Southwestern Resources Corp.

Southwestern Resources Corp.

May 20, 2009 22:50 ET

Southwestern Resources Corp.: Plan of Arrangement Update

VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 20, 2009) - Southwestern Resources Corp. (TSX:SWG) ("Southwestern" or the "Company") announces that, further to its news releases dated March 24 and May 12, 2009 regarding the Arrangement Agreement between the Company and Hochschild Mining plc ("Hochschild") dated March 23, 2009 (the "Arrangement Agreement") and the related plan of arrangement, which provided for the acquisition of all of the outstanding common shares of the Company by an indirect subsidiary of Hochschild (the "Arrangement"), Hochschild has today advised the Company that it will not complete the Arrangement today as previously announced by both parties.

Hochschild advised the Company that it declined to complete as a result of recent correspondence received by Southwestern from Hong Kong East China Non-Ferrous International Mineral Development Co., Limited ("ECE"), which provided notice of certain alleged misrepresentations pursuant to a Share Purchase Agreement between the Company and ECE dated May 15, 2008, whereby the Company sold its interest in the Boka Project to ECE. The Company believes such claims are without merit and do not constitute a "Material Adverse Effect" under the Arrangement Agreement. Therefore, the Company believes that Hochschild's failure to complete the Arrangement today is unfounded. Accordingly, Southwestern is considering its options in connection with the foregoing. In addition, Southwestern is continuing discussions with Hochschild on this matter, although there can be no assurance that the Arrangement will be completed. The Company will make a further announcement in due course.

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. Southwestern is a reporting issuer in British Columbia, Alberta, Manitoba, and Ontario and trades on the Toronto Stock Exchange under the symbol SWG.

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, the inherent uncertainty of litigation, 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 and the adequacy and availability of insurance coverage. 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.

Contact Information

  • Southwestern Resources Corp.
    David Black
    (604) 669-2525