Avaranta Resources Ltd. (CNSX:AVN) and Evrim Metals Corporation has announced that the two companies have signed a Merger Agreement to combine the business and assets of Evrim with those of Avaranta, subject to shareholder and regulatory approval.
The Agreement will provide Avaranta shareholders with quality mineral projects in Sonora, Mexico, and Evrim shareholders with access to public markets and venture capital. Pursuant to the Agreement, Evrim will amalgamate with a wholly owned subsidiary of Avaranta pursuant to the Business Corporations Act (British Columbia), and each Evrim share will be exchanged for one share of Avaranta.
"The mineral projects and database, recently acquired from Kiska Metals Corp., are primarily located within the Sonora copper-molybdenum belt, host to the world class Cananea and La Caridad porphyry deposits," stated Paddy Nicol, President and CEO of Evrim. "We look forward to advancing the projects through the successful execution of our business model as well as generating new targets for prospective joint venture partners."
"We are excited to join with a new emerging junior exploration company," stated Tony Roodenburg, President and CEO of Avaranta. "The nine mineral assets exist in a relatively under-explored geological belt in Mexico and represent an excellent opportunity for major and junior mining companies seeking quality projects. Evrim is also backed by a fine exploration team and a solid board of directors."
Avaranta and Evrim have agreed to carry out a proposed business combination by way of a statutory amalgamation under the provision of Business Corporations Act (British Columbia). A wholly owned subsidiary of Avaranta will amalgamate with Evrim, and each of the shareholders of Evrim will receive shares of Avaranta at a share exchange ratio of one share of Avaranta for every one share of Evrim, subject to regulatory approval and shareholder approval of both Avaranta and Evrim. Based on the current number of issued shares of Evrim and assuming no options of Evrim are exercised, Avaranta will issue 8,150,002 shares of Avaranta to shareholders of Evrim, and on a fully diluted basis will issue 8,550,002 shares of Avaranta to Evrim shareholders. Evrim also plans to issue up to an additional 14,000,000 shares pursuant to a private placement that is expected to be completed immediately prior to the effective time of the amalgamation. When combined with Avaranta's current capital structure of 1,650,000 issued shares, it is anticipated that the amalgamated entity will have 23,800,002 shares issued and outstanding and 24,200,002 on a fully diluted basis. It is anticipated that all currently outstanding options and warrants of Avaranta will be surrendered and cancelled. Upon the completion of the amalgamation, it is anticipated that the current board of directors and management of Avaranta will resign and be replaced by the board of directors of Evrim. Additional details of the transaction will be set out in the Information Circular (as defined below). The new Board of Directors will include David Caulfield, Kenneth Paul, Michael McInnis, and Paddy Nicol. Robert Duncan, Dorothy Miller, and Rory Kutlouoglu will act as VP Exploration, Chief Financial Officer, and VP Business Development, respectively.
Upon closing of the transaction, it is anticipated that Evrim will have a working capital position in excess of $7.0 million.
In addition to the exchange and conversion of securities, shareholders of Avaranta will be asked to approve a resolution to change the name of Avaranta to Evrim Resources Corporation.
Concurrently with the completion of the amalgamation, it is anticipated that Greencastle Resources Ltd., which currently holds 1,148,000 of the issued and outstanding shares of Avaranta, will sell one million shares to third parties introduced by Evrim.
As soon as reasonably practicable and in any event not later than November 26, 2010, Avaranta will convene a meeting of the Avaranta board of directors to approve the Avaranta Information Circular (the "Information Circular"). Avaranta and Evrim shall submit a listing application to the TSXV concurrently with the mailing of the Information Circular to Avaranta shareholders. Avaranta will then conduct and convene the Avaranta shareholder meeting on or before December 23, 2010. The intention of both Avaranta and Evrim is to list Evrim Resources Corporation on the TSXV within three days of shareholder approval or as soon thereafter as reasonably possible.
Source: Avaranta Resources Ltd.