June 17, 2009
ARMSTRONG, BRITISH COLUMBIA - GWR Resources Inc. (TSX Venture: GWQ) announces that it has entered into a Letter of Intent (the “LOI”) with Deep Creek Oil & Gas Inc. (“Deep Creek”) in order to acquire 100% of Deep Creek through an all share transaction. Aside from legal fees, this acquisition will not require any cash outlays by GWR. The purpose of this acquisition is to provide GWR with long term positive monthly cash flow, which can be utilized by GWR in the best manner possible (including ongoing exploration of GWR’s Lac La Hache copper-gold property). In addition, GWR intends to grow its oil and gas division in order to provide enhanced value to GWR’s shareholders.
Deep Creek will come with experienced management. In addition, GWR’s President, Irvin Eisler, has over 20 years of past experience in the oil and gas sector.
Deep Creek is a private BC company, which owns various interests in natural gas and light and heavy oil producing wells in AB, SK and ON. Largely as a result of aggressive acquisitions over the last couple of years and the subsequent decline in oil prices, Deep Creek was forced to make application for creditor protection in March of this year. Accordingly, GWR found what it believes to be a “business opportunity”. Deep Creek must make a formal proposal to creditors (the “Proposal”), which must be accepted or else Deep Creek will go into receivership. The transaction with GWR is instrumental for Deep Creek’s restructuring proposal with creditors.
It is proposed that GWR acquire Deep Creek in consideration of the issuance of 7,666,666 common shares. The deemed value of the acquisition is $2,000,000. It is expected that, upon closing, Deep Creek will have approximately $100,000 of working capital and approximately $800,000 of bank debt (which will be serviced by Deep Creek’s positive cash flow).
Assuming the Proposal is accepted by Deep Creek’s creditors, GWR will determine the optimum structure of the acquisition of Deep Creek (ie. share exchange, amalgamation or plan of arrangement) and enter into a definitive agreement. In addition to GWR completing its due diligence, the closing of this acquisition will be subject to a number of conditions, including all necessary shareholder and creditor approvals on the Deep Creek side, and approval by the TSX Venture Exchange on the GWR side. In addition, Deep Creek must complete a $600,000 equity financing, for which GWR’s management is providing assistance. It is anticipated that this acquisition will be completed within a couple of months from the date hereof.
Further news will follow, as appropriate.About GWR Resources Inc.
GWR RESOURCES INC. is an active mineral exploration company, currently exploring multiple zones containing commercial grades of copper and gold within its large Lac La Hache copper-gold porphyry project. GWR’s project is in the prolific Quesnel Trough area of British Columbia, between producing mines at Imperial Metals’ Mt. Polley Copper-Gold Mine and New Gold Inc.’s New Afton Copper-Gold project (Teck-Cominco’s legendary Afton mine). The Lac La Hache project is well-served by rail, road and power infrastructure.
For further information, please contact:
Responsible Officer: Irvin Eisler, President
Company Telephone Number: (250) 546-8048Neither 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.
Back to the News page