Hathor Exploration Limited to Acquire Terra Ventures Inc.
April 18 2011 - 10:57AM
Marketwired Canada
NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED
STATES.
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.
Advisors
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.
About Hathor
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.
About Terra
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.
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.
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