ST. JOHN’S, NEWFOUNDLAND AND LABRADOR, Jul 23 (MARKET
Mountain Lake Resources Inc. (TSX VENTURE: MOA) (“Mountain Lake”) of
Halifax, NS and New Island Resources Inc. (TSX VENTURE: NIS) (“New
Island”) of St. John’s, NL are pleased to report that, in accordance with
the terms of a Letter of Intent dated May 27, 2010 and further to the
news release of June 3, 2010, both companies have completed a due
diligence review of the assets, liabilities and operations of the other,
as currently available. Based upon these investigations, financial advice
provided by Salman Partners, and through arm’s length negotiations,
Mountain Lake and New Island have agreed to proceed with the proposed
business combination by way of a corporate arrangement pursuant to the
provisions of the Business Corporations Act (Alberta) (the
“Arrangement”). The Arrangement will effectively combine the assets and
liabilities of both issuers on a consolidated basis, with New Island
becoming a wholly- owned subsidiary operated by Mountain Lake.
By the terms of a definitive agreement between Mountain Lake and New
Island dated July 22, 2010, it is proposed that all of the shareholders
of New Island will exchange their issued common shares of New Island for
new common shares of Mountain Lake, on the basis of One (1) new share of
Mountain Lake for every Four point Two Five (4.25) shares of New Island.
All convertible securities of New Island will be exchanged for
convertible securities of Mountain Lake on the same basis, adjusted
accordingly to reflect the final agreed share exchange ratio. The
completion of the Arrangement is subject to standard conditions precedent
applicable to statutory plans of arrangement, including standard
commercial conditions precedent, approval of the common shareholders of
New Island, and court approval. The transaction is scheduled to close in
the fourth quarter of 2010.
Collectively, Mountain Lake and New Island feel the combining of regional
gold assets is a very sound strategy at this time and the proposed share
exchange ratio respects the interests of both companies’ shareholders. It
is further believed that the real value of the company’s combined assets
will be unlocked in the years ahead through organic growth as cash flow
from production at the Pine Cove gold mine is deployed to explore and
develop its other projects on the island of Newfoundland.
It is now anticipated that a special general meeting of the shareholders
of New Island to approve the Arrangement will be held in September 2010.
New Island shareholders will receive an information circular setting out
further details of the proposed transaction, and this Information
Circular will also be filed and made available on SEDAR (www.sedar.com)
under New Island’s public profile.
Interested parties are referred to Mountain Lake’s earlier news release
dated June 3, 2010 for further discussion of the proposed acquisition of
New Island, and details about the properties and business activities of
About New Island Resources Inc.
New Island Resources Inc. (TSX VENTURE: NIS) (New Island) is a
diversified junior exploration company holding gold and base metal
properties in the province of Newfoundland and Labrador. Its main
projects include: a 70% interest in the Pine Cove gold property, which is
on option to Anaconda Mining Inc. (Anaconda) whereby Anaconda can earn a
60% interest and operator status by bringing the property into commercial
production, where production is expected to commence in June 2010; a 100%
interest in the large Glover Island property having significant gold
showings covered by a mining lease; and a 17% shareholding in Prominex
Resources Inc. which holds the advanced Tulks Hill base metal deposit
south of Buchans. For more information visit: www.newislandresources.com.
About Mountain Lake Resources Inc.
Mountain Lake Resources Inc. (TSX VENTURE: MOA) is a diversified junior
exploration company, whose corporate strategy is to build shareholder
value through the exploration and development of economically viable
mineral properties. Mountain Lake’s current projects include: a 30%
interest in the Valentine Lake gold property (Newfoundland) with an
option to acquire the remaining 70% interest from Richmont Mines Inc.
(and a subsequent sub-option and joint venture agreement whereby Marathon
PGM Corp. can earn a 50% in the property; a 100% interest in the Bobby’s
Pond base metals property (Newfoundland); an option to earn a 100%
interest in the Little River gold exploration property (Newfoundland);
and a 2,350,000 share (approx.6.4%) stake in Etruscan Diamonds Ltd., an
alluvial diamond project (South Africa). For more information visit:
ON BEHALF OF THE BOARD OF DIRECTORS OF MOUNTAIN LAKE RESOURCES INC.
Gary Woods, President & CEO
ON BEHALF OF THE BOARD OF DIRECTORS OF NEW ISLAND RESOURCES INC.
Harold Wareham, President & CEO
NEITHER THE TSX VENTURE EXCHANGE, NOR ITS REGULATION SERVICES PROVIDER
(AS THAT TERM IS DEFINED UNDER THE POLICIES OF THE EXCHANGE) ACCEPTS
RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS NEWS RELEASE.
For corporate, media, or investor inquiries on Mountain Lake
please contact: Lytle & Associates
Greg Lytle, Corporate Communications
North America toll-free: (866) 285-5817
Int’l. & Vancouver: (604) 839-6946
For corporate, media, or investor inquiries
on New Island, please contact: New Island Resources Inc.
Harold Wareham, President
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