News Column

Dacha to participate in Merus Labs bought deal financing

June 12, 2014



TORONTO, June 12, 2014 /CNW/ - Dacha Strategic Metals Inc. (TSX-V: DSM) ("Dacha") announced today that it has agreed to subscribe for $5 million of common shares of Merus Labs International Inc. ("Merus") (TSX: MSL, NASDAQ: MSLI) at a price of $1.70 per share as part of the $27.2 million bought deal financing that Merus announced yesterday.

As Dacha announced on June 10, Dacha and Merus have entered into a letter agreement pursuant to which Dacha agreed to invest a minimum of $11 million in Merus in exchange for common shares of Merus. Dacha's $5 million subscription in the bought deal will count towards that commitment. The remaining not less than $6 million will be invested in Merus pursuant to the "Newco Acquisition" transaction (described in Dacha's June 10 press release) in which Dacha will contribute funds to a newly formed wholly-owned subsidiary and Merus will acquire that subsidiary in exchange for common shares of Merus. Dacha's subscription under the Merus bought deal is separate from and not conditional upon completion of the Newco Acquisition and accordingly Dacha will own $5 million of Merus common shares upon completion of the bought deal financing separate and apart from the Newco Acquisition.

Upon completion of the Newco Acquisition, Dacha intends to distribute the Merus common shares that it owns, which would then represent substantially all of Dacha's assets, to its shareholders with a view to ultimately winding up its operations. This would involve, among other things, delisting Dacha's shares from the TSX Venture Exchange and Dacha ceasing to be a reporting issuer.

Forward-Looking Statements

This release contains certain "forward looking statements" and certain "forward-looking information" as defined under applicable Canadian securities laws. Forward-looking statements and information can generally be identified by the use of forward-looking terminology such as "may", "will", "expect", "intend", "estimate", "anticipate", "believe", "continue", "plans" or similar terminology. Forward-looking statements and information include, but are not limited to, statements with respect to Dacha's participation in the Merus bought deal financing, the transactions contemplated under the June 10, 2014 letter agreement and Dacha's intention to distribute the Merus shares to its shareholders and wind up its operations thereafter. Forward-looking statements and information are subject to various known and unknown risks and uncertainties, many of which are beyond the ability of Dacha to control or predict, that may cause Dacha's actual results, performance or achievements may be materially different from those expressed or implied thereby, and are developed based on assumptions about such risks, uncertainties and other factors set out here in, including but not limited to: the risk that the transaction contemplated under the June 10, 2014 letter agreement will not be approved by the TSX, the TSXV or Nasdaq or the Dacha shareholders; risks and uncertainties related to the transaction not being completed in the event that the other conditions precedent thereto are not satisfied and other related risks and uncertainties. Dacha undertakes no obligation to update forward-looking information except as required by applicable law. Such forward-looking information represents management's best judgment based on information currently available. No forward-looking statement can be guaranteed and actual future results may vary materially. Accordingly, readers are advised not to place undue reliance on forward-looking statements or information.

Completion of the Newco Acquisition is subject to a number of conditions, including TSXV acceptance and shareholder approval. The Newco Acquisition cannot close until the required shareholder approval is obtained. There can be no assurance that the Newco Acquisition will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the Management Information Circular to be prepared in connection with the Newco Acquisition, any information released or received with respect to the transaction may not be accurate or complete and should not be relied upon. Trading in the securities of Dacha should be considered highly speculative.

The TSX Venture Exchange has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.

SOURCE Dacha Strategic Metals Inc.


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Source: Canada Newswire


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