TORONTO,ON and VANCOUVER, BC - August 14, 2013. Mega Uranium Ltd. ("Mega") (TSX:MGA) and Rockgate Capital Corp. ("Rockgate")(TSX:RGT) are pleased to announce that they have entered into a definitivearrangement agreement (the "Arrangement Agreement") with respect to their mergerpreviously announced on June 6, 2013 (the "Merger").
The Merger will be completed by way of an arrangement underthe Business Corporations Act (British Columbia) (the "Arrangement"), resulting in Rockgate becoming awholly-owned subsidiary of Mega at closing. Shareholders of Rockgate willreceive 2.2 common shares of Mega in exchange for each 1 common share ofRockgate (the "Exchange Ratio") held immediately prior to the effective time ofthe Arrangement (subject to rounding), resulting in them owning approximately49% of the issued and outstanding shares of Mega upon completion of the Merger,based upon the number of Mega's common shares currently outstanding. Inconnection with the Merger and subject to the approval of Mega's shareholders,Mega will effect a 1-for-10 consolidation of its common shares immediately orshortly after the effective time of the Arrangement. If the share consolidationis completed, the Exchange Ratio will effectively be 2.2 post-consolidationshares of Mega for each 10 Rockgate shares held immediately prior to theeffective time of the Arrangement.
Conditional upon completion of the Arrangement, andsubject to the approval of Mega's shareholders, Mega will change its name to"Uranium Capital Corporation" and a new board of directors will be electedcomprised of 5 nominees of Mega and 4 nominees of Rockgate.
The Arrangement Agreement contains customary dealsupport provisions, including a reciprocal break fee of $1,000,000 payable byMega or Rockgate, as the case may be, to the other party if the Merger is notcompleted in certain circumstances. In addition, the Arrangement Agreementincludes customary non-solicitation covenants by Rockgate and Mega, as well asthe right for Mega and Rockgate, as the case may be, to match any superiorproposal that may arise.
The completion of the Merger is subject tosatisfaction of certain customary conditions, including but not limited to, Megaand Rockgate shareholder approvals, and court and regulatory approvals, includingapproval by the Toronto Stock Exchange. The necessary approvals of the shareholdersof Mega and Rockgate will be sought at their respective special shareholdermeetings expected to be held on or about September 25, 2013. Assuming all the terms and conditions of theMerger are satisfied, closing is expected to take place in early October, 2013.
Dundee Securities Ltd., financial advisor to Rockgate andits board of directors, has provided an opinion to the effect that, as of thedate hereof and subject to the assumptions, limitations and qualifications setout therein, the consideration to be received by Rockgate shareholders pursuantto the Merger is fair, from a financial point of view, to Rockgate shareholders.
Stewart Taylor, Mega's President, stated "Theexecution of a definitive arrangement represents significant progress and a reciprocalcommitment of the parties in advancing our merger. We are also very focused onconsummating the sale of Lake Maitland to Toro Energy announced earlier thisweek and see our merger with Rockgate, together with the Toro Energytransaction, as major efforts aimed at creating value and contributing to thelong term strength of Mega as a diversified uranium company.
Rockgate President Karl Kottmeier, commented "I ampleased to announce this definitive agreement with Mega. By combining these twocompanies, we are creating a truly diversified junior uranium focused companyand what we believe is a compelling uranium investment opportunity. With therecently announced sale of the Lake Maitland project, Mega management will addover Aus $37 million worth of Toro shares to its existing $12.5 million equityportfolio and significantly reduce its expenditure rate. The new managementteam will continue to focus on advancing our principal projects, including theFalea deposit, managing the portfolio of investments and seeking newopportunities to build shareholder value in the uranium space."
Forward-LookingStatements CAUTIONARYNOTE REGARDING FORWARD-LOOKING STATEMENTS: This news release contains"forward-looking statements" within the meaning of the United StatesPrivate Securities Litigation Reform Act of 1995 and "forward-lookinginformation" as such term is defined in applicable Canadian securities laws(together referred to herein as "forward-looking statements"). Except forstatements of historical fact relating to Mega or Rockgate, informationcontained herein constitutes forward-looking statements. Forward-lookingstatements are characterized by words such as "plan,""expect", "budget", "target","project", "intend," "believe","anticipate", "estimate" and other similar words, orstatements that certain events or conditions "may" or"will" occur. Forward-looking statements in this news releaseinclude, but are not limited to, statements relating to completion of the combinationof Mega and Rockgate and the expected timing of completion and statementsregarding the expected benefits to Mega shareholders and Rockgate shareholdersof the Merger, as well as statements regarding the sale of Lake Maitland toToro Energy. Forward-looking statements are based on the opinions, assumptionsand estimates of management considered reasonable at the date the statementsare made, and are inherently subject to a variety of risks and uncertaintiesand other known and unknown factors that could cause actual events or resultsto differ materially from those projected in the forward-looking statements.Although Mega and Rockgate have attempted to identify important factors thatcould cause actual actions, events or results to differ materially from thosedescribed in forward-looking statements, there may be other factors that causeactions, events or results not to be anticipated, estimated or intended.
There can be no assurance that forward-lookingstatements will prove to be accurate, as actual results and future events coulddiffer materially from those anticipated in such statements. Neither Mega norRockgate undertakes any obligation to update forward-looking statements ifcircumstances or management's estimates, assumptions or opinions should change,except as required by applicable law. The reader is cautioned not to placeundue reliance on forward-looking statements. The forward-looking informationcontained herein is presented for the purpose of assisting investors inunderstanding Mega's and Rockgate's expected financial and operationalperformance and results as at and for the periods ended on the dates presentedin their respective plans and objectives and may not be appropriate for otherpurposes.
For further information please contact:Mega Uranium Ltd.
Richard PatricioExecutive Vice-President,Corporate AffairsTel. (416) 643-7630
Rockgate Capital Corp.KarlKottmeierPresidentTel.(604) 678-8941