Edda Resources Inc.

January 29, 2008 16:09 ET

Edda Resources Announces Reactivation

TORONTO, ONTARIO--(Marketwire - Jan. 29, 2008) - Edda Resources Inc. ("Edda" or the "Company") is pleased to announce that the Ontario Securities Commission has lifted the Cease Trade Order to which the Company has been subject since 1990. Management of the Company intends to reactivate the Company as a resource issuer. The following is the Company's proposed plan of reactivation:

(1) By Agreement dated October 27, 2005, as amended on November 30, 2006 and November 14, 2007, the Company acquire a 100% working interest in four (4) mining claim units comprising 1010 hectares located in the Flin Flon area of Northern Manitoba in consideration for the issuance of 100,000 common shares of the Company, subject to the lifting of the Cease Trade Order. The Company will now issue the 100,000 common shares to A.L. Parres Ltd. to acquire a 100% interest in the property subject to a 3% Net Smelter Returns Royalty in favour of A.L. Parres Ltd. The Company has the right to purchase a 1.5% Net Smelter Returns Royalty from A.L. Parres Ltd. for $750,000. The Company intends to seek financing to explore the gold potential of this property.

(2) The Management of the Company intends to complete a small working capital financing of 2,000,000 working capital units (the "WC Units") with each unit priced at $0.05 and being comprised of one (1) common share and one (1) warrant to purchase a further common share at $0.10 for two years (a "Warrant") for gross proceeds of $100,000.

(3) The Company will be holding an Annual and Special Meeting of Shareholders on or before April 29, 2008 to, among other things, elect directors, appoint auditors, approved a 10% rolling stock option plan, change the name of the Company, amend the Articles of Incorporation to increase the authorized capital to an unlimited number of common shares and to present audited financial statements to the shareholders for the last three years.

(4) The Company will be looking to acquire other resource properties and financing with respect thereto.

Management is currently comprised of Michael Wilson, President and a director, William R. Johnstone, Secretary-Treasurer and a director, James R.B. Parres, a director and Paul H. Berry, a director. Mike Wilson will be subscribing for 1,100,000 WC Units ($55,000); Bill Johnstone, through companies which he controls, will be subscribing for 400,000 WC Units ($20,000); and Jim Parres will be subscribing for 400,000 WC Units ($20,000). Mr. Mel de Quadros, Ph.D, P.Eng., a proposed director for election at the upcoming Annual and Special Meeting of Shareholders, will be subscribing for 100,000 WC Units ($5,000). Paul Berry will not be subscribing for any WC Units. The private placement will close on February 22, 2008. After giving effect to the proposed private placement, the Company will have 4,921,769 common shares and 2,000,000 Warrants issued and outstanding.

The insider private placements are exempt from the valuation and shareholder approval requirements of Ontario Securities Commission Rule 61-501 (the "Rule") by virtue of the exemptions contained in sections 5.5 3 and 5.7(1)3 of the Rule in that the insider private placements are for cash, the fair market value of the private placements does not exceed $2,500,000 and an independent director has approved the private placements.

As a result of the proposed private placement, Mr. Wilson will hold directly or indirectly or have control and direction over 1,100,000 common shares representing 22.34% of outstanding capital and 1,100,000 Warrants after giving effect the private placement. If Mr. Wilson were to exercise all of his warrants, he would hold 2,200,000 common shares directly and indirectly out of a partially diluted capital of 6,021,769 common shares (after giving effect to the exercise of his 1,100,000 Warrants) representing 36.53% of outstanding capital.

As a result of the proposed private placement, Mr. Johnstone will hold directly or indirectly or have control and direction over 400,000 common shares representing 8.16% of outstanding capital and 400,000 Warrants after giving effect the private placement. If Mr. Johnstone were to exercise all of his warrants, he would hold 800,000 common shares directly and indirectly out of a partially diluted capital of 5,321,769 common shares (after giving effect to the exercise of his 400,000 Warrants) representing 15.03% of outstanding capital.

As a result of the proposed private placement, Mr. Parres will hold directly or indirectly or have control and direction over 469,153 common shares representing 9.53% of outstanding capital and 400,000 Warrants after giving effect the private placement. If Mr. Parres were to exercise all of his warrants, he would hold 869,153 common shares directly and indirectly out of a partially diluted capital of 5,321,769 common shares (after giving effect to the exercise of his 400,000 Warrants) representing 16.33% of outstanding capital.

Cautionary Note Regarding Forward-Looking Statements: This Press Release contains forward-looking statements that involve risks and uncertainties, which may cause actual results to differ materially from the statements made. When used in this document, the words "may", "would", "could", "will", "intend", "plan", "anticipate", "believe", "estimate", "expect" and similar expressions are intended to identify forward-looking statements. Such statements reflect our current views with respect to future events and are subject to such risks and uncertainties. Many factors could cause our actual results to differ materially from the statements made, including those factors discussed in filings made by us with the Canadian securities regulatory authorities. Should one or more of these risks and uncertainties, such as actual results of current exploration programs, the general risks associated with the mining industry, the price of gold and other metals, currency and interest rate fluctuations, increased competition and general economic and market factors, occur or should assumptions underlying the forward looking statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, or expected. We do not intend and do not assume any obligation to update these forward-looking statements. Shareholders are cautioned not to put undue reliance on such forward-looking statements.

Contact Information

  • Edda Resources Inc.
    Mr. William R. Johnstone
    Secretary-Treasurer and a director of the Company
    (416) 865-6605