Merc International Minerals Inc.

Merc International Minerals Inc.

April 18, 2007 09:01 ET

Merc International Minerals to Acquire Uranium World Energy

TORONTO, ONTARIO--(CCNMatthews - April 18, 2007) - Merc International Minerals Inc. ("MIMI") (TSX VENTURE:MRK) is pleased to announce that it has signed an agreement dated April 18, 2007 to acquire all of the outstanding shares of Uranium World Energy Inc. ("UWE"), from the current UWE shareholders, in exchange for approximately 49% of MIMI's outstanding common shares after MIMI completes a $3.75 million non-brokered private placement at a price of $0.496 per share and after at least 75% of MIMI's outstanding warrants and all of its options are exercised.

MIMI anticipates:

(i) Consolidating its common shares on the basis of 1
post-consolidation common share for every 1.25 pre-consolidation
common shares.
(ii) Acquiring all of the outstanding shares of UWE in exchange for
12.0 million post-consolidation MIMI common shares on a one for
one basis.
(iii) Completing a private placement by means of a closing of
subscription receipts, which will be convertible into
post-consolidation MIMI common shares upon the completion of the
UWE acquisition at $0.62 per post-consolidation common share
($0.496 per pre-consolidation common share).
(iv) Changing its name and selling its current mining properties to an
arm's length third party.

UWE is a privately held company that was incorporated under the Business Corporations Act (Ontario) on April 6, 2006. It commenced operations, which involves the acquisition, exploration and development of mineral resource properties, on August 1, 2006.

UWE has 12.0 million shares outstanding. There are currently no issued and outstanding warrants or options to acquire common shares of UWE. UWE's largest shareholder is Majescor Resources Inc. ("Majescor"). Majescor is a publicly listed company whose shares are listed on the TSX Venture Exchange ("TSXV") under the symbol MAJ. Majescor owns 25% of UWE's shares. No other shareholder owns more than 10% of UWE's shares. No MIMI insider owns shares of UWE or has any other interest in UWE and no UWE insider owns shares of MIMI or has any other interest in MIMI.

UWE has an option to earn an 80% interest in a uranium exploration project located in Nunavut, Canada (the Baker Lake Uranium project).

The Baker Lake Uranium project is held by De Beers Canada Inc. ("De Beers") and is located 50 km west of the town of Baker Lake in Nunavut. In October 2005, Majescor signed an option agreement with De Beers to acquire an 80% interest in diamond and uranium rights associated with 51 permits covering a total surface area of more than 9,000 km2. Two continuous claim blocks totaling 19 of these permits were designated for their uranium potential and form the Baker Lake Uranium project.

In August 2006 UWE entered into an option agreement with Majescor whereby UWE was granted the right to acquire Majescor's Baker Lake uranium rights. Under the option agreement, UWE incurred $640,000 of exploration expenditures and issued Majescor 3.0 million UWE shares to earn its 80% interest in Baker Lake Uranium project. Having earned its 80% interest in the Baker Lake Uranium project from Majescor, UWE will be appointed the operator of a joint venture between UWE and De Beers.

The Baker Lake Uranium project is located along the eastern margin of the Thelon Basin, less than 20 km south of the Kiggavik Trend, which hosts uranium deposits. The Thelon Basin bears geological similarities to the sedimentary Athabasca basin, located 300 km to the southwest. Despite this similarity, the Thelon Basin has not seen recent prospecting work for its uranium potential; most previous work was carried out in the 1970s and 1980s.

In the fall of 2006 a limited uranium exploration campaign was undertaken by Majescor to verify the conclusions of a report conducted by MPH Consulting Ltd. of Toronto ("MPH"). The geological compilation and analysis carried-out by MPH resulted in the identification of high priority areas across the property and the selection of 7 target blocks for deep-penetrating airborne geophysical surveying. The 7 blocks were covered as part of a larger 5,992 line-km geophysical survey of De Beer's uranium and diamond permits at Baker Lake, which was completed in October 2006.

In November 2006, UWE took over from Majescor as the technical operator of the Baker Lake Uranium project. The final airborne geophysical data is currently being analyzed by MPH and De Beers geophysicists in preparation for the design of the 2007 diamond and uranium exploration programs.

It is anticipated that MIMI will file a National Instrument No. 43-101 compliant technical report with respect to the Baker Lake Uranium project prior to delivering any information to MIMI shareholders further to obtaining their approval.

Based on UWE's unaudited financial information, since inception UWE has issued 9.0 million shares for $1.5 million cash and issued 3.0 million shares to Majescor. UWE has incurred $0.7 million on exploration expenditures on the Baker Lake Uranium project and $0.1 million on other expenses, leaving UWE with net working capital of $0.7 million prior to entering into the agreement with MIMI.

It is a condition of the acquisition that a minimum of 75% of the holders of the outstanding MIMI warrants exercise their warrants and that 100% of the outstanding MIMI options exercise their options. MIMI has 4,374,334 common shares outstanding. It also has 4,333,334 Series A warrants and 125,000 stock options outstanding. Each Series A Warrants entitles the holder to purchase one additional common share at a price of $0.165 until December 29, 2007. Each stock option entitles the holder to purchase one additional common share at a price of $0.165 until December 29, 2010.

After completion of the acquisition of the UWE shares and the private placement financing, former MIMI shareholders (together with the 75% of MIMI warrant holders who exercise their warrants and MIMI option holders who exercise their options) will own 6.2 million MIMI common shares or 26% of the shares of the combined company. Former UWE shareholders will own 12.0 million MIMI common shares or 49% of the shares of the combined company. Subscribers to the private placement will own 6.0 million MIMI common shares or 25% of the shares of the combined company. Majescor will own 3.0 million MIMI common shares or 12% of the shares of the combined company. Majescor will hold their common shares for investment purposes and may increase or decrease their interests as market circumstances dictate.

Members from both the MIMI and UWE board will manage the combined company. The board of the combined company will be comprised of Messrs. John McBride, Thomas Pladsen, John Tait and Carlos Yrigoyen (from MIMI) and Lewis Lawrick, Andre Audet and Denis Simoneau (from UWE).

Andre Audet is the Chairman & Chief Executive Officer of Everton Resources Inc. (TSXV listed mineral exploration company exploring for gold in the Dominican Republic and in the James Bay territory of northern Quebec). Mr. Audet is also the Chairman of Majescor (TSXV) a mineral exploration company focused on uranium, gold & base metals and diamond exploration in Quebec, Northwest Territories, Nunavut, and Madagascar. In addition, Mr. Audet is also a board member of Blue Note Mining Inc. (TSXV), Forest Gate Resources Inc. (TSXV), Metco Resources Inc. (TSXV) and Pediment Exploration Ltd. (TSXV). Mr. Audet was also a founder of Orezone Resources Inc. (TSX, AMEX). Mr. Audet is a Certified Investment Manager (CIM) and has over twenty years of experience in the investment industry. From 1989 to 1999, Mr. Audet was a Vice-President & Financial Advisor for BMO/Nesbitt Burns where he specialized in managing portfolios for high net-worth clients and in raising over $40 million for various mineral exploration companies. From 1987 to 1989 Mr. Audet was a Financial Advisor at Midland Doherty and Royal Trust. In 1982, Mr. Audet graduated with a Bachelor's degree in Commerce with a specialization in Finance from the University of Ottawa. He is also a commentator on radio and television covering corporate news and various other investment topics.

Lewis Lawrick is the Chairman, Chief Executive Officer and Director of Anaconda Mining Inc. (TSX listed mineral exploration company). Mr. Lawrick has been the Managing Director of Thorsen-Fordyce Merchant Capital Inc. (private merchant bank focused on the mineral industry) since 2005 and President of VLL Investments Inc. (private investment company) since 1994. Mr. Lawrick has been an officer and/or a director of other private and public mining and mineral exploration companies, including Birim Goldfields Inc. (TSX), Franconia Minerals Corporation (TSXV), Normabec Mining Resources Ltd. (TSXV) and Serengeti Resources Inc. (TSXV). Mr. Lawrick received a Bachelor of Commerce degree from the University of Calgary in 1986.

Denis Simoneau is the Chairman and a Director of Birim Goldfields Inc. (TSX listed mineral exploration company). From 1994 to 2006 he was also the President and Chief Executive Officer of Birim Goldfields Inc. Prior thereto Mr. Simoneau was employed by SOQUEM (Quebec state-owned mining Corporation), as General Manager-Exploration (1986-1991) and as Vice-President, Special Projects and Development (1991-1995). Mr. Simoneau has been an officer and/or a director of other private and public mining and mineral exploration companies, including Ressources Appalaches Inc. (TSXV), First Gold Exploration Inc. (TSXV) and Normabec Mining Resources Ltd. (TSXV).

No changes to MIMI's current officers are anticipated at this time.

Completion of the transaction is subject to a number of conditions, including receipt of requisite regulatory approvals, including without limitation, the acceptance of the TSXV, MIMI shareholder approval, the execution of definitive agreements and the completion of due diligence satisfactory to each of MIMI and UWE. Pursuant to the rules of the TSXV and in particular, as set out in Policy 5.2, the acquisition of the UWE shares will be considered a "reverse takeover transaction", given the percentage of shares that will be held by former UWE shareholders. MIMI will therefore be completing a filing statement as mandated by the rules of the TSXV. When this filing statement is approved by the TSXV, MIMI will SEDAR file the same and will seek shareholder approval to the UWE acquisition by way of written consent resolution. MIMI has called a special meeting of shareholders to be held on May 8, 2007 at which, among other things, shareholders will be asked to consider and approve the sale of the mineral properties, the name change and the share consolidation mentioned above.

Completion of the transaction is subject to a number of conditions, including Exchange acceptance and disinterested Shareholder approval. 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 above mentioned filing statement and management information circular to be prepared, any information released or received with respect to the reverse takeover transaction may not be accurate or complete and should not be relied upon. Trading in the securities of Merc International Minerals Inc. should be considered highly speculative.

This news release may contain forward-looking statements based on assumptions and judgments of management regarding future events or results. Such statements are subject to a variety of risks and uncertainties which could cause actual events or results to differ materially from those reflected in the forward-looking statements. The Company disclaims any intention or obligation to revise or update such statements.

The TSX Venture Exchange has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.

Contact Information

  • Merc International Minerals Inc.
    Thomas Pladsen
    President and CEO
    (647) 287-3778
    (416) 628-5911 (FAX)