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Barkerville Gold Mines signs deal to acquire Williams Creek Gold

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Barkerville Gold Mines signs deal to acquire Williams Creek Gold

Barkerville GoldMines Ltd. signed a definitive arrangement agreement on April 29 toacquire Williams Creek Gold Ltd.by way of a plan of arrangement, the companies said in a May 2 joint statement.

In accordance with the deal, Barkerville has agreed to issuea total of 6.8 million shares in exchange for Williams Creek's 109,057,249 commonshares outstanding, valuing the transaction at about C$3.9 million, or about 3.55Canadian cents per Williams Creek share, based on the closing price of Barkervilleshares on the TSX Venture Exchange on April 29.

Barkerville also agreed to advance a loan of up to C$500,000to Williams Creek, to be available in multiple draws. The loan will bear a 5% interestper annum, evidenced by a grid promissory note and secured against the assets ofWilliams Creek.

Subject to the approval of the TSX-V and if the deal is terminated,Barkerville will have the right to convert the loan into common shares of WilliamsCreek at any time following the termination of the agreement. However, WilliamsCreek will not give effect to any conversion if Barkerville would own more than19.9% of Williams Creek's outstanding share capital after converting the loan.

Upon completion of the arrangement, Williams Creek will becomea wholly owned subsidiary of Barkerville and former shareholders of Williams Creekwill hold approximately 2.27% of Barkerville's outstanding shares. Furthermore,Williams Creek's common shares will be delisted from the TSX-V and an applicationwill be made for Williams Creek to cease as a reporting issuer.

The boards of both companies have already approved the transactionbut it remains subject to shareholder and regulatory approvals.