Metallum Resources Inc.
TSX VENTURE : MRV

Metallum Resources Inc.

March 18, 2009 16:43 ET

Metallum Resources Inc. Provides Further Details on the Proposed Business Combination With Solfotara Mining Corporation

TORONTO, ONTARIO--(Marketwire - March 18, 2009) - Metallum Resources Inc. (TSX VENTURE:MRV) (the "Company" or "Metallum") provides further details on the proposed reverse takeover ("RTO") with Solfotara Mining Corporation ("Solfotara"), previously announced on February 28, 2009 (the "Proposed Transaction"). The parties to the Proposed Transaction act at arm's length.

Background

On February 27, 2009, Metallum signed a Letter of Intent, as amended by agreement dated as of March 18, 2009 ("LOI") with Solfotara. If the Proposed Transaction is completed, the shareholders of Solfotara will own approximately 80% of the fully-diluted shares (pre-new money) of the Resulting Issuer (the entity formed out of the three cornered amalgamation of Metallum, Solfotara and a wholly-owned subsidiary of Metallum formed to complete the RTO) while the existing shareholders of Metallum will own approximately 20% of the fully-diluted shares (pre-new money) of the Resulting Issuer.

The Proposed Transaction is subject to the parties entering into a definitive agreement, obtaining all necessary regulatory approvals (including that of the TSX Venture Exchange ("Exchange")), and certain other terms and conditions.

The Reverse Takeover

On or immediately prior to the closing of the Proposed Transaction, the common shares in the capital of Metallum (the "Metallum Common Shares") will be consolidated on an approximate basis of one new share for every 6.4 old shares. As consideration for the acquisition of all of the outstanding shares of Solfotara (the "Solfotara Common Shares"), Solfotara's shareholders will receive one common share of the Resulting Issuer for each Solfotara Common Share.

There are currently 31,901,651 Solfotara Common Shares issued and outstanding. There are no shareholders that own 10% or more of the issued and outstanding Solfotara Common Shares other than:



----------------------------------------------------------------------------
Jurisdiction of Residence
Name or Incorporation % of Shares Held
----------------------------------------------------------------------------
Brian Lueck Paranaque 15.67%
Philippines
----------------------------------------------------------------------------
Suma Men West Vancouver, BC 12.54%

----------------------------------------------------------------------------
Magellan Copper and Gold PLC London, England 11.75%
(the over 10% beneficial
holders of which are, as
provided by Solfotara, Carbon
Mining plc; Peter Draper:
East West Drilling (L) ltd.
and Chew Hau Seng)
----------------------------------------------------------------------------


There are currently Solfotara warrants outstanding to purchase an aggregate of 11,250,000 Solfotara Common Shares (the "Solfotara Warrants") having an exercise price of $0.05 per share. Upon completion of the Proposed Transaction, the holders of all outstanding Solfotara Warrants will exchange such warrants for warrants to purchase common shares of the Resulting Issuer on a one-for-one basis with the same terms and conditions.

Information on Solfotara

Solfotara was incorporated on March 7, 2008 under the laws of British Columbia. Solfotara has offices in Manila, Philippines and Vancouver, Canada.

Solfotara is a privately owned company that has, through a number of foreign subsidiary companies, an interest in five exploration properties, being Basay, Biliran, Tawi-Tawi, Kilong-Olao and St. Anthony, all as described in more detail in the press release issued on February 28, 2009.

To date, Solfotara has raised approximately CDN$1,500,000 through the following financing initiatives: 11, 250,000 shares at $0.01 per share and 13,651,650 shares at $0.10 per share. In addition, 7,000,000 shares have been issued for property acquisitions, such shares having a prescribed value of $2,800,000.

Selected Financial Statement Information

The following table presents selected financial statement information for Solfotara. Such information is derived from the unaudited financial statements of Solfotara for the period ended December 31, 2008. The audited financial information for Solfotara will be filed on SEDAR when Metallum files its circular with respect to the Proposed Transaction.



----------------------------------------------------------------------------
Solfotara
December 31, 2008
(unaudited)
----------------------------------------------------------------------------
Cash and Prepaids 57,143
----------------------------------------------------------------------------
Property and Equipment, net 570,919
----------------------------------------------------------------------------
Total Assets 628,062
----------------------------------------------------------------------------
Current Liabilities 79,883
----------------------------------------------------------------------------
Total Liabilities 79,883
----------------------------------------------------------------------------
Capital Stock 1,140,665
----------------------------------------------------------------------------
Net Income (Deficit) (592,486)
----------------------------------------------------------------------------
Total Equity 548,179
----------------------------------------------------------------------------


Directors and Officers of the Resulting Issuer

In conjunction with the completion of the Proposed Transaction, it is intended that Greg Lipton, Kevin Bullock, Carl Hansen and Donald Rowsell will remain on the board of directors of the Resulting Issuer and that Brian Lueck, the current President & Chief Executive Officer of Solfotar and its affiliates, will join the board. Brief biographies for the proposed directors and officers of the Resulting Issuer are set out below:

Greg Lipton, P.Geo., Chief Executive Officer & Director

Greg Lipton is a registered Professional Geoscientist with the Association of Professional Geoscientists of Ontario (APGO), and a long time member of the Prospectors and Developers Association of Canada (PDAC). He has more than 30 years of field experience in international exploration for base metal, precious metal, diamond, and industrial mineral deposits, most of which was with BHP International and Utah International as a Senior Geologist. Mr. Lipton has worked many and varied geologic environments including porphyry, epithermal, VMS, MVT, BHT, and Sedex types in North, Central, and South America, Africa, Australia, Southeast Asia, and the Middle East.

Mr. Lipton has held his current position as President, Chief Executive Officer, and Director of Metallum since the fall of 2004.

Kevin Bullock, P. Eng. Director

Kevin Bullock is a registered Professional Mining Engineer in the province of Ontario and received his Engineering degree from Laurentian University in Sudbury, Ontario. Mr. Bullock is Volta Resources Inc. founding President and has been Chief Executive Officer since its inception in 2002. Mr. Bullock has over 18 years experience, at senior levels, in mining exploration, mine development and mine operations.

Mr. Bullock has completed several exploration and mining projects, both in North America and abroad, including projects in Mexico, Sweden, and West Africa, where he was Iamgold Corporation Ltd's General Manager. Until recently, Mr. Bullock was VP, Operations for Kirkland Lake Gold Ltd.

Carl B. Hansen, Director

Carl B. Hansen is currently President and Chief Executive Officer of Andina Minerals Inc., a publicly traded company listed on the TSX Venture Exchange, a position that he held from January, 2005 until February, 2009. He is a geologist with nearly 20 years of international experience in the exploration and mining industry where he has held various exploration, operational, and head office positions with both junior exploration and senior mining companies including INCO, TVX Gold, and Kinross.

Donald Rowsell, Director

Donald Rowsell worked in the brokerage business for 25 years initially as a stockbroker/partner in B M Young & Partners Ltd. and later in Arlington Securities Limited. Upon retiring, he formed a consulting company and became involved in consulting work for the Canadian Imperial Bank of Commerce (CIBC) until taking on the interim job as President and CEO and Director for Metallum, prior to Mr. Lipton's instalment. Mr. Rowsell is still actively involved as a Director and Chair of the Audit Committee for Metallum.

Brian Lueck, Director, President and Chief Operating Officer

Brian Lueck is President and Chief Executive Officer of Solfotara. A Philippine resident for more than 12 years and active in mineral exploration for more than 22 years, Mr. Lueck has past experience as an officer and director of several Canadian public companies involved in mineral exploration in the Philippines, Indonesia, Russia, Venezuela, Costa Rica and United States.

Financing Arrangements

It is a condition precedent to the closing of the Proposed Transaction, that a minimum $3,500,000 private placement of units ("Units") of the Resulting Issuer at $0.50 per Unit be completed. It is anticipated that each Unit will consist of one common share and common share purchase warrant of the Resulting Issuer exercisable for twelve months at $0.75 per share.

To facilitate certain aspects of the Proposed Transaction, Metallum has agreed to advance to Solfotara, pending receipt of Exchange approval, Cdn.$250,000 to fund a property option payment due by Solfotara in respect to its Basay Property. Pending Exchange approval, the Cdn.$250,000 will be advanced by Metallum to Solfotara in the form of a secured convertible debenture ("Debenture"). If the Proposed Transaction is completed, the principal amount of the Debenture plus accured interest will be convertible into Solfotara Common Shares at an agreed price. If the Proposed Transaction is not completed, Solfotara will be required, unless the reason for the default lies with Metallum, to repay the Debenture advances with interest. The LOI, as amended, contemplates that Metallum may make additional Debenture advances, again subject to Exchange approval, of up to a maximum of Cdn.$250,000 (for a total of Cdn. $500,000) prior to completion of the Proposed Transaction.

Significant Conditions to Closing

The completion of the Proposed Transaction is subject to a number of conditions precedent including, but not limited to, satisfactory due diligence reviews, negotiation and execution of definitive transaction documentation, approval by both boards of directors, approval by both shareholders, availability of prospectus and registration exemptions or obtaining exemptive relief, obtaining necessary governmental and third party approvals and Exchange acceptance. There can be no assurance that the Proposed Transaction will be completed as proposed or at all.

Sponsorship

A general policy of the Exchange requires that a sponsor be retained to prepare a sponsor report in compliance with Exchange Policy 2.2. Metallum has not yet appointed a sponsor, but is in discussions with Haywood Securities Inc. to act as sponsor in connection with the Proposed Transaction.

Arm's Length RTO

The control persons of Solfotara are not (and their associates and affiliates are not) control persons in Metallum. Accordingly, the acquisition by Metallum of all the issued and outstanding shares of Solfotara is not a Non-Arm's Length RTO Transaction for the purposes of Exchange policies.

About Metallum Resources Inc.

Metallum Resources Inc. is a precious metals exploration company which holds a group of 11 patented and 18 unpatented claims within Chester Township, known as its Chester Gold Property, located west of Highway 144 midway between Sudbury and Timmins, Ontario. It also has an option to earn a 70% interest in the M-18 gold property in Argentina.

Metallum has 53,803,828 common shares outstanding and is listed on the Exchange under the symbol MRV.

Reader Advisory

This press release contains forward-looking statements with respect to the Proposed Transaction and matters concerning the business, operations, strategy, and financial performance of the Resulting Issuer, Solfotara and Metallum. These statements generally can be identified by use of forward looking word such as "may", "will", "expect", "estimate", "anticipate", "intends", "believe" or "continue" or the negative thereof or similar variations. The completion of the Proposed Transaction and the future business, operations and performance of the Resulting Issuer discussed herein could differ materially from those expressed or implied by such statements. Such forward-looking statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations, including that the Proposed Transaction contemplated herein is completed. Forward-looking statements are based on a number of assumptions which may prove to be incorrect, including, but not limited to: the ability of Metallum and Solfotara to obtain necessary shareholder approval to complete the Proposed Transaction or to satisfy the requirements of the Exchange with respect to the Proposed Transaction. The cautionary statements qualify all forward-looking statements attributable to Metallum and Solfotara and persons acting on their behalves. Unless otherwise stated, all forward looking statements speak only as of the date of this press release and Metallum and Solfotara have no obligation to update such statements except as required by law.

Completion of the Proposed Transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and disinterested Shareholder approval. The Proposed Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Proposed Transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the management information circular prepared in connection with the Proposed Transaction, any information released or received with respect to the Proposed Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of Metallum Resources Inc. should be considered highly speculative.

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

Neither the TSX Venture Exchange Inc. nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information