Aterra Investments Enters into a Share Purchase and Exchange Agreement with Plains Creek

Feb 25, 2013, 17:24 ET from Aterra Investments Limited

TORONTO, Feb. 25, 2013 /CNW/ - Aterra Investments Limited ("Aterra") announces it has entered into a share purchase and exchange agreement (the "SPEA") between Aterra, Plains Creek Phosphate Corporation ("Plains Creek"), Plains Creek Mining Limited, a wholly-owned direct subsidiary of Plains Creek, GB Minerals AG ("GB Minerals"), a 50.1%-owned indirect subsidiary of Plains Creek, and WAD Consult AG ("WAD"). GB Minerals is the title holder of certain mineral rights comprising Plains Creek's Farim Phosphate Project located in the Republic of Guinea Bissau in West Africa.  Pursuant to the terms of the SPEA, Plains Creek has agreed to acquire, indirectly, all of the 49.9% of the shares of GB Minerals that are currently held by WAD, and will thereby become the sole indirect shareholder of GB Minerals (the "Transaction"). Prior to the completion of the Transaction, Plains Creek will have completed a consolidation of its existing common shares (the "Common Shares") on a 20-to-1 basis (the "Share Consolidation"). The common shares of Plains Creek after giving effect to the Share Consolidation are hereinafter referred to as the "Post-Consolidation Common Shares".

Among certain other steps comprising the Transaction, (i) Aterra will pay a cash purchase price of US$3,337,000 to WAD for 24.9% of the outstanding shares of GB Minerals (the "Purchased GBM Shares"), in addition to certain other non-refundable fee payments in the aggregate amount of US$663,000 previously made by Aterra to WAD, and (ii) Aterra will thereafter transfer the Purchased GBM Shares to Plains Creek in consideration of the issuance to Aterra of 9,661,200 Post-Consolidation Common Shares (the "Transaction Shares"). The Transaction Shares represent approximately 24.1% of the approximately 40,005,054 Post-Consolidation Common Shares that will then be outstanding after taking into consideration all the Post-Consolidation Common Shares to be issued to Aterra and WAD pursuant to the Transaction, and assuming no other new share issuances by Plains Creek. On this basis, upon completion of the Transaction, Aterra will beneficially own an aggregate of 11,067,450 Post-Consolidation Common Shares, representing approximately 27.7% of the then outstanding Post-Consolidation Common Shares.

In addition, Aterra also currently owns warrants (the "Warrants") to purchase an additional 14,062,500 Common Shares, as well as C$1,000,000 aggregate principal amount of secured convertible debentures (the "Debentures") of Plains Creek. Pursuant to the terms of the Debentures, upon the completion of the Share Consolidation, the principal amount of the Debentures and any accrued interest thereon will be convertible into Post-Consolidation Common Shares at any time, at Aterra's option, at a conversion price of C$0.20 per Post-Consolidation Common Share. Assuming Aterra were to fully convert its C$1,000,000 aggregate principal amount of Debentures (but none of the interest) after the Share Consolidation and exercise all its Warrants, and assuming no other new share issuances by Plains Creek at or prior to such time, then, together with its currently owned Common Shares and the Transaction Shares, Aterra would beneficially own an aggregate of 16,770,575 Post-Consolidation Common Shares, representing approximately 36.7% of the then outstanding Post-Consolidation Common Shares.

Aterra is acquiring the Transaction Shares for investment purposes and continues to monitor the business, prospects, financial condition and potential capital requirements of Plains Creek.  Depending on its evaluation of these and other factors, Aterra may from time to time in the future increase or decrease its ownership, control or direction over the Common Shares or other securities of Plains Creek through market transactions, private agreements, subscriptions from treasury or otherwise.

SOURCE Aterra Investments Limited