MOA Proposed Acquisition of New Island Resources
https://finance.yahoo.com/news/Mountain-Lake-Announces-bw-3530644076.html?x=0&.v=1
HALIFAX, Nova Scotia--(BUSINESS WIRE)--Mountain Lake ResourcesInc. (TSX-V: MOA- News) (“MountainLake”) and NewIsland Resources Inc. (TSX-V: NIS - News) (“New Island”)are pleased toannounce that they have entered into a Letter of Intent (the“Agreement”) whereby Mountain Lake proposes to acquire New Islandby wayof a corporate arrangement (the “Arrangement”). The Arrangementwilleffectively combine the assets and liabilities of both issuers on aconsolidated basis, with New Island becoming a wholly-ownedsubsidiaryof Mountain Lake.
By the Agreement dated June 2, 2010, it isproposed that all of theshareholders of New Island will exchange their issued commonshares ofNew Island for new common shares of Mountain Lake, on the basis ofeveryfive and one-half (5.5) shares of New Island for one (1) new shareofMountain Lake, provided that such proposed exchange ratio isnon-bindingand specifically subject to the completion of all due diligenceinvestigations, confirmation by independent fairness opinions, anyfurther negotiations based on the relative market values ofMountainLake and New Island, and such other factors as management mayconsiderappropriate. All convertible securities of New Island will beexchangedfor convertible securities of Mountain Lake on the same basis,adjustedaccordingly to reflect the final agreed share exchange ratio.
Managementof each company believes that combining the assets of NewIsland with Mountain Lake’s will strengthen both of theirfinancial andmanagement capabilities, and accelerate the exploration anddevelopmentof all of their properties by combining their mutual mineralpropertyinterests in Atlantic Canada. Mountain Lake will acquire NewIsland’shighly prospective mineral properties (more particularly describedbelow), including its interests in the advanced stage Pine Coveproperty. New Island’s shareholders will benefit from the greaterdepthof the Mountain Lake team’s geological and mining engineeringexpertise,as well as an interest in Mountain Lake’s mineral explorationprojects.The proposed Arrangement will also facilitate financing andfurtherexploration and development of these projects.
“MountainLake’s goal is to enhance shareholder value through strategicacquisitions and this merger has the potential for us to take asignificant step towards achieving that goal,” commented GaryWoods,President and CEO of Mountain Lake. “Shareholders of bothcompanies willbenefit from the combination of assets that each company brings totheother.”
Harold Wareham, President and CEO of New Island,stated: “The synergiescreated by the combination of the assets and strengths of bothcompanieswill enhance shareholder value.”
The combined company willhave a strong portfolio of Newfoundland andLabrador based gold properties at various stages, ranging fromearlystage exploration all the way to production in one of the mostminingfriendly jurisdictions in the world (ranked 8th in theFraserInstitute’s 2010 Survey). Projects will include:
Pine Cove Gold Project:
A 70%interest in the Pine Cove Gold Deposit, which will be reduced to40% once certain production criteria are met by Anaconda MiningInc.,who are operators of the project. Pine Cove, which is due tocommenceproduction in June, 2010, has probable mineral reserves of2,332,676tonnes grading 2.76 grams per tonne (g/t) gold (Au) (see resourceestimate performed by Eugene Puritch P.Eng. of P & E MiningConsultants Inc. and presented in the NI43-101 Pine Cove Project Technical Report and Feasibility Studydated March 18, 2005), which is planned to be mined at a rate of 1,000tonnes per day. The PineCove Property also has additional exploration potential onwhich toexpand the current reserves.
ValentineLake Gold Project:
A gold exploration and developmentproject that is controlled byMountain Lake and will be 50% owned by Mountain Lake uponcompletion ofthe sub-option agreement with Marathon PGM Corp. The ValentineLake Property is over 30 kilometres (km) long and to date theLeprechaun Deposit (at ~km 3 going northeast along strike) is thefirstdefined gold resource within the highly prospective Property. TheLeprechaun Deposit, has a NI 43-101 compliant underground inferredmineral resource of 1,314,780 tonnes grading 10.50 g/t gold using a5g/t gold minimum cut-off and a 3 m minimum width for a totalestimatedmineral resource of 443,000 ounces of gold (see resource estimateperformed by Larry Pilgrim, P. Geo., Qualified Person, and presented inthe NI43-101 Valentine Lake Technical Report dated January 12, 2005).Currently, and as follow-up to the successful winter 2010 drillprogram,an 8,000 metre (m) spring/summer drill program is underway thatwillfocus on advancing the Leprechaun Deposit towards an open pitresourceand exploring the multiple gold occurrences identified along theProperty’s 30 km strike length.
Glover Island Gold Property:
Agold exploration property 100% owned by New Island that is situatedroughly 70 km from Mountain Lake’s Valentine Lake gold project,and ishost to several significant gold prospects over an 11 km strikelength.Significant drill intercepts on the GloverIsland Property include 16.7 m of 5.31 g/t Au at the LPSEprospect,10.0 m of 4.93 g/t Au at Kettle Pond South, and 8.0 m of 10.18 g/tAu atthe Lucky Smoke deposit. Non NI 43-101 compliant resources havebeencalculated at the LPSE and Kettle Pond South prospects, andMountainLake believes that these could be upgraded to NI 43-101 disclosurestandards, once data verification and quality control measures arecompleted.
At the closing of the Arrangement, the currentdirectors of New Islandwill resign, and new directors will be nominated and appointed byMountain Lake. New Island has the right to nominate one directorto theBoard of Mountain Lake.
The completion of the Arrangement issubject to the fulfilment of anumber of prior conditions, including the completion of theparties’ duediligence investigations, final agreement as to the share exchangeratio, the acceptance of the TSX Venture Exchange to theArrangement,the approval of the Arrangement by the shareholders of New Islandby aspecial resolution of at least 2/3rds of the shares voted inperson orby proxy at a general meeting of New Island held to consider theArrangement, and the approval of the Supreme Court of NewfoundlandandLabrador. The Arrangement cannot close until all of theseconditionsprecedent and others are met. There can be no assurance that theArrangement will be completed as proposed or at all. Investors arecautioned that except as disclosed in New Island’s InformationCircularto be prepared in connection with the Arrangement, any informationreleased or received with respect to the Arrangement may not beaccurateor complete and should not be relied upon. Trading in thesecurities ofboth Mountain Lake and New Island should be considered highlyspeculative.
After entering into a definitive agreement, andunder certaincircumstances, if the Arrangement fails to complete, then thenon-completing party shall pay to the other a break-up fee equalto thegreater of: (a) 5.0% of the value of any alternative acquisitionproposal from a third party, and (b) $300,000.
It isanticipated that the special general meeting of the shareholdersof New Island to approve the Arrangement will be held at a date tobeannounced in July 2010. New Island shareholders will receive anInformation Circular setting out further details of the proposedtransaction, and this Information Circular will also be filed andmadeavailable on SEDAR (www.sedar.com)under New Island’s public profile.
Gary Woods, P.Geo., isthe Mountain Lake’s Qualified Person on the NewIsland acquisition and has reviewed and verified the contents ofthisnews release.
About NewIsland Resources Inc.
New Island Resources Inc. (TSX-V:NIS - News) (New Island) is adiversifiedjunior exploration company holding gold and base metal propertiesin theprovince of Newfoundland and Labrador. Its main projects include: a70%interest in the Pine Cove gold property, which is on option toAnacondaMining Inc. (Anaconda) whereby Anaconda can earn a 60% interestandoperator status by bringing the property into commercialproduction,where production is expected to commence in June 2010; a 100%interestin the large Glover Island property having significant goldshowingscovered by a mining lease; and a 17% shareholding in ProminexResourcesInc. which holds the advanced Tulks Hill base metal deposit southofBuchans. For more information visit: www.newislandresources.com
About Mountain Lake Resources Inc.
MountainLake Resources Inc. (TSX-V: MOA - News) is a diversifiedjuniorexploration company, whose corporate strategy is to buildshareholdervalue through the exploration and development of economicallyviablemineral properties. Mountain Lake’s current projects include: a30%interest in the Valentine Lake gold property (Newfoundland) withanoption to acquire the remaining 70% interest from Richmont MinesInc.(and a subsequent sub-option and joint venture agreement wherebyMarathon PGM Corp. can earn a 50% in the property; a 100% interestinthe Bobby’s Pond base metals property (Newfoundland); an option toearna 100% interest in the Little River gold exploration property(Newfoundland); and a 2,350,000 share (~6.5%) stake in EtruscanDiamondsLtd., an alluvial diamond project (South Africa). For moreinformationvisit: www.mountain-lake.com
ONBEHALF OF THE BOARD OF DIRECTORS
s/“Gary Woods”
President& CEO