including micro-diamonds and chrome spinels from heavy mineral concentrates obtained from two drill programs.

Exploration work at the Runton project, located in the Pilbara region, has identified a ten kilometre long intrusive dyke that has produced micro-diamonds, pyrope garnet and diamond associated chrome spinels from heavy mineral concentrates. Quantitative analysis of the recovered heavy mineral concentrates supports the overall conceptual model that the dyke forms part of a major kimberlitic event. To date drilling has only tested the extremely weathered section of this dyke and it is intended to carry out further deeper drilling of this target to recover fresh rock. Additional targets at the Runton project also require further evaluation by deep drill programs. The Caldera technical team believe that the Runton exploration results to date are significant and that additional funding will accelerate evaluation of the existing discovery. Caldera's technical team believes that further drilling programs at this project will produce positive results.

The Cromer Cone project, which adjoins Runton, is considered prospective for gold/base metals as evidenced by the recovery of numerous gold nuggets from surface metal detecting.

The Caldera Durack South project is complementary to some of WAD's North Kimberley diamond tenements due to its close proximity to those projects.

Dr. Greg Pooley, a member of the Aus. I.M.M. is the qualified person responsible for the technical information relating to Caldera in this news release.

About WAD

WAD owns an 80% interest in two private Australian companies that jointly own licences covering over approximately 700,000 acres that have been acquired in four key diamond project areas in the Kimberley Region of Western Australia - North Kimberley, Halls Creek Orogenic Zone - Argyle, South-Central Kimberley and West Kimberley project areas. The North Kimberley area includes the King George and Casuarina licences. The King George licences contains 7 known kimberlites and the reported recovery of 377 alluvial diamonds. The Casuarina licence area has yielded 109 alluvial diamonds recovered from 14 alluvial sites. The Halls Creek Orogenic Zone and Argyle Area include four main licence areas, the first being Ivanhoe hosting 6 alluvial diamond sites, with kimberlite and lamproite targets as well. The Flying Fox East licences are nearby and down drainage from the Argyle Mine, the largest diamond producer in the world by volume. The Wilson River licence area is the third and is located west of Argyle, adjacent to the Maude Creek diamondiferous kimberlite owned by Northern Star Resources. The Impact licence has had 13 diamonds recovered from 8 alluvial sites and is near the Durack kimberlite. The South-Central Kimberley project includes a number of licences that surround the diamondiferous Aries kimberlite as well as other Phillips Range kimberlites. The West Kimberley Project includes the Oscar Plateau and McSherry Gap licence areas that contain a number of weakly diamondiferous lamproites as part of the Ellendale lamproite field. WAD plans to carry out a property-wide high resolution aeromagnetic fixed wing geophysical survey in 2008, followed by drainage and loam sampling to verify and follow-up on anomalous unexplained alluvial diamond and diamond indicator results from previously reported sampling programs and historic lamproites, kimberlites and geophysical anomalies identified in previous exploration. A test survey is being planned using a high resolution magnetic and time domain electromagnetic helicopter-borne geophysical survey over a portion of the King George River block. Once the airborne surveys are completed ground geophysical surveys over prospective magnetic anomalies identified in previous exploration and in the Phase 1 airborne surveys will be initiated.

Mr. Michael Dufresne, M. sc., P.Geol., is the qualified person responsible for the technical information relating to WAD in this news release.

Strategy for the Transaction

The combination of Caldera and WAD will add significantly to Caldera's kimberlite portfolio and will bring together the strong experienced management teams of the two companies. WAD is a subsidiary of Longview Capital Partners, a TSX-listed investment company that creates long-term shareholder value by capitalizing on early stage opportunities in the natural resource sector, with the resultant earnings growth recognized in its share price. The merged company will continue to utilize the extensive diamond experience of Caldera's management, while taking advantage of Longview's financial and technical strength.

Caldera's Board are firmly of the view that this proposed transaction is a good opportunity to maximise Caldera shareholder value. The addition of the impressive WAD tenement package to Caldera's existing exploration portfolio will give the merged group one of Australia's largest diamond exploration tenement holdings; while the Vancouver based WAD management team will provide more opportunities for better market place recognition.

THIS NEWS RELEASE INCLUDES CERTAIN "FORWARD-LOOKING STATEMENTS". ALL STATEMENTS OTHER THAN STATEMENTS OF HISTORICAL FACT, INCLUDED IN THIS RELEASE, INCLUDING, WITHOUT LIMITATION, STATEMENTS REGARDING POTENTIAL MINERALIZATION AND RESERVES, EXPLORATION RESULTS, AND FUTURE PLANS AND OBJECTIVES OF CALDERA, ARE FORWARD-LOOKING STATEMENTS THAT INVOLVE VARIOUS RISKS AND UNCERTAINTIES. THERE CAN BE NO ASSURANCE THAT SUCH STATEMENTS WILL PROVE TO BE ACCURATE AND ACTUAL RESULTS AND FUTURE EVENTS COULD DIFFER MATERIALLY FORM THOSE ANTICIPATED IN SUCH STATEMENTS. IMPORTANT FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM CALDERA'S EXPECTATIONS ARE EXPLORATION RISKS DETAILED HEREIN AND FROM TIME TO TIME IN THE FILINGS MADE BY CALDERA WITH SECURITIES REGULATIONS.

NO STOCK EXCHANGE, SECURITIES COMMISSION OR OTHER REGULATORY AUTHORITY HAS APPROVED OR DISAPPROVED THE INFORMATION CONTAINED HEREIN.

Contact Information

  • Caldera Resources Inc.
    Chris Reindler
    President
    +61-8-9367-7728
    +61-8-9367-7705 (FAX)
    Email: calderares@bigpond.com