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Message: Avion Resources Corp. and Dynamite Resources Ltd. Enter Into Definitive Agreemen
| March 19, 2009 |
| Avion Resources Corp. and Dynamite Resources Ltd. Enter Into Definitive Agreement |
| TORONTO, ONTARIO--(Marketwire - March 19, 2009) - NOT FOR RELEASE IN THE UNITED STATES OR TO U.S. NEWS WIRE SERVICES Avion Resources Corp. (TSX VENTURE:AVR) ("Avion") and Dynamite Resources Ltd. (TSX VENTURE:DNR) ("Dynamite"), are pleased to announce that they have entered into a definitive agreement (the "Agreement"), whereby Avion is expected to acquire, by plan of arrangement, all of the issued and outstanding common shares of Dynamite at an exchange ratio of 0.75 (the "Exchange Ratio") Avion common shares for each Dynamite common share (the "Arrangement"). The business combination will provide both Avion and Dynamite shareholders with the opportunity to participate in the consolidation of the Tabakoto-Segala gold mine as well as the potential to acquire additional African gold assets and/or companies with near-term production capabilities. The board of directors of Dynamite has received a fairness opinion from Macquarie Capital Markets Canada Ltd. that the Exchange Ratio is fair, from a financial point of view, to the shareholders of Dynamite. The board of directors of Dynamite unanimously recommends that Dynamite shareholders vote in support of the Arrangement. The board of directors of Avion has received a fairness opinion from Canaccord Capital Corporation that the Exchange Ratio is fair, from a financial point of view, to the shareholders of Avion. The board of directors of Avion has unanimously approved the Arrangement. In addition, Avion and Dynamite announce that Avion has borrowed CDN$1 million from Dynamite. The loan shall be secured against the assets of Avion and, in the event the Arrangement is not completed, the amount outstanding under the loan will incur an interest rate of 10% per year and shall mature on the date which is 60 days following the date the Agreement is terminated. On March 10, 2009, Dynamite entered into a letter agreement (the "Letter Agreement") with Cash Minerals Ltd. ("Cash Minerals") whereby Cash Minerals will acquire a 100% interest in Dynamite's Mike Lake property located in the Yukon (the "Mike Lake Property") and Tau Mining Limited (UK) ("Tau"), a wholly owned subsidiary of Dynamite which indirectly holds the Kokomeren, Barskaun, Arabelsu and Moldatu mining licences in the Kyrgyz Republic. In consideration thereof, Cash Minerals shall issue 22,750,000 common shares of Cash Minerals (the "Cash Shares") and 11,375,000 Cash Minerals share purchase warrants (each a "Warrant") to Dynamite. Each Warrant shall entitle the holder thereof to acquire one Cash Share at a price of $0.10 for a period of 24 months from the date of issuance, subject to the receipt of all necessary regulatory approvals. Pursuant to the terms of the Letter Agreement, the parties shall enter into a definitive agreement with respect to the acquisition. Dynamite intends to distribute the Cash Shares and Warrants to be obtained upon completion of the purchase and sale of the Mike Lake Property and Tau to the current shareholders of Dynamite on a pro rata basis as part of the Arrangement with Avion. As Avion and Dynamite have one director in common, being Stan Bharti, and one officer in common, being Patrick Gleeson, the Arrangement is considered to be non-arm's length for the purposes of the TSX Venture Exchange. Mr. Bharti currently holds 1,363,636 Avion common shares and 1,925,000 Dynamite common shares. Mr. Gleeson currently holds 45,455 Avion common shares. Upon closing of the Arrangement, Mr. Gleeson will resign as Corporate Secretary and Ms. Brianna Davies will be appointed Corporate Secretary of the combined company. Arrangement Details Pursuant to the Arrangement, each Dynamite common share will be exchanged for 0.75 of an Avion common share (the "Exchange Ratio"). Each outstanding Dynamite convertible security will be exercisable for Avion common shares based on the Exchange Ratio. Upon completion of the combination, Dynamite shareholders will own approximately 40% of Avion. The Arrangement is subject to, among other things, regulatory approvals, including TSX Venture approval, final court approval and the requisite shareholder approval. The Exchange Ratio was calculated based on the net cash position of Dynamite being approximately CAD $11 million. In the event that upon closing of the transaction, Dynamite's net cash position is less than CAD $11 million, in certain circumstances, the Exchange Ratio shall be adjusted on a pro rata basis to reflect this reduction. About Avion Avion is a Canadian-based gold company with near-term production from its African gold projects in Mali. Avion has a strong operational team, as well as a team of highly qualified geologists that is currently exploring various projects in Mali. Avion currently holds 80% of the Tabakoto gold mine and has previously agreed to Dynamite acquiring 50% of its 80% interest in the Segala gold project in Mali. Additional information about Avion and its properties is available on its website at www.avionresources.com. About Dynamite Dynamite is a Canadian-based, junior mineral exploration company. Its key asset is its right to acquire a 40% interest in the Segala Gold Project, Mali. Dynamite's other projects are located in two areas: Mike Lake in the Yukon, Canada - Gold/Copper project located in the mineral rich Tintina Gold Belt; and in the Kyrgyz Republic - Uranium/ Gold properties located in the Tien Shan Mineral Belt near Centerra's Kumtor Gold Mine. Additional information about Dynamite and its properties is available on its website at www.dynamiteresources.com. |
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