BIGHORN PETROLEUM LTD., FLYING A PETROLEUM LTD., TENAKA DRILLING CONSORTIUM LTD. AND WYN DEVELOPMENTS INC. SIGN NON-BINDING LETTER OF INTENT TO COMBINE INTO A NEW CANADIAN NATURAL GAS DEVELOPMENT AND PRODUCTION COMPANY
Vancouver, British Columbia, Canada - April 27, 2007 - Wyn Developments Inc. ("Wyn Developments" or the "Company") Announces Bighorn Petroleum Ltd. (TSXV: BHP), Flying A Petroleum Ltd. (TSXV: FAB), Tenaka Drilling Consortium Ltd. and Wyn Developments Inc. (TSXV: WL, FWB: YXE, OTCBB: WYDPF), collectively the "Parties", are pleased to announce that they have entered into a non-binding letter of intent ("LOI") dated April 27, 2007, to enter into negotiations to formalize a business combination.
The terms of the LOI provide that the parties complete a due diligence review of each others' interests for a period of 120 days. During this due diligence period, it is anticipated that a NI 51-101 compliant reserves evaluation report will be prepared for all properties owned by the parties. The final structure of the business combination will be determined by the parties upon a review of tax, accounting, corporate and securities law issues.
The share exchange ratio and/or other consideration to be tendered by each party will be determined through negotiation between the parties upon receipt of all due diligence materials and in compliance with regulatory policies. The LOI provides that all share purchase warrants of the parties outstanding immediately prior to the closing of the business combination will be transferred to an equivalent number of warrants of the agreed upon successor entity.
The parties have agreed to negotiate with each other for the 120 day due diligence period and to exchange confidential information with a view to completing their due diligence investigations and settling a definitive agreement as soon as possible. If a definitive agreement is reached, it is expected to contain typical conditions for a transaction of this type, including the approval of the parties' shareholders and all necessary regulatory and court approvals.
The parties will provide news releases with updates on their progress with respect to this transaction in a timely manner during the coming months.
The parties are currently active partners on three property areas; the Prophet River, Bougie Trutch, and Trutch East natural gas development projects, all located in the Foothills region of the prolific natural gas bearing Western Canadian Sedimentary Basin, in northeastern British Columbia, Canada. The Western Canadian Sedimentary Basin is home to many world-class oil and gas fields, featuring extensive logistical infrastructure. The combined assets of all participants include:
- A 100% working interest in the Prophet River 'A' lands.
- A 65% working interest in the Prophet River 'B' lands.
- A 32.5% gross working interest in the Bougie Trutch lands, including a third party overriding royalty, subject to various terms.
- A 19.5% working interest in the Trutch East lands, including third party overriding royalty, subject to various terms.
- Milestone bonuses and stock payments for successful tie-in on the Trutch lands and minimum proven reserves on the Prophet River project.
- A British Columbia Oil and Gas Commission issued Operator's license.
- A combination of tax pools, government royalty credits, exploration credits, etc.
- A 32.5% interest in 14,217 meters of six inch pipeline from the Tommy Lake field to the c-36-A well, and a total of 1,688 meters of four inch pipeline from c-36-A to the b-56-A and c-25-A wells.
- A 100% ownership of the Prophet River 'A' and 'B' land 3D seismic data.
- The recently drilled d-60-E/94-G-15 Prophet River well, which as previously announced, yielded an initial unstabilized gas flow of up to 7.943 MMcf.d. from the Mississippian Horizon and excellent gas detection in the Triassic Halfway Formation, earning 11 square miles of leases from the surface to the Sulphur Point Formation. (The British Columbia Oil and Gas Commission has recently reclassified the d-60-E/94-G-15 well as an 'exploratory wildcat' well, and the Mississippian formation as a 'new pool discovery.').
- The right to earn an additional 10 square miles on the Prophet River 'B' Lands.
- 4 Triassic Halfway Formation wells: Two Triassic Halfway wells are currently producing since February 2007 which include the c-36-A/94-G-15 'new pool discovery' which the Operator has advised averaged 1.154 MMcf.d and b-56-A/94-G-15 which averaged 807.3 Mcf.d according to February 2007 production figures. The two other Triassic Halfway Formation wells are a-13-B/94-G-15 which tested 827.8 Mcf.d and b-086-A/94-G-15 which was recently drilled and cased.
- The producing c-25-a/94-G-15 Trutch East Halfway well which the Operator advised averaged 1.4 MMcf.d according to February 2007 production figures.
This transaction is subject to shareholder and regulatory approval.
Thomas W. Bainbridge P.Geol., is the qualified consultant for the Company's natural gas projects and has reviewed and verified the contents of this news release.
About Canada Rare Earths
Canada Rare Earths is a growth company focused on the exploration and development of rare earth elements at its 100% owned Goeland Rare Earths Project within the Montviel carbonatite complex, Montviel Township Quebec, immediately adjacent to Geomega's (TSX-V: GMA) recent rare earth discovery. The Goeland property located 215 km north of Val-d'Or, is road accessible and consists of 47 claims totaling approximately 2,600 hectares. Since the acquisition of the Goeland Project, the Company, in a short period of time, has successfully established itself in one of the largest Carbonatite complexes in North America. Worldwide, carbonatite-related deposits are a major host for rare earths elements ("REE"). The world's most advanced and prolific REE deposits in production or development, Bayan Obo (China), Molycorp's Mountain Pass (USA), Lynas's Mount Weld (Aus), and Rare Earth Element Resource's Bear Lodge project, are all hosted by carbonatites.
For more information on Canada Rare Earths, please contact our Head Office.
On Behalf of the Board of Canada Rare Earths Inc.
Chad McMillan
President & CEO
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. All of the above is subject to TSX.V and regulatory acceptance.
FORWARD LOOKING STATEMENTS
Cautionary Note Regarding Forward-Looking Statements: Certain disclosure in this release, including statements regarding the Company's Pre-Development Agreement and the exploration of the Goeland Project, constitute "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and Canadian securities legislation. In making the forward-looking statements in this release, the Company has applied certain factors and assumptions that the Company believes are reasonable, including that the Company is able to obtain any required government or other regulatory approvals and any required financing to complete the Company's obligations pursuant to the Pre-Development Agreement and planned exploration activities, that the Company is able to procure equipment and supplies in sufficient quantities and on a timely basis and that actual results of exploration activities are consistent with management's expectations. However, the forward-looking statements in this release are subject to numerous risks, uncertainties and other factors relating to Canada Rare Earth's operation as a mineral exploration company that may cause future results to differ materially from those expressed or implied in such forward-looking statements. Such uncertainties and risks may include, among others, actual results of the Company's exploration activities being different than those expected by management, uncertainties involved in the interpretation of drilling results and geological tests, delays in obtaining required government or other regulatory approvals or financing, inability to procure equipment and supplies in sufficient quantities and on a timely basis, equipment breakdowns and bad weather. There can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. Readers are cautioned not to place undue reliance on forward-looking statements. Canada Rare Earths does not intend, and expressly disclaims any intention or obligation to, update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by law.
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