04/02/2010 - 14:40

Kings falls on Toronto Exchange plans

04/02/2010 - 14:40

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Shares in exploration minnow Kings Minerals fell today after announcing plans to complete a business combination with its 71.3 per cent controlled subsidiary, San Anton Resource Corporation before listing on the Toronto Stock Exchange.

Shares in exploration minnow Kings Minerals fell today after announcing plans to complete a business combination with its 71.3 per cent controlled subsidiary, San Anton Resource Corporation before listing on the Toronto Stock Exchange.

As part of the deal Kings will acquire all of the outstanding shares of San Anton not presently owned by Kings in exchange for shares of Kings and will establish a wholly-owned Canadian subsidiary which will amalgamate with San Anton to form an amalgamated company.

Pursuant to the amalgamation, Kings will receive all of the common shares of the amalgamated company so that it will become a wholly-owned subsidiary of Kings and the shareholders of San Anton, other than Kings, will receive two ordinary shares in the capital of Kings for each San Anton common share held.

Completion of the transaction is subject to a number of conditions including the receipt of all required regulatory, stock exchange, director and shareholder approvals.

The board of Kings believes that combining the two outfits will better position the companies for advancing the development of the San Anton Project, which will be for the benefit of both company's shareholders.

Shares in Kings closed down one cent, or 5.71 per cent, to 16.5 cents per share.

 

Full announcement below:

KINGS MINERALS NL ANNOUNCES BUSINESS COMBINATION WITH SAN ANTON RESOURCE CORPORATION INC.

The Directors of Kings Minerals NL (ASX: KMN) ("Kings") are pleased to announce that, subject to certain conditions, it has agreed in principle with its 71.3% controlled subsidiary, San Anton Resource Corporation Inc. (TSX: SNN) ("San Anton"), to complete a business combination whereby Kings will acquire all of the issued and outstanding shares of San Anton not presently owned by Kings in exchange for shares of Kings. In connection with the transaction, Kings intends to apply for a listing on the Toronto Stock Exchange ("TSX").

Under the terms of the proposed transaction, Kings will establish a wholly-owned Canadian subsidiary which will amalgamate with San Anton (the "Amalgamation") to form an amalgamated company ("Amalco"). Pursuant to the Amalgamation, Kings will receive all of the common shares of Amalco so that Amalco will become a wholly-owned subsidiary of Kings and the shareholders of San Anton, other than Kings, will receive two (2) ordinary shares in the capital of Kings for each San Anton common share held.

San Anton currently has 105,195,690 common shares issued and outstanding, of which Kings owns, indirectly through its wholly-owned subsidiary Kings Minerals Mexico Pty Ltd., 75,000,001 common shares, representing approximately 71.3% of the issued and outstanding common shares of the Company. Kings currently has 424,510,871 ordinary shares issued and outstanding, as well as 6,350,000 ordinary shares issuable upon exercise of outstanding stock options. Upon completion of the Amalgamation, the former shareholders of San Anton (other than Kings) will hold approximately 60,391,378 ordinary shares of Kings, representing approximately 12.5% of the issued and outstanding ordinary shares of Kings after giving effect to the Amalgamation.

Norman Seckold, the Chairman of Kings, is the Chairman of San Anton and Craig McPherson, the Chief Financial Officer of Kings, is a director of San Anton.

In connection with the completion of the Amalgamation, Kings intends to change its name and to apply for a listing on the TSX. Kings has not yet applied nor been accepted for listing on the TSX, and listing will be subject to fulfilling all of the listing requirements of the TSX. There is no assurance that a listing on the TSX will be obtained.

Completion of the transaction is subject to a number of conditions, including the receipt of all required regulatory, stock exchange, director and shareholder approvals. The transaction cannot close until all such approvals are obtained. There can be no assurance that the transaction will be completed as proposed or at all.

Because Kings is a related party to San Anton, the proposed transaction is subject to valuation and minority approval requirements under Canadian Laws. The Board of Directors of San Anton has established a special committee of independent directors, namely Donald Christie, Jeffrey Dawson and Nicholas Tintor, to retain an independent valuator to provide a valuation for the proposed transaction and to consider the fairness of the proposed transaction, from a financial point of view, to the shareholders of San Anton (other than Kings) and to supervise the preparation of the valuation and fairness opinion.

Copies of the formal valuation and fairness opinion, factors considered by the special committee and the Board of Directors of San Anton and other relevant background information will be included in a management information circular that will be sent to San Anton's shareholders in connection with a special meeting of San Anton shareholders (the "Meeting") to consider the transaction. The Meeting will be scheduled to be held on a date to be announced in the future. For the transaction to proceed, a special resolution of San Anton Shareholders authorizing the Amalgamation must be approved by at least two-thirds of the votes cast by holders of San Anton common shares at the Meeting (including Kings and its affiliates). In addition, the proposed transaction is conditional upon the
approval of the majority of the minority of San Anton's shareholders (excluding Kings and its affiliates). The proposed transaction will also be conditional upon customary terms for transactions of this nature, including there being not more than [5]% of San Anton's shareholders who exercise their right of dissent in respect of the Amalgamation.

The board of Kings Minerals NL believes that combining San Anton and Kings will better position the companies for advancing the development of the San Anton Project, which will be for the benefit of both of our shareholders.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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