East West Resource Corporation Announces Updates to Proposed Transaction with Rainy Mountain Capital Corp.
Thunder Bay, Ontario – September 24, 2009 – East West Resource Corporation ("East West") is pleased to announce an update in connection with its proposed transaction with Rainy Mountain Capital Corp. ("Rainy Mountain"). As initially referred to in its July 31, 2009 news release, the Company entered into a letter of intent (the "Letter of Intent") dated July 28, 2009 with Rainy Mountain pursuant to which Rainy Mountain proposed to acquire all of the issued and outstanding shares of East West from the shareholders of East West in consideration for an aggregate of approximately 26,000,000 common shares in the capital of Rainy Mountain by way of a plan of arrangement. As a result of which, East West would have become a wholly-owned subsidiary of Rainy Mountain. The parties have since agreed to redesign the structure of the transaction contemplated in the Letter of Intent.
Based on the advice of their respective professional advisors, East West and Rainy Mountain have now agreed to effect the proposed transaction by way of a private placement (the "Private Placement") pursuant to which Rainy Mountain will subscribe for, on a post Consolidation basis, an aggregate of approximately 3,750,000 common shares (the "Shares") of East West at a price of $0.10 per Share to result in gross proceeds of approximately $375,000 to East West. The Shares will subsequently be distributed to the shareholders of Rainy Mountain. Upon the distribution of the Shares to the shareholders of Rainy Mountain, the Rainy Mountain shareholders will become shareholders of East West, following which Rainy Mountain will be dissolved. As a capital pool company, the only asset that Rainy Mountain has, and will contribute to East West, is its cash. The Private Placement is intended to serve as Rainy Mountain's "Qualifying Transaction" under the policies of the TSX Venture Exchange.
In connection with the Private Placement, East West will incur the following proposed changes (collectively, and including the Private Placement, the "Proposed Transaction"):
- the appointment of a new management team and board of directors;
- the consolidation of the East West shares on a five old shares for one new share basis;
- the continuance from the Business Corporations Act (Ontario) (the "Ontario Act") to the Business Corporations Act (British Columbia) (the "B.C. Act"); and
- the name change to "Rainy Mountain Royalty Corp."
all of which are summarized below.
In connection with the Proposed Transaction, East West proposes to consolidate its capital structure (the "Consolidation") on the basis of five old common shares of East West for one new common share of East West. The Consolidation will occur prior to the closing of the Private Placement and will be effected under the Ontario Act
Continuance & Name Change
Following the proposed Consolidation, East West will continue (the "Continuance") out of the Province of Ontario under the provisions of the Ontario Act and into the Province of British Columbia under the provisions of the B.C. Act. The Continuance is considered to be in the best interests of East West as upon the completion of the Proposed Transaction, East West's head office and its management will be located in Vancouver, British Columbia. Concurrently with the Continuance, East West will effect its name change to "Rainy Mountain Royalty Corp."
Management & Board of Directors
In connection with the Proposed Transaction, the current board of directors and management will resign and the new board of directors and management of East West will be comprised of the following:
- Robert Buchan, MSc (Mineral Economics) (Chairman and Director);
- Ronald A. Coombes (President, Chief Executive Officer and Director);
- Douglas L. Mason (Director);
- Edward Yurkowski, P.Eng., B.Sc., Civil Engineering (Director);
- Sead Hamzagic, CGA (Chief Financial Officer and Director);
- Bruce E. Morley, LLB, B.Comm. (Director); and
- Sabrina Jones, B.A. (Director)
Ronald A. Coombes, who acts as the President and Chief Executive Officer for numerous mining issuers listed on the Exchange, will lead the new East West management team. As well, Robert (Bob) Middleton, PEng., will continue with East West as its Consulting Geophysicist. Collectively, the new board members hold a variety of senior positions with various public and private companies and the new board will have extensive experience in the mining industry.
Further details of the Proposed Transaction will be included in the subscription agreement in connection with the Private Placement and Management Information Circular to be filed with the regulatory authorities and mailed to East West's shareholders in accordance with applicable securities laws.
About East West
East West was incorporated in the Province of British Columbia in 1979 and continued to the Province of Ontario on December 11, 2005. East West’s exploration efforts are focused on the platinum group metals as well as copper and nickel. It has three flagship assets in Ontario: Marshall Lake (copper, zinc project), Norton-McFaulds (copper nickel, platinum group elements project), and Shebandowan (gold, copper project). These three projects are joint ventured with Marshall Lake Mining PLC, White Tiger Mining Corp., and Xstrata Copper respectively. In addition there are eight other projects that are funded by joint venture partners.
ON BEHALF OF THE BOARD OF DIRECTORSM.J.(Moe) Lavigne, President and CEO