Wits Basin Agrees in Principal to Material Terms of Merger
Wits Basin Precious Minerals Inc. (OTCBB:WITM) is pleased to announce that material terms have been agreed to, in principal, in connection with the previously released non-binding memorandum of understanding discussion agreement to merge/amalgamate with EasyKnit Enterprises Holdings Limited. EasyKnit is a Bermuda incorporated company with its principal office in Hong Kong and its securities listed for trading on the Hong Kong Stock Exchange under the symbol “616 on SEHK.” The non-binding memorandum of understanding has been expanded to include material terms whereby all outstanding common shares of Wits Basin will be exchanged for three billion (3,000,000,000) shares of EasyKnit, which represents approximately 43 percent of the issued capital. It further provides for definitive documents to be finalized during February 2007. The timetable for closing will be dependent upon obtaining required regulatory approvals as well as mutual on-going due diligence review and votes by the shareholders of both companies.
Detailing the proposed transaction, Wits Basin’s CEO Stephen King explains, “The proposed exchange ratio for each common share of Wits Basin represents approximately 21 shares of EasyKnit for each Wits Basin common share.
In addition, the parties further contemplate:
Seeking an ADR program to facilitate the trading of EasyKnit shares in the U.S.
That management of Wits Basin will be retained to manage and lead the direction of the merged company.
That the name of the merged company will be changed to more accurately reflect its new scope of business.”
About EasyKnit
EasyKnit Enterprises Holdings Limited (based in Hong Kong) currently has a bleaching and dyeing business as well as holdings of real estate. The NAV is approximately HK$0.10, which is comprised of property and cash. EasyKnit is incorporated in Bermuda and its shares are listed on the Stock Exchange of Hong Kong Limited under the stock code “616.” If the merger proceeds, EasyKnit will be transformed into a mining company with international natural resource assets distributed in China, South Africa, Mexico, and the USA.
EasyKnit has also entered into a discussion with SSC-Sino Gold Consulting Company Limited for a strategic equity joint venture to strengthen its gold mining management and acquisition of gold properties in China and has paid HK$10 Million into escrow for this transaction.
About Wits Basin Precious Minerals Inc.
We are a minerals exploration and development company holding interests in five exploration projects and currently do not claim to have any mineral reserves on any project. Our common stock trades on the Over-the-Counter Bulletin Board under the symbol “WITM.” To find out more about Wits Basin Precious Minerals Inc. (OTCBB: WITM) visit our website at www.witsbasin.com.
Forward-Looking Statements and Risk Factors
The statements included in this press release concerning predictions of economic performance and management’s plans and objectives constitute forward-looking statements made pursuant to the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. This press release contains forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially. Such statements are valid only as of today, and we disclaim any obligation to update this information. These statements are subject to known and unknown risks and uncertainties that may cause actual future experience and results to differ materially from the statements made. These statements are based on our current beliefs and expectations as to such future outcomes. These risks and uncertainties include, among others, the Company’s ability to obtain or maintain regulatory approvals; the Company’s ability to obtain necessary financing; the Company’s ability to enter into and meet all the conditions to consummate the proposed merger agreement, and other risks and uncertainties described in the Company’s filings from time to time with the Securities and Exchange Commission. The Company disclaims any obligation to update its forward-looking statements.
In addition, the exploration for and development of mineral deposits involves significant financial risks, which even experience and knowledge may not eliminate, regardless of the amount of careful evaluation applied to a process. While the discovery of a mineral deposit may result in substantial rewards, few properties are ultimately developed into producing mines. Moreover, we cannot make any estimates regarding probable reserves and mineral resources in connection with any of our projects and any estimates relating to possible reserves are subject to significant risks. Therefore, no assurance can be given that any size of reserves or grades of reserves will be realized. If a discovery is made, the mineral deposit discovered, assuming recoverable, may differ from the reserves and mineral resources already discovered and recovered by others in the same region of the planned areas of exploration. Further, the cost of exploration and exploitation can be extensive and there is no assurance that we will have the resources necessary or the financing available to pursue projects we currently hold interests in or to acquire interests in other mineral exploration projects that may become available. The risks we face are numerous and detailed information regarding these risks may be found in filings made by us with the Securities and Exchange Commission, including our most recent annual report on Form 10-KSB, quarterly reports on Form 10-QSB and reports on Form 8-K.
The proposed merger with EasyKnit is subject to various contingencies, including negotiation and execution of definitive documentation, completion of due diligence, receipt of required regulatory approvals, and board and shareholder approvals by both parties.