European Uranium Resources Ltd. ("EUU") (TSXV: EUU) and Portex
Minerals Inc. ("PAX") (CNSX: PAX) announce that they have entered
into a binding Letter of Intent dated December 6, 2013 (the
"Binding LOI") to merge (the "Merger") through a plan of
arrangement under which EUU will acquire all of the outstanding
common shares of PAX in exchange for EUU common shares. The merged
company will be named European Minerals Inc. ("European Minerals"
or the "merged company") and will be a Europe-focused company with
a diverse, multi-commodity portfolio of exciting exploration and
development projects.
"European Minerals will be a Europe-focused company with a
unique portfolio of exploration and development projects in base
metals, precious metals and uranium," said Dorian L. (Dusty) Nicol,
CEO of EUU. "The merged company's projects will have tremendous
geologic potential for discovery, both by addition to existing
resources and by discovery of new deposits."
"Portex looks forward to continuing its exploration and
development strategy with its new partners at EUU. We believe that
the Merger will benefit the shareholders of both companies,"
commented Peter F. Chodos, President and CEO of Portex.
Summary of the Binding LOI and the Merger
Pursuant to the Binding LOI, EUU will acquire all of the issued
and outstanding PAX shares pursuant to a plan of arrangement under
the Business Corporations Act (Ontario) under which EUU will
acquire all of the issued and outstanding shares of PAX. Under the
plan of arrangement, PAX shareholders will receive 0.6 of an EUU
common share in exchange for each PAX common share and PAX will
become a wholly-owned subsidiary of EUU. Under the Binding LOI, EUU
and PAX have agreed that, upon completion of the Merger, EUU will
change its name to European Minerals Inc. The Merger will be
classified as a reverse takeover under the rules of the TSX Venture
Exchange (the "TSXV" or the "Exchange") and trading in EUU's shares
will be halted until TSXV requirements are met. The CNSX may also
halt trading in PAX's shares for a similar period.
Upon completion of the Merger, PAX shareholders would hold
approximately 65% of European Minerals, with the remaining 35%
being held by EUU Shareholders (assuming that each of the GRIT
Financings, described below, is completed prior to closing but that
no other additional shares of EUU or PAX have been issued). Subject
to market conditions, EUU may conduct a private placement prior to
closing of the Merger. If EUU determines to proceed with any such
financing, it will make a separate announcement in that regard. Any
such financing is not expected to be conditional upon completion of
the Merger. Based on the current cash positions of the parties, the
merged company will require additional funds to support its
exploration activities; EUU does not expect that it will receive
the necessary approvals to complete the Merger unless additional
funds become available to the merged company.
The Binding LOI will be superseded by a definitive agreement
(the "Definitive Agreement") to be negotiated between the parties.
The Binding LOI can be terminated prior to the parties entering
into the Definitive Agreement in certain circumstances including if
either party is not satisfied (acting reasonably) with the results
of its respective due diligence investigations or if the parties
fail to enter into the Definitive Agreement on or before December
20, 2013 (or such other date that EUU and PAX may agree). In
addition, the Binding LOI may be terminated by either party if the
board of directors of the other party does not recommend that its
shareholders vote in favour of the Merger. The Binding LOI may also
be terminated in certain other circumstances that are customary for
a transaction of this nature.
The Binding LOI contemplates that the Definitive Agreement will
provide that completion of the Merger will be subject to
conditions, including obtaining all necessary approvals from the
PAX and EUU security holders, the Superior Court of Justice of
Ontario and the TSXV, including the TSXV's approval for the listing
of the merged company's shares on completion of the Merger,
completion of the Merger by March 31, 2014 (or such other date as
EUU and PAX may agree) and such other closing conditions customary
for transactions of this nature as may be specified in the
Definitive Agreement.
The Binding LOI contemplates that the Definitive Agreement will
contain customary non-solicitation provisions in respect of each
party (subject to "fiduciary out" provisions that entitle either
party to consider and accept a superior proposal and a 5-business
day "right to match" period) and provisions that each of the
parties will pay a termination fee of $400,000 upon the occurrence
of customary termination fee events. The Binding LOI also provides
for mutual non-solicitation covenants, with reciprocal termination
payments of $400,000 if either party terminates the Binding LOI to
enter into an alternative transaction.
Copies of the Binding LOI will be filed with Canadian regulators
and will be available at the SEDAR website at www.sedar.com under
EUU's and PAX's profiles.
About PAX
PAX, an Ontario incorporated company, is a Toronto-based mineral
development company focused on the acquisition and development of
base and precious metal properties in Europe. PAX currently has
properties in Spain and Portugal and a large land position in
Ireland and Northern Ireland. PAX's common shares are listed on the
CNSX.
PAX's principal assets are the Toral zinc-lead-silver project in
northwestern Spain's zinc district and Lagoa Salgada
zinc-lead-copper-gold-silver project in Portugal, in the Iberian
Pyrite Belt. Both of these properties have 43-101 compliant
resource estimates and geologic potential to expand significantly.
PAX also has a large exploration land position in Northern Ireland
and the Republic of Ireland, holding ground believed to be
geologically prospective for base and precious metal deposits,
including ground adjacent to Dalradian Resources' (TSX: DNA) Tyrone
Project.
Business of the Merged Company
EUU's flagship asset is currently the Kuriskova uranium project
in Slovakia, which, according to a 43-101 compliant prefeasibility
study completed in 2012, could be one of the lowest cost uranium
producers in the world.
Following the Merger, the merged company will become a
Europe-focused company with a diverse, multi-commodity portfolio of
exciting exploration and development projects, ranging from
early-stage exploration to prefeasibility, focused on base metals,
precious metals and uranium. It is anticipated that the merged
company will focus on advancing the base metal properties in its
portfolio while continuing to advance the Kuriskova uranium project
through key aspects of environmental studies in anticipation of a
feasibility study to be completed in future.
The Principals of the Merged Company
Pursuant to the Binding LOI, upon completion of the Merger the
board of directors of European Minerals will consist of eight
directors, four of which will be nominated by each of EUU and PAX.
EUU's nominees will include Dorian (Dusty) Nicol. PAX's nominees
will include Peter Chodos. The identities of the parties' other
nominees are yet to be determined. The senior officers of EUU upon
the completion of the Merger are expected to be:
Peter F. Chodos, currently President and
CEO of PAXDorian L. (Dusty) Nicol, currently President and CEO of
EUULen Goldsmith, currently CFO of EUUDoris Meyer, currently
secretary of EUU
ChairmanDirector, President and CEOChief
Financial OfficerSecretary
The backgrounds of the above individuals are as follows:
Peter F. Chodos
Peter F. Chodos is a director and the President and Chief
Executive Officer of PAX. Mr. Chodos also serves as Executive Vice
President, Corporate Development for Chieftain Metals Inc. He has
over 30 years' experience in the financial markets primarily in
Canada but also in the United States and the United Kingdom. He has
completed many merger and acquisition transactions as well as
private and public financings and restructurings. In 2004, Mr.
Chodos co-founded Mt. Auburn Capital Corp., a structured products
firm. From July 2006 to February 2009, Mr. Chodos was a Managing
Director of BluMont Capital Corporation, a provider of alternative
investment products to retail investors in Canada. Most recently,
he was the President and Chief Executive Officer of a publicly
listed mining merchant bank. Mr. Chodos has a B.Comm from McGill
University and a Masters of Business Administration from Harvard
University. He is a Chartered Accountant and Chartered Professional
Accountant (Canada) and a Chartered Business Valuator.
Dorian L. (Dusty) Nicol
Dorian L. (Dusty) Nicol is a director and the President and
Chief Executive Officer of EUU. Mr. Nicol has a B.Sc. in geology
from M.I.T. and a Master's Degree in Geology from Indiana
University. He is an exploration geologist with over 30 years of
international experience in mineral exploration and mine
development. Mr. Nicol speaks six languages including fluent
Spanish and Portuguese. In 1997, Mr. Nicol joined Queenstake
Resources Ltd., first as V.P. Exploration and then as President and
Chief Executive Officer until 2005, when, after a merger, he became
Executive V.P. Exploration and a Director of Yukon-Nevada Gold
Corp. until July 2008. Previous other positions held by Mr. Nicol
were Latin America Manager for Canyon Resources; V.P. Exploration
for Castle Exploration with programs in Central America and Africa,
and exploration positions with Exxon Minerals and Renisson Gold
Fields in Papua New Guinea. He is a member of the American
Institute of Professional Geologists and a Fellow of the Society of
Economic Geologists.
Len Goldsmith
Len Goldsmith is the Chief Financial Officer of EUU. Prior to
becoming the Chief Financial Officer of EUU in October 2013, Mr.
Goldsmith had served as EUU's controller since 2009. Mr. Goldsmith
is a Certified General Accountant, Chartered Professional
Accountant (Canada), and Accredited Chartered Certified Accountant
(UK) with more than twenty-five years' experience, much of which
has been in the mineral exploration sector. Mr. Goldsmith holds the
position of Chief Financial Officer for several mining companies
trading on the TSX and TSX Venture stock exchanges.
Doris Meyer
Doris Meyer is the Secretary of EUU. She was Chief Financial
Officer of EUU before retiring in October 2013. Ms. Meyer has been
a Canadian Certified General Accountant since 1985. Ms. Meyer is
the owner and founder of Golden Oak Corporate Services Ltd. Golden
Oak has provided publicly traded mineral exploration companies with
administrative, financial reporting and corporate compliance
services since October 1996. Ms. Meyer holds the position of
Corporate Secretary and in some cases as a director of several
mineral exploration companies trading on the AIM, TSX and TSX
Venture stock exchanges.
GRIT Financings
EUU and PAX have recently announced financings (the "GRIT
Financings") of $1.25 million and $2.4 million, respectively, from
Global Resources Investment Limited ("GRIL").
GRIL has been established to exploit investment opportunities in
the junior mining and natural resources sectors worldwide, with an
investment objective to generate medium and long-term capital
growth. GRIL will re-register as a public company and be
constituted as an investment trust with the name Global Resources
Investment Trust Plc ("GRIT") and seek admission of its ordinary
shares on the main market for listed securities on the London Stock
Exchange.
On November 7, 2013, EUU announced that it had re-negotiated its
previously private placement with GRIL and had agreed to acquire
751,744 ordinary shares of GRIL ("GRIT Shares") in exchange for
12,500,000 newly issued EUU shares common shares at $0.10 per
share. GRIT will own approximately 19.3% of EUU after its GRIT
Financing transaction, on a non-diluted basis. The EUU shares
issued under the GRIT Financing will be subject to a 4-month hold
period.
EUU intends to then sell its GRIT Shares from time to time in
accordance with applicable securities laws, through the facilities
of the London Stock Exchange, in order to generate cash. EUU
intends to use the proceeds from any such sales to advance its
Kuriskova uranium project in Slovakia, for working capital and
general corporate purposes.
As Portex announced on September 24, 2013, that it had also
entered into an agreement with GRIT. Portex has agreed to acquire
1,443,348 GRIT Shares in exchange for 40,000,000 newly issued
Portex common shares. GRIT will own approximately 19.5% of Portex
after its GRIT Financing is transaction, on a non-diluted basis.
The Portex shares issued under the GRIT Financing will be subject
to a 4-month hold period.
Closing of the each of the GRIT Financings is subject to a
number of conditions precedent, including approval of the TSX
Venture Exchange (in the case of EUU), and GRIT successfully
listing on the London Stock Exchange.
Additional Information
Dorian (Dusty) Nicol, a director and the President and CEO of
EUU, holds approximately 5.4% of the issued and outstanding shares
of PAX (pre-GRIT Financing). Peter Bojtos, a director of EUU, holds
approximately 0.076% of the issued and outstanding shares of PAX
(pre-GRIT Financing), respectively. Due to their respective
interest in EUU, Messrs. Nicol and Bojtos abstained from voting on
the EUU Board resolution to approve the Binding LOI.
Subject to and upon completion of the respective GRIT
Financings, GRIT will become an insider of each of EUU and PAX,
holding approximately 19.3% of the issued and outstanding shares of
EUU and approximately 19.5% of the issued and outstanding shares of
PAX. Assuming that each of the GRIT Financings completes and that
GRIT does not dispose of any of the shares it acquires thereunder,
and that neither EUU nor PAX issues any further shares prior to
completion of the Merger, GRIT is expected to be an insider of the
merged entity.
The Merger may require a sponsoring broker member of the TSVX.
EUU is looking into whether an exemption from this requirement may
be available.
Completion of the transaction is subject to a number of
conditions, including Exchange acceptance and disinterested
Shareholder approval. The transaction cannot close until the
required Shareholder approval is obtained. There can be no
assurance that the transaction will be completed as proposed or at
all.
Investors are cautioned that, except as disclosed in the
Management Information Circular 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 EUU should be
considered highly speculative.
The TSX Venture Exchange has in no way passed upon the merits of
the proposed transaction and has neither approved nor disapproved
the contents of this press release.
About European Uranium Resources Ltd.
European Uranium Resources Ltd. is a dedicated European uranium
exploration and development company that has built a portfolio of
outstanding projects in Slovakia. European Uranium is well placed
to become the key uranium exploration and development company in
Europe. Europe is the world’s largest per capita consumer of
uranium with 160 reactors and more under construction or planned,
but with only one currently operating uranium mine. A 43-101
prefeasibility study completed by Tetra Tech, Inc. indicates that
Kuriskova could be built and operated using Best Available
Technology for environmental protection and still have among the
lowest production costs per pound of uranium in the world. European
Uranium has a strong base of supportive shareholders including
AREVA, ranked first in the global nuclear power industry and a key
player in uranium mining and nuclear operations on a world-wide
basis.
About Portex Minerals Inc.
Portex is a Toronto-based mineral development company focused on
the acquisition and development of base and precious metal
properties in Europe. Portex currently has properties in Spain and
Portugal and a large land position in Ireland and Northern
Ireland.
Cautionary Statement Regarding Forward Looking
Information
Except for statements of historical fact, this news release
contains certain "forward-looking information" within the meaning
of applicable securities law. Forward-looking information is
frequently characterized by words such as "plan", "expect",
"project", "intend", "believe", "anticipate", "estimate", "will",
"could" and other similar words, or statements that certain events
or conditions "may" occur. In particular, forward-looking
information in this press release includes, but is not limited to,
statements with respect to the expectations of management regarding
the Merger, the respective interests of the PAX and EUU
shareholders in the merged company, the completion of the GRIT
Financings, the mineral potential of the mineral rights held by EUU
and PAX, the proposed name change, execution of the Definitive
Agreement, preparation of the information circular, shareholder
approval of the Merger, the proposed reverse takeover and name
change, the timing for removal of the trading halt on EUU's shares,
the business of the resulting issuer upon completion of the Merger,
and TSXV approval of the Merger, including the proposed reverse
takeover. Although EUU and PAX believe that the expectations
reflected in the forward-looking information are reasonable, there
can be no assurance that such expectations will prove to be
correct. Such forward-looking statements are subject to risks and
uncertainties that may cause actual results, performance or
developments to differ materially from those contained in the
statements including, without limitation, the risks that TSXV may
not approve the Merger; the shareholders of EUU and/or PAX may not
approve the Merger, including the proposed reverse takeover; the
parties may not be satisfied with their due diligence
investigations, the parties may be unable to agree upon and even if
agreed, satisfy all of the conditions to closing, the Definitive
Agreement; the TSXV may not approve the technical report(s)
regarding the merged company's material properties; either or both
of the GRIT Financings may not complete and EUU may not be able to
retain a sponsor if required.
EUROPEAN URANIUM RESOURCES LTD.
"Dusty Nicol"
Dorian L. (Dusty) Nicol, President and CEO
For further information please contact: Dorian (Dusty) Nicol,
at (604) 536-2711, or visit www.euresources.com.
PORTEX MINERALS INC.
"Peter F. Chodos"
Peter F. Chodos, President and CEO
For further information please contact: Peter F. Chodos,
at (416) 479-5417, or visit www.portexminerals.com.
EUROPEAN URANIUM RESOURCES LTD.Dorian (Dusty) Nicol,
604-536-2711President and CEOwww.euresources.comorPORTEX MINERALS
INC.Peter F. Chodos, 416-479-5417President and
CEOwww.portexminerals.com
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