Sprott Resource Corp Announces
$100 million Equity Financing By Subsidiary Orion Oil & Gas Ltd.
Toronto:
October 15, 2009 ? Sprott Resource
Corp. (TSX: SCP) ? Sprott Resource Corp. (?SRC?) is pleased to announce that
its wholly-owned subsidiary Orion Oil & Gas Ltd. (formerly 1491542 Alberta
Ltd.) (?Orion? or the ?Company?) has entered into an equity financing
agreement, on a best efforts agency basis, with a syndicate of agents co-led by
Cormark Securities Inc., FirstEnergy Capital Corp. and TD Securities Inc.
(collectively, the ?Agents?).? Pursuant
to the agreement, Orion has agreed to raise $100,000,000 (the ?Offering?) from
the sale of subscription receipts (?Subscription Receipt?) at a price of $5.00
per Subscription Receipt.
On October 13, 2009, SRC announced an agreement
between Orion and Wintraysan Capital Corp. (TSX Venture: WTS.P) (?Wintraysan?)
whereby Wintraysan, pursuant to a plan of arrangement or other similar form of
transaction (the ?Arrangement?), will acquire all of the currently issued and
outstanding securities, including common shares, of Orion (?Orion Shares?) in a
reverse take-over transaction at an exchange ratio of three (3) Wintraysan
common shares (?Wintraysan Shares?) for every one (1) Orion Share outstanding.? It is anticipated that in conjunction with
the Arrangement and Offering, Wintraysan will effect a consolidation (the
?Consolidation?) of the Wintraysan Shares on the basis of one (1) new
Wintraysan Share for each fifteen (15) existing Wintraysan Shares.?
In addition, it is intended that Wintraysan will
change its name to ?Orion Oil & Gas Corporation?
or such other name (?New Orion?) as may be approved by the board of directors
of Wintraysan (the ?Name Change?). In accordance with applicable laws, the
Consolidation and the Name Change are subject to the approval of the
shareholders of Wintraysan.
Each Subscription Receipt will be exchanged for one
(1) common share of New Orion (?New Orion Share?), post completion of the
Arrangement and Consolidation, without additional payment upon satisfaction of
certain conditions. The proceeds of the Offering will be held in escrow pending
Orion?s and Wintraysan?s receipt of all necessary regulatory approvals, the
completion of the Arrangement, and approval of the New Orion Shares on a recognized
stock exchange acceptable to the Agents. Upon these conditions being met, the
proceeds of the Offering will be released to New Orion.?
Post Consolidation, and following the completion of
the Arrangement and assuming full completion of the Offering, approximately 78
million New Orion Shares and other securities of New Orion, exercisable or
convertible into approximately 4.1 million New Orion Shares are anticipated to
be issued and outstanding.
If closing of the Arrangement does not take place by 120
days post closing of the Offering, or if the Arrangement is terminated at any
earlier time, holders of the Subscription Receipts will be entitled to a return
of their full subscription price and their pro rata entitlement to the interest
earned on the escrowed funds.? The
Subscription Receipts will be subject to a hold period until the closing of the
Arrangement. The Offering is subject to the receipt of all necessary regulatory
and stock exchange approvals and Closing of the Offering is scheduled for end
of November or early December 2009.
Wintraysan is a ?capital pool company? as defined
under the policies of the TSX Venture Exchange (the ?Exchange?) and intends for
the proposed acquisition (the ?Proposed Qualifying Transaction?) to constitute
the ?Qualifying Transaction? of Wintraysan as such term is defined in the
policies of the Exchange.? The Proposed
Qualifying Transaction will be an arm?s length transaction as the directors and
officers of Wintraysan currently have no interest in Orion.
Orion was recently incorporated by SRC for the purpose
of acquiring all of the issued and outstanding shares of Auriga Energy Inc.
(?Auriga?). Auriga is a private Alberta oil and
gas company with assets in the Kaybob, Redwater and Bigstone areas of Alberta.?? It is expected that Orion will complete its
acquisition of all of the issued and outstanding securities of Auriga on
October 20, 2009 and in any event no later than November 15, 2009.
Description of Significant Conditions to Closing
Completion of the Proposed Qualifying Transaction is
subject to the satisfaction of a number of conditions, including, but not
limited to, Exchange acceptance. Other necessary conditions to the closing of
the Proposed Qualifying Transaction, include obtaining all other necessary regulatory
and third-party approvals and authorizations, the completion of a definitive
agreement setting forth the terms and conditions set out in the letter
agreement with respect to the Proposed Qualifying Transaction, completion of
the Offering, and the completion of due diligence.? As the Proposed Qualifying Transaction is an
arm's-length transaction, it is anticipated that Wintraysan shareholder
approval will not be required. There can be no assurance that the Proposed
Qualifying Transaction will be completed as proposed or at all.
About
Sprott Resource Corp.
SRC
is a Canadian based company, the primary purpose of which is to invest,
directly and indirectly, in natural resources. Through acquisitions, joint
ventures and other investments, SRC seeks to provide its shareholders with
exposure to the natural resource sector for the purposes of capital
appreciation and real wealth preservation. SRC is well positioned to draw upon
the considerable experience and expertise of both its Board of Directors and Sprott
Consulting Limited Partnership (?SCLP?), of which Sprott Inc. is the sole
limited partner. Pursuant to a management services agreement between SCLP and
SRC, SCLP provides day-to-day business management for SRC as well as other
management and administrative services.
Forward-looking
Statements
This news release
contains forward-looking statements and information (?forward looking
statements?) within the meaning of applicable securities laws relating to the
proposal to complete the Proposed Qualifying Transaction and associated
transactions (including the Offering), including statements regarding the terms
and conditions of the Proposed Qualifying Transaction and associated
transactions (including the Offering). Readers are cautioned to not place undue
reliance on forward-looking statements. Actual results and developments may
differ materially from those contemplated by these statements depending on,
among other things, the risks that the parties will not proceed with the
Proposed Qualifying Transaction and associated transactions (including the
Offering), that the ultimate terms of the Proposed Qualifying Transaction and
associated transactions (including the Offering) will differ from those that
currently are contemplated, and that the Proposed Qualifying Transaction and
associated transactions (including the Offering) will not be successfully
completed for any reason (including the failure to obtain the required
approvals or clearances from regulatory authorities). The forward-looking
statements contained in this document are made as of the date hereof and SRC
does not undertake any obligation to update publicly or revise any
forward-looking statements or information, whether as a result of new
information, future events or otherwise, unless so required by applicable
securities laws.
The subscription
receipts offered have not been and will not be registered under the United
States Securities Act of 1933, as amended and may not be offered or sold in the
United States absent registration or an applicable exemption from the
registration requirement.? This press
release shall not constitute an offer to sell or the solicitation of an offer
to buy nor shall there be any sale of the securities in any jurisdiction in
which such offer, solicitation or sale would be unlawful.
For further
information, please contact:
Kevin Bambrough
President and CEO
Tel: (416) 977-7333
Fax: (416) 977-9555