SASKATOON, Dec. 18, 2013
/CNW/ - Shane Resources Ltd. (NEX: SEI.H) ("Shane" or the
"Company"), announced today that it has entered into an
asset purchase agreement (the "Purchase and Sale Agreement")
with Star Minerals Group Ltd. ("Star") (TSXV: SUV) whereby
Star has agreed to purchase the Don's Lake, Munroe and Brownell
claims held by Shane, as well as a net smelter royalty granted by
Golden Band Resources Inc. (the "Purchased Assets"), subject
to certain conditions.
Kyle Kozuska, President and Chief
Executive Officer of Shane stated "The decision to sell
substantially all of Shane's assets is the result of extremely
difficult capital markets for junior exploration companies and the
relatively large capital requirements to further explore Shane's
properties. The interest shown by Star in the properties and
the offer made by Star to purchase Shane's assets for a combination
of cash and shares represents an opportunity for Shane shareholders
to continue to participate in future development of these
properties as well as the properties currently in Star's
portfolio."
Under the terms of the Purchase and Sale Agreement, Star has
agreed to purchase substantially all of the assets of Shane for an
aggregate of $655,000, payable as to
$55,000 in cash and the balance in
common shares of Star (the "Consideration Shares"). The
deemed price of the Consideration Shares will be $0.05 in accordance with the terms of the
Purchase and Sale Agreement, representing the minimum allowable
issuance price of the Consideration Shares as prescribed by the
policies of the TSX Venture Exchange as determined at the date of
the Purchase and Sale Agreement, resulting in an aggregate of
12,000,000 Consideration Shares to be issued. The
Consideration Shares will be subject to a four month hold period
pursuant to applicable securities laws.
The closing is subject to customary conditions precedent and
closing conditions, including (i) Shane shareholder approval; and
(ii) in respect of the Don's Lake property, Claude Resources Inc.
having waived its right of first refusal or allowed it to lapse;
and (iii) applicable regulatory approvals. Shane shareholders will
be asked to approve the transactions contemplated by the Purchase
and Sale Agreement at the annual and special meeting of
shareholders ("AGSM"), scheduled for January 31, 2014.
Under the Purchase and Sale Agreement, Star has been granted
typical deal protection provisions, including a right to match any
superior proposal that is received by Shane on an unsolicited
basis. The transaction contemplated by the Purchase and Sale
Agreement are considered to be Non-Arm's Length pursuant to the
policies of the NEX board of the TSX Venture Exchange due to Mr.
Kozuska being a director of both companies.
At the AGSM, the Company will also seek shareholder approval for
the delisting of its common shares from the NEX board of the TSX
Venture Exchange prior to the proposed winding up of the
Company.
Furthermore, the Board of Directors of Shane will be proposing
the voluntary winding up of the Company pursuant to The Business
Corporations Act (Saskatchewan). This will involve the
discontinuance of the business of the Company and the satisfaction
of all liabilities of the Company. The Company intends to
settle liabilities by first using available cash on hand, followed
by liquidation of a portion of the Consideration Shares if
required. At this time the Company projects that the cash
from the sale proceeds may be sufficient to settle outstanding
liabilities. Following the satisfaction of all such
liabilities, the liquidation plan will contemplate the distribution
to shareholders, on a pro rata basis, the remaining funds and
assets of the Company, if any, which distribution the Company
anticipates would consist primarily of the Consideration Shares. At
the AGSM, shareholders will be asked to approve a plan of
liquidation and distribution to take all necessary steps to effect
the voluntary winding up of the Company. A one time distribution to
shareholders is not expected before the end of Q1 2014.
Both the approval by shareholders of the transactions
contemplated by the Purchase and Sale Agreement and the voluntary
winding up of the Company will require the approval of two thirds
of the votes cast at the AGSM. The Shareholders will receive
additional details on the transaction contemplated by Purchase and
Sale Agreement, the delisting of Shane's common shares and the
winding up process in the management information circular to be
sent to shareholders as part of the AGSM materials.
Neither the NEX Exchange nor its regulation services provider
(as that term is defined in the policies of the NEX Exchange)
accepts responsibility for the adequacy or accuracy of this
release.
Certain information set out in this News Release constitutes
forward-looking information. Forward-looking statements
(often, but not always, identified by the use of words such as
"expect", "may", "could", "anticipate" or "will" and similar
expressions) may describe expectations, opinions or guidance that
are not statements of fact and which may be based upon information
provided by third parties. Forward-looking statements are based
upon the opinions, expectations and estimates of management of the
Company as at the date the statements are made and are subject to a
variety of known and unknown risks and uncertainties and other
factors that could cause actual events or outcomes to differ
materially from those anticipated or implied by such
forward-looking statements. Those factors include, but are
not limited to, the ability of the Company to complete the
transaction contemplated by the Purchase and Sale Agreement and to
satisfy the conditions precedent thereto, the uncertainty of the
value of the non-cash consideration anticipated to be received and
the ability of the Company to satisfy its liabilities,
uncertainties and other factors that are beyond the control of the
Company, risks associated with the industry in general, commodity
prices and exchange rate changes, operational risks associated with
exploration, development and production operations, delays or
changes in plans, risks associated with the uncertainty of reserve
or resource estimates, health and safety risks and the uncertainty
of estimates and projections of costs and expenses. In light
of the risks and uncertainties associated with forward-looking
statements, readers are cautioned not to place undue reliance upon
forward-looking information. Although the Company believes
that the expectations reflected in the forward-looking statements
set out in this press release or incorporated herein by reference
are reasonable, it can give no assurance that such expectations
will prove to have been correct. The Company does not
undertake to update any forward-looking statements except as
required by law.
SOURCE Shane Resources Ltd.