Rockgate Capital to Acquire Delta Exploration
November 10 2008 - 9:00AM
Marketwired
Rockgate Capital Corp. (TSX VENTURE: RGT) ("Rockgate") and Delta
Exploration Inc. (TSX VENTURE: DEV) ("Delta") announced today that
they have entered into a binding letter agreement dated November
7th, 2008 (the "Letter Agreement") pursuant to which Rockgate has
agreed to acquire all of the issued and outstanding common shares
of Delta (the "Transaction"). Delta is a mining exploration company
and Rockgate's joint venture partner in respect of its uranium
property in Mali, West Africa (the "Falea Property"). Rockgate
previously announced its intention on October 15, 2008 to make a
take-over bid for all the outstanding common shares of Delta.
Rockgate and Delta believe that this negotiated Transaction will
offer significant benefits to both companies and their respective
shareholders, including:
- consolidated ownership of the Falea Property;
- enhanced and accelerated development of the Falea Property
through a dedicated Rockgate team with a proven track record of
successful African exploration;
- a strengthened balance sheet to support growth strategies;
and
- an increased management and financial capacity which will
allow progress on Delta's grassroots exploration projects.
Under the Transaction, Delta shareholders will receive 0.50 of a
common share of Rockgate for each Delta common share held. For
Delta Shareholders, this represents 14 percent premium to the
closing price of the Delta common shares on the TSX Venture
Exchange as at October 14, 2008, the last trading day immediately
prior to announcement of Rockgate's intention to make the offer,
and a premium of 87 percent to the 20-day volume weighted average
price as at the same date. Upon the completion of the Transaction,
shareholders of Delta will receive in total approximately
13,873,139 common shares of Rockgate representing 25.3 percent of
the then outstanding 54,878,000 common shares of Rockgate.
As previously announced on October 15, 2008, the Company has
entered into a lock-up agreement with certain Delta shareholders
owning 3,225,300 Delta common shares, or 11.6 percent of the Delta
issued and outstanding common shares, under which such shareholders
have agreed to vote in favour of the Transaction.
Pursuant to the Letter Agreement, Delta has agreed to settle all
legal proceedings (including the currently outstanding arbitration
with respect to the Falea Property) against Rockgate on or prior to
November 12, 2008. Rockgate will be required to pay Cdn$150,000 to
Delta as full and final settlement of such claims and Delta will
release Rockgate and certain related persons from all claims with
respect to matters which existed or occurred on or prior to May 31,
2008.
Rockgate and Delta have agreed to commence negotiation of a
Definitive Agreement in respect of the Transaction as soon as
practicable. The Definitive Agreement shall include customary terms
and conditions, including representations and warranties, covenants
and conditions and completion mechanics (including those contained
in the Letter Agreement, to the extent still applicable). If the
parties do not agree to a form of Definitive Agreement, the
Transaction will proceed under a court-approved statutory plan of
arrangement governed by the Business Corporations Act (British
Columbia) in accordance with the terms of the Letter Agreement. If
the Transaction is not completed prior to April 30, 2009, the
parties will have a right to terminate the Letter Agreement.
Implementation of the Transaction will be subject to stock exchange
and regulatory approvals.
Rockgate's financial advisor is PI Financial Corp., its special
counsel for the Transaction is Blake, Cassels & Graydon LLP and
its corporate counsel is Salley Bowes Harwardt LLP.
Forward-looking statements
This press release contains "forward-looking statements". These
statements relate to future events or future performance and
reflect Rockgate's and Delta's expectations regarding the
Transaction, and the future growth, results of operations, business
prospects and opportunities of each of Rockgate and Delta. These
forward-looking statements reflect Rockgate's and Delta's current
internal projections, expectations or beliefs and are based on
information currently available to Rockgate and Delta,
respectively. In some cases forward-looking statements can be
identified by terminology such as "may", "will", "should",
"expect", "intend", "plan", "believe", "potential" or the negative
of those terms or other comparable terminology. A number of factors
could cause actual events or results to differ materially from
those discussed in the forward-looking statements. Although
Rockgate and Delta believe that the forward-looking statements
contained in this press release are based on reasonable
assumptions, readers cannot be assured that actual results will be
consistent with such statements. Accordingly, readers are cautioned
against placing undue reliance on forward-looking statements.
ON BEHALF OF THE BOARD OF DIRECTORS OF ROCKGATE CAPITAL
CORP.
Karl Kottmeier, President
ON BEHALF OF THE BOARD OF DIRECTORS OF DELTA EXPLORATION
INC.
James Gillis, President
The TSX Venture Exchange has in no way passed upon the merits of
the proposed transaction and has not reviewed and does not accept
responsibility for the adequacy or accuracy of the content of this
press release.
Contacts: Rockgate Capital Corp. Karl Kottmeier President (604)
678-8941 Delta Exploration Inc. James Gillis President (250)
828-2878
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