Lakota Offers To Merge With Equs
Limited
Thursday October 23, 9:09 am ET
TORONTO, ONTARIO--Lakota Resources Inc. (YLA-TSX Venture Exchange)
(" Lakota" ) is pleased to announce that it has reached agreement in principle with Equs
Limited, an Australian company (EQS-Australian Stock Exchange) (" Equs" ), to merge the
two companies. Under the terms of the proposed merger, subject to receipt of all necessary
approvals, including regulatory approvals, shareholders and optionholders of Equs will
receive common shares in the capital of Lakota in exchange for their Equs shares and
options. The merger is proposed to be effected by a scheme of arrangement in accordance
with the Corporations Act 2001 (Cth.). While the exchange ratio is still being negotiated,
Lakota has offered to purchase the outstanding shares of Equs for approximately 6.0
million shares of Lakota. The trading range of Lakota has been between CDN $4 and $5
during the last 8 months, which equates to an offer price of approximately A$0.30 per Equs
share. Lakota currently has approximately 13.1 million common shares issued and
outstanding and CDN $1.0 million cash.
The object of the business combination would be to create a strong African-focussed
exploration and development company with a large portfolio of quality gold-based property
holdings in Tanzania, Democratic Republic of Congo (DRC) and other East African
countries. The combined company would be in a better position to seek and secure
international investor support, joint venture agreements and private placement financings to
further the development of the merged mineral interests.
Equs is an exploration company, the outstanding shares of which are listed on the
Australian Stock Exchange, with approximately 90 million shares issued and outstanding
and cash reserves of approximately A$5.5 million. Equs has entered into agreements to
earn majority interests in over 4,000 km2 of mineral concessions in the Moto greenstone
belt of north-eastern DRC. These concessions contain at least 10 old minesites from which
over 3.0 million ounces of gold have been recovered. Aside from the mine workings and
the reported reserves-resources contained therein, the extension of the known mineral
horizon offers outstanding opportunities for exploration and the development of new
resources within this under-explored terrain.
Lakota has over thirty mineral properties in the Lake Victoria Gold Fields area of
Tanzania. Several of these properties, in the Bulyanhulu area (the Tembo Project), are the
subject of an option agreement with Orogen Holdings (BVI) Limited (Orogen), a
subsidiary of Gold Fields Limited (which recently made a CDN$1 million investment in
Lakota common shares at a price of CDN$4.65 per share). Orogen has the right to earn a
70% interest by incurring US$13 million in exploration expenditures following option
period expenditures of CDN$800,000. The Tembo project adjoins Barrick Gold`s
Bulyanhulu mine, which produces about 400,000 oz Au per annum. In the Tulawaka Area,
where Barrick Gold and Miniere du Nord (MDN) are carrying out feasibility studies on the
Tulawaka gold deposit, Lakota has a joint venture agreement with MDN on five licences
whereby MDN may earn a 70% interest in those licences by making option payments and
exploration expenditures. Lakota geologists are carrying out the exploration program under
the supervision of MDN. Lakota is also carrying out exploration for its own account on
properties east of Lake Victoria and along the Rwamagaza greenstone belt in Tanzania.
Lakota has a staff of experienced geological and technical personnel based in Mwanza,
Tanzania, and a corporate and accounting office in the city of Dar Es Salaam. Logistically
its crews are ideally situated to service and carry out exploration and development
activities in the eastern portion of Africa.
Lakota Resources Inc. would be the surviving company under the merger, having Equs as a
wholly-owned subsidiary. Lakota would be listed on the TSX Venture Exchange, the
Frankfurt Stock Exchange and, potentially, the Australian Stock Exchange. It is
contemplated that, upon completion of the proposed merger, the board of directors of the
surviving company would include Reginald N. Gillard and Patrick J. Flint, currently the
non-executive Chairman and a non-executive director and Company Secretary,
respectively, of Equs. Klaus Eckhof, the President and a director of Lakota and also a
non-executive director of Equs, would continue as President of the surviving company.
The proposed merger is subject, among other usual conditions, to: the receipt of all
necessary approvals, including regulatory, Court and applicable securityholder approvals;
the entering into of a definitive Merger Implementation Agreement; completion of due
diligence by the parties; and the receipt by Equs of a favourable independent expert`s report
in respect of the proposed transaction.
Shares Outstanding 13,143,431
Contact:
Jack Tindale
Director
Lakota Resources Inc.
Phone: 416-368-3332
www.lakotaresources.ca
or
George H. Breuler
Chairman
Lakota Resources Inc.
Phone: 772-633-0923
The TSX Venture Exchange has not reviewed and does not accept responsibility for the
adequacy or accuracy of this release.
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