Here's the news release from Dec. 04. SMF

Canada Lithium, Sirocco to merge in all-share deal

2013-12-04 07:05 ET - News Release

Also News Release (C-SIM) Sirocco Mining Inc

Mr. Peter Secker of Canada Lithium reports

SIROCCO AND CANADA LITHIUM COMBINING TO FORM STRATEGIC INTERNATIONAL COMPETITOR IN GROWTH-ORIENTED INDUSTRIAL MINERALS SECTOR

Canada Lithium Corp. and Sirocco Mining Inc.'s respective boards of directors have approved a definitive agreement, which the companies have entered into, pursuant to which they will complete a business combination by way of a statutory plan of arrangement under the Canada Business Corporations Act. Following the completion of the arrangement, the current Canada Lithium shareholders will hold approximately 58 per cent of the combined company, while current shareholders of Sirocco will hold approximately 42 per cent.

Highlights of the arrangement include:

• Sirocco shareholders will receive 1.175 common shares (on a preconsolidated basis) in the capital of Canada Lithium for each outstanding Sirocco common share. Pursuant to the transaction, Canada Lithium expects to issue approximately 294 million common shares (on a preconsolidation and non-diluted basis).
• The arrangement values each Sirocco share at 48 cents representing a premium of approximately 23 per cent to the 20-day volume weighted average price of the Sirocco common shares on the Toronto Stock Exchange as of Dec. 3, 2013.
• The arrangement has been approved by the board of directors of both companies. Following the closing of the arrangement, the board of the combined company will comprise nine individuals. Four of the nine will be Canada Lithium nominees, with the remaining five individuals to be nominated by Sirocco.
• In connection with the arrangement, Canada Lithium will consolidate its common shares on the basis of one postconsolidation common share for each three existing Canada Lithium common shares.

"We're delighted to be joining forces with the Sirocco team. They have an exceptional track record in identifying growth opportunities, establishing sound operations and building wealth for shareholders," said Canada Lithium chief executive officer Peter Secker.

Commenting on the transaction, Sirocco chief executive officer, Mr. Clark, said, "We have been looking for growth opportunities in the industrial minerals sector and this combination provides an excellent opportunity for geographic and product diversification while at the same time aligning two products with potential future complementary applications."

At a full annualized production rate, Canada Lithium would produce approximately 20,000 tonnes of battery-grade lithium carbonate, which represents about 12 per cent of the world's output. The commodity, an essential component in lithium-ion batteries, powers the vast and growing field of consumer electronics, electric and hybrid vehicles and grid storage units. Sirocco's iodine operation in Chile will produce approximately 1,400 tonnes of iodine in 2013, with plans to produce 1,000 tonnes in 2014. Upon completion of the installation of a semi-autogenous grinding mill, annual capacity will increase to over 2,000 tonnes per year.

Under the arrangement, as noted above, shareholders of Sirocco will receive 1.175 common shares (on a preconsolidation basis) in the capital of Canada Lithium for each outstanding Sirocco common share, representing a premium of approximately 23 per cent to the 20-day volume weighted average price of the Sirocco common shares on the Toronto Stock Exchange as of Dec. 3, 2013. The total consideration payable pursuant to the arrangement values Sirocco's equity at approximately $120-million. Pursuant to the transaction, Canada Lithium expects to issue approximately 294 million common shares (on a preconsolidation and non-diluted basis).

The transaction will be carried out by way of a court-approved plan of arrangement and will require the approval of at least 66-2/3 per cent of the votes cast by the securityholders of Sirocco at a special meeting of Sirocco shareholders expected to take place in January, 2014. It is expected that the transaction will be exempt from the registration requirements of the U.S. Securities Act of 1933, as amended. The transaction is also subject to obtaining the approval of at least a majority of the votes cast by the shareholders of Canada Lithium approving the issuance of the shares in connection with the arrangement and approval of at least 66-2/3 per cent of the votes cast by the shareholders of Canada Lithium approving the consolidation of the shares of Canada Lithium on 1:3 basis, at a special meeting of Canada Lithium shareholders expected to take place the same date as the Sirocco meeting. In addition to securityholder and court approvals, the transaction is subject to applicable regulatory approvals, including the TSX, and the satisfaction of certain other closing conditions as is customary in transactions of this nature.

Canada Lithium's financial adviser, Primary Capital Inc., has provided an opinion to the Canada Lithium board of directors that the transaction is fair, from a financial point of view, to Canada Lithium's shareholders (other than Sirocco). The financial adviser for Sirocco, Scotia Capital Inc., has provided an opinion to the Sirocco board of directors that the consideration to be received by the Sirocco shareholders under the transaction is fair, from a financial point of view, to the Sirocco shareholders. Canada Lithium's legal counsel is Cassels Brock & Blackwell LLP and Sirocco's legal counsel is Blake, Cassels & Graydon LLP. Kingsdale Shareholder Services Inc. has been retained as proxy solicitors and information agent.

The arrangement agreement includes a commitment by each of Sirocco and Canada Lithium not to solicit alternative transactions to the proposed arrangement. In certain circumstances, if a party terminates the definitive agreement to enter into an agreement to effect a superior proposal that is different from the arrangement, then such party is obligated to pay to the other party as a termination payment of $4-million, subject to a right by each party to match a competing superior proposal in question.

In connection with the arrangement agreement, Sirocco has also agreed to provide a bridge loan of up to $10-million to Canada Lithium. The loan will be due and payable on the earliest of the following: (a) 30 days after the completion of a superior proposal transaction by Canada Lithium or (b) six months following a demand notice from Sirocco. The bridge loan is subject to, among other things, receipt of TSX approval and certain other closing conditions. The loan may be converted, at the option of Sirocco, into common shares of Canada Lithium at a conversion price of 39.9 cents per common share, at any time after the termination of the arrangement agreement.

Further information regarding the transaction will be contained in an information circular that each of Canada Lithium and Sirocco will prepare, file and mail in due course to their respective shareholders in connection with the special meetings of each of the Canada Lithium and Sirocco shareholders to be held to consider the transaction. All shareholders are urged to carefully read the information circulars once they become available as they will contain additional important information concerning the transaction.

Details regarding these and other terms of the transaction are set out in the arrangement agreement, which is available on SEDAR.

The information agent for the arrangement is Kingsdale Shareholder Services Inc. Questions and requests for assistance, including requests for additional information may be directed to Kingsdale at 1-866-581-0510 or by e-mail.