News Bulletin

Crowflight Minerals receives offer for Bucko Lake Nickel Mine

Monday, 08 Feb 2010

Crowflight Minerals inc. has announced that it has received a non binding expression of interest from Pala Investments Holdings regarding the acquisition of the Bucko Lake Nickel Mine and certain surrounding exploration areas in the Thompson Nickel Belt of Canada.

In consideration for the purchase of the Bucko Assets, Pala has proposed that it would pay to Crowflight the sum of C$101.9 million. If the acquisition were completed, Crowflight would cancel the 116,079,971 common shares and 50,588,235 share purchase warrants held by Pala in consideration for $29.88 million, providing an aggregate net payment from Pala to Crowflight of $72.0 million. Stan Bharti, the Executive Chairman of Crowflight, stated, "Pala is in a unique position as Crowflight's largest shareholder and with two representatives on the Crowflight Board of Directors to assess the potential of developing a profitable mine at Bucko Lake. We believe that Pala's expression of interest shows that Crowflight is undervalued compared to the potential that remains in the Bucko Lake mine.

In addition to receiving the cash consideration, Crowflight would retain certain exploration mineral properties of Crowflight, including the Bowden Lake, Halfway Lake and Manibridge deposits located in Manitoba as well properties within the Sudbury district namely, the AER Kidd property (past producer in 1967-68) and the Peter's Roost property.

The expression of interest is non binding and subject to a number of conditions, including the negotiation and execution of a definitive agreement, receipt of requisite board, shareholder and regulatory approvals and Pala being satisfied with its due diligence review of the Bucko Assets. As Pala holds approximately 22.8% of the issued and outstanding common shares of Crowflight, the proposed transaction would be considered to be a related party transaction under Canadian securities laws, thus subject to minority shareholder approval and receipt by Crowflight of a formal valuation report.

In connection with the receipt of the non binding expression of interest, Crowflight has commenced a strategic review of its assets and operations. Crowflight has also appointed a Special Committee of the Board of Directors to spearhead this strategic review and has appointed Macquarie Capital Markets Canada Ltd. as financial advisors.

Proposed Private Placement

To continue the re development of the Bucko Lake mine during the strategic review being conducted by the Board, Crowflight intends to complete a private placement financing through the issuance of 93,750,000 common shares (the "Common Shares") at a price of $0.16 (the "Issue Price") per Common Share for total gross proceeds of $15,000,000. Crowflight has received a commitment from Pala to purchase 21,356,250 Common Shares, which represents its pro rata share of the Common Shares to be issued pursuant to the Private Placement. In addition, Crowflight has received indications that Kingplace Enterprises Limited, a principal shareholder of Crowflight, will participate in the financing to maintain up to its pro rata interest in Crowflight. Crowflight intends to provide a complete operational update detailing the progress made to date and the plans for re starting production at Bucko in the coming days.

Source: Crowflight Minerals Website February 2010

     

     

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