Pinetree-Backed Mega Uranium Merges with Rockgate

Toronto-based Mega Uranium Ltd., a producer of uranium, has merged with Rockgate Capital Corp., a mineral exploration company based in Vancouver. The transaction, which will see Rockgate become a subsidiary of Mega Uranium, will create a diversified uranium company with assets in Australia and Mali, and approximately $22 million of cash. Mega Uraninum is a portfolio investment of Canadian private equity firm Pinetree Capital.


Mega Uranium And Rockgate Capital Announce Proposed Merger To Create Diversified Uranium Company

TORONTO, ON and VANCOUVER, BC – June 6, 2013. Mega Uranium Ltd. (“Mega”) (TSX:MGA) and Rockgate Capital Corp. (“Rockgate”) (TSX:RGT) are pleased to announce that they have entered into a binding letter of intent (the “LOI”) to combine the two companies (the “Merger”) and create a diversified uranium company with advanced uranium assets in Australia and Mali, a pro forma cash balance of approximately $22 million and a uranium-focused investment portfolio valued at approximately $12 million. Completion of the Merger is subject to the satisfaction of certain conditions discussed below.

Under the terms of the Merger, Rockgate shareholders will receive 2.2 Mega Shares for each one (1) common share of Rockgate held (subject to rounding and without giving effect to the proposed share consolidation of the Mega Shares discussed below). The exchange ratio represents an implied price of C$0.25 per Rockgate share, based on the closing price of the Mega Shares on the Toronto Stock Exchange (“TSX”) on June 5, 2013, and a 36% premium to Rockgate’s 20-day volume-weighted average price (“VWAP”) for the period ending June 5, 2013. Upon completion of the Merger, Rockgate and Mega shareholders will own approximately 49% and 51% of the combined company, respectively.

Sheldon Inwentash, Chairman and Chief Executive Officer of Mega, commented “This transaction represents the opportunity to combine one of Africa’s most promising undeveloped uranium assets with our significant Australian portfolio, to create an international uranium developer. We are confident about the combined team’s ability to unlock significant value from our collective assets for our shareholders.”

Commenting on the transaction, Karl Kottmeier, President of Rockgate, said “By combining Rockgate and Mega, we are creating a truly unique new company. Our experienced team will be dedicated to building value by advancing our diversified asset base of uranium-focused projects and prudently managing our portfolio of equity investments and cash. We believe this new company will provide investors with an ideal way to gain exposure to the junior uranium sector.”


•A pipeline of advanced stage and exploration projects in Africa and Australia with a sizable global resource base
•Larger entity with superior capital markets presence and trading liquidity
•Strong combined management team with complementary market and operational expertise
•A portfolio of equity investments in quality junior uranium explorers and developers providing access to future growth
•Potential synergies and cost savings via back-office consolidation, sharing of facilities / resources and overall economies of scale


•Increased resource diversification and access to a growing poly-metallic deposit in Falea
•Accretive on a resource per share basis
•Bolsters company treasury
•Access to experienced technical team


•Resource diversification geographically and with varying stages of development
•Advanced projects in a leading uranium mining jurisdiction
•Further diversification through exposure to a global equity portfolio
•Significant premium on both a spot and 20-day VWAP basis
•Management team additions with extensive uranium market transactional expertise


Post-Merger, the combined company’s management and board will reflect the collective strengths of both companies, having years of experience in the global resource sector and strong expertise in western Africa and Australian uranium landscape. Karl Kottmeier will become Chief Executive Officer, Douglas Ford will become Chief Financial Officer, Richard Patricio will become Chief Operating Officer and Bryan Hyde will become Chief Technical Officer of the company. Richard Homsany will remain Executive Vice President, Australia. Subject to the approval of the shareholders of Mega, the nine member board will be led by Sheldon Inwentash as Chairman and include Karl Kottmeier, Richard Patricio, Edward Ford, Allen Ambrose, Anthony Grey, Michael Sweatman, Phil Williams and Douglas Reeson.


The combined company will have a portfolio of strategic assets which will be the key drivers of growth and value creation and include:

The 100%-owned, flagship Falea project comprises three permits, totalling 225 km2 in southwestern Mali and is a polymetallic, flat-lying deposit containing potentially viable quantities of uranium, silver and copper. Rockgate commenced a pre-feasibility study on the Falea project in 4Q 2012 which is anticipated to be completed by the end of 2013.

Australian Assets
Three, resource-compliant uranium projects with additional interests in exploration properties covering ~5,800 km2 throughout Queensland, South Australia, Northern Territory and Western Australia. Lake Maitland (100%-owned(1), W. Australia) hosts 20.7 Mlbs U3O8 Indicated at a grade of 0.05% and 1.6 Mlbs U3O8 Inferred at a grade of 0.04% and is currently in the feasibility stage. Ben Lomond (100%-owned, Queensland) hosts 7.9 Mlbs U3O8 Indicated at a grade of 0.27% and 2.8 Mlbs U3O8 Inferred at a grade of 0.21% and is currently in pre-feasibility while Maureen (100%-owned, Queensland) hosts 5.9 Mlbs U3O8 Indicated at a grade of 0.09% and 0.4 Mlbs U3O8 Inferred at a grade of 0.11%.

Balance Sheet
The combined company will have approximately $22 million of cash at closing of the transaction. In the current uranium market, the combined company’s mining assets will require minimal investment and, as such, the cash on hand is anticipated to be more than sufficient to advance both Falea through PFS and Lake Maitland DFS and predevelopment and maintain the other Australian assets while remaining able to undertake investment in new opportunities.

Investment Portfolio
Shareholders can expect to benefit from a portfolio of advanced resource equity positions (~$12 million) which management believes are currently significantly undervalued in the market and potentially represent a strong sample of the next stage of uranium development assets globally.


It is anticipated that the Merger will be completed by way of a three-cornered amalgamation, or a plan of arrangement, resulting in Rockgate becoming a wholly-owned subsidiary of Mega at closing. As part of the transaction, it is also proposed that Mega will effect a 10-for-1 consolidation of the Mega Shares prior to the Merger. Subject to completion of the prior consolidation of the Mega Shares (the “Mega Consolidated Shares”), Rockgate shareholders will receive 2.2 Mega Consolidated Shares for each ten (10) common shares of Rockgate held (subject to rounding).

The transaction is subject to completion of due diligence, the execution of a definitive agreement substantially on the terms set out in the LOI, and the approval of Rockgate shareholders and Mega Shareholders (as to the issuance of the Mega Shares under the Merger and the 10-for-1 share consolidation), at meetings to be held as soon as practicable following execution of the definitive agreement, in addition to other customary closing conditions, including receipt of all regulatory and stock exchange approvals. Mega and Rockgate have also agreed to reciprocal non-solicitation restrictions, including rights to match any superior proposals, and for the payment of a C$1 million reciprocal break fee under certain circumstances.

Certain members of management, directors and key shareholders of Mega and Rockgate, including Pinetree Capital Ltd. (in respect of Mega), have expressed their willingness to enter into support agreements with the companies to, among other things, vote their common shares of the companies in favour of the matters relating to the Merger.

Subject to the execution of the definitive agreement and satisfaction of all closing conditions, the Merger is expected to be completed in September 2013.

Dundee Capital Markets is acting as financial advisor and Blake, Cassels & Graydon LLP is acting as legal counsel to Rockgate and its Board of Directors.

Additional information about Mega Uranium Ltd. and Rockgate Capital Corp. is available by visiting Mega’s website at or Rockgate’s website at or under their profiles on SEDAR at

National Instrument 43-101 – Standards for Disclosure for Mineral Projects
Stewart Taylor, B.Sc., Mega’s President, is Mega’s Qualified Person for the purposes of National Instrument 43-101 and has reviewed and approved the technical contents of this release under the heading “Australian Assets”. Bryan Hyde, C.Eng., B.Sc., MIMMM, a Director of Rockgate, is Rockgate’s Qualified Person for the purposes of National Instrument 43-101 and has reviewed and approved the technical contents of this release under the heading “Falea”.

This news release may use the terms “measured”, “indicated” and “inferred” as these terms are defined under Canada’s National Instrument 43-101. U.S. investors are advised that, while such terms are recognized and required by Canadian regulations, they are not recognized by the United States Securities and Exchange Commission (“SEC”) and may not be comparable to similar information for United States mining or exploration companies. As such, certain information contained on this news release concerning descriptions of mineralization and resources under Canadian standards is not comparable to similar information made public by United States companies subject to the reporting and disclosure requirements of the SEC. U.S. investors are cautioned not to assume that any part or all of the mineral deposits described in these categories will ever be converted into proven or probable reserves, as defined in the SEC’s Industry Guide No. 7.

For further information please contact:

Mega Uranium Ltd.

Richard Patricio
Executive Vice-President, Corporate Affairs
Tel. (416) 643-7630

Rockgate Capital Corp.
Karl Kottmeier
Tel. (604) 678-8941

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