VANCOUVER, BRITISH COLUMBIA — (Marketwire) — 03/11/13 — The Pacific Road Resources Funds (“PRRF”) are pleased to announce that they have completed a subsequent USD$2,500,000 investment in Reno Creek Holdings Inc. (“Newco”), which indirectly owns the Reno Creek uranium project. As a result of the investment, PRRF now owns approximately 87.3% of Newco, with the balance being owned by Bayswater Uranium Corporation (the “Company”). As a result of PRRF-s funding of the operating budgets for Newco, the maximum ownership interest that the Company can earn in Newco has been reduced to approximately 12.7%.
No shares of the Company were acquired in the transaction.
Pursuant to the definitive investment agreement dated April 7, 2010 between the Company, its subsidiary, Bayswater Holdings Inc. (“BHI”), and PRRF, as amended (the “Investment Agreement”), PRRF is entitled to exchange its shares in Newco for common shares of the Company within six months following the later of the completion of a feasibility study on the Property or receipt of all required permits for production, but in any event not later than within five years of closing, which occurred on April 7, 2010, provided certain conditions are met. The Newco shares will be exchangeable, at PRRF-s election, either:
As the number of shares of the Company issuable to PRRF is contingent, in part, upon future values and share prices and PRRF has not made any decision to convert, the number of such shares which PRRF may acquire should it exercise its exchange rights, cannot be determined at this time. However, assuming exchange of PRRF-s investment in Newco on the basis of alternative (a) above, PRRF would be entitled to receive in respect of the Newco common shares acquired on the date hereof approximately 26,669,423 Company common shares (based on a conversion rate of $1.0302 for USD$1.00, being the Bank of Canada noon-day rate on March 7, 2013). In addition, PRRF would be entitled to receive 79,912,281 Company common shares in respect of its initial $20 million investment in Newco completed in April 2010, subsequent USD$7,000,000 investment completed in March 2011 and subsequent USD$8,000,000 investment completed on January 31, 2012, based on alternative (a) above and the Bank of Canada noon-day rate on the applicable investment date.
As a result, assuming exchange alternative (a) above, after giving effect to PRRF-s investments, PRRF would hold approximately 106,581,704 common shares in the Company or approximately 79.7% of the common shares on a fully-diluted basis (based on conversion rates, being the Bank of Canada noon-day rate, on the applicable investment dates).
Pursuant to, and subject to compliance with the terms of, the shareholders agreement between PRRF, the Company, the Company-s wholly-owned subsidiary, Bayswater Holdings Inc., Newco, and AUC LLC (the operator of the Reno Creek project) dated April 7, 2010, the majority shareholder has the right to require the other shareholder to sell its shares to a third party purchaser if the majority shareholder has determined to sell its shares.
PRRF purchased the Newco common shares for investment purposes and may or may not: (i) purchase or sell Newco common shares or other securities of Newco or its subsidiaries (which may include coordinating a sale of all of the shares of Newco or a subsidiary thereof pursuant to its contractual rights), (ii) exchange its Newco common shares for Company common shares, and/or (iii) purchase or sell securities of the Company in the future on the open market or in private transactions, depending on market conditions and other factors.
A copy of the early warning report filed in connection with the investment is available on the Company-s profile on SEDAR at or may be obtained by contacting Greg Dick at +61 2 9241 1000.
About Pacific Road Resources Funds and Pacific Road Capital Management Pty Limited
The Pacific Road Resources Funds are private equity funds investing in the global mining industry. They provide expansion and buyout capital for mining projects, mining related infrastructure and mining services businesses located throughout resource-rich regions of the world. The Pacific Road Resources Funds are managed or advised by Pacific Road Capital Management Pty Ltd (“PRCM”). The PRCM team, located in Sydney, Australia, San Francisco and New York, USA, is comprised of experienced mining investment professionals that have extensive knowledge and experience in the mining and infrastructure sectors, including considerable operating, project development, transactional and investment banking experience. For further information on the Pacific Road Resources Funds and PRCM, please go to their website at .
Contacts:
Greg Dick
+61 2 9241 1000