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Message: International Wayside Gold Mines Ltd.: Tentative Agreement Reached with Cross

International Wayside Gold Mines Ltd.: Tentative Agreement Reached with Cross

posted on Feb 11, 2009 01:14PM
February 10, 2009
International Wayside Gold Mines Ltd.: Tentative Agreement Reached with Cross Lake Minerals to Acquire QR Mine & Mill and $3 Million Financing
VANCOUVER, BRITISH COLUMBIA--(Marketwire - Feb. 9, 2009) - The Board of Directors of International Wayside Gold Mines Ltd. ("Wayside") (TSX VENTURE:WYG)(FRANKFURT:IWUA) is pleased to announce that Wayside and Cross Lake Minerals Ltd. ("Cross Lake") have entered into a non binding agreement in principle whereby Wayside will purchase a subsidiary of Cross Lake holding all of Cross Lake's interest in the QR Mine and Mill (collectively the "QR Mine & Mill") (the "Sale Transaction"). Cross Lake is currently subject to creditor protection under the Companies Creditors Arrangement Act (Canada) ("CCAA") and prior to the closing of the Sale Transaction, and as part of its restructuring of its business and assets pursuant to the CCAA, the British Columbia Business Corporations Act ("BCBCA") and the Bankruptcy and Insolvency Act ("BIA") (the "Restructuring Transaction"), Cross Lake will transfer all of its assets and properties and certain related obligations and liabilities and all environmental obligations and liabilities relating to the QR Mine and Mill to a new wholly owned subsidiary of Cross Lake ("Subco") in exchange for the shares of Subco ("Subco Shares"), the assumption of such obligations and liabilities including obligations to the Province of British Columbia, BC Hydro and other secured creditors, certain royalty and back-in rights held by third parties and a 2% net profits royalty in respect of all minerals extracted from the QR Mine. Pursuant to the Sale Transaction, Cross Lake will transfer all of the Subco Shares to Wayside and in consideration Wayside will issue to Cross Lake that number of securities of Wayside which represents 45% of all the outstanding voting shares and 99.9% of all the outstanding equity shares of Wayside.

Concurrently with the completion of the Sale Transaction, Wayside will transfer all of its properties including the Cariboo Gold Project, assets, liabilities and obligations (including the Subco Shares) which company owns the QR Mine and Mill to a wholly-owned subsidiary of Wayside ("Newco") in exchange for shares of Newco (the "Newco Shares"); distribute the Newco Shares to the shareholders of Wayside (for greater clarity, excluding Cross Lake) on the basis of one Newco Share for each share of Wayside held by such shareholders; reorganize its share capital so that the shares of Wayside held by the shareholders other than Cross Lake are retractable at a price and time to be agreed by the parties; change its name to a new name designated by Cross Lake, and delist from the Exchange (the "Spin-Off Transaction").

Newco holding all of the previous assets and liabilities, if any, of Wayside and the QR Mine and Mill (to be renamed "Barkerville Gold Mines Ltd.") will make an application to list its shares on the TSX Venture Exchange (the "TSXV"). This transaction is subject to meeting the usual listing requirements of the TSXV which will include having the necessary funds to meet the obligations of operating the QR Mine and Mill, conduct recommended work programs on its exploration projects, satisfy the necessary general and administrative expenses and having unallocated working capital. It is contemplated that as part of the Spin-Off Transaction, Barkerville will file a prospectus in certain jurisdictions to qualify its shares for distribution. There can be no assurance that Barkerville will receive a receipt for any prospectus filed nor any assurance that the Company will meet the listing requirements of the TSXV.

The Sale Transaction and Spin-Off Transaction (together, the "Transactions") will be structured as a plan of arrangement involving Wayside, its security holders, Cross Lake and Barkerville pursuant to the provisions of the B.C. Business Corporations Act ("BCBCA"). The final terms of the Transactions will be modified to the extent necessary to give effect to tax and legal advice to be sought by the parties.

The completion of the Transactions will be subject to the satisfaction of a number of conditions including the completion of the Restructuring Transaction, listing of the shares of Barkerville on the TSXV, the usable tax pool of Wayside being not less than $30,000,000, completion of definitive agreements and due diligence. Completion will also be subject to obtaining the necessary shareholder, regulatory and Court approvals. Upon closing of the Transactions, Wayside will have no debts, liabilities or other obligations (absolute, contingent or otherwise), all outstanding options, warrants and other rights to acquire securities of Wayside will be exercised or cancelled, the directors and officers of Wayside will resign and be replaced by nominees of Cross Lake. Upon closing of the Transactions Barkerville will hold all of the properties, assets, liabilities and obligations of Wayside and the QR Mine and Mill as previously described. The Transactions will close at a mutually acceptable date as agreed upon by the parties.

Upon satisfactory completion of due diligence and the entering into of definitive agreements, detailed information with respect to the Transactions will be provided in the Management Information Circular to be mailed to shareholders. There is no assurance that the Transactions will proceed, or that they will proceed on the basis described herein.

In advance of the Transactions, Wayside has entered into a non-brokered private placement of up to 10,000,000 units at a purchase price of $0.30 per unit for gross proceeds of up to $3,000,000. Each unit will consist of one common share and one half of one share purchase warrant entitling the investor to purchase an additional common share for each full warrant at a price of $0.50 per share for a six month period. A finder's fee of 7% of the gross proceeds in cash and bonus warrants will be paid to registered security dealers in connection with the financing. The proceeds of the financing will be used to repay loans, pay outstanding creditors and provide working capital for Wayside.

Additionally, Wayside has received conditional acceptance by the TSX Venture Exchange for the acquisition of Golden Cariboo Resources Ltd.'s land package at the Cariboo Gold Project (see "News Release 08-12", August 29, 2008). Golden Cariboo's tenure covers a total area of approximately 27,605 hectares southeast and contiguous to the lands containing Waysides' proposed Bonanza Ledge mine.

The Cariboo Gold Project encompasses (from northwest to south east), the former producing Hardscrabble Tungsten Mine, Mosquito Creek Gold Mine (now on care and maintenance), Aurum Mine, Island Mountain Mine, Cariboo Gold Quartz Mine, Bonanza Ledge (proposed mine), the Cariboo Thompson Gold & Silver Mine and the Cariboo Hudson Mine.

The Company commenced operations in the Cariboo District in 1994 and since that time has focused on the exploration and development of its gold properties. Mineral tenures in the Historic Cariboo Goldfields encompass approximately 1,065 square km (106,484 hectares) over a 60 km long by 20 km wide belt. In the Barkerville Gold Camp, 101 creeks have reported placer gold production. Recorded gold production from the area totals more than 3.8 million ounces, including an estimated 2.64 million ounces from placer mining and 1.23 million ounces from lode mining.

The technical information in this News Release has been reviewed and approved by chief geologist Jim Yin, PhD, P.Geo, a qualified person as defined in National Instrument 43-101.


J. Frank Callaghan, President and CEO
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