EACOM Timber Corporation

EACOM Timber Corporation

November 24, 2009 21:04 ET

EACOM Timber Corporation: Warrant Holders Exercise $2.4 Million of Warrants Early

Funds In Place to Purchase the Big River Sawmill

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Nov. 24, 2009) - EACOM Timber Corporation (NEX:ETR.H) today announced it has received proceeds of $2,406,250 related to the early exercise of 9,625,000 warrants. These proceeds plus the Company's estimated $2 million in working capital gives the Company sufficient capital to purchase the Big River Sawmill without taking on debt to finance the purchase, leaving the Company's balance sheet debt free.

In addition, as previously announced, the Company closed in escrow on November 13, 2009 another $3,000,000 non brokered private placement, which will be released subject to the TSX-Venture Exchange approval of the Big River Sawmill purchase.

EACOM and Domtar are working to finalize the asset purchase agreement. Domtar has extended the exclusive option period to December 7, 2009 to allow for completion of this agreement.

The Honourable John Reynolds P.C., a director of EACOM said that "We are excited to be able to purchase the Big River Sawmill and plan to operate the mill in Big River, if we receive an acceptable timber allocation from the Saskatchewan government." He went on to say," To date we have not received a timber allocation and we may have to consider moving the mill to another region where timber would be made available, creating jobs in a new community."

The start-up of the Big River Sawmill will depend on, among other things, EACOM securing a timber allocation from the Saskatchewan government, on terms acceptable to EACOM. EACOM has not been allocated a timber supply to operate the mill, and there is no assurance that such a timber supply will be forthcoming. EACOM plans to purchase the Big River sawmill and pursue other alternatives for the mill if it cannot negotiate a timber allocation, on acceptable terms, in Saskatchewan. Other regions in Canada may have timber available and EACOM would consider moving the sawmill to another region if it did not get a timber allocation in Saskatchewan.

Warrant Exercise Details

The warrants exercised were issued as part of the non-brokered private placement that closed on August 26, 2009, 10,000,000 warrants were issued with an exercise price of $0.25 and a one year term. Each warrant entitled the holder to purchase once common share for $0.25. The common shares issued will be subject to a hold period expiring on December 27, 2009. The Company expects the remaining 375,000 warrants to be exercised shortly, which would provide additional proceeds of $93,750.

Statements in this news release other than historical information are forward-looking statements subject to risks and uncertainties. Actual results could differ materially depending on factors such as the availability of resources, the timing and effects of regulatory actions, the strength of competition, the outcome of litigation and the potential for acquisition transactions. Additional information regarding risks and uncertainties is set forth in the current MD&A for EACOM Timber Corporation on file with the Canadian Securities Commissions.

Contact Information

  • EACOM Timber Corporation
    Michael Liggett
    1.604.279.8511 or 1.800.315.3660
    1.604.279.8711 (FAX)