EDITOR: | July 15th, 2014

Athabasca Nuclear and Strike Graphite Announce Intent to Merge

| July 15, 2014 | No Comments
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July 15, 2014 (Source: Marketwired) — NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES

Athabasca Nuclear Corporation (TSX VENTURE:ASC) (“Athabasca Nuclear”) and Strike Graphite Corporation (TSX VENTURE:SRK) (“Strike”) are pleased to jointly announce that they intend to merge and form a combined Saskatchewan-centered exploration and development company with a multi-faceted project portfolio being focused on the Preston Lake uranium and the Sask Craton diamond projects.

The transaction (the “Transaction“) will be completed by way of a plan of arrangement, or other business combination, in which Athabasca Nuclear will acquire all of the issued and outstanding common shares of Strike. Each Strike shareholder will receive one common share of Athabasca Nuclear for each common share of Strike held. All outstanding Strike options and warrants will be exchanged for options and warrants of Athabasca Nuclear in an amount and at exercise prices adjusted in accordance with the same exchange ratio.

Merged Entity Highlights:

  • Athabasca Nuclear is the Operator of and a working interest partner in the Western Athabasca Syndicate, which is advancing the Preston Uranium Project, a large-scale uranium exploration project that is regionally proximate to the high-grade uranium discovery made by Fission Uranium Corp. in the SW Athabasca Basin. Approximately $3,500,000 dollars in exploration has been carried out since July 2013 by the Western Athabasca Syndicate in advancing the Preston Uranium Project within a broader tenure base consisting of approximately 709,513 acres.
  • Strike’s principal asset is the early-stage Sask Craton and Sask Craton North diamond exploration properties (“Sask Craton Properties”), for which Strike has received conditional TSX Venture Exchange approval. The Sask Craton Properties, in which Strike will hold an 80% undivided interest, are contiguous and proximate to the recent Pikoo diamond discovery made by North Arrow Minerals Inc. and consists of a mineral tenure base of approximately 1,300,000 acres.
  • The combined entity stands to benefit from reduced operating costs associated with the elimination of certain duplicative administrative and staffing costs affiliated with running a publicly-traded company. The elimination of such duplicative costs may result in incremental capital being available to be allocated to exploration of the combined entity’s project base rather than to administrative expenses.
  • The aggregation of multiple large-scale project interests within the same jurisdiction (Saskatchewan) offers the prospective benefit of being able to coordinate regional service companies on a multi-project basis with potential economic advantages resulting from volume-based work.
  • The combined entity stands to benefit from a stronger working capital position and balance sheet. Leveraging the fiscal strength of Athabasca Nuclear, Strike shareholders will gain access to funding to advance their project and address a working capital deficiency which previously would have required significant dilution.
  • The combined entity stands to benefit from a diversified project base attracting capital market interest in multiple commodity areas.
  • The combined entity will offer shareholders of both companies greater liquidity by way of a larger combined capitalization and the benefit of trading volumes for both equities being concentrated into a single vehicle.

This proposed transaction offers valuable benefits to the current shareholders of both Athabasca Nuclear and Strike. Not only will a combined entity present a superior fiscal situation, but it will also uniquely capture and focus the interest of the capital markets in two of Canada’s emerging resource plays, the SW Athabasca Basin and the Sask Craton, into a single listed vehicle,” stated Ryan Kalt, Chairman & Chief Executive Officer of Athabasca Nuclear.

Strike is in a fortunate position to have successfully negotiated for its Sask Craton and Sask Craton North properties which recently received conditional approval by the TSX Venture Exchange. By combining with a larger exploration company, Strike will be in an improved position to better access exploration capital for its projects, fund current liabilities, and benefit from a diversified project base,” noted Geoff Balderson, President of Strike.

Athabasca Nuclear currently has 48,593,954 common shares outstanding, and Strike currently has 4,490,649 shares outstanding with a further 12,691,453 shares expected to be issued as a result of its previously announced property acquisitions and debt settlement.

Terms of Transaction

The Transaction will be placed into effect by a plan of arrangement under the Business Corporations Act (British Columbia). Subject to the fulfillment of closing conditions, Athabasca Nuclear will acquire from the shareholders of Strike 100% of the outstanding common shares of Strike in exchange for common shares of Athabasca Nuclear and Strike will, as a result, become a wholly owned subsidiary of Athabasca Nuclear. Each Strike shareholder will receive one common share of Athabasca Nuclear for each common share of Strike held. All outstanding Strike options and warrants will be exchanged for options and warrants of Athabasca Nuclear in an amount and at exercise prices adjusted in accordance with the same exchange ratio. On issuance of the Athabasca Nuclear options and warrants, the Strike options and warrants will be cancelled.

If the Transaction is completed, the combined Athabasca Nuclear and Strike entity would have approximately 65,776,056 common shares issued and outstanding, of which current Athabasca Nuclear shareholders will own approximately 73.9% and former Strike shareholders would own approximately 26.1%.

After completion of the Transaction, the executive officers and board of directors of Athabasca Nuclear will be unchanged, with exception of the addition of Blair Way, a current Director of Strike, who is expected to join the Board of Directors of Athabasca Nuclear.

Closing of the Transaction, expected on or before September 20, 2014, is subject to, among other conditions enumerated below, receipt of court approval and the affirmative vote of at least 66 2/3 percent of the votes cast by Strike shareholders, currently standing at 4,490,649 shares, at a special meeting of the Strike shareholders.

Closing Conditions

Completion of the Transaction is conditional upon, among other conditions:

1. Shareholders of Athabasca Nuclear and Strike having approved the Transaction at joint meetings expected to be held in September 2014; and

2. Completion of legal and financial due diligence by each of the parties; and

3. Closing of the of the Sask Craton and Sask Craton North property acquisitions announced by Strike in its news releases of May 22, 2014 and July 3, 2014; and

4. Completion of the proposed debt settlement announced by Strike in its news releases dated May 22, 2014 and July 3, 2014; and

5. Execution of a formal plan of arrangement agreement; and

6. A fairness opinion to support the exchange ratio of Strike securities for Athabasca Nuclear securities in the Transaction, if required; and

7. Receipt of all necessary regulatory approvals, including approval of the TSX Venture Exchange; and

8. The absence of a material adverse change in the business, financial condition, assets or operations with respect to each party; and

9. The waiver of change-of-control payments, if applicable; and

10. The discontinuance by Strike of its non-brokered private placement announced July 3, 2014.

The parties caution that no assurance can be given at this time that the Transaction will be completed, that the conditions to closing will be satisfied, or that the terms of the Transaction will not change materially from those described in this news release.

ON BEHALF OF THE BOARDS

Mr. Ryan Kalt, Chairman & Chief Executive Officer

Athabasca Nuclear Corporation

Mr. Geoff Balderson, President & Chief Executive Officer

Strike Graphite Corporation

Forward-Looking Statements

This news release contains Forward-Looking statements. Forward-Looking statements address future events and conditions and therefore, involve inherent risks and uncertainties. Actual results may differ materially from those currently expected or forecast in such statements. Readers are cautioned not to place undue reliance on Forward-Looking Statements, as there can be no assurance that the plans, intentions or expectations upon which the Forward-Looking Statements are based will occur. Forward-Looking Statements herein are made as at the date hereof, and unless otherwise required by law, the issuers do not intend, or assume any obligation, to update these Forward-Looking Statements.

Neither the 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.


Raj Shah

Editor:

Raj Shah has professional experience working for over a half a dozen years at financial firms such as Merrill Lynch and First Allied Securities Inc., ... <Read more about Raj Shah>


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