Diamondex Resources Ltd. (TSX VENTURE: DSP) ("Diamondex") and Triex
Minerals Corporation (TSX VENTURE: TXM) ("Triex") are pleased to
announce joint execution of a binding letter agreement to complete
a business combination (the "Transaction") that has been
unanimously approved by the Boards of Directors of both companies.
Diamondex is also proposing to consolidate its common shares on the
basis of one post-consolidation share for every ten
pre-consolidation common shares.
Under the agreement, Diamondex and Triex have agreed, through
their respective special committees comprised of independent
directors (the "Special Committees") in consultation with their
respective financial advisors, that the Transaction will be
conducted on the basis of 8.5 pre-consolidation common shares of
Diamondex for each common share of Triex. This represents a 95%
premium to Triex shareholders based on the 20-day volume-weighted
average share price of both companies' common shares on the TSX
Venture Exchange up to and including August 11, 2009.
The parties have agreed to immediately negotiate a definitive
agreement (the "Definitive Agreement"), incorporating the terms of
the binding letter agreement and other terms and conditions
customary for transactions of this nature. It is expected that the
Definitive Agreement will be entered into in approximately two
weeks' time. The Transaction, which is subject to acceptance by the
TSX Venture Exchange and shareholder approval, is expected to close
in mid-October 2009. Upon closing Triex shareholders will hold
approximately 48% of the combined company ("Newco").
TRANSACTION RATIONALE
The proposed Transaction will provide tangible benefits for the
shareholders of both companies. These benefits include a more
diversified property portfolio with respect to both commodity focus
and mineral exploration districts and a strengthened group of
officers and directors mandated to advance the companies'
properties and aggressively seek out new opportunities.
Highlights of the Transaction include:
- Triex shareholders will realize a significant premium, 95%,
based on the 20-day volume-weighted average share price of both
companies.
- Diamondex shareholders will gain access to working
capital.
- Creating a more diverse, multi-commodity portfolio comprising
established properties located in Ontario, Saskatchewan, Alberta
and northern Canada, with identified exploration targets focused on
base metals, gold, diamonds and uranium.
- Significant savings in general and administrative expenses,
facilitating more efficient use of working capital for exploration
and acquisition efforts.
- Newco will have a stronger management and board.
BOARD AND MANAGEMENT
Members of the current Diamondex and Triex management teams will
form the nucleus of Newco's management, which will include:
- Randy Turner as President & CEO;
- Dr. Michael Gunning, currently President of Triex, as Senior
Vice President, Business Development and Acquisitions
- David Clarke, Senior Vice President, Exploration; and
- Christopher Mitchell, CFO of both companies, will continue in
that role at Newco.
The Newco Board of Directors will be chaired by James Eccott
(current Chairman of Diamondex), and will include two individuals
who are current directors of Diamondex (James Excell and Mike
Muzylowski), three current directors of Triex (Michael Gunning,
Gary Lindsay and Robert Weicker) and three individuals who are
current directors of both Diamondex and Triex (John McDonald, Hugh
Morris and Randy Turner).
TRANSACTION DETAILS
Both companies plan to hold special meetings of shareholders to
approve the Transaction and related matters on or around October 2,
2009. The form of the Transaction will be determined after due
consideration of relevant legal, tax, regulatory and other
matters.
The officers and members of the Board of Directors of both
companies have agreed to support the proposed Transaction and will
enter into lockup agreements comprising approximately 9% of Triex'
and 12% of Diamondex' issued and outstanding shares upon execution
of the Definitive Agreement.
Full details of the offer will be included in the Definitive
Agreement and will be described in a management information
circular to be filed with the regulatory authorities and mailed to
Triex and Diamondex shareholders in accordance will applicable
securities laws.
The Diamondex Special Committee has engaged Haywood Securities
Inc. as its financial advisor and Anfield Sujir Kennedy & Durno
as legal advisor to Diamondex. The Triex Special Committee has
engaged Raymond James Ltd. as its financial advisor and Gowling
Lafleur Henderson LLP as legal advisor to Triex.
The Transaction is subject to customary conditions, including
regulatory approval, the completion of satisfactory due diligence
by each of the parties, and the parties negotiating and entering
into the Definitive Agreement.
Coincident with the Diamondex shareholders' meeting to vote on
the Transaction, Diamondex shareholders will be asked to approve a
one for ten consolidation and a name change.
Concurrently with entering into the binding letter agreement in
respect of the Transaction, Triex and Diamondex have entered into a
loan agreement with respect to a $500,000 loan from Triex to
Diamondex (the "Bridge Loan") for working capital purposes. The
Bridge Loan is repayable by Diamondex on or before December 31,
2009 together with interest at the rate of 14% per annum and is
secured by a pledge of Diamondex's proprietary geological database.
The terms of the loan were negotiated by the two Special Committees
and is subject to acceptance by the TSX Venture Exchange.
ABOUT DIAMONDEX
Diamondex was founded as an exploration company focused on the
discovery of primary diamond deposits in Canada. Through the
advancement of original conceptual models and the successful
execution of regional exploration plays, the Company assembled a
property portfolio that, at its peak, exceeded nine million acres.
In 2007 the Company, along with Shore Gold Inc., acquired the
option to earn up to a shared 72.5% interest in the Buffalo Hills
Joint Venture in central Alberta, which hosts the third largest
kimberlite field in Canada.
More recently, Diamondex acquired, through staking, 414,000
acres in the "Ring of Fire" district of northern Ontario, currently
one of the most active exploration districts in Canada. This
extensive land position, which contains numerous geophysical
anomalies, protects a package of supracrustal rocks that
potentially host both base and precious metal deposits.
ABOUT TRIEX
Triex explores for uranium deposits with the potential for low
cost production, located in areas with established infrastructure,
in jurisdictions where permitting is favourable and where
government policies are supportive of uranium exploration and
development activities. Its current portfolio of eleven main
properties includes seven properties in the Athabasca Basin of
northwestern Saskatchewan, the world's premier exploration district
for high grade uranium deposits.
FORWARD LOOKING INFORMATION
This news release includes certain forward-looking information
concerning the proposed Transaction. Forward-looking information is
frequently identified by such words as "may", "will", "plan",
"expect", "anticipate", "estimate", "intend" and similar words
referring to future events and results. Forward-looking information
is based on the current opinions and expectations of management.
All forward-looking information is inherently uncertain and subject
to a variety of assumptions, risks and uncertainties, including the
speculative nature of mineral exploration and development,
fluctuating commodity prices, competitive risks, the availability
of financing and risks associated with business combination
transactions, as described in more detail in each of Triex's and
Diamondex's securities filings available at www.sedar.com. Actual
events or results may differ materially from those projected in the
forward-looking information and the reader is cautioned against
placing undue reliance thereon. Neither Triex nor Diamondex assumes
any obligation to revise or update this forward-looking
information, except as required by applicable securities law.
DIAMONDEX RESOURCES LTD.
Randy C. Turner, President
TRIEX MINERALS CORPORATION
Michael H. Gunning, President
The TSX Venture Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of the content of this
news release.
Contacts: Diamondex Resources Ltd. Randy Turner President
604-687-6644 604-687-1448 (FAX) www.diamondexresources.net Triex
Minerals Corporation Michael Gunning President 604-687-6680
604-687-1448 (FAX) www.triexminerals.com
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