Waymar Resources Ltd.
TSX VENTURE : WYM

Waymar Resources Ltd.
Orosur Mining Inc.
TSX : OMI
AIM : OMI

Orosur Mining Inc.

May 12, 2014 08:00 ET

Orosur and Waymar Announce Proposed Business Combination

SANTIAGO, CHILE and VANCOUVER, BRITISH COLUMBIA--(Marketwired - May 12, 2014) -

NOT FOR DISSEMNIATION IN THE US OR THROUGH US NEWSWIRE SERVICES

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION

Orosur Mining Inc. ("Orosur" or the "Company") (TSX:OMI)(AIM:OMI) and Waymar Resources Ltd. ("Waymar") (TSX VENTURE:WYM) (collectively the "Parties") are pleased to announce that they have entered into an agreement (the "Arrangement Agreement") to complete a business combination (the "Acquisition"). Completion of the Acquisition will create a premier South American gold exploration, development and production company with a producing mine and exploration assets in Uruguay and exploration and development projects in established mining jurisdictions in Chile and Colombia.

The Acquisition has been structured as an amalgamation pursuant to a plan of arrangement under the Business Corporations Act (British Columbia). Pursuant to the Acquisition, Orosur will acquire all of the outstanding common shares of Waymar ("Waymar Shares") in exchange for common shares of Orosur by way of a statutory scheme of arrangement on the basis of 0.375 of an Orosur common share (an "Orosur Share") for each Waymar Share (the "Exchange Ratio"). Upon completion of the Acquisition, outstanding Waymar warrants will be exchanged for warrants of Orosur subject to adjustments to the number and exercise price in accordance with the Exchange Ratio. Any stock options of Waymar outstanding on the effective date will be exercisable into Orosur Shares, subject to adjustments to the number and exercise price in accordance with the Exchange Ratio.

Based on the current outstanding share capital of Waymar, Orosur will issue approximately 18.5 million Orosur Shares to acquire all of the outstanding Waymar Shares. Upon completion of the Acquisition, current Orosur shareholders and current Waymar shareholders will hold approximately 80.9% and 19.1%, respectively, of the total issued and outstanding Orosur Shares,

Orosur is being advised in relation to this transaction by Cantor Fitzgerald Europe. Waymar is being advised in relation to this transaction by PowerOne Capital Markets Limited. Both Cantor Fitzgerald Europe and PowerOne Capital Markets Limited provided fairness opinions to the boards of directors of Orosur and Waymar, respectively.

Transaction Highlights

  • Creation of a cash generative, growth focused exploration, development and production company with a portfolio of producing and advanced projects in Chile and Uruguay and an exciting, high grade gold exploration property in Colombia.
  • Allows shareholders of both Orosur and Waymar to participate in the upside from the advancement of Waymar's 100%-owned Anzá Project in Colombia. The Anzá project covers not only the Anzá discovery but also several additional targets in the area, which have been already identified as prospective and remain untested by drilling.
  • Addition of a highly experienced and complementary team with proven South American track record.
  • Enhanced shareholder base and liquidity in the London and North American capital markets.
  • Addition of a complementary 'bolt-on' asset for Orosur in form of Anzá exploration project with a 100% ownership and no mandatory work commitments/option fees will enable Orosur to progress activities pursuant to ongoing exploration results and capital availability.
  • Creates an attractive platform for further growth.

Ignacio Salazar, CEO of Orosur, commented, "The acquisition of Waymar, with complementary assets to Orosur, will represent an excellent value opportunity for the shareholders of both companies where the combination is stronger than the simple addition of the parts. The Anzá gold exploration project is an attractive high grade asset with significant upside which, set alongside our San Gregorio Mine and Pantanillo and Anillo projects is a major step towards the creation of a strong and diversified gold company with a well balanced mix of existing production, exciting exploration and advanced development projects in South America. I am delighted that, with this transaction, Orosur is not only acquiring an attractive asset but also adding the business and geological expertise of the Waymar team to its Board and management. This is in line with our objective to build the company through expert local knowledge. As ever, we remain committed to enhancing shareholder value."

Pablo Marcet, CEO of Waymar, commented, "This transaction will provide the necessary resources and collective expertise to realize the full potential of our Anzá Project and will allow our Waymar shareholders to participate in the significant growth prospects of the San Gregorio Mine as well as Orosur's attractive exploration and development projects in Chile and Uruguay. At a time when many companies in our sector have to resort to severely dilutive financings or face extinction altogether, Waymar shareholders will have the opportunity to become part of a stronger company that will create medium and long-term value for all shareholders."

The completion of the Acquisition is conditional upon (i) the approval of at least two-thirds of the votes cast at the annual and special meeting of Waymar shareholders (the "Waymar Meeting"), (ii) the approval of the Supreme Court of British Columbia, (iii) regulatory approvals, and (iv) the satisfaction of certain closing conditions customary for transactions of this nature. The Arrangement Agreement also provides for, among other things, board support and non-solicitation covenants (subject to fiduciary obligations of the Waymar board of directors and a "right to match") as well as payment to Orosur of a break fee equal to $300,000 and a payment to Waymar of a break fee of $225,000, in either case if the Acquisition is not completed in certain specified circumstances. The terms and conditions of the Agreement will be summarized in Waymar's management proxy circular prepared in connection with the Waymar Meeting.

The Agreement has been approved by the Board of Directors of each of Waymar and Orosur. Directors, officers and key investors of Waymar representing approximately 21.3% of the Waymar Shares entitled to vote at the Waymar Meeting have entered into lock-up agreements with Orosur under which they have agreed to vote their Waymar Shares in favour of the Arrangement.

For more information regarding the proposed Acquisition and the Anzá project, please see an updated corporate presentation available at www.orosur.ca.

Management & Board Composition

The Arrangement Agreement contemplates that upon completion of the Acquisition, Pablo Marcet will join the Orosur executive team and both Pablo Marcet and H.D. Lee, current directors of Waymar, will join the Board of Directors of Orosur. Mr. Marcet and Mr. Lee have considerable experience and expertise in mining in South America, each notably playing respectively key operating (GM Operations) and financial (CFO) roles for Northern Orion Resources Inc. prior to its acquisition by Yamana Gold in 2007 for over $1.4 billion. There will be a further announcement to this effect in due course, as required by the AIM Rules for Companies and AIM Rules for Nominated Advisors.

About Waymar Resources

Waymar is a Canadian mineral exploration company with a 100% interest in the Anzá Project, located in the west of the Antioquia Department in the Republic of Colombia. The Anzá Project is part of the Middle Cauca Belt, widely acknowledged as one of the best endowed Colombian gold trends, hosting deposits like Buriticá, Titiribí, Marmato and La Colosa.

Waymar currently has 49,245,170 shares outstanding as well as 3,095,000 options and 5,781,250 warrants outstanding, of which 4,581,250 warrants are due to expire on June 29, 2014.

Waymar's consolidated financial statements and MD&A for the year ended December 31, 2013 are available at www.sedar.com. As at December 31, 2013, Waymar reported gross assets of C$14.3 million. As Waymar is an exploration and development company, it has not generated any revenue or profits from its minerals interests.

For more information on Waymar, please visit www.waymarresources.com.

Further Information

Waymar and Orosur shareholders, as well as all other interested parties, are advised to read the materials relating to the Acquisition that will be filed by Waymar with securities regulatory authorities in Canada when they become available. Copies of these documents may be obtained free of charge at www.sedar.com under the profile of Waymar Resources Ltd.

About Orosur Mining Inc.

Orosur is a fully integrated gold production, exploration and development company focused on identifying and developing gold projects in South America. The Company operates the San Gregorio Mine, the only producing gold mine in Uruguay, and has an exploration portfolio of high quality assets in Uruguay and Chile, including the Pantanillo project in the Maricunga Mining district of Chile.

Cautionary Statements

This announcement contains certain forward-looking information and statements including the completion of the Acquisition and the transactions contemplated thereby and the benefits of a combined company if the Acquisition is completed. Orosur and Waymar caution readers not to place undue reliance on forward-looking information which by its nature is based on current expectations regarding future events that involve a number of assumptions, inherent risks and uncertainties, which could cause actual results to differ materially from those anticipated by Orosur or Waymar.

Each of Orosur and Waymar disclaim any obligation or undertaking to update, review or revise such forward-looking information contained in this announcement to reflect any change in its expectations or any change in events, conditions or circumstances on which such information is based unless required to do so by applicable law.

Forward-looking information is not based on historical facts but rather on current expectations and assumptions regarding, among other things, that Orosur and Waymar will complete the Acquisition in accordance with the terms of the Arrangement Agreement, including obtaining the required approvals and consents and meeting all conditions. Forward-looking information involves significant known and unknown risks and uncertainties. A number of factors could cause actual results to differ materially from those anticipated by Orosur and Waymar including, but not limited to, whether Waymar shareholder approval will be obtained, whether the Acquisition will be approved by the Supreme Court of British Columbia and whether all the conditions under the Agreement will be met.

This news release does not constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of any of the securities referenced herein in any jurisdiction in which such offer, solicitation or sale would be unlawful. The securities referenced in this news release have not been registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or any state securities laws and may not be offered or sold in the United States (as defined in Regulation S under the U.S. Securities Act) absent registration under the U.S. Securities Act and all applicable state securities laws or pursuant to an exemption from such registration requirements.

Contact Information

  • Orosur Mining Inc
    Ignacio Salazar
    Chief Executive Officer
    562 2924 6800
    info@orosur.ca
    www.orosur.ca

    Waymar Resources Ltd.
    Pablo Marcet
    Chief Executive Officer
    1 (778) 373 0100
    info@waymarresources.com
    www.waymarresources.com

    Cantor Fitzgerald Europe
    Stewart Dickson / Jeremy Stephenson / Carrie Lun
    +44 (0) 20 7894 7000

    FTI Consulting
    Ben Brewerton / Oliver Winters / Sara Powell
    +44 (0) 20 3727 1000