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
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.
War Eagle Mining Company Inc.
President and CEO
War Eagle Mining Company Inc.
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