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FOR IMMEDIATE RELEASE
THE SILVER RECYCLING COMPANY INC.
TSX VENTURE: TSR
July 25, 2008
The Silver Recycling Company
Enters Into Letter of Intent with Acquisition Target
VANCOUVER, B.C. - July 25, 2008 -
The Silver Recycling Company Inc. (TSX VENTURE: TSR) ("Silver Recycling")
is pleased to announce that it has entered into a non-binding letter of
intent ("LOI") to acquire a silver scrap refining company. The
target has been in business in the United States for over 22 years and is
the second target that Silver Recycling has taken to the letter of intent
stage (the first transaction was closed on May 22, 2008).
Under the terms of the LOI:
- The purchase price will be determined based
on a multiple of average earnings of the target for the fiscal years
2006 and 2007, subject to a minimum purchase price of US$9 million
and working capital and other price adjustments.
- The acquisition will be effected through a
merger of the target with a wholly-owned acquisition subsidiary of
Silver Recycling.
- One-half of the purchase price will be paid
in cash and the balance in shares of the merged company
("Acquisition Shares"), which shares will be exchangeable
into common shares of Silver Recycling.
- The number of Acquisition Shares issuable
will be determined using the volume weighted twenty trading days
average share price of Silver Recycling, all of which shall be
issuable at closing.
- The Acquisition Shares will be subject to
an escrow agreement, pursuant to which 20% of the Acquisition Shares
will be released from escrow commencing one year following closing
and the balance over the two years thereafter.
Silver Recycling previously
announced that it was undertaking preliminary due diligence of this
target pursuant to a standstill agreement executed on May 30, 2008. The
LOI has extended the standstill period until October 31, 2008, with the
option of Silver Recycling to extend further to December 31, 2008.
The parties will endeavour to
negotiate a binding definitive agreement while Silver Recycling completes
its due diligence investigation and financial audit. Concurrent with the
execution of the LOI, Silver Recycling advanced a non-refundable deposit
in the amount of US$100,000, which shall be credited to the purchase
price.
Completion of the transaction contemplated in the letter of intent is
subject to customary conditions for this type of transaction, including
satisfactory due diligence investigation, successful completion of an
audit on the financial statements of the target, satisfactory results of
a Phase 1 Environmental audit, completion of necessary financing to fund
the cash portion of the purchase price, settlement of employment
agreements with key employees of the target, receipt of all necessary
corporate approvals of Silver Recycling, and all requisite regulatory and
any other required approvals. There is no guarantee that all of these
conditions will be satisfied.
Don Holmstrom, President and CEO stated, "Entering into this LOI is
another exciting step in executing our strategy for consolidating key
silver recycling companies throughout North America. We look forward to
completing our due diligence and moving this transaction forward."
The TSX Venture Exchange does not accept responsibility for the
adequacy or accuracy of this release.
About 'The Silver Recycling Company Inc.'
Silver Recycling is a consolidator of privately-owned silver and other
precious metals recycling companies and recently closed the acquisition
of two companies in Pennsylvania as announced in the news release of May
28, 2008. Silver Recycling is continuing to review other candidate
companies within the precious metals recycling industry for acquisition
and integration in alignment with the Company's business strategy.
Information about Silver Recycling is available on their website www.silver-recycling.com.
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FOR FURTHER INFORMATION, PLEASE CONTACT:
Certain statements included in this press release may be considered forward-looking.
Such statements involve known and unknown risks, uncertainties and other
factors that may cause actual results, performance or achievements to be
materially different from those implied by such statements, and therefore
these statements should not be read as guarantees of future performance
or results. All forward-looking statements are based on the Company's
current beliefs as well as assumptions made by and information currently
available to it as well as other factors, including the availability of
funds, the results of the evaluation of business operations, outcome or
failure of negotiations with third parties, precious metal prices, and
general market and industry conditions. Readers are cautioned not to
place undue reliance on these forward-looking statements, which speak
only as of the date of this press release. Due to risks and
uncertainties, including the risks and uncertainties identified by the
Company in its public securities filings, actual events may differ
materially from current expectations. The Company disclaims any intention
or obligation to update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise.
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