TORONTO, June 30, 2011 /CNW/ - Sprott Resource Corp. (TSX: SCP) - Sprott Resource Corp. ("SRC") announced today that its former subsidiary Orion Oil & Gas Ltd. ("Orion") has completed its strategic merger with WestFire Energy Ltd. ("WestFire") (TSX: WFE) pursuant to the previously announced plan of arrangement (the "Arrangement"). Immediately upon completion of the Arrangement, WestFire and Orion amalgamated under the Business Corporations Act (Alberta), continuing as WestFire Energy Ltd.
The requisite approvals of the shareholders of each of WestFire and Orion and the Court of Queen's Bench of Alberta in connection with the Arrangement were obtained earlier today.
Pursuant to the Arrangement, SRC acquired an aggregate of 13,153,936 common shares of WestFire ("WestFire Shares") and an aggregate of 15,512,858 non-listed, non-voting convertible shares ("WestFire Non-Voting Shares"), which may be converted into WestFire Shares on a one for one basis in certain circumstances. SRC owns nearly all of the WestFire Non-Voting Shares and approximately 19.5% of the WestFire Shares.
SRC acquired the WestFire Shares and WestFire Non-Voting Shares for investment purposes. Subject to the restrictions set forth in the Investor Agreement dated May 11, 2011 between WestFire and SRC, a copy of which is available on SEDAR, SRC may purchase or sell securities of WestFire in the future on the open market or in private transactions, depending on market conditions and other factors material to the investment decisions of SRC.
Prior to the completion of the Arrangement, SRC held 229,334,351 common shares of Orion (the "Orion Shares"). The closing price of the Orion Shares on the Toronto Stock Exchange on June 30, 2010 was $0.83 per share.
About Sprott Resource Corp.
SRC is a Canadian based company, the primary purpose of which is to invest and operate 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.
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