The Silver Recycling Company Inc.
NEX BOARD : TSR.H

The Silver Recycling Company Inc.

May 07, 2008 19:49 ET

The Silver Recycling Company Announces Second Amendment to Purchase Agreement

VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 7, 2008) -

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

The Silver Recycling Company Inc. (the "Company") (NEX:TSR.H) is pleased to announce it has entered into a second amendment ("Amendment") dated May 5, 2008 to the purchase agreement ("Purchase Agreement") dated March 4, 2008, in respect of the acquisition of two privately-owned companies (the "Targets") involved in the silver scrap recycling business.

Under the terms of the Amendment:

- The cash portion of purchase price of US$3.72 million has not been modified but is now payable in three installments: US$225,000 in deposits that have already been paid; US$1.4 million due on closing and the balance of US$2.1 million deferred until one year after closing.

- The Company will deliver a vendor take-back note ("VTB") on closing for the deferred cash payment of US$2.1 million.

- The share portion of purchase price remains unchanged; however, additional share consideration will be issuable to the vendors in the event that the Company undertakes a dilutive financing prior to the redemption of the VTB.

- The VTB principal, together with accrued interest, may be paid prior to maturity without penalty and the interest on the VBT principal will accrue at an annual interest rate of 6% and be due and payable quarterly, in arrears, subject to a deemed principal increase equal to 5% of the outstanding balance six months after issuance of the VBT.

- The VBT will be guaranteed by the principal Target and secured by certain assets of such Target and certain covenants of the Company relating to funding and an intended subsequent acquisition will be secured by a repurchase right to the shares of the Targets.

- Closing is to occur on or before May 23, 2008.

Don Holmstrom, President and CEO commented: "The support and partnership with the target shareholders in this first acquisition will allow this deal to close in a timely fashion. Silver Recycling is now positioned to aggressively pursue the next two targets with which we have had discussions and execute its financing strategy as we grow our Company."

The Amendment is subject to both TSX-V acceptance and the consent of the majority of the shareholders of the Company.

Completion of the transaction is subject to a number of conditions, including TSX Venture Exchange acceptance. 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 Filing Statement prepared in connection with the transaction, any information released or received with respect to the Change of Business may not be accurate or complete and should not be relied upon. Trading in the securities of Silver Recycling should be considered highly speculative.

About The Silver Recycling Company Inc.

Silver Recycling is seeking to consolidate privately-owned silver and other precious metals recycling companies. Silver Recycling is continuing to review other candidate companies within the precious metals recycling industry for acquisition and integration in alignment with the Company's business strategy.

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. The TSX Venture Exchange does not accept any responsibility for adequacy or accuracy of this release.

Contact Information

  • The Silver Recycling Company Inc.
    Don Holmstrom, CA
    President & CEO
    (604) 688-3011
    (604) 687-6942 (FAX)
    Email: dholmstrom@silver-recycling.com
    or
    The Silver Recycling Company Inc.
    Sidney R. Stern
    Executive Director
    (604) 688-3011 or Cell: (604) 617-6697
    Email: sstern@silver-recycling.com
    or
    The Silver Recycling Company Inc.
    #501 - 321 Water Street
    Vancouver, B.C., Canada V6B 1B8
    (604) 688-3011