Dynamite Resources Ltd.

Dynamite Resources Ltd.

July 11, 2007 22:01 ET

Dynamite Resources Announces Mailing of Tau Mining Offer and Take-Over Bid Circular Together With Directors' Circular

TORONTO, ONTARIO--(Marketwire - July 11, 2007) -


DYNAMITE RESOURCES LTD. ("Dynamite") (TSX VENTURE:DNR) today announced the execution of an arrangement agreement relating to the previously announced transaction, whereby the Corporation (as defined below) will acquire all of the issued and outstanding ordinary shares ("Tau Ordinary Shares") of Tau Mining Limited ("Tau") by way of take-over bid (the "Offer"). Prior to completion of the Offer, Dynamite and 6803725 Canada Inc. (formerly Tau Finance Inc.), a subsidiary of Dynamite, will amalgamate and continue as one corporate entity (the "Corporation") in accordance with a court approved plan of arrangement (the "Arrangement"). In connection with the Arrangement, outstanding common shares of Dynamite will be converted into common shares of the Corporation ("Common Share") on a one for one basis and outstanding convertible securities of Dynamite will remain outstanding and be convertible into Common Shares of the Corporation in accordance with their terms.

Pursuant to the terms of the Offer, for each Tau Ordinary Share held, a Tau shareholder will have the option to receive either (i) one quarter of one Common Share of the Corporation and one quarter of one Common Share purchase warrant of the Corporation, with each whole Common Share purchase warrant (a "Warrant") to be exercisable to acquire one Common Share at a price of C$1.00 for a period of two years following the closing of the Arrangement, or (ii) cash consideration of C$0.15 and one sixteenth of one Common Share (the "Cash/Share Consideration"), provided that as a condition of the Offer, holders of at least 70 million Tau Ordinary Shares shall have agreed to accept the Cash/Share Consideration. The Offer is subject to certain conditions, including there being validly deposited and not withdrawn at the expiry time acceptances under the Offer such that the Corporation has, by virtue of such acceptances, acquired or unconditionally contracted to acquire: (i) not less than 90% (or such lesser percentage as the Corporation may decide) in value of the Tau Ordinary Shares to which the Offer relates; and (ii) not less than 90% (or such lesser percentage as the Corporation may decide) of the voting rights carried by those Tau Ordinary Shares (excluding in each case any Tau Ordinary Shares held by the Corporation and its affiliates).

Dynamite also announced it will mail to shareholders of Tau its Offer and Take-over Bid Circular dated July 10, 2007 and related documents, in connection with the Offer. Included in the package being mailed to Tau shareholders today is the Directors' Circular prepared by Tau's Board of Directors, which includes the unanimous recommendation of the directors that Tau shareholders should accept the Offer.

The Arrangement is conditional upon receipt of shareholder, court and regulatory approval and other conditions customary in a transaction of this nature, including the fulfillment of all of the conditions of the Offer. The Arrangement must be approved by at least two-thirds of the votes cast by shareholders of Dynamite at a meeting of holders of common shares of Dynamite to be held on August 7, 2007. The Arrangement and the Offer are expected to close in late August 2007.

Tau's Uranium Properties

Tau indirectly owns 100% of two uranium properties, Kokomeren & Barskaun, in the Kyrgyz Republic, Central Asia. The properties are located within the Tien Shan Mountains, one of the most prolific uranium provinces in the world. More that 300 uranium deposits have been recognized along the Tien Shan Mineral Belt. The region's reserves of uranium were originally mined to produce highly enriched uranium and plutonium for use in nuclear reactors and in the Soviet Union's nuclear arsenal.

The Kokomeren and Barskaun License Areas have been explored by geologists of the former Soviet Union.

Within the Kokomeren License (942km2) lies the Orto-Kuganda uranium deposit. The Soviet-Era FSU C2 category resource (historical and not NI 43-101 compliant) was calculated on the basis of exploration results in 1961 and is summarized as follows:

- 92,050 tonnes @ 0.127% U;

- 116.9 tonnes U total (136.8 tonnes U3O8 which equates to greater than 300,000lbs U3O8)

The structure that is host to the Orto-Kuganda uranium deposit extends for several kilometers in both strike directions and remains, for the most, under-explored.

The setting and type of mineralization is analogous to other intrusive-related uranium deposits such as Kok-Moinok in Kyrgyzstan, Kyyktal and Charkasar in Eastern Uzbekistan, Dzhantuar (7,154 tonnes U), Koscheka, and Rudnoe in Western Uzbekistan, uranium deposits that form the Elkon district in Eastern Siberia (250,000 tonnes U), and the Rossing deposit in Namibia.

The Barskaun exploration property is situated in the Issyk-Kul Lake Region of the Kyrgyz Republic occupying an area approximately 311 km2.

The Barskaun Licence area incorporates more than 20 significant uranium occurrences, as well as a large number of radiometric and geochemical anomalies. Mineralized showings over the Barskaun License Area have uranium grades (in individual channel samples) reported as high as 0.45% to 0.8%.

Tau's 2007 proposed exploration program for the Kokomeren and Barskaun licences is CAD4.4million and includes drilling, mapping & airborne geophysics.

Other Opportunities in Kyrgyzstan & Infrastructure

Tau is actively pursuing additional properties in the Tien Shan Mineral Belt as well as reviewing opportunities to hold direct and/or indirect equity in a downstream processing facility(s).

Dynamite Resources Limited

Please visit the Company's web site at www.dynamiteresources.com.

Qualified Person

The technical and scientific information in this document is based on information that was compiled by Caracle Creek International Consulting Inc. ("CCIC") and has been reviewed by Iain Kelso, P.Geo., Technical Manager with CCIC and a qualified person under NI43-101.

Cautionary Note Regarding Forward-looking Information

Except for statements of historical fact contained herein, the information in this press release constitutes "forward-looking information" within the meaning of Canadian securities law. Such forward-looking information may be identified by words such as "plans", "proposes", "estimates", "intends", "expects", "believes", "may", "will" and include without limitation, statements regarding the Company's plan of business operations; use of proceeds; availability of financing on acceptable terms; and projected costs and expenditures. There can be no assurance that such statements will prove to be accurate; actual results and future events could differ materially from such statements. In particular, past success or achievement does not guarantee future success. Factors that could cause actual results to differ materially include, among others, metal prices, competition, financing risks, acquisition risks, risks inherent in the mining industry, and regulatory risks. Most of these factors are outside the control of the Company. Investors are cautioned not to put undue reliance on forward-looking information. Except as otherwise required by applicable securities statutes or regulation, the Company expressly disclaims any intent or obligation to update publicly forward-looking information, whether as a result of new information, future events or otherwise.

This news release does not constitute an offer to sell or a solicitation of an offer to sell 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 unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.


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