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Silk Road Resources Ltd. Announces Closing of Private Placement

^{Published on 2009-05-26 14:00:00, Last Modified on 2009-05-26 14:00:59 - Market Wire}
 

 TORONTO, May 26 /CNW/ - Silk Road Resources Ltd. ("Silk Road" or the "Company") (TSXV: SIL) announces that it has closed the previously announced non-brokered private placement of 1,400,000 units of the Company (the "Units") with Robert G. Power Professional Corporation ("RGP") as to 1,000,000 Units and Patriarco Holdings Limited ("PHL") as to 400,000 Units. Each Unit, comprised of one common share of the Company and one common share purchase warrant, was sold for $0.25 for aggregate gross proceeds of $350,000. Each common share purchase warrant entitles the holder thereof to acquire one common share for a period of three years from the closing date of the private placement at a price of: (i) $0.28 in the first year; (ii) $0.30 in the second year; or (iii) $0.35 in the third year. Pursuant to Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"), the issuance of the Units is a "related party transaction" as the respective principals of RGP and PHL currently each hold, directly or indirectly, 1,000,000 common shares and 5,257,748 common shares, respectively, representing 3.62% and 19.02% of the issued and outstanding shares of the Company. The Company is exempt from the formal valuation and minority approval requirements of MI 61-101 contained in section 5.5(a) and section 5.7(a), as neither the fair market value of the subject matter of, nor the fair market value of the consideration for the private placement exceeds 25% of the Company's market capitalization. The private placement has been accepted by the TSX Venture Exchange. The Company intends to use the proceeds from the private placement to cover preliminary costs in connection with its previously announced business combination with EurOmax Resources Limited ("EurOmax") and to cover operating costs and general working capital until the completion of the business combination. The Company may loan part of the proceeds of the private placement to EurOmax for its general working purposes for the period until the business combination is completed. Forward Looking Statements: Certain information regarding the Company set forth in this press release, including management's assessment of the Company's future plans and operations contains forward looking statements that involve substantial known and unknown risks and uncertainties. These forward looking statements are subject to numerous risks and uncertainties, some of which are beyond the Company's and management's control, including but not limited to, the impact of general economic conditions, industry conditions, fluctuation of commodity prices, fluctuation of foreign exchange rates, imperfection of reserve estimates, environmental risks, industry competition, availability of qualified personnel and management, stock market volatility, timely and cost effective access to sufficient capital from internal and external sources. The Company's actual results, performance or achievement could differ materially from those expressed in or implied by, these forward looking statements and accordingly, no assurance can be given that any of the events anticipated to occur or transpire from the forward looking statements will provide any benefits to the Company. The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release. %SEDAR: 00012266E 

For further information: David Bell, CEO of Silk Road at (416) 624-8794