Stroud Adopts Shareholder Rights Plan
TORONTO, ONTARIO–(Marketwire – Aug. 8, 2008) – Stroud Resources Ltd. (TSX VENTURE:SDR) (“Stroud” or the “Company”) announced today the adoption by its Board of Directors of a Shareholder Rights Plan (the “Plan”), similar to those adopted by many other Canadian corporations. Given the very encouraging drill results announced to date by the Company on its Santo Domingo silver/gold project in central Mexico, the Board is of the view that such results and the prospects for this property are not adequately reflected in the trading price of the Company’s common shares. The Plan is being adopted to address the Board’s concerns that current legislation does not provide sufficient time for the Board and shareholders of the Company to properly evaluate an unsolicited bid or pursue alternatives with a view to maximizing shareholder value. The Plan seeks to ensure that all shareholders of the Company have an equal opportunity to participate in the benefits of a takeover bid.
The Plan does not attempt to discourage bids. It allows a potential bidder to make a “permitted bid” directly to the shareholders of the Company without the prior approval of the Board. Such permitted bid must be made to all shareholders and must remain open for a minimum period of 60 days after the date of the bid and for a further period of 10 business days after the offer or publicly announces that the shares deposited constitute more than 50% of the outstanding common shares held by independent shareholders. The Plan also allows for a “competing permitted bid” to be made while the permitted bid is in existence.
To implement the Plan, the Board of Directors of the Company has authorized the issue of one Right in respect of each outstanding common share of the Company, to holders of record at 4:00 p.m. (Toronto time) on August 7th, 2008. For administrative convenience, the Rights will trade with the common shares and be represented by the certificates representing common shares.
The Plan is effective immediately, but is subject to regulatory and shareholder approval. The Plan requires ratification of shareholders at a meeting to be held within six months of adoption and reconfirmation at least every three years thereafter, failing which the Plan shall terminate and be of no further force or effect.
Neither the Board nor management of the Company is aware of any pending or threatened take-over bid for the Company.
About Stroud Resources Ltd.
Stroud is a debt-free exploration company focused on the discovery and exploration of silver and gold deposits in Mexico and Ontario. Stroud owns a 100% interest in the Santo Domingo epithermal silver-gold project in central Mexico. In addition to the Santo Domingo project, Stroud’s assets include 100% interests in the Hislop gold property, near Timmins, Ontario and the Leckie gold property, near North Bay, Ontario. Stroud also generates cash flow from a 3.75% interest in six natural gas and natural gas condensate wells in central Alberta.
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