Roxmark, Ontex shareholders to consider merger Dec. 18

2009-11-20 15:42 ET - News Release

See News Release (C-RMK) Roxmark Mines Ltd

Mr. Monir Younan of Roxmark reports

ROXMARK MINES AND ONTEX RESOURCES ANNOUNCE EXECUTION OF AMALGAMATION AGREEMENT AND SCHEDULING OF SHAREHOLDERS MEETINGS

Roxmark Mines Ltd. and Ontex Resources Ltd. have entered into an amalgamation agreement in connection with their previously announced proposed merger.

The two companies have also each called a special meeting of shareholders to be held on December 18, 2009 to consider the proposed merger (and, in the case of Ontex, other related matters). A joint management information circular will be mailed to Roxmark and Ontex shareholders of record as at November 16, 2009 and available under each of their profiles on SEDAR at www.sedar.com shortly. At the Ontex meeting, Ontex shareholders will also be asked to approve the change of the company's name to Goldstone Resources Limited, on completion of the transaction.

Pursuant to the amalgamation agreement and previously executed letter agreement, Ontex has agreed to acquire all of the issued and outstanding shares of Roxmark pursuant to a "three-cornered" amalgamation (which will result in Roxmark becoming a wholly-owned subsidiary of Ontex). Roxmark shareholders will be entitled to receive one Ontex share for every 1.25 Roxmark shares held at the time of completion of the transaction (which is equivalent to 0.80 of an Ontex share on its current basis for each Roxmark share). Prior to completing the transaction, Ontex plans to consolidate its outstanding shares on a 1-for-3 basis. If the consolidation is completed, Ontex will issue one share for every 3.75 shares of Roxmark held at the time of completion of the transaction. In addition, all convertible securities of Roxmark will be exercisable for shares of Ontex based on the same exchange ratio applicable to the Roxmark shares. Additional details regarding the transaction will be described in the joint management information circular.

The parties have completed their due diligence in accordance with the terms of the letter agreement and have also agreed to waive a previously contemplated $1,500,000 loan by Ontex to Roxmark.

Roxmark and Ontex believe that the merger is a major step toward creating one gold mining company holding significant properties in the prolific Beardmore-Geraldton Greenstone gold belt, close to the Trans-Canada Highway, TransCanada Pipeline, and major power lines. Roxmark and Ontex believe the land position of the combined company will improve exploration potential and offer significant synergies in exploration, development and diversification of risk and that existing mine infrastructure, which includes a permitted mill, will also be a significant advantage.

Both companies also believe that, in addition to cost savings, the merged company will be strongly positioned to participate in the anticipated further consolidation in the Canadian gold industry.

Closing is anticipated on or before the end of 2009, at which point Roxmark shareholders will hold approximately 56% of the combined company on a non-diluted basis, which will have approximately 97.2 million shares outstanding on a post consolidation basis.

In addition to shareholder approval, completion of the transaction is subject to certain other conditions which are customary for transactions similar in nature to the proposed merger.