VANCOUVER,
July 6, 2011 /PRNewswire/ -
A. Recommencement of Trading
Trading in the shares of Mountain-West Resources Inc. (TSX-V-MWR)
(the "Company") was halted on April
15, 2011 and the trading will recommence at the opening of
trading on July 5, 2011. This news
release makes related disclosure.
B. Mina Pascua Property Option Agreement
On April 15, 2011, the Company
announced its negotiations with Jorge
Lopehandia to enter into an agreement regarding the Mina
Pascua property located in northern Chile (Mina Pascua is that portion of the
Pascua Lama Property which is situated in Chile. The other portion of Pascua Lama is situate in Argentina. The Mina Pascua Property Option
Agreement does not relate to the portion of Pascua Lama located in Argentina). Each of Barrick Gold Corporation
and Jorge Lopehandia allege to own
the Mina Pascua Property and that alleged ownership is the subject
of litigation which commenced in Santiago, Chile on March 4, 2001 and which is ongoing (see the news
release of June 6, 2011 for further
details of the litigation and see page 71 of the Barrick 2003
Annual Information Form dated May 19,
2004 and filed in SEDAR where Barrick admits that legal
proceedings were commenced in 2001 and that an ex parte injunction
was issued "barring [Barrick's subsidiary] from selling or
encumbering the claims while the suit is pending before the Chilean
courts"). Trading in the shares was halted on April 15, 2011 pending the issuance of news
relating to the pending agreement with Jorge Lopehandia.
On June 6, 2011 the Company announced
that it has entered into a formal property option agreement with
Jorge Lopehandia. The Company filed
that Mina Pascua Property Option Agreement with the Exchange and
obtained conditional approval. Completion of the transaction is
subject to a number of conditions, including, but not limited to
final Exchange approval and shareholder approval. There is a risk
that the transaction will not be accepted by the Exchange or that
the terms of the transaction may change substantially prior to
acceptance. Should this occur, a trading halt may be imposed. There
are many other risks, some of which are set out at the end of the
June 6, 2011 news release.
C. Due Diligence Private Placement
Also, on April 15, 2011 the Company
announced a non brokered Due Diligence private placement in the
amount of $900,000 the proceeds of
which were to fund the due diligence relating to the then proposed
agreement with Jorge Lopehandia and
general corporate expenses. None of the funds from the Due
Diligence Private Placement were to be provided to Mr.
Lopehandia.
On June 8, 2011 the Company announced
that the Due Diligence Private Placement terms were amended such
that the amount being raised was being increased from $900,000 to $1,001,850 and that the term of the warrants was
being reduced from three years to two years, with the exercise
price in the first and second year remaining the same that is,
$1.00 and $1.50 respectively. The Company has received
conditional approval from the Exchange and is proceeding with that
Due Diligence Private Placement. The Company hopes to receive final
approval from the Exchange shortly. The Company expects to close
the Due Diligence Private Placement immediately thereafter. Further
due diligence in Chile relating to
the Mina Pascua Property will then proceed.
D. Debt Settlement and Proposed Further Property Option
Financing - Working Capital Requirements
Also on June 8, 2011, the Company
announced that if the Exchange were to approve the Mina Pascua
Property Option Agreement (there is no guarantee that the Exchange
will grant such approval), then one of the Exchange conditions
would be that the Company have adequate working capital. In order
to meet such working capital requirements, the Company will settle
some debt by issuing securities to its creditors and conduct a
further private placement.
(i) Debt Settlement
The Company will settle existing debt in the approximate amount of
$910,000, by issuing units (the
"Debt Settlement Units") to various creditors. Those
creditors will include those private placees under the private
placement announced on October 21,
2011 and who wish to receive Debt Settlement Units rather
than the return of their private placement funds. The Exchange has
advised that it will not be accepting for filing that private
placement. The Creditors will also include those persons who lent
funds to the Company under the loan arrangement announced on
December 31, 2010. The private
placement announced January 12, 2011
will not be proceeding as most of those private placees were the
lenders under the December 31, 2010
loan arrangement and therefore the January
12, 2011 transaction is more appropriately classified as a
debt settlement rather than a private placement. Each Debt
Settlement Unit will be comprised of one share and one share
purchase warrant with each warrant exercisable to purchase a
further share at the price of $1.00
in the first year and $1.50 in the
second year. All securities would be subject to a four month hold
period. The Company intends to issue a further news release within
the next few days to set the price of the pending Debt Settlement.
The Debt Settlement is subject to Exchange approval.
(ii) Further Private Placement
As stated above, the Company will need to conduct a further private
placement if it is to meet Exchange capital requirements. The exact
amount of the further private placement has not been determined but
would be in an amount to provide at least (a) payment under the
Mina Pascua Property Option Agreement (approximately $2.1 Million) and (b) working capital for at
least six months. The Company expects that private placement would
close at the time of the initial payment under the Mina Pascua
Property Option Agreement. The terms of that further private
placement will be set at the time of the announcement of that
further private placement. There is no guarantee that the Company
will be able to raise the required funds under that further private
placement. That further private placement would be subject to
Exchange approval.
On behalf of the Board of Directors,
BRENT JOHNSON, President
Neither 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.
FORWARD LOOKING CAUTIONARY STATEMENT
This press release contains "forward-looking
statements" within the meaning of the United States Private
Securities Litigation Reform Act of 1995 and "forward-looking
information" within the meaning of the British Columbia Securities
Act and the Alberta Securities Act and National Instrument 51-102.
Generally, the words "expect", "intend", "estimate", "will" and
similar expressions identify forward-looking information. By their
very nature, forward-looking statements are subject to known and
unknown risks and uncertainties that may cause our actual results,
performance or achievements, or that of our industry, to differ
materially from those expressed or implied in any of our forward
looking information. Statements in this press release regarding the
Company's business or proposed business, which are not historical
facts are forward-looking information that involve risks and
uncertainties, such as estimates and statements that describe the
Company's future plans, objectives or goals, including words to the
effect that the Company or management expects a stated condition or
result to occur. Since forward-looking statements address events
and conditions, by their very nature, they involve inherent risks
and uncertainties. Actual results in each case could differ
materially from those currently anticipated in such statements.
Investors are cautioned not to place undue reliance on
forward-looking statements, which speak only as of the date they
are made. All of the Company's Canadian public disclosure filings
may be accessed via www.sedar.com and readers are urged to review
these materials, including the technical reports filed with respect
to the Company's mineral properties. The foregoing commentary is
based on the beliefs, expectations and opinions of management on
the date the statements are made. The Company disclaims any
intention or obligation to update or revise forward-looking
information, whether as a result of new information, future events
or otherwise.
SOURCE Mountain-West Resources Inc