LAM Laramide Resources Ltd - News Release
Laramide arranges to acquire Alliance Pacific
Laramide Resources Ltd LAM
Shares issued 25,479,622 Jul 10 2002 close $ 0.13
Thursday July 11 2002 News Release
Mr. Marc Henderson reports
LARAMIDE TO ACQUIRE ALLIANCE PACIFIC RESOURCES INC.
Laramide has entered into an agreement dated July 4, 2002, to acquire all of the issued and outstanding shares of Alliance Pacific Resources Inc., a private, Toronto based company which sole asset is an option to acquire an interest in a 4,500-square-kilometre concession in the autonomous province of Xinjiang in northwestern China.
Alliance Pacific (APR) secured an option agreement on the concession in late 1997 and has yet to fulfill the terms of the original option, principally due to the downturn in market conditions for gold and gold-related assets. Recent discussions between APR and the Xinjiang autonomous region, however, have been positive in regards to APR's renewed ability to resume performance of its obligations and on that basis, APR principals are currently in China negotiating a revision and extension of the original agreement. A key condition precedent of Laramide's acquisition of APR is satisfactory evidence of an agreement between APR and the Xinjiang autonomous region and the preparation of an independent qualifying report satisfactory to the TSX Venture Exchange regarding the economic merit and geological potential of the concession.
The concession is located in the northwestern region of Xinjiang in close proximity with the Kazakhstan border and is within a known gold belt with excellent geological prospectivity. Previous work on the concession carried out in the early 1990s included almost 30,000 metres of trenching and 37,000 metres of drilling in approximately 140 holes. This work identified at least three discrete deposits which are the source of APR/Laramide's interest.
Terms of the acquisition call for Laramide (LAM) to acquire APR for initial consideration of $1-million payable in Laramide shares with pricing determined based on the trading price of LAM for the 20-day period beginning June 24, 2002, provided however that the number of LAM shares to be issued as initial consideration will not be less than 5.5 million or more than eight million. Completion of the transaction is subject to a minimum of 75 per cent of APR shares being tendered to the Laramide bid.
In addition to this initial consideration, additional shares of LAM will be issued to APR shareholders based on certain performance milestones being achieved. The initial performance milestone, for which an additional number of shares equal to 25 per cent of the purchase shares will be issued, requires a minimum of $2-million to be raised for the exploration and development of the properties. A further and final payment of bonus shares, again equal to 25 per cent of the purchase shares, is triggered by the earliest occurrence of any one of the following events: (a) Laramide receiving an independent consulting report indicating a mineral resource on the concessions exceeding two million ounces; (b) Laramide accepting a joint venture proposal with indicated consideration including cash, shares and work commitments of at least $5-million; or (c) Laramide receiving a takeover bid that values the company in excess of $25-million.
Assuming the transaction is completed, Alliance Pacific Resources Inc. will become a wholly owned subsidiary of Laramide and Laramide is committed to issuing one million options to the three principals of APR who collectively hold more than 60 per cent of the shares. Pricing of these options and the appropriate vesting considerations will be subject to the guidelines of the TSX Venture Exchange and to the approval, if necessary, of the shareholders of Laramide.
Laramide has entered into lock-up agreements with the three APR principals and anticipates that they will retain their positions in the subsidiary company after the transaction is completed in order to assist in the continuing development of the concessions in China. The APR principals are well qualified for such a role and bring the requisite suite of diverse skill sets that Laramide believes are necessary for a mineral exploration company to succeed in China.
Given the status of the concession and the requirement to prepare an independent qualifying report, Laramide anticipates a closing date for the transaction of Nov. 1, 2002. Updates as to the status of the transaction will be provided on an interim basis with the initial update expected in early August.
(c) Copyright 2002 Canjex Publishing Ltd. |
