Southwestern Resources Corp.
TSX : SWG

Southwestern Resources Corp.

March 10, 2009 08:17 ET

Southwestern Announces Letter Agreement With Hochschild Mining plc for Acquisition of All Outstanding Common Shares

VANCOUVER, BRITISH COLUMBIA--(Marketwire - March 10, 2009) - Southwestern Resources Corp. (TSX:SWG) ("Southwestern" or the "Company") is pleased to announce that it has entered into a Letter Agreement (the "Letter Agreement") with Hochschild Mining plc ("Hochschild") respecting the acquisition by Hochschild, directly or indirectly, of all of Southwestern's issued and outstanding common shares for cash consideration of $0.50 per share (the "Transaction").

Pursuant to the Letter Agreement, Southwestern and Hochschild have agreed to negotiate in good faith and use their best efforts to enter into a definitive agreement respecting the Transaction by March 23, 2009. The Transaction is subject to customary conditions, including the completion of due diligence and receipt of a fairness opinion from Southwestern's financial advisors. In addition, the Transaction will require the requisite approval of Southwestern's shareholders.

The Company has established an independent committee of its board of directors in order to evaluate the transaction and has engaged Canaccord Capital Corporation as its financial advisor in connection with the foregoing.

As a result of the proposed Transaction, Southwestern has terminated its discussions with Geoinformatics Exploration Inc., regarding the proposed business combination of the companies, which the Company previously announced in its press release dated February 23, 2009.

About Southwestern

Southwestern is a Vancouver-based mineral exploration company engaged in the identification, acquisition, evaluation and exploration of gold, silver and base metals mineral properties. The Company has a number of significant projects, including the Liam gold-silver project in Peru. Southwestern is a reporting issuer in British Columbia, Alberta, Manitoba, and Ontario and trades on the Toronto Stock Exchange under the symbol SWG.

About Hochschild

Hochschild is a leading precious metals company listed on the London Stock Exchange (HOCM.L for Reuters / HOC LN for Bloomberg) with a primary focus on the exploration, mining, processing and sale of silver and gold. Hochschild currently operates five underground epithermal vein mines, four located in southern Peru and one in southern Argentina and one open pit mine in northern Mexico. Hochschild also has one early stage development project in Mexico and fifteen longer-term prospects throughout Latin America. Hochschild has over forty years experience in the mining of precious metal epithermal vein deposits.

Forward-looking Statements

Statements in this news release that are forward-looking statements are based on the current expectations, beliefs, assumptions, estimates and forecasts about the Company's business and the industry and markets in which it operates. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or implied by these forward-looking statements due to a number of factors, including but not limited to, the Company's access to additional capital to fund future activities, the loss of mineral properties or the inability to obtain mining licenses, the inherently risky nature of the Company's activities and its lack of experience in bringing an exploration property into production, its ability to repatriate any earnings, foreign exchange fluctuations, the political stability and economic uncertainty of those areas in which the Company carries on operations and the lack of infrastructure in those areas, title risks, the risks and uncertainties associated with joint ventures and the Company's reliance on third parties, statutory and regulatory compliance, the adequacy and availability of insurance coverage, the Company's dependence upon employees and consultants and fluctuations in mineral prices and other risks detailed in the Company's filings with the Canadian Securities Authorities. In addition, there is no assurance that the abovementioned transaction will complete.

These risks, as well as others, could cause actual results and events to vary significantly. The Company expressly disclaims any intent or obligation to update these forward-looking statements, unless the Company specifically states otherwise.

Contact Information

  • Southwestern Resources Corp.
    Timo Jauristo
    Interim President & CEO
    (604) 669-2525
    Website: www.swgold.com