Message #39 From:
NewsBot Date: February 20, 2007 04:13:00 AM
WITM News Wits Basin Updates Current Developments Related to Merger Progress and Acquisition of China Mining Properties
MINNEAPOLIS--(BUSINESS WIRE)--Wits Basin Precious Minerals Inc. (OTCBB:WITM) is pleased to bring current information to our shareholders relating to the planned merger with Easyknit and potential acquisition of existing cash flow properties in the People’s Republic of China (“PRC”).
The Planned Merger
In its February 5, 2007 press release, the Company announced its intention to merge with Easyknit Enterprises Holdings Limited pursuant to an exchange of stock. That exchange contemplates granting 21 shares of Easyknit stock for each share of Wits Basin. The actual value of the Easyknit stock to be received by the Wits Basin shareholders will depend upon the Easyknit stock price at the time of closing, as well as the US-Hong Kong dollar exchange rate at that time. The values calculated in the example below assume the Hong Kong market and Easyknit shares remain in their respective values. However, as an example, if the closing had occurred on February 16, 2007, the value could be calculated as follows:
Easyknit shares
21
Easyknit closing price on Hong Kong Stock Exchange on February 16, 2007(a)
x HK$2.170
Total value
= HK$45.57
Hong Kong/US conversion rate on February 16, 2007(b)
Certain Board Members and representatives of management are now planning a return trip to Hong Kong in March, which they believe will allow for the finalization and execution of the definitive documents. Out of respect for the Chinese New Year, the planned date of execution of the definitive documents is now expected to be on or before March 31, 2007.
Company management is currently working with the depository trustee to commence meeting the requirements of the ADR program. The ADR program will enable our North American shareholders to have a North American exchange available to them to buy and sell their respective shares after completion of the merger. The Company intends to implement the ADR Program in conjunction with the merger.
The proposed joint venture with SSC Mandarin Financial Services Ltd (SSC) announced on February 7, 2007, is expected to yield qualified prospects in various PRC mining properties and exploration opportunities including gold, zinc, nickel, iron ore, and bauxite. SSC has taken the members of the Board of Directors and management on site visits to the PRC to review potential candidates for acquisition. Wits Basin Chairman Vance White released the following statement regarding these potential acquisitions:
“Our Company is very grateful for the opportunity to form a joint venture with SSC. Their significant ground work, efforts and relationships in the local PRC markets over the last five or six years helps create an environment where we expect to find some very attractive mining properties in the PRC to acquire. To date, we have investigated at least five projects that appear to meet our criteria, including mining properties that are in production and have positive cash flow. We are starting to carry out in-depth due diligence on these projects.”
The SSC and Wits Basin joint venture is not conditional on the merger of Easyknit Enterprises Holdings Limited nor is the merger dependent on the joint venture.
We are a minerals exploration and development company holding interests in five exploration projects and currently do not claim to have any mineral reserves on any project. Our common stock trades on the Over-the-Counter Bulletin Board under the symbol “WITM.” To find out more about Wits Basin Precious Minerals Inc. (OTCBB:WITM) visit our website at www.witsbasin.com.
Forward-Looking Statements and Risk Factors
The statements included in this press release concerning predictions of economic performance and management’s plans and objectives constitute forward-looking statements made pursuant to the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. This press release contains forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially. Such statements are valid only as of today, and we disclaim any obligation to update this information. These statements are subject to known and unknown risks and uncertainties that may cause actual future experience and results to differ materially from the statements made. These statements are based on our current beliefs and expectations as to such future outcomes. These risks and uncertainties include, among others, the Company’s ability to obtain or maintain regulatory approvals; the Company’s ability to obtain necessary financing; the Company’s ability to enter into and meet all the conditions to consummate the proposed merger agreement, and other risks and uncertainties described in the Company’s filings from time to time with the Securities and Exchange Commission. The Company disclaims any obligation to update its forward-looking statements.
In addition, the exploration for and development of mineral deposits involves significant financial risks, which even experience and knowledge may not eliminate, regardless of the amount of careful evaluation applied to a process. While the discovery of a mineral deposit may result in substantial rewards, few properties are ultimately developed into producing mines. Moreover, we cannot make any estimates regarding probable reserves and mineral resources in connection with any of our projects and any estimates relating to possible reserves are subject to significant risks. Therefore, no assurance can be given that any size of reserves or grades of reserves will be realized. If a discovery is made, the mineral deposit discovered, assuming recoverable, may differ from the reserves and mineral resources already discovered and recovered by others in the same region of the planned areas of exploration. Further, the cost of exploration and exploitation can be extensive and there is no assurance that we will have the resources necessary or the financing available to pursue projects we currently hold interests in or to acquire interests in other mineral exploration projects that may become available. The risks we face are numerous and detailed information regarding these risks may be found in filings made by us with the Securities and Exchange Commission, including our most recent annual report on Form 10-KSB, quarterly reports on Form 10-QSB and reports on Form 8-K.
The proposed merger with Easyknit and joint venture with SSC are subject to various contingencies, including negotiation and execution of definitive documentation, completion of due diligence, receipt of required regulatory approvals, and board and shareholder approvals by both parties.
