Information Circular and Update for Acquisition of Aggregates Management Inc.
November 3, 2008
EDMONTON, ALBERTA - November 3, 2008 - Athabasca Minerals Inc. ("Athabasca" or the "Corporation") (TSX Venture: ABM) is pleased to announce the filing and mailing of the Information Circular detailing the proposed acquisition of Aggregates Management Inc. (AMI). This Information Circular will be provided to all shareholders of record effective October 21st, 2008 with the meeting scheduled for November 20th, 2008. Additional details on AMI and the proposed acquisition can be viewed in the Corporation press releases of May 1, 2008 and October 1, 2008. The Information Circular will also be available on SEDAR. Athabasca has completed the following steps in order to complete the acquisition of AMI:
- Completion of independent valuation of AMI
- Arranged credit facility for Cdn $9 million with the Bank of Montreal
- Athabasca entered into a non-arm's length security purchase agreement ("Security Purchase Agreement") on September 25, 2008 to effectively acquire all of the issued and outstanding shares of AMI for an aggregate purchase price of Cdn $13,500,000
The independent valuation of AMI by Evans and Evans Inc. as of January 31, 2008 provided a fair market value range of Cdn $12.9 million to $13.5 million. On August 31, 2008, the independent valuation of AMI was revised and gave an increased value range of Cdn $14.7 million to $15.5 million.
AMI is a private company with long term contracts to manage two major sand and gravel pits for the Alberta government located in the heart of the oil sands industry in the Fort McMurray region. The two gravel pits are the Susan Lake Gravel Pit (Susan Lake), located approximately 80 km north of Fort McMurray and the Poplar Creek Gravel Pit (Poplar Creek), which is located approximately 30 km north of Fort McMurray.
AMI entered into a ten year agreement with the Province to operate the Susan Lake on March 17, 1998. This contract was renewed for a second ten year period that expires in November 2017. Susan Lake is approximately 9,400 acres (3,760 hectares) in size. In 2006, Susan Lake produced 5.2 million tonnes of sand and gravel and in 2007 it produced 7.2 million tonnes of sand and gravel. From December 2007 to September 2008, a total of 8.3 million tonnes of sand and gravel was sold and removed from Susan Lake. In September 2008 a new pit record was established with 2.1 million tonnes sold and removed in a single month.
The contract to manage Poplar Creek expires in February 2013; this pit is approximately 3,680 acres (1,489 hectares) in size. AMI is in the process of developing this site into an industrial storage yard for the oil sands industry.
Pursuant to the Security Purchase Agreement, the Effective Date of the Acquisition is June 30, 2008. All working capital generated by AMI from the Effective Date to the Closing Date will accrue to the benefit of Athabasca.
The Acquisition is a "related party transaction" within the meaning of TSX Venture Policy 5.9 (which incorporates Multilateral Instrument 61-101) ("Policy 5.9") as certain of the Vendors are Related Parties. As a result, Multilateral Instrument 61-101 ("MI 61-101") provides that a "related party transaction", such as the Acquisition, must be approved by a majority of the votes cast by holders of securities, excluding holders of securities whose votes cannot be included for the purposes of minority approval, as that term is defined in MI 61-101. Under MI 61-101, as applied to the Acquisition, minority approval of the resolution concerning the Acquisition would require the approval by a majority of all the votes cast by minority shareholders.
The completion of the Acquisition is subject to the approval of TSX Venture and all other necessary regulatory approval. The completion of the Acquisition is also subject to additional conditions precedent, including: (i) shareholder approval of Athabasca for the Acquisition; (ii) AMI entering into new management agreements with certain key personnel; and (ii) certain other usual conditions for transactions of this nature.
About Athabasca Minerals:
Athabasca Minerals Inc. is a resource company engaged in the management, exploration and development of industrial minerals in Canada. The Company's aim is to find and develop local sources of industrial minerals essential to the economic development of specific high growth regions. The Company has substantial land holdings in the vicinity of Fort McMurray, Alberta and Peace River, Alberta. Independent from its mineral exploration activities, the Company is also pursuing sand and gravel exploration and development projects throughout northern Alberta. These activities include contracts works, gravel pit management, new gravel development and acquisitions of sand and gravel operations.
For further information contact Udomdej Kriangkum, the President of Athabasca at (780) 465-5696 or Dean Stuart, Boardmarker Group, at (403) 517-2270.
As indicated above, completion of the Acquisition is subject to a number of conditions, including but not limited to, TSX Venture acceptance and shareholder approval. The Acquisition cannot close until the required shareholder approval is obtained. There can be no assurance that the Acquisition will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the Information Circular of Athabasca to be prepared in connection with the Acquisition, any information released or received with respect to the Acquisition may not be accurate or complete and should not be relied upon. Trading in the securities of Athabasca should be considered highly speculative.
The securities of Athabasca being offered have not been, nor will be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons absent U.S. registration or an applicable exemption from U.S. registration requirements. This release does not constitute an offer for sale of securities in the United States.
Except for historical information contained herein, this news release contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially. Neither Athabasca nor AMI will update these forward-looking statements to reflect events or circumstances after the date hereof. More detailed information about potential factors that could affect financial results is included in the documents filed from time to time with the Canadian securities regulatory authorities by Athabasca and AMI.
The TSX Venture Exchange Inc. has in no way passed upon the merits of the Acquisition and has neither approved nor disapproved the contents of this press release