War Eagle to Acquire Andromeda Resources VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 01/21/13 -- War Eagle Mining Company Inc. (TSX VENTURE:WAR) ("War Eagle" or the "Company") has entered into an agreement dated January 11, 2013 with Toronto-based Andromeda Resources Inc. ("Andromeda"), which is a private company incorporated in Ontario. The agreement contemplates that pursuant to a so-called "triangular merger" the shareholders of Andromeda (other than War Eagle) will exchange each issued and outstanding common share of Andromeda held by them for 0.897 common shares of War Eagle (the "Merger") such that the shareholders of War Eagle on the effective date of the merger will own approximately 80% of the outstanding shares of War Eagle and the shareholders of Andromeda (other than War Eagle) will own the remaining 20%. Andromeda will continue as a wholly-owned subsidiary of War Eagle. As at December 31, 2012 War Eagle had outstanding 12,193,149 common shares, 400,000 common shares to be issued upon TSX Venture Exchange ("TSXV") approval, 4,540,877 share purchase warrants and options to purchase 1,195,000 common shares. At the effective date of the Merger Andromeda will have 3,900,000 common shares outstanding, of which War Eagle already owns 500,000 shares and 500,000 shares will be owned by each of 2 directors of War Eagle who are consultants to Andromeda. There will be 1,000,000 outstanding options to purchase Andromeda common shares, held by 2 directors of War Eagle who are consultants to Andromeda; these options, if exercised, will receive War Eagle shares as a result of the Merger. Andromeda also owes War Eagle $253,000, including accrued interest, which will become an inter-company receivable and be eliminated on consolidation. The Merger terms will result in the issue by War Eagle of approximately 3,048,287 common shares; no fractional shares will be issued. Effective with the merger, the outstanding share capital of War Eagle will be approximately 15,241,436 common shares. War Eagle, which currently is at arm's length from Andromeda, plans to work with former management of Andromeda to develop base metal properties in Mexico and in particular in Chihuahua State, and possibly elsewhere in Latin America. There are several zinc and copper resources in Chihuahua and neighbouring states that could benefit from consolidation, not the least of which is War Eagle's Tres Marias project. The synergies between Andromeda and War Eagle are expected to provide a strong base for developing War Eagle into an emerging base metal development company. The board of War Eagle will be comprised of four current members of the board of War Eagle and a nominee of Andromeda. Management will be headed by Thomas Atkins, the current President and CEO of War Eagle, who will be able to draw upon current management of Andromeda, which represents many years of Mexico-specific exploration and mine development experience. Paul A. Carroll QC will continue as Chairman of the Board. Messrs. Atkins and Carroll have had lengthy business careers in the mining industry, including in Mexico. As directors and senior executives of small and large capitalization international mining companies they have had the responsibility of planning, executing and communicating short- and long-term corporate objectives and initiatives. Completion of the transaction is conditional upon, among other things, receipt of all required regulatory and Andromeda shareholder approvals and the negotiation and execution of definitive documentation. However, there can be no assurance that the transaction will be completed as proposed or at all. The TSXV has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this news release. About War Eagle War Eagle is an experienced mineral exploration company, publicly traded since 1987 and listed on the TSXV under the symbol "WAR". The Company has been in the exploration phase of the Tres Marias zinc-lead-germanium project in Chihuahua, Mexico. Tres Marias is a former producing zinc and germanium mine that first produced ore in 1949. This news release was prepared by management of War Eagle, which takes full responsibility for its contents. Legal Notice Regarding Forward-Looking Statements This disclosure contains certain forward-looking statements that involve substantial known and unknown risks and uncertainties, certain of which are beyond the Company's control including: the impact of general economic conditions in the areas in which the Company operates, industry conditions, changes in laws and regulations including the adoption of new environmental laws and regulations and changes in how they are interpreted and enforced, increased competition, the lack of availability of qualified personnel or management, fluctuations in commodity prices, foreign exchange or interest rates, stock market volatility and obtaining required approvals of regulatory authorities. In addition there are risks and uncertainties associated with mining operations, therefore the Company's future results, performance or achievements could differ materially from those expressed in these forward-looking statements will transpire. All statements included in this press release that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. These statements include references to a future drill program and related plans. These statements are based on assumptions made by the company based on its experience, perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate in the circumstances. Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. Contacts: War Eagle Mining Company Inc. Thomas Atkins President and CEO 416-509-4326 War Eagle Mining Company Inc. Donald Padgett Director 604-681-7010 email@example.com www.wareaglemining.com
War Eagle to Acquire Andromeda Resources
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