East West Resource Corporation To Be Acquired By Rainy Mountain Capital Corp.
Thunder Bay, Ontario – July 31, 2009 – East West Resource Corporation ("East West") is pleased to announce that it has entered into a letter of intent (the "Letter of Intent") executed on July 28, 2009 with Rainy Mountain Capital Corp. ("Rainy Mountain"), a company incorporated under the laws of British Columbia, pursuant to which Rainy Mountain will acquire 100% of the issued and outstanding common shares of East West (the "Proposed Transaction"). Rainy Mountain is a capital pool company and the Proposed Transaction is intended to serve as Rainy Mountain's "Qualifying Transaction" under the policies of the TSX Venture Exchange (the "Exchange").
Upon completion of the Proposed Transaction, Rainy Mountain expects to be listed as a Tier 2 Mining Issuer pursuant to the minimum listing requirements of the Exchange and will change its name to a name acceptable to Rainy Mountain, East West and the applicable regulatory authorities.
Pursuant to the Proposed Transaction, Rainy Mountain will acquire all of the outstanding East West common shares by issuing approximately 26,000,000 fully paid and non-assessable common shares in Rainy Mountain, specifically one Rainy Mountain share for every five East West shares held by East West shareholders. As a result of the issuance of Rainy Mountain shares, following the closing (the "Closing") of the Proposed Transaction, East West will become a wholly-owned subsidiary of Rainy Mountain (the "Resulting Issuer") and the East West shareholders will become shareholders of the Resulting Issuer.
East West will use its commercially reasonable efforts to cause East West option holders to exercise their options prior to the Closing. Any unexercised options will be terminated in accordance with the terms of the definitive agreement to be entered into between the parties. Holders of unexercised East West warrants will have their warrants converted into Rainy Mountain warrants, adjusted to account for the Proposed Transaction, so that the warrant holder will have the right to acquire the adjusted ratio of Rainy Mountain shares as would have been the case had the East West warrants been exercised immediately prior to the completion of the Proposed Transaction.
It is anticipated that the transactions contemplated herein will be effected by way of a plan of arrangement, however, the parties may consider alternative structures based on the advice of their respective professional consultants and advisors. If completed by way of plan of arrangement, East West will need to seek shareholder approval. The Letter of Intent, as described herein, will be superseded by a definitive agreement and closing of the Proposed Transaction will be subject to several conditions including but not limited to, due diligence, regulatory, shareholder and court approvals, as required.
Further details of the Proposed Transaction will be included in the definitive agreement and Management Information Circular, should the parties proceed by way of plan of arrangement, 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 DIRECTORS
M.J.(Moe) Lavigne, President and CEO