Macusani Yellowcake Inc.

Macusani Yellowcake Inc.

April 27, 2007 17:30 ET

Macusani Yellowcake Inc.: Silver Net Equities Inc. Provides Details of Proposed Qualifying Transaction

CALGARY, ALBERTA--(CCNMatthews - April 27, 2007) - SILVER NET EQUITIES INC. ("Silver Net" or the "Corporation") (TSX VENTURE:SVE.P) a capital pool company, announced on March 27, 2007 that it has entered into an arm's length Letter of Intent dated March 22, 2007 with Macusani Yellowcake Inc. ("Macusani"), a private Ontario corporation exploring for uranium in Peru. The Letter of Intent contemplates the merger of the two companies pursuant to a statutory amalgamation and will serve as Silver Net's Qualifying Transaction (the "Proposed Qualifying Transaction") pursuant to Policy 2.4 of the TSX Venture Exchange Inc. (the "Exchange"). The shares of the Corporation have been halted and will remain halted pending review of certain materials by the Exchange.

Terms of the Transaction

Under the Proposed Qualifying Transaction, following the continuance of Silver Net into the province of Ontario, Silver Net and Macusani would amalgamate to form a new company under the name "Macusani Yellowcake Inc." ("Amalco") with former holders of common shares of Silver Net receiving 0.55 of an Amalco common share for each Silver Net Share held for an aggregate of 1,100,000 common shares of Amalco (assuming no exercise of convertible securities of Silver Net) and former holders of shares of Macusani receiving common shares in Amalco on a share for share basis. Shares issued to former Macusani shareholders will be placed in escrow to be released in stages in accordance with applicable securities regulatory policies. The Proposed Qualifying Transaction and issuance of shares thereunder are subject to regulatory approval, including that of the Exchange. Prior to the execution of the Letter of Intent, there was no relationship between Silver Net and Macusani and their respective directors, officers and shareholders. Since the Proposed Qualifying Transaction has been negotiated at arm's length, it is not anticipated that majority of the minority shareholder approval will be required pursuant to Exchange requirements, although the amalgamation will require approval by Silver Net shareholders at a meeting expected to be held in June, 2007. After the Proposed Qualifying Transaction, it is expected that Amalco will be a Tier 2 mining issuer on the Exchange.

Upon completion of the Proposed Qualifying Transaction, it is expected that former Macusani shareholders will hold approximately 94% of Amalco and former Silver Net shareholders will own approximately 6% of the outstanding Amalco shares (on a non-diluted basis, assuming full completion of the Macusani Financing described below but before taking into account any options, warrants or other rights to acquire shares).

Completion of the Proposed Qualifying Transaction is subject to a number of conditions, including but not limited to (i) Exchange acceptance and if applicable pursuant to the Exchange requirements, majority of the minority shareholder approval; (ii) satisfactory due diligence by both parties; (iii) the completion by Macusani of a National Instrument 43-101 compliant technical report; (iv) the execution of definitive agreements; (v) Silver Net having net cash (cash less all liabilities) at closing of not less than $75,000; (vi) Macusani completing the Macusani Financing (as defined below) for gross proceeds of not less than $1.5 million and at a price per share of not less than $0.75; and (vii) completion of the Proposed Qualifying Transaction on or before August 1, 2007. A finder's fee of 150,000 pre adjustment Shares will be paid in connection with the Proposed Qualifying Transaction to Mr. Tim Gallagher of Toronto, Ontario. In addition, certain current directors of Silver Net have agreed to sell 200,000 free trading pre adjustment shares to Mr. Gallagher at a price of $0.20 per Common Share following completion of the Proposed Qualifying Transaction. Where applicable, the Proposed Qualifying Transaction cannot close until the required shareholder approval is obtained. It is anticipated that meetings of the Silver Net and Macusani shareholders will be held in mid-June 2007 to approve the Proposed Qualifying Transaction and any related matters with completion of the transaction currently scheduled for July, 2007. There can be no assurance that the Proposed Qualifying Transaction will be completed as proposed or at all.

Prior to the completion of the Proposed Qualifying Transaction, Silver Net must submit for review to the Exchange a management information circular, which is required to contain full, true and plain disclosure of all material facts relating to the Proposed Qualifying Transaction. Silver Net will be required to include in its management information circular, prospectus level disclosure on the Proposed Qualifying Transaction.

Investors are cautioned that, except as disclosed in the management information circular to be prepared in connection with the Transaction, any information released or received with respect to the Proposed Qualifying 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.

Raymond James Ltd., subject to completion of satisfactory due diligence, has agreed to act as sponsor for the Proposed Qualifying Transaction. An agreement to sponsor should not be construed as any assurance with respect to the merits of the transaction or the likelihood of completion.

Macusani Uranium Properties

Macusani controls over 2,000 hectares (200 km2) of mineral properties on the Macusani Plateau in Puno in southeastern Peru, where it is exploring for large, open pitable uranium deposits. These properties were indirectly acquired in January 2007 by Macusani pursuant to the acquisition of Global Gold SAC, a Peruvian company then controlled by Macusani director, Dr. Laurence Stefan. The extensive Macusani volcanic plateau was tested for uranium by the Peruvian Institute of Nuclear Energy ("IPEN") in 1978 whereby numerous uranium showings were discovered over a 600 km2 area. Both the main IPEN anomaly controlled by Vena Resources and Cameco Corp. and the Solex Resources Corp./Frontier Pacific Mining Corporation joint venture properties being drilled are located within 5 km of Macusani's properties which will be drill tested commencing this month.

Over the past year, virtually all of the known Macusani Plateau has been staked and Macusani acquired its initial properties from its Peruvian operating team who were early property holders in the Macusani District. In addition to Solex and Frontier Pacific, other important property holders include Vena Resources which recently announced a strategic agreement with Cameco Corp. which has the option to invest up to $10 million to acquire a 50% interest in Vena's Peruvian subsidiary that holds the uranium claims.

Macusani believes that its properties are underlain by uraniferous volcanic ignimbrite breccia rocks similar to those currently being drilled on the Solex/Frontier joint venture properties. A radiometric survey has been carried out over an area of 2,000 meters by 1,000 meters with very encouraging results. The results were plotted and have indicated a radiometric anomaly 2,000 meters long and 400 meters wide. Grab samples were taken at all high radiometric points and analyzed. A drill program has been laid out and drilling permits obtained for 18 drill sites.

Macusani has mobilized two drills to test the uranium potential of its 100% owned properties. Macusani will become the second Canadian company to drill in this new uranium district following the nearby 500hole program currently being carried out by the Solex Resources Corp./Frontier Pacific Mining Corporation joint venture.

Macusani is currently sufficiently funded to carry out its current planned exploration program and has no debt. As at and for the period from incorporation (November 9, 2006) to January 31, 2007 (audited) Macusani reported working capital of $989,090, total assets of $1,826,797, total liabilities of $119,189, shareholders' equity of $1,707,608 and a net loss of $782,494. Macusani did not generate any revenues during the period. Macusani is in the process of marketing a non-brokered private placement of up to 6.5 million units, each unit priced at $0.75 and consisting of one common share and one common share purchase warrant exercisable for a two year period at a price of $1.00, to raise gross proceeds of up to $4.875 million (the "Macusani Financing"). Macusani will pay a cash finder's fee of 8% to registered dealers who procure subscription for units. Net proceeds from the Macusani Financing are to be used to fund further exploration of the Macusani properties, further property acquisitions, if warranted, and for general working capital. Prior to the Macusani Financing, there are approximately 15.4 million shares of Macusani outstanding (18.6 million shares, fully-diluted).

Principals of Macusani

The current officers of Macusani are Peter Hooper, President, and Dr. Laurence Stefan, V.P. Exploration. The board of directors is comprised of Messrs. Hooper and Stefan, Alan Ferry and Lonnie Kirsh.

The insiders of Macusani, their jurisdictions of residence and the percentage of shares of Macusani held by each are as follows:

Beneficial Interest Holder Residence % of Macusani shares
owned or controlled
Peter Hooper Toronto, Canada 14%
Dr. Laurence Stefan(1) South Africa 12%
Alan Ferry(2) Toronto, Canada 23%
Lonnie Kirsh Toronto, Canada 1.1%

(1) These shares are owned by The Gold Leaf Trust, a trust controlled
by Dr. Stefan.

(2) Mr. Ferry holds his shares through 1140301 Ontario Limited,
a company controlled by him.

Proposed Insiders of Amalco

Upon completion of the Proposed Qualifying Transaction it is expected that the current directors and officers of Macusani would be the directors and officers of Amalco. They are:

Peter Hooper, President and Director -Mr. Hooper is a senior mining engineer and geologist and principal of Hooper Mining Services which has consulted to projects world wide. He is a Director of Khan Resources which controls a uranium deposit in Mongolia, and was formerly a Director of PurePoint Uranium Group Inc. which controls uranium properties in Saskatchewan. Mr. Hooper has had direct mining operating experience including Mine Manager of the Beaver Lodge Uranium Mine operated by a predecessor of Cameco Inc.

Dr. Laurence Stefan -V.P. Exploration and Director - Dr. Stefan is the Managing Director of Minera Colibri in Peru which is a private gold processing and exploration company. He previously worked with Gold Fields of South Africa and JCI Inc. with recent years spent mainly on South American projects.

Alan Ferry, Chairman and Director - Mr. Ferry is employed as Vice President of D&D Securities Company, Toronto in Corporate Finance. He is a geologist and CFA and has been employed in the investment business for over 25 years as a mines analyst and investment banker. He also sits on the boards of several mining companies notably as Lead Director of Guyana Goldfields Inc.

Lonnie Kirsh, Director - Mr. Kirsh is a partner of the Toronto law firm Kutkevicius Kirsh, LLP and practices in the area of corporate finance and securities law. Mr. Kirsh's previous work experience includes positions in the Listed Issuers Services division of the Toronto Stock Exchange and the Corporate Finance Branch of the Ontario Securities Commission and he continues to serve as a member of the Securities Advisory Committee of the Ontario Securities Commission.

Change of Auditor

Silver Net also announced that it has replaced its auditor with Maldaner Crooks Watson, Chartered Accountants. The former auditors of Silver Net are no longer providing audit services for reporting issuers.

The statements made in this news release may contain certain forward-looking statements. Actual events and/or results may differ from expectations. Certain risk factors may also affect the actual results achieved.


Contact Information

  • Silver Net Equities Inc.
    Gordon D. Anderson
    President, Chief Executive Officer and director
    (403) 265-3733 (Ext. 235)
    Macusani Yellowcake Inc.
    Peter Hooper
    President and director