Sprott Resource Holdings Press Releases


Press Release

Sprott Resource Corp Announces $100 million Equity Financing By Subsidiary Orion Oil & Gas Ltd.



TORONTO, Oct. 15 /CNW/ - Sprott Resource Corp. (TSX: SCP) - Sprott Resource Corp. ("SRC") is pleased to announce that its wholly-owned subsidiary Orion Oil & Gas Ltd. (formerly 1491542 Alberta Ltd.) ("Orion" or the "Company") has entered into an equity financing agreement, on a best efforts agency basis, with a syndicate of agents co-led by Cormark Securities Inc., FirstEnergy Capital Corp. and TD Securities Inc. (collectively, the "Agents"). Pursuant to the agreement, Orion has agreed to raise $100,000,000 (the "Offering") from the sale of subscription receipts ("Subscription Receipt") at a price of $5.00 per Subscription Receipt.

On October 13, 2009, SRC announced an agreement between Orion and Wintraysan Capital Corp. (TSX Venture: WTS.P) ("Wintraysan") whereby Wintraysan, pursuant to a plan of arrangement or other similar form of transaction (the "Arrangement"), will acquire all of the currently issued and outstanding securities, including common shares, of Orion ("Orion Shares") in a reverse take-over transaction at an exchange ratio of three (3) Wintraysan common shares ("Wintraysan Shares") for every one (1) Orion Share outstanding. It is anticipated that in conjunction with the Arrangement and Offering, Wintraysan will effect a consolidation (the "Consolidation") of the Wintraysan Shares on the basis of one (1) new Wintraysan Share for each fifteen (15) existing Wintraysan Shares.

In addition, it is intended that Wintraysan will change its name to "Orion Oil & Gas Corporation" or such other name ("New Orion") as may be approved by the board of directors of Wintraysan (the "Name Change"). In accordance with applicable laws, the Consolidation and the Name Change are subject to the approval of the shareholders of Wintraysan.

Each Subscription Receipt will be exchanged for one (1) common share of New Orion ("New Orion Share"), post completion of the Arrangement and Consolidation, without additional payment upon satisfaction of certain conditions. The proceeds of the Offering will be held in escrow pending Orion's and Wintraysan's receipt of all necessary regulatory approvals, the completion of the Arrangement, and approval of the New Orion Shares on a recognized stock exchange acceptable to the Agents. Upon these conditions being met, the proceeds of the Offering will be released to New Orion.

Post Consolidation, and following the completion of the Arrangement and assuming full completion of the Offering, approximately 78 million New Orion Shares and other securities of New Orion, exercisable or convertible into approximately 4.1 million New Orion Shares are anticipated to be issued and outstanding.

If closing of the Arrangement does not take place by 120 days post closing of the Offering, or if the Arrangement is terminated at any earlier time, holders of the Subscription Receipts will be entitled to a return of their full subscription price and their pro rata entitlement to the interest earned on the escrowed funds. The Subscription Receipts will be subject to a hold period until the closing of the Arrangement. The Offering is subject to the receipt of all necessary regulatory and stock exchange approvals and Closing of the Offering is scheduled for end of November or early December 2009.

Wintraysan is a "capital pool company" as defined under the policies of the TSX Venture Exchange (the "Exchange") and intends for the proposed acquisition (the "Proposed Qualifying Transaction") to constitute the "Qualifying Transaction" of Wintraysan as such term is defined in the policies of the Exchange. The Proposed Qualifying Transaction will be an arm's length transaction as the directors and officers of Wintraysan currently have no interest in Orion.

Orion was recently incorporated by SRC for the purpose of acquiring all of the issued and outstanding shares of Auriga Energy Inc. ("Auriga"). Auriga is a private Alberta oil and gas company with assets in the Kaybob, Redwater and Bigstone areas of Alberta. It is expected that Orion will complete its acquisition of all of the issued and outstanding securities of Auriga on October 20, 2009 and in any event no later than November 15, 2009.

Description of Significant Conditions to Closing

Completion of the Proposed Qualifying Transaction is subject to the satisfaction of a number of conditions, including, but not limited to, Exchange acceptance. Other necessary conditions to the closing of the Proposed Qualifying Transaction, include obtaining all other necessary regulatory and third-party approvals and authorizations, the completion of a definitive agreement setting forth the terms and conditions set out in the letter agreement with respect to the Proposed Qualifying Transaction, completion of the Offering, and the completion of due diligence. As the Proposed Qualifying Transaction is an arm's-length transaction, it is anticipated that Wintraysan shareholder approval will not be required. There can be no assurance that the Proposed Qualifying Transaction will be completed as proposed or at all.

About Sprott Resource Corp.

SRC is a Canadian based company, the primary purpose of which is to invest, directly and indirectly, in natural resources. Through acquisitions, joint ventures and other investments, SRC seeks to provide its shareholders with exposure to the natural resource sector for the purposes of capital appreciation and real wealth preservation. SRC is well positioned to draw upon the considerable experience and expertise of both its Board of Directors and Sprott Consulting Limited Partnership ("SCLP"), of which Sprott Inc. is the sole limited partner. Pursuant to a management services agreement between SCLP and SRC, SCLP provides day-to-day business management for SRC as well as other management and administrative services.

Forward-looking Statements

This news release contains forward-looking statements and information ("forward looking statements") within the meaning of applicable securities laws relating to the proposal to complete the Proposed Qualifying Transaction and associated transactions (including the Offering), including statements regarding the terms and conditions of the Proposed Qualifying Transaction and associated transactions (including the Offering). Readers are cautioned to not place undue reliance on forward-looking statements. Actual results and developments may differ materially from those contemplated by these statements depending on, among other things, the risks that the parties will not proceed with the Proposed Qualifying Transaction and associated transactions (including the Offering), that the ultimate terms of the Proposed Qualifying Transaction and associated transactions (including the Offering) will differ from those that currently are contemplated, and that the Proposed Qualifying Transaction and associated transactions (including the Offering) will not be successfully completed for any reason (including the failure to obtain the required approvals or clearances from regulatory authorities). The forward-looking statements contained in this document are made as of the date hereof and SRC does not undertake any obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

The subscription receipts offered have not been and will not be registered under the United States Securities Act of 1933, as amended and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirement. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

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