By: Terra Ventures Inc.
Vancouver, British Columbia - Hathor Exploration Limited (TSX: HAT) (“Hathor”) and Terra Ventures Inc. (TSX-V: TAS) (“Terra”) today jointly announce that they have executed a binding letter agreement (the “Agreement”) pursuant to which Hathor will acquire, in an all-share transaction, all of the issued and outstanding shares of Terra by way of a plan of arrangement (the “Arrangement”).
The synergy of this proposed transaction is underscored by the shared nature of the core assets of the two companies. The Arrangement consolidates a 100% interest in the Roughrider uranium deposit and an approximate 98% interest in the large and prospective Russell Lake exploration project, located at either end, respectively, of the prolific eastern corridor of the Athabasca Basin.
Both companies believe this consolidation of property ownership will create value to a degree not possible for either company to achieve on its own; the sum is greater than the parts. Hathor shareholders are expected to realize full value for the mineral resource potential of the Roughrider deposit as it grows. Terra shareholders are expected to benefit more from full participation in Roughrider and in all of Hathor’s other properties, including Russell Lake.
Hathor and Terra believe the combination of the two companies is a natural progression in the ongoing advancement of the Roughrider uranium deposit. This consolidation compliments and builds on the recent expansion and strengthening of Hathor’s expert uranium exploration and management teams, the conversion of the Roughrider mineral claim to mineral lease, and the graduation of Hathor from the TSX Venture Exchange to a full listing on the Toronto Stock Exchange
Each company is committed to a time is of the essence mandate in the execution of their business plans. Consolidating the fragmented ownership of Roughrider and Russell presents significant potential post-transaction value for both groups of shareholders.
Details of the Arrangement
The proposed transaction will be carried out by way of a plan of arrangement under the Business Corporation Act (British Columbia).
Under the Arrangement, Terra shareholders will receive 0.20 of a Hathor common share for each Terra common share held, resulting in Hathor issuing approximately 12.4 million of its common shares to Terra shareholders representing approximately 10% of Hathor’s total post-Arrangement issued and outstanding share capital. All outstanding Terra options and warrants will be replaced or assumed by Hathor and exercisable to acquire Hathor shares with the number of Hathor shares and exercise price adjusted, as appropriate, to reflect the consideration to be received by the Terra shareholders pursuant to the Arrangement.
Based on Hathor’s closing share price on April 15, 2011 (the last full trading day prior to the announcement of the Arrangement), the proposed exchange ratio represents a 16% premium to Terra’s closing share price on April 15, 2011 and a 13% premium based on the 20-day volume weighted average share prices for the two companies’ shares up to that date. The proposed Arrangement values Terra at approximately $24 million.
The implementation of the Arrangement will be subject to a number of conditions, including approval by at least 66 2/3% of the votes cast at a special meeting of Terra shareholders that is expected to be held in June, 2011, approval of the Supreme Court of British Columbia, approval of the Toronto Stock Exchange and the TSX Venture Exchange, completion of satisfactory due diligence on or before May 2, 2011, completion of definitive documentation and such other conditions as are customary for a transaction of this nature.
The Agreement also provides for, among other things, customary board support and non-solicitation covenants from Terra (subject to customary “fiduciary out” provisions that entitle Terra to consider and accept a superior proposal and a right in favour of Hathor to match any superior proposal). The Agreement also provides for the payment of a termination fee to Hathor of $625,000 should Terra accept an unsolicited superior proposal and terminate the Agreement.
The current management team of Hathor will manage the affairs of Terra upon completion of the Arrangement. The Board of Hathor has unanimously approved the Arrangement.
The Board of Directors of Terra has received an opinion from Cormark Securities Inc., its financial advisor, that as of the date of the Agreement, the consideration received pursuant to the Arrangement is fair, from a financial point of view, to Terra shareholders. The Board of Directors of Terra, with one dissenting member, is recommending that Terra shareholders vote in favour of the Arrangement.
Scotia Capital Inc. is acting as financial advisor to Hathor and its board of directors. Gowling Lafleur Henderson LLP is acting as legal advisor to Hathor and Blake Cassels & Graydon LLP is acting as legal advisor to the independent committee of the board of directors of Hathor.
Cormark Securities Inc. is acting as financial advisor to Terra. James L. Harris Law Corp. is acting as legal advisor to Terra and McMillan LLP is acting as special counsel to Terra.
Hathor is a publicly-traded mineral exploration company listed on the Toronto Stock Exchange trading under the symbol HAT. Hathor is focused on uranium exploration in the Athabasca Basin region of Saskatchewan and Alberta. The Athabasca Basin is the preeminent exploration district in the world for high grade uranium, and for the past 30 years has been responsible for between 20 and 30% of global annual uranium mine production. Hathor’s Roughrider uranium deposit is within the northern part of the main uranium-producing eastern corridor of the Athabasca Basin. The property has been converted from mineral claim to mineral lease, and following the discovery in 2008, Hathor continues to drill, update and optimize the overall resource potential of three different mineral zones identified to date. Terra owns a 10% interest in the largest claim on the property containing the entire deposit known to date, carried to the completion of a positive feasibility study and announcement of intent for commercial production. Hathor’s exploration pipeline behind Roughrider is highlighted by the 74,000 ha Russell Lake property located in the southern portion of the eastern corridor of the Basin. The property has numerous early stage targets in various stages of development and testing. Terra owns an 8% interest in the Russell Lake South property, carried to the completion of a positive feasibility study and announcement of intent for commercial production.
Terra is a junior exploration company focused on acquiring and developing quality uranium projects which have world class potential. Terra is listed on the TSX Venture Exchange under the symbol TAS. Terra’s principal property interests currently consist of an interest or option in the Roughrider uranium deposit, South Russell project, and the Wheeler River area properties, all of which are in Saskatchewan’s Athabasca Basin. With respect to Wheeler River, Terra has an option to earn up to a 95% interest in this prospect which adjoins the Wheeler River property of Denison Mines Corp. (60%) and Cameco (30%). Terra is currently carrying on its exploration program of the Wheeler River property, to include drilling in the normal course of business. Terra also holds a 10% production carried interest in 34 claims held by Titan Uranium Inc. in seven separate projects located in the southwestern and northeastern parts of the Athabasca Basin, Saskatchewan.
For further Information, contact:
The Toronto Stock Exchange does not accept responsibility for the adequacy or accuracy of this press release.
Neither the TSX Venture Exchange nor its Regulation Service Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this new release.
None of the securities anticipated to be issued under the plan of arrangement have been or will be registered under the Securities Act of 1933, as amended, or any state securities laws, and such securities are anticipated to be issued in the United States pursuant to exemptions from such registration requirements. This press release shall not constitute an offer to sell or solicitation of an offer to buy any securities in any jurisdiction where such an offer or sale would be unlawful.
Forward Looking Information
This press release contains “forward-looking information” within the meaning of applicable Canadian securities legislation, including information relating to Hathor or Terra’s future financial or operating performance may be deemed "forward looking". All statements in this news release, other than statements of historical fact, that address events or developments that Hathor or Terra expects to occur, are "forward-looking statements". Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects", "does not expect", "plans", "anticipates", "does not anticipate", "believes", "intends", "estimates", "projects", "potential", "scheduled", "forecast", "budget" and similar expressions, or that events or conditions "will", "would", "may", "could", "should" or "might" occur. All such forward-looking statements are based on the opinions and estimates of the relevant management as of the date such statements are made and are subject to important risk factors and uncertainties, many of which are beyond Hathor or Terra’s ability to control or predict. Forward-looking statements are necessarily based on estimates and assumptions (including that the Arrangement will be completed successfully on the terms agreed upon by the parties and that the business of Terra will be integrated successfully into the Hathor organization) that are inherently subject to known and unknown risks, uncertainties and other factors that may cause actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking statements. In the case of Hathor and Terra, these facts include their anticipated operations in future periods, planned exploration and development of its properties, and plans related to its business and other matters that may occur in the future. This information relates to analyses and other information that is based on expectations of future performance and planned work programs. Statements concerning mineral resource estimates may also be deemed to constitute forward-looking information to the extent that they involve estimates of the mineralization that will be encountered if a mineral property is developed. Forward-looking information is subject to a variety of known and unknown risks, uncertainties and other factors which could cause actual events or results to differ from those expressed or implied by the forward-looking information, including, without limitation: exploration hazards and risks; risks related to exploration and development of natural resource properties; uncertainty in Hathor’s ability to obtain funding; uranium price fluctuations; recent market events and conditions; risks related to the uncertainty of mineral resource calculations and the inclusion of inferred mineral resources in economic estimation; risks related to governmental regulations; risks related to obtaining necessary licenses and permits; risks related to their business being subject to environmental laws and regulations; risks related to their mineral properties being subject to prior unregistered agreements, transfers, or claims and other defects in title; risks relating to competition from larger companies with greater financial and technical resources; risks relating to the inability to meet financial obligations under agreements to which they are a party; ability to recruit and retain qualified personnel; and risks related to their directors and officers becoming associated with other natural resource companies which may give rise to conflicts of interests. This list is not exhaustive of the factors that may affect Hathor or Terra’s forward-looking information. Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in the forward-looking information. Hathor and Terra’s forward-looking information is based on the reasonable beliefs, expectations and opinions of their respective management on the date the statements are made and neither Hathor nor Terra assumes any obligation to update forward-looking information if circumstances or management’s beliefs, expectations or opinions change, except as required by law. For the reasons set forth above, investors should not place undue reliance on forward-looking information. For a complete discussion, please refer to Hathor’s Annual Information Form, its audited financial statements and MD&A for the year ended March 31, 2010 and its unaudited financial statements and MD&A for the nine months ended December 31, 2010, and Terra’s audited financial statements and MD&A for the year ended February 28, 2010 and its unaudited financial statements and MD&A for the nine months ended November 30, 2010, all of which is filed on SEDAR at www.sedar.com.
-- Posted Monday, April 18 2011 | Digg This Article |
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