Western Keltic Mines Inc.
TSX VENTURE : WKM

Western Keltic Mines Inc.

November 26, 2007 09:15 ET

Western Keltic Mines Inc. Accepts Sherwood Copper Corporation's Offer to Purchase Western Keltic; Cancels Previously Announced Financing

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Nov. 26, 2007) -

THIS PRESS RELEASE, REQUIRED BY APPLICABLE CANADIAN LAWS, IS NOT FOR DISTRIBUTION TO U.S. NEWS SERVICES OR FOR DISSEMINATION IN THE UNITED STATES, AND DOES NOT CONSTITUTE AN OFFER OF THE SECURITIES DESCRIBED HEREIN.

Western Keltic Mines Inc. ("Western Keltic") (TSX VENTURE:WKM) announced today that it has entered into an agreement (the "Letter Agreement") with Sherwood Copper Corporation ("Sherwood") (TSX VENTURE:SWC) wherein Sherwood has agreed to make an offer (the "Offer") to acquire all of the shares of Western Keltic for consideration of 0.08 of a common share of Sherwood for each common share of Western Keltic.

Based on the November 23, 2007 closing price for the Sherwood common shares, the consideration under the Offer equates to an approximate price of $0.47 per Western Keltic common share, which represents a 53% premium over Western Keltic's closing price of $0.305 per common share on November 23, 2007. Based on the 79,830,855 Western Keltic common shares currently issued and outstanding, the aggregate value of the Offer is approximately $37 million. Western Keltic's Board of Directors has unanimously approved the terms of the Letter Agreement and recommends that Western Keltic shareholders accept the Offer. The members of Western Keltic's Board of Directors, as well as Western Keltic's largest registered shareholder, representing an aggregate of approximately 26.8 million Western Keltic common shares issued or issuable upon the exercise of options and warrants, have, respectively, agreed to enter into or have already entered into lock-up agreements in respect of the Offer.

As a result of Sherwood's proposal, Western Keltic has determined that it will not further pursue its previously announced prospectus offering at this time.

Details of the Sherwood Proposal

The Letter Agreement between Sherwood and Western Keltic contemplates that the transaction would be structured as a take-over bid, subject to standard conditions and the condition that no less than 66 2/3% of the issued and outstanding common shares of Western Keltic be tendered to the Offer. The parties may consider structuring the transaction in an alternative form as mutually determined by Sherwood and Western Keltic.

Under the Letter Agreement, Western Keltic has agreed not to solicit other proposals or seek alternative offers, subject to the exercise by the Western Keltic Board of Directors of its fiduciary duties and its right, subject to certain conditions, to respond to an unsolicited proposal from another party where it has a fiduciary duty to do so. Western Keltic is also obliged to provide Sherwood with the particulars of any such proposal and Sherwood has a right to match any such third party proposal. A break fee of $1.4 million is payable to Sherwood in the event of an unsolicited superior third party proposal which is accepted by Western Keltic.

The Offer is conditional upon, among other things: (1) the share capitalization of Western Keltic not increasing from the current level other than through the issue of Western Keltic shares as a result of the exercise of existing options and warrants; (2) negotiation and finalization of definitive support and/or other agreements, to include standard provisions, including: the obligation of the Western Keltic Board to recommend that Western Keltic shareholders tender their Western Keltic shares in favour of the Offer, and certain other provisions reflecting the terms of the Letter Agreement, including in respect of non-solicitation, the break fee and right to match; (3) entering into lock-up agreements with each member of the Western Keltic Board of Directors; (4) final approval of the take over bid circular by the Sherwood Board of Directors; (5) the approvals, acceptances and consents of all applicable regulatory authorities, stock exchanges and banks as necessary to complete the transaction; (6) no material adverse changes in respect of either party, excluding general market conditions; and (7) certain limits on Western Keltic's financial commitments and obligations prior to closing.

Under the Letter Agreement, Sherwood and Western Keltic have agreed to use their commercially reasonable best efforts to finalize and execute the definitive support agreement in respect of the Offer by December 7, 2007. If the definitive support agreement is not executed on or before December 7, the Letter Agreement may be terminated by either party.

John McConnell, CEO of Western Keltic said, "This transaction represents an attractive premium for our shareholders while providing an excellent opportunity for Western Keltic shareholders to participate in the development of the Kutcho property without experiencing the level of dilution that would be necessary if Western Keltic were to advance the project independently. Sherwood should have access to financing, and cash flow from its Minto Mine operations, that could contribute funds towards the development cost of the Kutcho Creek deposit and an available development team with the experience to ensure the project moves ahead quickly. Overall I think this is a win/win for Western Keltic shareholders."

The Board of Directors of Western Keltic established a Special Committee, which has considered the Offer. The Special Committee engaged Paradigm Capital Inc. and Haywood Securities Inc. to act as its financial advisors and Stikeman Elliott LLP as its legal advisor. The Special Committee has received assurances from its advisors that they will be able to provide a fairness opinion in respect of the Offer, which they took into account in their recommendation of the Offer to the Board of Western Keltic.

About Western Keltic

Western Keltic is focused on identifying and developing valuable base and precious metal projects. The company's efforts are supported by a management team that is highly experienced in permitting, developing and operating mines in a responsible manner. Headquartered in Vancouver, Canada, Western Keltic is a publicly traded company, listed on the TSX Venture Exchange under the symbol "WKM". Visit www.westernkeltic.com for more information.

Forward-Looking Statements

This document may contain "forward-looking statements" within the meaning of Canadian securities legislation and the United States Private Securities Litigation Reform Act of 1995. These forward-looking statements are made as of the date of this document and the Company does not intend, and does not assume any obligation, to update these forward-looking statements.

Forward-looking statements relate to future events or future performance and reflect management's expectations or beliefs regarding future events and include, but are not limited to, statements with respect to the estimation of mineral reserves and resources, the realization of mineral reserve estimates, the timing and amount of estimated future production, costs of production, capital expenditures, success of mining operations, environmental risks, unanticipated reclamation expenses, title disputes or claims and limitations on insurance coverage. In certain cases, forward-looking statements can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved" or the negative of these terms or comparable terminology. By their very nature forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include, among others, risks related to actual results of current exploration activities; changes in project parameters as plans continue to be refined; future prices of resources; possible variations in ore reserves, grade or recovery rates; accidents, labour disputes and other risks of the mining industry; delays in obtaining governmental approvals or financing or in the completion of development or construction activities; as well as those factors detailed form time to time in the Company's interim and annual financial statements and management's discussion and analysis of those statements, all of which are filed and available for review on SEDAR at www.sedar.com. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements.

Accordingly, readers should not place undue reliance on forward-looking statements.

On behalf of the Board of Directors

WESTERN KELTIC MINES INC.

John McConnell, President and CEO

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO U.S. PERSONS UNLESS REGISTERED OR EXEMPT THERE FROM.

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

Contact Information

  • Western Keltic Mines Inc.
    John McConnell
    President & CEO
    (604) 807-4839 or (604) 682-8414 or 1-800-501-1201
    (604) 682-3727 (FAX)
    Website: www.westernkeltic.com