On September 25, BVI-registered mineral exploration company Talon Metals Corp. announced that it has entered into a binding agreement with Saber Energy Corp., - a private energy company, also incorporated in the British Virgin Islands, with extensive land holdings and an active exploration program in Botswana. Talon and Saber have agreed to negotiate a pre-merger agreement concerning the business combination of the companies, and additionally Talon has agreed to lend up to $6 million to Saber.
An initial $3 million loan has been advanced, and Talon will receive 1.5 million common share purchase warrants of Saber, at an exercise price determined in accordance with a specified formula, expiring three years after the date of issuance. The loan bears interest at 12% per annum until January 22, 2009, and 18% per annum thereafter.
Under the terms of the agreement, the common shares of both BVI companies will be exchanged for securities of the company resulting from the merger. The agreement between companies provides that when Saber completes the private placement of the BVI company, the Talon shareholders will receive one common share purchase warrant for each common share of Talon held by such shareholder. If the merger occurs, Talon warrants will be exchanged at the Talon Ratio for common share purchase warrants of the merged companies. As part of the merger, the outstanding options and warrants of Talon and Saber, as applicable, will be exchanged for options and warrants of the merged companies.
Mr. Stuart Comline, President and CEO of Talon Metals Corp. (BVI), said that the proposed merger with BVI incorporated Saber Energy Corporation would allow Talon to participate in a large, rapidly developing project, and BVI company's shareholders would benefit from the plans to further explore and develop its gas project, and then put it into production.
