Union Gold Inc. Enters Into a Binding Merger Agreement With Shoal Point Energy Ltd.
May 28 2008 - 10:42AM
Marketwired
CALGARY, ALBERTA ("Union"), a TSXV listed Company, announces
that it has today entered into an binding agreement (the "Letter
Agreement") with respect to a proposed amalgamation or plan of
arrangement, or other form of merger or business combination (the
"Transaction") with Shoal Point Energy Ltd. ("Shoal Point").
About Shoal Point Energy:
Shoal Point Energy Ltd. is a petroleum exploration and
development company based in Calgary, Alberta, Canada. Shoal Point
is presently drilling a high impact exploration well in Western
Newfoundland. The "SPE et al Shoal Point 2K-39" well is being
drilled with partners Canadian Imperial Venture Corp ("Canadian
Imperial") based in St John's Newfoundland and PDI Production Inc
of St Johns, owned by Enegi Oil ("Enegi") based in Manchester
England. Shoal Point Energy Ltd. is the operator of the 2K39 well
and post earn in will have a 45.5% working interest, Canadian
Imperial will hold a 22.5% working interest and Enegi will hold a
32% working interest.
In addition to the Western Newfoundland prospect, Shoal Point
also has an interest in the South Stoney Creek lands (approximately
40,000 acres) located in the Moncton Sub-basin of New Brunswick,
which is a well established oil and gas producing area. Shoal plans
to expand on these initial opportunities in Atlantic Canada as the
management team has extensive experience in the area.
About Union Gold Inc.:
Along with liquid assets in excess $3.5 million, Union Gold has
gold exploration projects located in South Western New Brunswick
and Northern Ontario.
Summary of the Proposed Transaction
At the upcoming Annual General Meeting of Union Gold to be held
on June 6th, 2008 and to effect the Transaction Union Gold proposes
to split its common shares on a 2.5 new for one old basis. Security
holders of Shoal will receive .66 Union Gold securities for each
for each Shoal security post the Union Gold split. As result of
this transaction former security holders of Shoal will own
approximately 75% of the outstanding common shares of Union Gold
and the current security holders of Union Gold will hold
approximately 25% of the outstanding common shares of Union Gold.
There will be approximately 47.5 M basic shares outstanding of the
newly combined entity post the Transaction.
The parties to this Letter Agreement acknowledge that the final
structure of the Transaction will be set forth in the Definitive
Agreement and will be determined on the basis of tax, securities
and corporate law advice in order to ensure the most efficient
structure for each of the parties and their respective security
holders.
Upon execution of the Letter Agreement, the parties agree to
promptly begin negotiating in good faith with a view of entering
into a mutually accepted definitive agreement (the "Definitive
Agreement") incorporating the terms hereof and other terms
customary of a Transaction of this nature. The Definitive Agreement
shall be executed by no later than June 6, 2008 unless that date is
extended by mutual written agreement.
Investors are cautioned that, except as disclosed in the
Definitive Agreement to be prepared in connection with the
Transaction, any information released or received with respect to
the Transaction may not be accurate or complete and should not be
relied upon. Trading in the securities of Union Gold should be
considered highly speculative.
Kingsdale Capital Markets Inc. has agreed to act as Advisor for
the Transaction. An agreement to advise should not be construed as
any assurance with respect to the merits of the transaction or the
likelihood of completion.
There can be no assurance that the Transaction will be completed
as proposed or at all.
The TSX Venture Exchange Inc. has in no way passed upon the
merits of the proposed transaction and has neither approved nor
disapproved the contents of this press release.
Contacts: Union Gold Inc. Jeffrey Becker President (416)
364-0042