Carrington Acquisition Corp.

March 20, 2009 13:43 ET

Carrington Provides an Update on Qualifying Transaction

LONDON, ONTARIO--(Marketwire - March 20, 2009) - Carrington Acquisition Corp. of London, Ontario (TSX VENTURE:CAQ.P) ("Carrington") and Mr. George Lunick, President and CEO of Carrington, announces that Carrington is continuing to move forward with its proposed Qualifying Transaction with Dolly Silver Corporation ("Dolly Silver"), a junior Canadian silver mining and exploration company, which was previously announced on August 11, 2008.

Under the original term sheet signed between Carrington and Dolly Silver and dated July 16, 2008 (the "Agreement") the parties had contemplated the Carrington would acquire all of the outstanding common shares of Dolly Silver in exchange for common shares of Carrington. As a result of the number of shareholders of Dolly Silver expected prior to closing, the parties have now agreed to consummate the Qualifying Transaction by way of an amalgamation of Carrington and Dolly Silver pursuant to the laws of the Province of British Columbia.

In addition, both Carrington and Dolly Silver have agreed to seek shareholder approval for consolidation of their respective issued and outstanding common shares on a one 'new' (post-consolidated) common share for each two 'old' (pre-consolidated) common shares. It is expected that this will result in a more favourable capital structure for the Resulting Issuer. It was originally expected that Haywood Securities may act as an agent or sponsor for the proposed Qualifying Transaction, however, the parties have determined that they will not require the assistance of Haywood. Carrington has set a meeting date of April 14, 2009, for approval of, among other matters, the consolidation and proposed amalgamation, subject to necessary regulatory approval of the Qualifying Transaction.

It is also a condition of the Completion of the Qualifying Transaction that Dolly Silver complete a financing for a maximum of 12,500,000 post-consolidated common shares at a deemed (post-consolidated) price of $0.40 per share. Fund from this financing will be used in the exploration work programs on both the properties owned by Dolly Silver (the "Dolly Silver Properties") and properties which are subject to an earn-in agreement (the "Earn-In Agreement") with Dolly Varden Resources ("Dolly Varden") to earn a 50% interest in the Dolly Varden silver mines, deposits and properties located in the historic Dolly Varden mining camp in British Columbia (the "Dolly Varden Properties"). The Dolly Silver Properties and Dolly Varden Properties are considered prospective for the discovery of gold, silver, zinc and lead deposits. Based on the terms of the Earn-in Agreement, Dolly Silver has made a $500,000 down payment and will be required to spend $7,500,000 on exploration of the Dolly Varden Properties over a three year period. After all terms and conditions of the Earn-in Agreement are met, Dolly Silver and Dolly Varden will be deemed to have formed a joint venture.

One of the originally proposed directors of the Resulting Issuer, Fred Christensen, has, for personal reasons, decided not to stand for nomination. In his place, it is proposed that Greg Missal will stand for election, subject to necessary regulatory approval of the Qualifying Transaction. Mr. Missal will bring a broad base of mining experience to the board, most recently as Vice President, Government and Regulatory Affairs of Tahera Diamond Corp., a TSX listed mining exploration company, from March 1998 to December 2008.

Carrington has also made application pursuant to the TSX Venture Exchange (the "Exchange") bulletin titled Temporary Relief Measures dated November 3, 2008, for a six month extension of Carrington's deadline to complete a Qualifying Transaction of January 19, 2009. This application is currently being reviewed by the Exchange.

Trading in the shares of Carrington will remain halted until receipt by the Exchange of satisfactory documentation.

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 information circular to be prepared in connection with the proposed 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.

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

  • Carrington Acquisition Corp.
    George Lunick
    President and CEO
    (519) 679-1300
    Dolly Silver Corporation
    Glenn Laing
    (416) 368-8496