Roxmark Mines and Ontex Resources announce execution of amalgamation
agreement and scheduling of shareholders meetings
The two companies have also each called a special meeting of shareholders to be held on
Pursuant to the amalgamation agreement and previously executed letter agreement, Ontex has agreed to acquire all of the issued and outstanding shares of Roxmark pursuant to a "three-cornered" amalgamation (which will result in Roxmark becoming a wholly-owned subsidiary of Ontex). Roxmark shareholders will be entitled to receive one Ontex share for every 1.25 Roxmark shares held at the time of completion of the transaction (which is equivalent to 0.80 of an Ontex share on its current basis for each Roxmark share). Prior to completing the transaction, Ontex plans to consolidate its outstanding shares on a 1-for-3 basis. If the consolidation is completed, Ontex will issue one share for every 3.75 shares of Roxmark held at the time of completion of the transaction. In addition, all convertible securities of Roxmark will be exercisable for shares of Ontex based on the same exchange ratio applicable to the Roxmark shares. Additional details regarding the transaction will be described in the joint management information circular.
The parties have completed their due diligence in accordance with the terms of the letter agreement and have also agreed to waive a previously contemplated
Roxmark and Ontex believe that the merger is a major step toward creating one gold mining company holding significant properties in the prolific Beardmore-Geraldton Greenstone gold belt, close to the Trans-Canada Highway, TransCanada Pipeline, and major power lines. Roxmark and Ontex believe the land position of the combined company will improve exploration potential and offer significant synergies in exploration, development and diversification of risk and that existing mine infrastructure, which includes a permitted mill, will also be a significant advantage.
Both companies also believe that, in addition to cost savings, the merged company will be strongly positioned to participate in the anticipated further consolidation in the Canadian gold industry.
Closing is anticipated on or before the end of 2009, at which point Roxmark shareholders will hold approximately 56% of the combined company on a non-diluted basis, which will have approximately 97.2 million shares outstanding on a post consolidation basis.
In addition to shareholder approval, completion of the transaction is subject to certain other conditions which are customary for transactions similar in nature to the proposed merger.
ABOUT ONTEX
Ontex is a junior resource company focused on gold exploration and deposit delineation at its Brookbank gold property in northern Ontario spanning a strike length of 35 kilometres. To date, diamond drilling has identified a structure over a 7 kilometre strike length with mineralized zones extending from surface to a depth of at least 800 metres. The mineral resources at a 2.0 g/t gold cut-off grade stands at 1.84 million tonnes grading 7.3 g/t gold containing 432,300 ounces of Indicated and 2.66 million tonnes grading 4.9 g/t gold containing 421,400 ounces of Inferred resource (see National Instrument 43-101 technical report - "Technical Report on the Brookbank Gold Deposit, Beardmore - Geraldton Area, Northern Ontario,
About Roxmark Mines
Roxmark is a gold and molybdenum exploration and development company operating in the Geraldton-Beardmore area. In the Beardmore camp, Roxmark is pursuing a number of initiatives including re-opening the Northern Empire Mine and its onsite mill and expanding the resource base at the nearby Leitch-Sand River Mine, once one of Canada's richest and now 100% owned by the Company. Operated from 1937 to 1965 the Leitch Mine processed 906,395 tons of ore with a recovery of 0.92 tons of gold per ton, yielding 860,648 oz. gold at
A 2008 National Instrument 43-101-compliant report on the Northern Empire Mine identified 86,652 tonnes grading 10.70g.Au/t, containing 29,807 ounces of indicated gold resources; and 64,748 tonnes grading 9.95g.Au/t, containing 20,719 ounces of inferred gold resources, at shallow depths over a limited drilled strike length of the Contact and Power Zones. The technical data and the contents of this news release relating to Roxmark have been reviewed by
In addition, Roxmark is an active participant (with a 30% carried interest) in The Hardrock Project, a joint venture with Premier Gold Limited (TSX: PG) to develop a number of Geraldton Camp properties. In 2009, as operator, Premier is spending an estimated
In recent years, Roxmark has generated cash flow from bulk-sampled gold and molybdenum processed at its fully-permitted, upgraded Northern Empire mill near Beardmore and has the advantage of infrastructure from the formerly productive gold mines located on its properties which generated 4 million ounces of gold before being shut down due to a
Forward-Looking Information
This news release contains "forward-looking information" within the meaning of applicable Canadian and
This news release and the information contained herein does not constitute an offer of securities for sale in the
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 release.
For further information: Ontex Resources Limited: J. Patrick Sheridan, Jr., President & CEO, Ontex Resources Limited, (416) 628-5936, [email protected]; www.ontexresources.com; Roxmark Mines Limited: Monir Younan, President, Roxmark Mines Limited, (416) 860-1636, [email protected]; www.roxmark.com
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