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

The Silver Recycling Company Inc.

March 13, 2008 19:54 ET

The Silver Recycling Company Enters Into Definitive Purchase Agreement

VANCOUVER, BRITISH COLUMBIA--(Marketwire - March 13, 2008) -

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

The Silver Recycling Company Inc. (NEX BOARD:TSR.H) ("Silver Recycling") is pleased to announce that it has entered into a binding definitive purchase agreement (the "Purchase Agreement") dated March 4, 2008, pursuant to which Silver Recycling intends to acquire (the "Acquisition") two privately-owned companies (the "Targets") involved in the silver scrap recycling business.

Assets and Business of the Targets

The assets of the Targets include a fully operational silver scrap recycling operation, plant, equipment and real estate to recycle scrap and refine it into silver and other precious metals. In 2007, the Targets produced approximately 4.5 million troy ounces of silver, which is predominately high grade.

Purchase Agreement

Pursuant to the Purchase Agreement, which is a binding agreement among the parties, Silver Recycling must pay to the vendors the purchase price of US$5.2 million, consisting of US$3.2 million in cash and US$2 million in common shares of Silver Recycling (the "Share Consideration") and assume approximately US$1.8 million of long term debt. Based on current foreign exchange rates for the Canadian dollar, assumed to be at par, there will be approximately 2,758,621 shares of Silver Recycling issued for the Share Consideration. Silver Recycling has advanced deposits in the amount of US$225,000, which shall be credited to the purchase price and are non-refundable except in certain circumstances, including any default of the vendors.

Closing is subject to customary closing conditions, including corporate and TSX Venture Exchange approvals.

Acquisition Financing

In connection with the Acquisition and to provide the Acquisition Financing, Silver Recycling is undertaking a proposed private placement of 6,700,000 units (the "Units") at a price of CDN$0.60 per Unit, for gross proceeds of up to CDN $4,020,000. Silver Recycling may elect to sell up to an additional 1,666,667 Units (for additional gross proceeds of up to approximately $1.0 million) if the offering is over-subscribed. Closing of the offering is subject to TSX Venture Exchange acceptance and receipt of subscriptions for aggregate gross proceeds of approximately CDN$4.0 million. Closing of the offering may occur before the Acquisition is completed provided that CDN$3.5 million and any additional proceeds realized from the sale of Over-Allotment Units are placed into escrow and not released until the closing of the Acquisition.

Each Unit will consist of one common share of Silver Recycling and one-half of one non-transferable common share purchase warrant (a "Warrant"). Each whole Warrant will entitle the holder thereof to purchase one additional share for a period of 12 months from the date of issue at an exercise price of CDN$0.85 per share, subject to acceleration and adjustment in certain circumstances.

The securities issued by the company have not and will not be registered under the United States Securities Act of 1933, as amended (the "1933 Act"), or the securities laws of any state of the United States, and may not be offered or sold in the United States absent registration or an applicable exemption therefrom under the 1933 Act and the securities laws of all applicable states.

Regulatory

The Acquisition and related Acquisition Financing are intended to serve as Silver Recycling's listing transaction on the Exchange. The Acquisition would constitute a Change of Business transaction under TSX Venture Exchange Policy 5.2 (the "COB Policy"). Pursuant to the COB Policy, Silver Recycling intends, subject to TSX Venture Exchange approval, to deliver a filing statement in respect of the Acquisition in order to obtain the written consent of the majority of its shareholders.

Completion of the transaction is subject to a number of conditions, including TSX Venture Exchange acceptance and disinterested shareholder approval. The transaction cannot close until the required shareholder approval is obtained. 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 to be prepared in connection with the transaction, any information released or received with respect to the COB may not be accurate or complete and should not be relied upon. Trading in the securities of Silver Recycling should be considered highly speculative.

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

About The Silver Recycling Company

Silver Recycling is seeking to consolidate privately-owned silver and other precious recycling companies. Silver Recycling is continuing to review other targets within the precious metals recycling industry.

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

Contact Information

  • The Silver Recycling Company Inc.
    Sidney Stern
    President & CEO
    (604) 688-3011
    (604) 687-6942 (FAX)
    Email: sstern@silver-recycling.com
    or
    The Silver Recycling Company Inc.
    501 - 321 Water Street, Vancouver V6B 1B8