Terreno Resources Corp. to Acquire Dominican Renewables, Inc. to Focus on Biofuel Production in the Dominican Republic
Resources Corp. (TSX VENTURE:TNO) (“Terreno” or the “Company”) a junior mining exploration and development company listed on the TSX Venture Exchange (the “TSXV”) is pleased to announce that it has entered into a memorandum of understanding (the “MOU”), with Dominican Renewables, Inc. (“DRI”) with respect to a proposed acquisition by the Company (the “Acquisition”) of DRI and financings for both the Company and DRI (the “Offerings” – collectively, including the Acquisition, the “Transaction”). DRI holds interests over certain lands and agreements for the production of biofuels in the Dominican Republic. The Transaction may constitute a Change of Business Transaction of the Corporation as defined in the policies of the TSXV.
The Proposed Acquisition
The MOU contemplates that, the Company will acquire all of the shares in DRI such that DRI will become a wholly-owned subsidiary of the Company. As consideration, the Company will issue to shareholders of DRI, an aggregate of 51,372,364 common shares in the capital of Terreno (2 Terreno shares for every one DRI share held), at a deemed price of $0.05 per common share, for total consideration of approximately $2.56m, without limitation. Common shares of the Company to be issued as consideration for the Acquisition, including common shares issued previously by the Company, may be subject to escrow in accordance with the policies of the TSXV.
John Icke, Chairman of Terreno, commented “We had been aware of DRI prior to our mineral exploration work in the Dominican Republic, having hired Bruce Keith (DRI’s CEO) to become the CEO of Terreno. Since being in the country we have become acutely aware of the reliance and prohibitive costs of traditional fuel imports with no current local supply. DRI is uniquely positioned to address this issue in a socially responsible manner through providing a biofuel component blended with traditional fuel products. The success of this transaction brings near term cash flow potential to Terreno with the ability to scale up the operations in the future.”
The Transaction allows Terreno to benefit from synergies of running its existing portfolio of mineral exploration projects in Argentina and the Dominican Republic, and running DRI, as Terreno’s CEO, Bruce Keith, is also the CEO of DRI. Terreno’s intention is to hold its portfolio of mineral exploration properties in Argentina and the Dominican Republic with a view to increasing activity on these projects when market conditions for junior resource exploration improve.
The completion of the Acquisition and the Offering, as such terms defined herein, are subject to the approval of the TSXV and all other necessary regulatory approvals. The completion of the Acquisition is also subject to certain other additional conditions precedent, including, but not limited to: (i) the entering into of a definitive agreement by Terreno and DRI on or before October 31, 2013 (the “Definitive Agreement”); (ii) completion of satisfactory due diligence by each of Terreno and DRI; (iii) the approval of the Acquisition by the TSXV; (iv) approval of each of Terreno’s and DRI’s respective board of directors; (v) completion of the Offering; (vi) the absence of any material change or change in a material fact which might reasonably be expected to have a material adverse effect on the financial and operational conditions or the assets of each of the parties to the Definitive Agreement; and (viii) certain other conditions typical in a transaction of this nature.
The Transaction may constitute a Change of Business, as defined in the Policies of the TSXV. In addition, as the proposed Transaction is not at arm’s length (Mr. Bruce Keith is the CEO of both Terreno and DRI) it may require disinterested shareholder approval.
Further disclosure concerning the Transaction will be provided to shareholders in an Information Circular or in a Filing Statement which may be required by the TSXV and if a Filing Statement is required, it will be prepared and filed in accordance with Policy 5.2 of the TSXV on SEDAR at www.sedar.com no less than 7 business days prior to the closing of the proposed Transaction. A press release will be issued once the Filing Statement has been filed, if and as required pursuant to TSXV policies. Financial information concerning DRI will be made available in a subsequent news release.
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