HALIFAX, NOVA SCOTIA and VANCOUVER, BRITISH COLUMBIA--(Marketwire - Feb. 27,2009) - Erdene Resource Development Corp. ("Erdene") (TSX:ERD) and Beta MineralsInc. ("Beta") are pleased to announce the closing of the transactions (the"Transaction") contemplated by the Amended and Restated Letter Agreement datedJanuary 23, 2009 (the "Agreement"), among Erdene, Beta and Deepstep KaolinCompany LLC ("Deepstep"). Pursuant to the Agreement, Erdene and Deepstepexchanged all of the outstanding common shares of Erdene Materials Corporation("EMC"), a Delaware company, for common shares of Beta giving Erdene acontrolling interest in Beta. The sole assets of EMC are primary kaolin clayassets located in Georgia, U.S.A., (collectively, "Clay Assets").
The Beta shareholders approved the transaction at the adjourned annual andspecial meeting of shareholders held on February 20, 2009 pursuant to theprocedure described in the news release of Beta issued on January 26, 2009. TheBeta shareholders also approved a change of name from Beta to Advanced PrimaryMinerals Corporation ("the "Resulting Issuer") at the same meeting.
The Transaction constituted an arms length "Reverse Takeover" under theapplicable policies of the TSX Venture Exchange ("the "Exchange").
"We are very excited to be launching our new specialty kaolin business andare aggressively moving forward with our plans to begin production of ourhigh-quality primary kaolin resource in the second quarter of 2009," said KenMacDonald, the new President and CEO of the Resulting Issuer. "We are in theadvanced stage of constructing a new, state of the art processing plant inDearing, Georgia and we have secured contracts with established companies forthe production of kaolin products, targeting the ceramics industryinitially."
"We have put a tremendous effort into the identification and evaluation ofour Georgia primary kaolin resource over the past 10 years and feel veryoptimistic about the development of this business opportunity," said PeterAkerley, President and CEO of Erdene. "We look forward to seeing the inherentvalue of this unique kaolin resource being realized to the benefit of theshareholders of Erdene and the Resulting Issuer."
It is anticipated that the shares of the Resulting Issuer will recommencetrading on the Exchange under the symbol "APD" the week of March 2, 2009.
The Transaction
Prior to the closing, EMC transferred certain assets, such that at the timeof closing it was only holding the Clay Assets. On closing, Erdene and Deepsteptransferred to Beta all of the issued and outstanding securities of EMC andcertain debt owing by EMC to Erdene in exchange for the issuance by Beta of81,000,000 common shares of the Resulting Issuer (the "Shares"). The Shares wereissued as to 71,000,000 to Erdene and 10,000,000 to Deepstep. In addition,36,000,000 Shares are to be issued to Erdene upon certain permits being obtainedto allow production from the Clay Assets and if such permits are not obtainedwithin three years, the 36,000,000 Shares will not be issued. Pursuant to theTransactions, Erdene has agreed to transfer 2,925,000 Shares to Toll CrossSecurities Inc. in satisfaction of a success fee payable in connection with theTransaction.
Upon completion of the Transaction, EMC became a wholly-owned subsidiary ofthe Resulting Issuer, and changed its name to "Advanced Primary MaterialsCorporation"
Concurrent with the closing of the Transaction, the Resulting Issuerappointed new directors to replace James Currie, Roy Hudson, and Neville Simpsonwho resigned. The board of the Resulting Issuer now consists of: Philip Martin,Kenneth MacDonald, Chris Cowan, and Philip Webster. James Currie resigned asManaging Director and the current officers of the Resulting Issuer are: KenMacDonald, President and Chief Executive Officer; Michael O'Keefe, ChiefFinancial Officer; David Avant, Vice President Operations; Paul Coughlan, VicePresident Business Development; and Suzan Frazer, Corporate Secretary.
Concurrent with closing and pursuant to the Agreement, the Resulting Issuerentered into consulting agreements (the "Consulting Agreements") with RoyHudson, Neville Simpson, James Currie, and Philip Martin (the "Consultants"),all of whom are familiar with the pre-Transaction assets of Beta, and willprovide transition support related thereto. The Consultants' fee for performingthe duties required under the Consulting Agreements is 750,000 options topurchase common shares of the Resulting Issuer (the "Consulting Options"). TheConsulting Options will expire six months after the termination of theConsulting Agreements. The exercise price of the Consulting Options is equal tothe greater of: (i) the volume weighted average trading price per Share on theExchange for twenty trading days following closing; (ii) the closing price ofthe Shares on the Exchange on the twentieth trading day following closing; or(iii) the minimum price allowable by the TSX.V.
EMC, formerly a wholly owned subsidiary of Erdene, has been active in Georgiaand South Carolina for over 10 years. EMC's kaolin project has received over $15million in investment exploring for, evaluating, extensively testing andsecuring high quality primary kaolin resources in Georgia and South Carolina.This culminated in the first commercial production of specialty primary clay inGeorgia with KaMin LLC, formerly the kaolin division of J.M. Huber Corporation,mining EMC's kaolin since 2003 to produce their premium HuberPrime(TM)LWC paperproduct pursuant to a US$3.8 million prepaid royalty agreement giving KaMin LLCaccess to a limited quantity of EMC's resource.
The Resulting Issuer owns or controls through long term leases, severalhigh-quality primary kaolin clay deposits with a total National Instrument43-101 compliant resource of 27.3 million tons (Indicated and Measured). Thedeposits are located in Georgia, USA, which is a world leader in kaolinproduction and generates over $1 billion from the sale of kaolin annually. Theinitial focus of the Resulting Issuer's operations will be to supply primarykaolin products sourced from its McDuffie County, Georgia properties for theceramics industry and specialty industrial applications that benefit from theunique characteristics of the Resulting Issuer's primary kaolin resource. TheMcDuffie County properties contain just under 10 million tons of the company'shighest quality primary kaolin resource.
The goal of the Resulting Issuer is to become North America's leadingspecialized kaolin producer. To this end, the Resulting Issuer is within weeksof completing construction of a new, state-of-the-art processing facility inDearing, Georgia that will begin operation in Q2 2009. Production commitmentsare in place with established companies and extensive product development andtesting has been carried out with advanced commercial trials underway.
The Resulting Issuer is targeting value added products that benefit from theunique attributes of its high quality primary kaolin resource. Target marketsinclude ceramics, catalysts, paint and coatings, and other industrialapplications. Customer product trials have shown that the Resulting Issuer'sprimary kaolin products meet or exceed the quality of comparable foreignimports. Proximity to the US domestic market and elimination of foreign exchangerisk add a strong competitive advantage.
The Resulting Issuer has assembled an experienced management team and Boardof Directors with strong technical, financial and management experience and aproven track record within the kaolin industry as well as with other industrialminerals. The new executive management team is comprised of:
Ken W. MacDonald, President and CEO and Director
Mr. MacDonald, a chartered accountant, brings almost 25 years of executivelevel mine management, finance and operating experience to the Resulting Issuer.He is one of the founding members of Erdene being with the company since itsincorporation in 2002 and is currently their Vice President Business Strategyand CFO. He has been involved in the financing and development of Erdene'sGeorgia and South Carolina primary kaolin operation continuously since 1998.
David Avant, Jr. - Vice-President, Operations
Mr. Avant, B. Sc. Geology, a registered geologist in the state of Georgia,brings over 25 years experience in industrial mineral exploration, processingand management with extensive kaolin experience. He owns and operates DeepstepMineral Products LLC, a company focused on the development of specialty kaolinand mica products. Previously, from 1995 to 2006, Mr. Avant was President andpart owner of Georgia Industrial Minerals, Inc. a large mica producer. From 1991to 1995 he was Exploration Manager of ECC International (now Imerys Inc.) andfrom 1979 to 1991 he held the positions of Geologist, Exploration Manager andLand Manager with Georgia Kaolin Group Inc.
Paul D. Coughlan - Vice-President, Business Development
Mr. Coughlan has over ten years experience in the exploration, management anddevelopment of kaolin projects in Georgia where he has held the position ofGeneral Manager of EMC's Georgia operation since 1998. He has represented EMCduring that period in its relationships with partners in all industrial mineralprojects in the US and manages bench and pilot plant testing for internalprojects and third party customers including product development, processing andtesting. Mr. Coughlan has been employed in the resource industry since 1993 invarious roles including landowner negotiations, environmental reclamation andexploration.
About the Resulting Issuer
Immediately after closing, the Resulting Issuer has a consolidated workingcapital position of approximately $1.9 million. It has 109,742,853 shares issuedand outstanding and a fully diluted share position of 116,692,853, excluding anyadditional Shares to be issued to Erdene in connection with the Transaction.
Early Warning
Upon completion of the Transaction, Erdene owns and controls 71,000,000Shares and Deepstep owns and controls 10,000,000 Shares, which constitutes anaggregate of approximately 74% of the total issued and outstanding Shares.Erdene is entitled to receive an additional 36,000,000 Shares upon the ResultingIssuer obtaining certain permits and may receive additional Shares upon theconversion of debt owed by EMC to Erdene. The Shares were acquired pursuant tothe Transaction and both Erdene and Deepstep intend to hold the Shares forinvestment purposes. Erdene and Deepstep may increase or decrease theirinvestment in the Resulting Issuer depending on market conditions or any otherrelevant factors.